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As new events celebrating weed’s unofficial holiday of April 20 continue to spring every year, money troubles have forced some of the country’s oldest gatherings to wind down, even as industry analysts predict one of the biggest cannabis sales days ever this coming Saturday.

Despite a more positive outlook for the U.S. cannabis industry this 4/20, the cancellation of celebrations in legacy markets like California due to a lack of corporate sponsors point to growing fault lines between state markets, with companies in newer strongholds on the East Coast and Midwest better positioned to host events, while those in established regions view 4/20 marketing as a dispensable expense.

Last month, the city of San Francisco said that its annual 4/20 cannabis festival, which typically draws thousands of enthusiasts to Golden Gate Park’s Hippie Hill, was canceled for 2024.

It was a big blow to the city’s storied history with the plant, as well as the businesses that have come to rely on the event as a crucial marketing opportunity. With roots in the counterculture movement of the 1960s, the festival had evolved into a city-sanctioned celebration with live music, food vendors, and cannabis booths.

“We understand the disappointment and hope to make it up with a great event next year,” organizer Alex Aquino said in a statement.

The event’s scrapping came as California’s cannabis industry continues to grapple with falling sales (with tax revenue) and widespread closures. Officials cited department budget cuts and broader industry headwinds that made it difficult for event organizers to secure the sponsorships necessary to cover the costs of hosting the festival.

“It usually costs about $40,000 and the city’s in a budget crunch,” a park department spokesperson told a local ABC station. “So, we just couldn’t pay to staff it this year.”

Many enthusiasts are still expected to gather at Golden Gate Park on April 20 to celebrate. Some industry insiders and long-time festival goers believe that the cancellation could actually help to revive the original spirit of the event, which began as a grassroots gathering decades before it became a platform for cannabis brands via city dollars.

“4/20 in GG Park has a long, storied history that dates back for decades before the fences, ID checks, and litany of restrictions that came along with a city-sponsored and corporate-backed event,” local San Fransisco dispensary owner William Dolan told the LA Times.

Local residents may find some reprieve in the news, as traffic jams, problematic parking situations, and inadequate facilities have stained the gathering’s reputation. For now, the city’s cannabis community will have to find alternative ways to come together and celebrate the plant using local event listings, or hope they don’t get a phone call from their landlords.

A tree blooms in Brooklyn

Things are a bit different along some of the Eastern seaboard’s younger legal markets, where newly-sprouting businesses are finding ways to engage with consumers.

Folks can buy tickets to attend daytime festivals in Brooklyn on Saturday, perhaps after a night at S.O.B.’s with Raekwon of Wu-Tang Clan. One could even check out THC NYC’s cannabis museum, which is hosting an open house from Wednesday until Friday.

INTER_, an interactive art exhibit in New York City, is partnering with Big Apple-based The Travel Agency for a one-night-only event on Thursday. According to the flyer, the event is designed for adults who want to explore art in a fun and friendly space — potentially in an altered state of mind.

Gotham, a New York City-based cannabis concept store, will kick off more experiential events on Wednesday with a one-time-only, weed-themed comedy show hosted by local duo Comedy Underground Overground. The event will also serve surprise goodies and drinks by Cann, a cannabis-infused beverage company.

Gotham is also joining forces with ICECREAM, the skate label under Pharrell Williams’ Billionaire Boys Club, to support the launch of the ICECREAM 420 Capsule Collection. The event will be held at the clothing line’s flagship store on Saturday, offering exclusive gifts and discounts to the first 100 shoppers who purchase an item from the collection.

And to help some recover from their celebrations, Gotham and Edie Parker are hosting a whimsically upscale brunch at The Standard Hotel East Village on April 21. Attendees will be treated to light bites, mocktails, and cocktails in a lush garden setting, along with goodies from both brands.

“In the competitive landscape of New York’s cannabis market, securing sponsorship dollars has been a challenge, mirroring the situation in California,” Geraldine Hessler, Gotham’s chief creative officer, told Green Market Report.

“However, we at Gotham have devised a solution for our upcoming experiences by forging innovative partnerships and engaging in cross-promotion with prestige brands. By taking our 4/20 marketing campaign to new locations, we’re expanding our reach beyond the dispensary and ensuring that we engage with a broader audience and attract potential customers beyond our usual demographic.”

What the data says

April 20 is always a good day for dispensaries, attracting a record number of customers each year. But with the holiday falling on a weekend for the first time since 2019, retailers can expect even higher sales, potentially 2.5 times bigger than any other day of the 2023 calendar year, according to cannabis data firm Treez.

In 2023, dispensaries saw more than double the number of shoppers on 4/20 compared to any other day. Cashless payments also grew in popularity, with 28% of customers using this option, a 65% increase from 2022.

While the average discount on April 20, 2023 was 32.42%, experts advise against increasing discounts, as it may not lead to higher profits. Instead, they recommend targeted discounts for specific products and actions like online ordering, loyalty program enrollment, and cashless payments to entice new and existing customers while increasing profits.

Customer turnout on 4/20 has risen by 25% since 2020, while other cannabis-related holidays have seen a 13% decline. The firm said that’s because customers tend to stock up before those holidays, whereas 4/20 remains a cannabis-specific buying day.

Understanding local market trends and consumer behaviors is also important, as sales lifts during the 2023’s 4/20 celebration varied by state, according to cannabis market research firm BDSA.

Retailers are advised to focus on promoting innovative products this year, such as infused pre-rolls and topicals, which have shown strong growth potential. Educational events and social media campaigns can help generate excitement around those type of novel offerings, the firm suggested.

However, BDSA also pointed the need for retailers to balance discounts with long-term brand value. Offering limited edition, branded merchandise can create a memorable experience for customers and foster a sense of community around the 4/20 celebration, especially as events don’t have as much money to spend.

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Michigan-based Agrify Corporation (Nasdaq: AGFY) posted a dramatic decline in revenue for both the fourth quarter and full fiscal year ending Dec. 31, 2023, despite seeing its first positive quarterly net income of $572,000 in the fourth quarter.

The company’s revenue for fiscal year 2023 plummeted to $16.9 million, a 71% decrease from the $58.3 million reported in the previous fiscal year. Similarly, fourth-quarter revenue fell to $2.8 million, a 52.5% drop compared to the $5.9 million reported in the same quarter of 2022.

Despite the steep decline in revenue, Agrify managed to improve its gross profit, posting $5.3 million for the fiscal year 2023, compared to a gross loss of $31.8 million in the previous year. The company’s fourth-quarter gross profit also improved, reaching $2.7 million, a significant turnaround from the $33.5 million gross loss reported in the fourth quarter of 2022.

“We continued to see improvements and make progress on our turn-around,” CEO and chairman Raymond Chang said in a statement. “Despite continuous industry headwind, we are starting to see a pick-up in capital expenditures, especially in newly licensed states.

Agrify attributed its positive net income in the fourth quarter to various cost-cutting measures, including reducing headcount, consolidating offices and warehouses, and selling slow-moving inventory. The company also implemented a new policy requiring significant upfront deposits on new sales orders, which helped reduce receivables and improve cash collection.

Chang added, “Although such a drastic change in our policy resulted in lower top-line growth, it significantly reduced our receivables and improved our cash collection. General and administration expenses were reduced from $73 million in 2022 to $19 million in 2023, with a further reduction to less than $3 million per quarter in the fourth quarter of 2023 to align with our current business scale.”

Operating expenses for fiscal year 2023 decreased by 85% to $24.3 million, down from $161.5 million in the previous year. As a result, Agrify’s net loss for fiscal year 2023 narrowed to $18.7 million, a marked improvement from the net loss of $188.2 million in fiscal year 2022.

Despite the challenges, Agrify remains optimistic about its future prospects, citing growing interest in its Vertical Farming Units (VFUs) and end-to-end extraction solutions.

Management believes that its focus on providing tech-enabled, data-driven solutions to the cannabis industry will position it for future growth.

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Canadian producer Avant Brands Inc. (TSX: AVNT) (OTCQX: AVTBF) announced record-breaking financial results for the first quarter of 2024 ending Feb. 29, thanks to a successful international expansion strategy and a tight ship across the board.

The company reported a 15% rise in net revenue, reaching $8.1 million, with international sales surging by 21% to $3.3 million. Avant achieved a record adjusted EBITDA of $3.8 million, a significant 120% increase.

The growth was primarily driven by Avant’s aggressive market penetration in key regions such as Australia, Germany and Israel.

The company also reported a record adjusted net income of $1.2 million, a 403% increase attributed to increased sales and efficient cost management.

“Despite facing short-term challenges in late 2023, Avant Brands is pleased to report record-breaking Q1 2024 results across all key metrics,” founder and CEO Norton Singhavon said in a statement.

“This achievement signifies a successful return to our growth trajectory. Our team’s unwavering commitment to production increases, sales growth and cost reduction has played a pivotal role in driving this turnaround. We are confident that by staying relentless in adhering to these core principles, we will achieve continued growth as we execute our global expansion strategy.”

Avant’s focus on production optimization led to a record cannabis output of 3,231 kilograms, resulting in lower production costs and higher gross margins. The company also reported a record 2,785 kilograms of cannabis sold during the quarter.

Cash flow from operations increased to $3.8 million, marking seven consecutive quarters of positive cash flow. Effective cost-control measures resulted in a 14% reduction in SG&A and corporate expenses, further improving profitability.

“Notably, the Company maintains a flawless track record, achieving 100% collection on all international sales and brand licensing revenue,” it said in a news release.

Subsequent to the first quarter, Avant said it expanded its cultivar offerings to meet rising global demand. The company also partnered with IM Cannabis Corp. (NASDAQ: IMCC) to launch its flagship brand, BLK MKT, in Germany. The idea is to position it as a big player in what is anticipated to be the largest recreational cannabis market globally, as Canadian cannabis market opportunities dry up.

While questions around Germany country’s recent quasi-legalization temper excitement, its medical program is going to benefit greatly from the new measures.

Looking forward, Avant said it plans to prioritize market expansion and build BLK MKT into a “global icon.”

The company also said it is in “active discussions” to launch the flagship brand in Australia.

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Canadian producer Avant Brands Inc. (TSX: AVNT) (OTCQX: AVTBF) and IM Cannabis Corp. (NASDAQ: IMCC), a medical cannabis company based in Israel and Germany, announced Tuesday that they signed an international trademark licensing agreement that grants IMC’s German subsidiary, Adjupharm GmbH, the exclusive right to launch Avant’s flagship BLK MKT brand in the German medical cannabis market.

Under the terms of the agreement, Avant will license its BLK MKT brand to Adjupharm. The products will exclusively feature cannabis cultivated by Avant in Canada and subsequently exported to Germany.

The collaboration comes on the heels of Germany’s recent loosening of medical cannabis restrictions on Monday and looks to capitalize on the growing market opportunity in the country, as the recreational question continues to bear out.

“This agreement signifies a significant milestone in our longstanding partnership with IMC,” Norton Singhavon, founder and CEO of Avant Brands, said in a statement. “Partnering with IMC is a strategic move; it not only bolsters our position as a global leader in the ultra-premium cannabis sector but also amplifies the reach of our flagship brand, BLK MKT, on the global stage.”

The companies think that combining Avant’s premium products with IMC’s sales, marketing, and distribution expertise will lead to success in the market.

Avant’s three largest cultivation facilities are certified with International Cannabis Certification Network – Good Agricultural Practices (ICANN-GAP) and Good Agricultural and Collection Practices (GACP), allowing the company to distribute internationally.

“By evolving our partnership with Avant, we continue to improve our supply chain and ability to provide ultra-premium, quality brand and product to the German medical cannabis market,” said Oren Shuster, CEO of IMC.

Adjupharm, which is the sixth largest distributor of medical cannabis flowers in Germany, touted its meaningful growth in 2023, with sales per SKU rising by 180%.

Adjupharm CEO Richard Balla said joining forces with Avant will “continue to accelerate the strong momentum we have established in the German medical cannabis market.”

“We have been working toward this moment for the last four years,” Balla, who is also the CEO of IMC Germany, said last month.

“We have the entire infrastructure in house. We are EU-GMP certified to repack bulk. We have an EU-GDP-certified logistics center to store cannabis and are delivering IMC cannabis to any pharmacy in Germany within 24 hours. Our team has extensive cannabis as well as pharmaceutical experience. We have all the necessary supply agreements in place to support accelerated growth.”

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SNDL Inc. (Nasdaq: SNDL) and Nova Cannabis Inc. (TSX: NOVC) announced on Monday that SNDL has agreed to assign its rights to own or operate four Dutch Love cannabis retail stores to Nova in a deal that will see Nova issue $8.179 million of its shares to SNDL.

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close by the end of April 2024. Upon completion, Nova’s total store count will reach 100, while SNDL’s direct and indirect cannabis store count across all retail banners will stand at 190.

“SNDL remains committed to strengthening Nova’s retail position and the sustainability of its capital structure, as underscored by the extension of the credit facility,” SNDL CEO Zach George said in a statement. “The assignment of four well-located cannabis retail stores to be owned or operated by Nova creates an opportunity for Nova to open its first Value Buds branded locations in British Columbia and highlights the benefit of SNDL’s M&A pipeline.”

In addition to the store assignment, SNDL has extended the maturity date of a $15 million revolving credit facility with Nova for an additional 24 months, to March 31, 2026. The credit facility has also been amended to remove SNDL’s right to demand repayment prior to the maturity date, subject to certain conditions.

“The updates announced further solidify SNDL’s continued support of Nova’s growth trajectory,” said Anne Fitzgerald, lead independent director of Nova. “We will continue to collaboratively pursue avenues that support Nova’s expansion and optionality with our partners at SNDL.”

McCarthy Tétrault LLP is acting as legal counsel to SNDL, while Bennett Jones LLP is acting as legal counsel to Nova.

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California-based Gold Flora (OTC: GRAMF) reported strong revenue growth and expanded gross margins from its merger with TPCO, but the company still faced a loss for the fourth quarter and fiscal year ending Dec. 31, 2023.

The attributed the loss to higher operating expenses and one-time costs related to the deal.

Total revenue for 2023 rose 38.5%, from $65.7 million in fiscal year 2022 to $91 million, according to  regulatory filings. Wholesale revenue grew 14.4% over the year, from $10.9 million in 2022 to $12.5 million.

Retail revenue rose 43.4% from $54.7 million to $78.4 million, primarily due to additional retail locations from the TPCO acquisition.

Net loss nearly doubled from $21.5 million in 2022 to $42.7 million in 2023. The company reported positive adjusted EBITDA in the fourth quarter and improved its gross margin to 66%.

“Where other operators have experienced persistent challenges in California, our purpose-built and difficult to replicate footprint allows us to succeed and grow scale consistently,” CEO Laurie Holcomb said in a statement.

The company closed underperforming delivery locations and sold an unprofitable retail license, which temporarily affected revenue but enhanced long-term profitability.

Gold Flora said it completed the business combination and integration of “legacy operations,” resulting in approximately $30 million in annualized cost savings. The company also invested in expanding its cultivation facilities and launched a new product brand designed to appeal to high-volume consumers.

Holcomb noted that the majority of Gold Flora’s revenue now comes directly from its owned brands, “augmented by our retail store network, which is based in highly desirable, limited license locations.”

“The work we undertook and investments we have made in 2023 were crucial to ensure we began 2024 ready to capitalize on the substantial untapped opportunity here in California and achieve our goal of generating positive cash flow this year,” she said.

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A push to legalize adult-use marijuana in Hawaii ended after House Democrats announced they would not proceed with a bill that had already passed the state Senate.

The legislation, SB 3335, would have legalized and regulated cannabis for adults over 21 years old. Despite receiving Senate approval in March, the bill met its demise in a House committee this week.

Maui Democrat and House Finance Committee Chair Kyle Yamashita said that Hawaii’s efforts to legalize adult-use cannabis has been a “deeply divisive issue.” He cited the state’s ongoing efforts to address challenges stemming from last summer’s wildfires as reasons for not advancing the legislation.

“Due to numerous concerns regarding the implementation of the bill, the House has decided against further deliberation in the House Finance Committee,” Yamashita said in a statement Tuesday. “This decision is strengthened by the prevailing ‘no’ votes from committee members expressed on the House floor.”

He added, “During an abnormally fiscally challenging year, the committee must prioritize addressing wildfire-related expenses after the August 8 tragedy in Lahaina and Upcountry Maui. Ensuring the recovery of our communities continues to come at an extraordinary cost to the state budget, and the full cost of implementing the legalization of adult-use cannabis is unknown.”

The version of the bill that passed out of the state’s Senate would have allowed adults to possess up to one ounce of cannabis flower and five grams of concentrates. It also established a variable tax structure depending on the intended use for the cannabis products (adult-use, medical, or industrial hemp).

In addition, the bill included provisions to prevent discrimination against cannabis users in various areas, such as child custody, parole, and state benefits. It also provided for the expungement of certain cannabis-related criminal records and resentencing of individuals convicted under older laws.

A recent poll showed that 58% of Hawaii residents support legalizing and regulating marijuana. Gov. Josh Green also expressed support for legalization as a public safety measure.

“While we are disappointed that the legalization bill has died for the year, there is still another crucial bill in play that would improve Hawaii’s inadequate decriminalization policy, which currently only applies to up to three grams of cannabis,” Karen O’Keefe, director of state policies for Marijuana Policy Project, told Law360.

“With the absence of legalization this year, it is imperative that the legislature passes this bill. It would spare hundreds of people a life-altering criminal conviction for the personal use of cannabis.”

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The U.S. cannabis industry is grappling with a staggering $3.8 billion in delinquent payments, which poses an existential threat to many businesses in the sector, according to a new report from Whitney Economics.

The report, released Tuesday, revealed that the total amount of overdue payments equates to approximately 1.6 months of revenue for the entire industry. Many cannabis companies find themselves operating for an entire year with only about 10 months of actual cash flow, making it challenging to stay afloat.

“If payments are delayed for one business, it can create a ripple effect throughout the supply chain, especially a supply chain that already operates on razor thin margins,” the firm said.

Ripple effect

According to the study, cannabis cultivation companies are the most severely impacted by late payments. Large corporations and multistate operators account for a significant portion, $1.4 billion, of the delinquent payments.

The research also points out that retail dispensaries wield considerable power and are more likely to be late payers, while cultivators and small businesses bear the brunt of the consequences when payments are delayed.

“This is disproportionately impacting smaller and minority-owned businesses and in many cases is resulting in forced market consolidation and individual wealth destruction,” the report said.

Whitney said that delinquencies greater than 45 days account for 56.3% of the total delinquencies.

According to respondent data, wholesale and distribution companies are stuck in the middle, getting squeezed by late payments on both sides. They often don’t pay growers until retailers pay them. Slim margins and expensive quick loans make this juggling act even harder.

“Our lingering Accounts Payable is a direct result of our open Accounts Receivable,” one distributor said. “We pay obscene interest rates on capital to fund our customers’ inventory and expansion.”

Some distributors work on consignment, meaning they only pay suppliers after the product sells. That motivates them to delay payments as long as possible to avoid tying up their cash in inventory.

Meanwhile, processors are trying to collect from retailers and distributors.

“Receivables are probably the biggest challenge we face,” a respondent said. “The combination of few retailers having lines of credit to buy inventory coupled with the high cost of labor for on-site cash pickups (especially when payment isn’t ready) makes for a ‘perfect storm’ in the receivable’s world.”

High costs

Cannabis businesses often also face very high interest rates for loans, usually between 25% and 33%. To save money and avoid borrowing more at these steep rates, they’re incentivized to postpone paying what they owe to other companies for as long as possible.

However, the practice contributes to the broader issue plaguing the industry: Companies choose their own financial self-preservation by holding onto cash longer, but that comes at the expense of the businesses they owe money to.

It creates a vicious cycle where someone is always waiting to get paid.

A person interviewed for the report said that he spends a majority of his time “tracking down delinquent payments, sometimes in excess of 90% of his week,” instead of operating his company.

Addressing the issue will necessitate cooperation from both cannabis companies and government officials overseeing the industry, the report noted. Failure to tackle the problem promptly could lead to a wave of failing businesses, further shaking the sector’s stability.

“With federal illegality still in place, and limited options available to address short termed gaps in financing, there is an incentive for self-preservation, even if that means putting others out of business,” the report said.

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Florida’s state Supreme Court on Monday greenlit an adult-use ballot measure bankrolled by Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF).

“Our role is narrow — we assess only whether the amendment conforms to the constitutionally mandated single-subject requirement, whether the ballot summary meets the statutory standard for clarity, and whether the amendment is facially invalid under the federal constitution,” Justice Jamie Grosshans wrote in the opinion published Monday.

“In light of those limited considerations, we approve the proposed amendment for placement on the ballot.”

Many executives, experts, and advocates believe the proposal will surpass the required 60% approval threshold, citing generally broad support across demographics.

“There’s a majority of Americans who support this, and that’s in every single age group, every education level, every income level, and every political group,” Sally Peebles, who leads Vicente LLP’s Florida office, noted.

Peebles also suggested that the legalization initiative, along with an abortion issue that was also approved by the court on Monday, could drive higher voter turnout, particularly among casual Democratic voters.

Still, a memo from Viridian Capital Advisors takes a more cautious approach.

“Assuming a go ahead by the Court, recreational use in Florida still has one (additional) major hurdle,” the cannabis-focused investment firm wrote. “The constitutional amendment requires a 60% supermajority to pass, and that is a tough standard.”

In 2014, Florida held a vote on allowing medical cannabis, but it received only 57% of the vote, just short of the 60% threshold. Two years later, in 2016, a similar measure was voted on, and this time it passed with 71% of the votes in favor.

“Ohio voters approved adult use last year by a 57% level,” the firm said, adding that polling on the issue is “all over the place.”

Still, Florida-focused cannabis company stocks performed better than the overall market last week, the firm noted.

Viridian calculated each company’s “torque” in relation to Florida by dividing the number of dispensaries each company has in the state by its enterprise value. Cansortium and AYR have the highest torque, followed by Planet 13 and Jushi Holdings. The strong performance of these Florida-centric stocks indicates that investors believed the court would approve the ballot measure.

If Florida legalizes adult-use cannabis, industry experts generally estimate that revenues could roughly double. With Florida’s estimated 2024 sales at approximately $2.8 billion, doubling would represent a 7.3% increase in total U.S. cannabis sales for 2024.

If Florida’s legalized sales reach levels similar to Colorado’s on a per-adult-resident basis, the firm said, sales could increase by nearly 120%. The potential for both Florida and Pennsylvania to legalize recreational use is one reason why Viridian believes consensus growth estimates for 2025 are likely to be exceeded.

“The big question that needs to be answered is, if the Supreme Court allows us to be on the ballot and it does pass, will that allow for new licenses?” Peebles said.

Hashing out rules

Uncertainty remains regarding the implementation and regulation of legal cannabis if the ballot measure passes. It is unclear whether the initiative would permit license types beyond the currently allowed “vertically integrated” operations.

The legislature also would need to establish new regulations in the next legislative session if the ballot initiative passes, and the governor would have to sign off on any resulting bills.

Twenty-two medical marijuana licenses are pending currently from an application process in April 2023, but they have not yet been awarded. Litigation from unsuccessful applicants could further delay the issuance of those licenses.

“Since the licenses haven’t been issued yet, we don’t know what that will look like yet,” Peebles said.

Still, there are those close to the situation who are hearing about licenses being sold or being offered at a lower price than what were seen years ago.

If adult-use cannabis is legalized, companies now selling delta-8 THC and similar products may also face challenges and could be forced to pivot to other markets, products, or states. A law tempering the sale of intoxicating hemp products recently made it through the legislature.

Existing medical outfits should gain the most for now, and moves have already been made such as securing new capital. ($40 million so far)

“We are thankful that the court has correctly ruled the ballot initiative and summary language meet the standards for single subject and clarity,” said Trulieve CEO Kim Rivers. “We look forward to supporting this campaign as it heads to the ballot this November.”

The Florida-based cannabis giant has already poured $40 million into the effort so far.

Opinion_SC2023-0682

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California-based single-state operator Glass House Brands (OTC:GLASF) published its preliminary financials for the fourth quarter and full year ending Dec. 31, 2023, with the firm deeper in the red despite meaningful growth in revenue.

In the fourth quarter of 2023, the company reported net sales of $40.4 million, a 35% increase from the $29.9 million in the fourth quarter of 2022, but a 16% slump from the $48.2 million reported in the third quarter of 2023. That beat the Yahoo Finance average analyst estimate by $1.7 million.

However, net loss totaled $37.4 million, a 20% rise from $17.3 million in 2022’s fourth quarter, according to filings. The gross profit for the period was $18 million, up from $9.2 million in the same period the previous year, with the gross margin improving to 45% from 31%.

For the entire year, Glass House’s revenue reached $160.8 million, an 89% increase from the previous year, with an adjusted EBITDA of $24.5 million, reversing the previous year’s loss of $22.3 million.

Still, net loss came out to $97.4 million, a 192.49% rise from $33.3 million in the previous year.

“Strong demand for everything we grow continues and we ended the year with finished goods inventory relative to sales of less than two weeks,” CEO Kyle Kazan said in a statement. “We need more inventory to meet this demand and are very excited that Greenhouse 5 is now online and fully planted after starting cultivation at the end of January.”

The company also noted operational improvements, such as a 5% reduction in the cost per equivalent dry pound of production and a 37% increase in production volume. The year ended with a cash balance of $32.5 million, more than double the previous year’s $14.1 million.

Glass House also said it would restate its financial statements for previous fiscal years to correct identified issues. The restatement is expected to impact the reported financials for 2021 and 2022, as well as the interim period ending March 31, 2023.

Looking forward, Glass House anticipates continued sales growth and expansion in 2024, particularly with the new Greenhouse 5 facility coming online, which is expected to beef production capacity.

The company expects total revenue to be between $28 million and $29 million in the first quarter, a bit more than the same time last year but less than what they made at the end of 2023, which is normal due to the seasonal nature of their business.

For the second quarter of 2024, Glass House predicts a big increase in earnings, expecting between $52 million and $54 million. The expectation stems from the idea that the firm’s new greenhouse will be working at full capacity, providing better growing conditions for their products.

For the entire year, Glass House is targeting to earn between $215 million and $220 million, which would be a significant jump from the previous year. The goal is based on the added production from the new greenhouse and their plans for improving sales and operations.

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Clinical-stage biopharmaceutical Atai Life Sciences (NASDAQ: ATAI) managed to lower spending during 2023, but still burned through much of the cash it had on hand.

The company’s cash reserves fell 43.6% from $273.1 million to $154.2 million, primarily due to operational costs, investments in Beckley Psytech, and funding for ongoing research programs. However, Atai said it feels confident in its financial stability, citing sufficient funds to support operations through 2026.

“Much of our recent focus has centered on psychedelic-based therapies for depression … that require two hours or less in a clinic,” CEO Florian Brand said in a statement.

“We believe that the combination of a short treatment time and durable efficacy has the potential to enable accessible and convenient interventional treatments at scale.”

Research and development expenses fell to $62.2 million in 2023, down 16.3% from $74.3 million in the previous year, mainly due to lower contract research organization costs and personnel expenditures. G&A expenses also decreased to $63.6 million, down 9.7% versus $70.4 million, primarily driven by reduced personnel and administrative costs.

In terms of clinical progress, Atai’s Phase 2a results for its psychedelic-based therapies for depression, particularly BPL-003, showed rapid and sustained antidepressant effects, with a 45% remission rate among patients three months post-dosing.

Looking ahead, Atai said it anticipates significant milestones in its clinical pipeline, including the Phase 2b readout of BPL-003 in late 2024.

“A controlled Phase 2b study of BPL-003 in 225 TRD patients is underway across multiple sites, including the United States, Australia, and Europe, with topline data expected in (the second half of 2024),” the company said in a news release. “Data from a Phase 2a open-label study in Alcohol Use Disorder patients is expected mid-2024.”

The company also noted progress in other programs such as VLS-01 for treatment-resistant depression and ELE-101 for major depressive disorder.

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Adam Jackson, KahliBuds, 420GrowLife