Each week, Benzinga’s Stock Whisper Index uses a combination of proprietary data and pattern recognition to showcase five stocks that are just under the surface and deserve attention.
Investors are constantly on the hunt for undervalued, under-followed and emerging stocks. With countless methods available to retail traders, the challenge often lies in sifting through the abundance of information to uncover new opportunities and understand why certain stocks should be of interest.
Here’s a look at the Benzinga Stock Whisper Index for the week of Sept. 20:
Barrick Gold (NYSE:GOLD): The gold-mining company saw increased interest from readers this week on the heels of a 50 basis point cut to interest rates by the Federal Reserve, which saw gold prices rise. The interest also comes after Barrick Gold CEO Mark Bristow spoke at the Gold Forum Americas earlier this week and said the company expects 30% growth in gold-equivalent ounces by the end of the decade from its existing assets.
Bristow’s comments emphasized the company’s current mines and those in development, as the industry experiences a surge in merger and acquisition activity. The CEO also highlighted how the company is expanding its copper portfolio, which could be something exciting to watch for investors.
Barrick shares were down 2% over the last five trading days, as seen on the Benzinga Pro chart below. The stock is up 14% year-to-date in 2024.
Galmed Pharmaceuticals (NASDAQ:GLMD): The biopharmaceutical company saw shares soar during the week after an announcement on drug development activities. Galmed plans to add drug developments that target cardiac fibrosis and colorectal and hepatic cancers. The company will release data from the studies during the fourth quarter.
“The conditions Galmed plans to focus upon in the coming years are major public health problems impacting millions of people worldwide and posing huge financial burden on health providers,” Galmed CEO Allen Baharaff said.
Large interest in Galmed saw shares halted several times during the trading week. Helping with volatility in the biopharmaceutical company is the low-float of the stock with around 625,000 shares available according to Benzinga Pro. Low-float stocks can often see high volatility on company announcements.
The stock was up 160% over the last five days and up nearly 100% year-to-date in 2024.
ServiceNow Inc (NYSE:NOW): The software company is seeing a large increase in interest from readers ahead of its third-quarter financial results. Analysts expect the company to report revenue of $2.74 billion, up from $2.29 billion in last year’s third quarter.
The company has beaten analyst revenue estimates in six straight quarters. Analysts expect the company to report earnings per share of $3.46, up from $2.92 in last year’s third quarter. ServiceNow has beaten earnings estimates from analysts in more than 20 straight quarters.
The company’s earnings report will show investors and analysts whether revenue growth and AI platform demand are continuing to strengthen. The company saw subscription revenue up 23% year-over-year in the second quarter and said it was helping meet demand from CEOs looking for new growth as ServiceNow reinvents “every workflow, in every company, in every industry with GenAI at the core.”
ServiceNow shares are up 4% over the last five days and up 34% year-to-date.
Deutsche Bank (NYSE:DB): It’s not every week that a bank stock makes its way on the Stock Whisper Index, but here we are. Deutsche Bank saw strong interest from readers, which could be due to bank stocks getting a lift after the interest rate cut was announced.
The move could see lenders have their balance sheets strengthened going forward and see increased demand for loan activity. Deutsche Bank reports third-quarter financial results in October and could comment on demand and what the future looks like for the company and the sector.
Shares were up 5% over the last five days and 24% year-to-date.
Stryker Corporation (NYSE:SYK): The medical equipment company saw strong interest from readers during the week, which comes on the heels of acquisition announcements, new products and analyst notes.
The company recently unveiled new foot and ankle solutions that can help restore limb length. Stryker closed its acquisition of privately held care.ai, a company helping with AI-assisted virtual care workflows and smart room technology. The company said the acquisition will help accelerate its digital vision and could expand its healthcare IT business.
On Friday, Stryker closed its acquisition of NICO Corporation, a company with a surgery method for tumor and intracerebral hemorrhage procedures. Stryker also announced an acquisition of pain management company Vertos Medical in August. Together, the acquisitions and new products could have investors excited about the company’s future and its potential diversification efforts.
Piper Sandler recently maintained an Overweight rating and a $380 price target on the stock. Wolfe Research initiated coverage with an Outperform rating and a $405 price target.
Stay tuned for next week’s report, and follow Benzinga Pro for all the latest headlines and top market-moving stories here.
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In the heart of Cape Cod, Massachusetts, Tribal Fire, a Native American-owned cannabis delivery service, is blazing a trail in the fast-growing cannabis industry. Founded by Chef John Marcellino, a member of the Mashpee Wampanoag tribe, and his wife, this family-run business stands out in a market that poses significant challenges for minority entrepreneurs.
As investors set their sights on the Massachusetts cannabis market, Tribal Fire offers key insights. Marcellino’s journey underscores the value of community partnerships, navigating strict regulations while meeting increasing demands for discreet, high-quality cannabis delivery.
Strategic Advice: Find The Right Partner
Securing funding was a major challenge for Marcellino. “We were dead in the water,” he said, noting the difficulty of raising capital while living on Massachusetts’ only tribal reservation. Although he completed the required paperwork and training with the Cannabis Control Commission (CCC), building the facility proved to be an even greater hurdle.
The turning point came when cannabis company Theory Wellness provided a $250,000 grant, allowing Tribal Fire to move forward. “It’s hard to go to banks in this industry,” Marcellino said. Thanks to this support, Tribal Fire officially opened on August 23, 2023.
- Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. You can’t afford to miss out if you’re serious about the business.
Delivering Cannabis In Massachusetts
For now, Marcellino’s team delivers only Theory Wellness products with the idea to expand in the future “We focus on Theory Wellness because it’s a fantastic product, but we do have the option to carry others,” he said.
What sets Tribal Fire apart is its commitment to discretion and customer care, targeting a niche market of users who prioritize privacy. “About 25% of our customers are people like clergy, police officers, or state workers who don’t want to be seen walking into a cannabis store,” Marcellino said.
He added that their service plays a critical role in promoting safety, especially during late-night hours. “We often get calls from people who are already partying and don’t want to risk driving out to get more alcohol or visit a cannabis store.”
By delivering discreetly, Tribal Fire provides a safer alternative for those who might otherwise drive under the influence. “In a few years, I believe we’ll have solid data showing that our service is helping prevent accidents and keeping people out of trouble.”
The Cost Of Compliance
Tribal Fire’s unique selling point extends beyond its delivery model. “We are the Mercedes-Benz of cannabis delivery in Massachusetts,” Marcellino joked. But behind that confidence lies a meticulous approach to security and compliance.
The company operates from a state-approved facility, outfitted with 14 cameras, motion detectors and a generator to ensure operations remain secure even during power outages. The’ve also invested in a steel-reinforced walk-in vault and delivery vehicles equipped with cameras and GPS tracking. All drivers wear body cameras to comply with legal requirements. “Security is our number one concern, and we’ve ensured we meet every standard,” Marcellino said.
Expanding In Cape Cod’s Elite Market
Tribal Fire is strategically positioned for growth in Cape Cod, a prime destination for affluent tourists. Despite the challenges, Marcellino envisions exciting expansion opportunities, including packaging services and cannabis consumption lounges. With Cape Cod’s reputation as a luxurious getaway, the potential for a high-end cannabis dining experience is immense.
“We have room for growth. Space for packaging, and I’m also interested in starting a consumption restaurant,” Marcellino said, blending his culinary expertise with cannabis-infused cuisine. “I make a great lobster roll. Imagine that with a cannabis cream sauce,” he joked.
Tribal Fire offers an entry point into a thriving tourism market. Positioned in one of Massachusetts’ most iconic coastal destinations, the business is primed to attract a clientele seeking discreet, high-quality cannabis experiences.
Marcellino is open about needing additional financial support to bring his vision to life. “We’re looking for investors. We want to grow. We’re ready for it.”
Takeaway For Investors
The Massachusetts cannabis market remains one of the most tightly regulated in the U.S., but with the right support, businesses like Tribal Fire are proving that it’s possible to succeed. Marcellino’s advice for other entrepreneurs looking to enter the industry? “Be honest. Tell your story. People want to help you, especially in this industry. There’s a lot of good people out there who want to see you succeed,” he said.
Tribal Fire’s journey is far from over, but its early success serves as a beacon of possibility for others. “We’re saving lives, preventing problems, and giving people options. That’s what we’re all about,” Marcellino said.
The process behind top-shelf cheeses, aged meats, reserved wines and premium cannabis all relies on one thing: precise control of time, temperature and moisture. Whether aging cheddar or curing cannabis, the science of preservation unlocks quality.
Nested in Vermont, Cannatrol is a family-owned venture that applies these same principles to cannabis drying, boosting growers’ profits by reducing labor, product loss and inefficiencies. By minimizing touch points and preserving valuable terpenes, the system helps growers maintain potency and quality, ensuring profits don’t evaporate in postharvest handling.
- Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. You can’t afford to miss out if you’re serious about the business.
The Problem, The Solution And The Market Need
Founded by Jane and David Sandelman, Cannatrol is transforming postharvest cannabis processing with its innovative drying and curing technology.
David, an inventor with a background in energy and temperature controls, saw a common problem facing cheesemakers: the difficulty of achieving precise aging conditions without access to traditional cheese caves.
Using his experience in temperature control, David developed a method to manage vapor pressure in these environments. When cannabis began its path toward legalization, it became clear that this same technology could be adapted for drying and curing cannabis flowers.
“The physics of drying cheese and cannabis are remarkably similar,” David explained. “Both require precise moisture and temperature control to preserve quality, whether you’re producing a fine cheese or top-shelf cannabis.”
Unlike conventional drying methods that rely on air conditioners and dehumidifiers, Cannatrol ensures there are no fluctuating temperatures and moisture levels are stable throughout the process, drying evenly and consistently.
“Minimal variations in airflow, temperature and humidity can damage the glands that cover the flower. These glands known as trichomes, host cannabinoids and terpenes, and give the flower its quality and potency. These represent the true value in premium cannabis,” David noted.
Tech For Top-Line Revenue
At the core of Cannatrol’s success is its patented approach to controlling temperature and dew point independently, which allows for pinpoint control of vapor pressure. “We’re not just controlling humidity,” David emphasized. “We’re controlling the entire environment, down to the molecular level.”
This precise control leads to a significantly better product. Research conducted in partnership with the Cannabis Research Coalition found that flowers dried using Cannatrol’s technology retained 17% more terpenes than cannabis dried with conventional methods.
Additionally, damage to the trichome heads—a key factor in cannabis potency—was reduced to just 1–2%, compared to 25–35% with air conditioners and dehumidifiers.
David explained: “The trichomes are where all the valuable cannabinoids and terpenes are stored, so any damage directly affects the product’s quality and potency. By preserving more of the trichomes, growers not only improve the overall quality of their cannabis but also protect their top-line revenue.”
Modular Features
The technology itself is adaptable, with options ranging from a consumer-grade unit the size of a dorm fridge to large-scale commercial systems capable of handling up to 720 pounds of wet flowers. “Our units are turnkey,” said Jane, who leads Cannatrol’s marketing efforts. “They’re designed for easy setup, whether it’s a home grower or a large commercial operation.”
What sets Cannatrol apart is the elimination of manual labor and guesswork. Traditional drying rooms require constant monitoring to prevent over-drying or mold growth, which can lead to product loss and reduced shelf life. Cannatrol’s systems remove these risks. “Once the flower is in our system, it doesn’t need to be moved or checked,” Jane noted. “You don’t risk over-drying and the flower is ready to be stored or consumed directly from the unit.”
Read Also: EXCLUSIVE: Presidential Cannabis — California’s Blunt Kings Share Their Recipe To Succeed In Retail
The Business Advantage: Cutting Costs And Boosting Quality
David highlighted the financial impact of investing in postharvest processes: “Facilities using conventional methods can lose as much as 5% of their revenue by overdrying their flower and volatilizing terpenes. That’s throwing money out the door. We’re not just helping growers save money—we’re helping them build a brand based on consistent, high-quality flowers.”
Moreover, Cannatrol’s systems allow growers to maintain shelf stability for a longer time, which is critical for brands looking to differentiate themselves in a crowded market. “We’ve had clients tell us that our system has led to longer-lasting products on dispensary shelves, which ultimately translates to better consumer satisfaction,” Jane added.
Entrepreneurial Spirit And Innovation
At the heart of Cannatrol’s success is the Sandelmans’ drive to solve problems with technical innovation. Their journey from Vermont restaurateurs to cannabis industry pioneers is a testament to the power of engineering and invention.
“We didn’t set out to revolutionize cannabis drying,” David reflected. “We saw a problem, and we came up with a solution. The cannabis industry was just the next frontier.”
For the Sandelmans, it’s not just about profit margins or flashy new technology: it’s about crafting solutions that work. “Our focus has always been on creating the best product possible,” Jane said. “If you’re solving a problem and making something better, the business success will follow.”
With thousands of units sold across 16 countries and growing demand from large-scale commercial operations, the Sandelmans’ vision is expanding rapidly—and they’re showing no signs of slowing down.
Read Next: Cannabis Robots: Meet The Company Boosting Efficiency And Margins Through Packaging Automation
The ongoing debate over cannabis rescheduling continues to stir discussions within the industry, with many wondering what it will mean for the future of cannabis regulation.
Recent actions by federal agencies have prompted hope that rescheduling may occur within the next year, but the path remains unclear. According to Gary Santo, the CEO of Rx Green Technologies, the process is far from simple.
Untangling the Road to Cannabis Rescheduling
Santo, who will be speaking at the upcoming Benzinga Cannabis Capital Conference, discussed the complexity of rescheduling during a recent interview. He explained that while the rescheduling process has seen movement, it is not just a matter of waiting for a decision. “There’s more than just hope behind this rescheduling process. We’ve already seen significant movement—40,000 public comments, requests for hearings—so it’s no longer just talk,” he said.
Despite this progress, Santo urged caution, stating that the rescheduling timeline could extend longer than many in the industry expect. “In 12 months, I don’t think it’s unrealistic to say within 12 months, I don’t think they can just keep rolling this along,” he said, acknowledging that federal agencies must address several complex factors before making any final decision.
The Difference Between Rescheduling and Descheduling
Santo also weighed in on the critical distinction between rescheduling and descheduling cannabis. Both options are being discussed, but each has implications for the industry. “You could deschedule it; you can reschedule it. And there are so many moving parts that need to be addressed throughout different parts of the government and also with working with the states,” he explained. These moving parts include various regulatory hurdles and coordination across multiple federal and state agencies, complicating the process.
He also cautioned that the simultaneous efforts to push for different outcomes—rescheduling, descheduling, or other reforms—could create confusion. “Sometimes I wonder if having all these different initiatives—the shotgun approach—is more harmful than helpful. Everyone’s chasing different outcomes, and that might slow down actual progress,” Santo observed, suggesting that a more focused approach might yield quicker results.
What the Industry Can Expect
As the cannabis industry awaits further developments, many operators are left wondering how rescheduling—or descheduling—will ultimately affect them. He stressed that while progress is being made, the actual impact of these regulatory changes could take years to materialize.
“Rescheduling has already set things in motion. There’s no turning back now; a conclusion has to be reached,” he said, adding that the industry should prepare for a potentially lengthy process.
Santo’s analysis highlights the importance of understanding the full scope of regulatory changes rather than expecting immediate results. As the industry evolves, operators and investors must prepare for the challenges and opportunities that rescheduling may bring.
Cannabis rescheduling seems to be right around the corner. Want to understand what this means for the future of the industry? Hear directly from top executives, investors, advocates, and policymakers at the 19th Benzinga Cannabis Capital Conference in Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.
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Image: Nicky from Pixabay
In an increasingly digital age, where each click and search reflects the pulse of worldwide concerns, Semrush (NYSE:SEMR)’s second Annual Global Issues Index emerges as a critical barometer for understanding societal priorities. In this year’s index, published Thursday, mental health and the ongoing War on Drugs dominate the landscape of global searches.
Semrush Index Tracks Global Consumer Concerns
As with last year, these concerns remain at the forefront, signaling a sustained demand for solutions. For cannabis and wellness businesses, these trends hint at untapped opportunities to align products and strategies with consumer needs.
- Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. If you’re serious about the business, you can’t afford to miss out.
The Semrush index leverages data from over 200 million global users to track search trends across 35 countries, focusing on 24 core societal issues based on search volume. Utilizing advanced machine learning algorithms, the index identifies year-over-year changes, providing businesses and policymakers with actionable insights to address these pressing global concerns effectively.
Data-Driven Digital Marketing Strategies
Fernando Angulo, senior market research manager at Semrush, provided deep insights into these trends. He highlighted how continuous shifts in global search patterns, particularly around mental health, reveal a prime opportunity for businesses, especially within the wellness, psychedelics and cannabis sectors. “Mental health consistently tops global search trends, which means there’s a real demand for solutions related to mental well-being across countries,” Angulo told Benzinga.
Furthermore, Angulo emphasized the importance of targeted digital marketing strategies, noting that companies can connect with consumers by focusing on specific search terms like “natural supplements for depression” and “natural remedies for anxiety.”
Identifying And Using High-Traffic Keywords For Business Growth
The utility of Semrush’s tools extends beyond mere observation, as Angulo illustrated the capabilities of keyword research and competitive analysis in gaining a market edge. “With Semrush’s keyword research and competitive analysis tools, cannabis businesses can identify high-traffic, low-competition keywords that help them stand out in the market,” he said.
This strategic approach allows businesses to hone in on relevant terms and effectively capture the attention of their desired audience.
War On Drugs Impacts Consumer Behavior
Building on this, Columbia University professor Jeremy Kagan also discussed with Benzinga how the prevalent War on Drugs influences consumer behavior and business opportunities. He pointed out that businesses could use these insights to refine their branding and marketing strategies, particularly in regions grappling with drug policy changes. “The rising attention on the War on Drugs reflects growing concerns about the illegal drug trade and its impact on society,” Kagan explained, suggesting that cannabis businesses emphasize their adherence to safety and quality to distinguish themselves.
Moreover, Kagan notes the societal impact of legal trade, with cannabis industry playing a vital role in contributing to tax revenue and social programs.
Adapting Marketing To Economic Pressures
Kagan also touched on economic concerns, like inflation and unemployment, which resonate in the search behaviors captured by Semrush. He suggested that marketers adapt by offering value-driven messages, tapping into the widespread need for relief and comfort as economic pressures mount.
The insights provided by Semrush’s 2024 Index paint a vivid picture of an increasingly complex world. Businesses that correctly interpret these digital trends can not only benefit but also potentially alleviate some of society’s most urgent problems.
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- Biden Administration Finalizes Rule To Expand Mental Health Care Access: How This Could Impact The Psychedelics Industry
- Cannabis Use Is Up Among Older Adults For Wellbeing, Health Purposes: Poll
Image courtesy of Semrush.
While many cannabis retailers in Canada face a tightening market, High Tide Inc. (NASDAQ:HITI) stands out with a robust increase in revenue and market share in its 2024 third-quarter financial results.
On Monday, the Calgary-based company reported record revenue of CA$131.7 million ($97 million), marking a 6% increase both year-over-year and sequentially.
CEO Raj Grover Discusses Growth Drivers
In an exclusive interview with Benzinga, High Tide’s founder and CEO Raj Grover highlighted the success of its discount club model. “Since the beginning of this calendar year alone, we have added 21 new stores, including 11 in the third quarter. At the same time, same-store sales have risen 118% since the launch of our discount club model through June 2024, including 5% sequentially,” he said.
“Among those still standing, we are vastly outperforming the industry averages, as our average store was on a CA$2.6 million annual revenue run-rate in June 2024, vs. our peers averaging CA$1 million,” Grover added.
- Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. If you’re serious about the business, you can’t afford to miss out.
Store Growth And Loyalty Fuel Market Share Expansion
The quarter also saw a 12% market share across the provinces where High Tide operates, up from 10% a year ago. Grover attributes this growth to an increase in store count and enhancements to the company’s loyalty programs.
Notably, the Cabana Club and its ELITE membership tier have been significant contributors. “ELITE members tend to shop more frequently and have larger basket sizes than base-tier members. Thanks to our innovative and disruptive membership-based retail model, we are clearly industry leaders in customer engagement and retention,” Grover said.
Read Also: Cannabis Retailer Tokyo Smoke To Close 29 Stores In Canada As It Seeks Creditor Protection
With over 1.55 million Cabana Club members, including 57,000 ELITE members, High Tide continues to set itself apart in the cannabis retail landscape. Moreover, the company remains committed to leveraging its strong market position for future expansion, aiming for 300 Canna Cabana locations nationwide and further advancements in its white-label product offerings.
Operational Efficiency Boosts High Tide’s Financial Performance
Financially, High Tide continues to show strength with its fifth consecutive quarter of positive net income, posting CA$0.8 million in net earnings. This is a marked improvement from a CA$3.6 million loss in the year-ago period. The company’s adherence to stringent cost controls has allowed it to convert its operational efficiency into robust free cash flow, amounting to CA$21.8 million over the trailing four quarters.
Q3 2024 Financial Highlights
- Revenue was CA$131.7 million ($97 million), up from CA$124.4 million in the same period last year, marking a 6% increase both year-over-year and sequentially.
- Net income was CA$0.8 million, showing an improvement from a net loss of CA$3.6 million in the same period last year and a rise from CA$0.2 million sequentially.
- Adjusted EBITDA was CA$9.6 million, marking the 18th consecutive quarter of positive Adjusted EBITDA, compared to CA$10.2 million during Q3 2023.
- Gross profit was CA$35.5 million, up from CA$34.6 million in the same period last year, reflecting a 3% increase year-over-year and maintaining stability sequentially.
As High Tide continues to drive innovation and growth, it remains the highest revenue-generating cannabis company reporting in Canadian dollars, positioning itself for continued market leadership amid challenging industry conditions.
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Photo: Courtesy of High Tide.
As the cannabis industry continues to evolve, investors are urged to shift their focus from government-led momentum to the fundamentals of business performance. Gary Santo, CEO of Rx Green Technologies and upcoming speaker at the Benzinga Cannabis Capital Conference emphasized the importance of moving past the early “green wave” excitement and honing in on the real value of cannabis operators.
Past the Hopeful Phase
Santo argues that the time has come for investors to stop relying on the hope that government regulations will bring a quick turnaround for the cannabis industry. “By now, investors should have moved past the hopeful phase of, ‘Let’s wait and see if the government fixes things.’ That momentum play can’t be the foundation anymore,” he said during a recent interview. According to him, investors must assess companies based on their underlying business models and operations rather than potential regulatory changes.
In the early days of cannabis investing, many companies attracted attention simply because they were part of the cannabis industry. This initial rush, however, led to a lot of money flowing into businesses that didn’t necessarily have strong, sustainable business models.
“Investors need to shift their attention toward the fundamentals of the businesses out there. Some exceptional operators are flying under the radar because the entire industry has been painted with this broad brush,” Santo said.
Also Read: Legal Medical Cannabis Could Save US Healthcare $29B Annually, New Study Finds
Looking at Fundamentals
He is optimistic that the regulatory environment for cannabis will improve, even if the pace of change remains slow. “The good news is the regulatory environment cannot get any worse for cannabis, right? So it’s only going to get better,” he noted.
Additionally, Santo dispelled concerns that cannabis could be made illegal again. “We’re not at risk of cannabis suddenly becoming illegal again where it’s already legal. That’s simply not going to happen, so there’s stability in that,” he explained. This reassurance is crucial for investors who have hesitated to fully commit to the industry due to the uncertainty surrounding federal laws.
Building for the Future
Santo will speak at the upcoming Benzinga Cannabis Capital Conference in Chicago, where industry leaders will discuss the future of cannabis investing. With more than 120 speakers confirmed, including major players in the cannabis space, Santo’s insights will add depth to the ongoing conversation about how to invest in cannabis wisely.
Investors attending the event will hear firsthand how focusing on business fundamentals is essential for long-term success.
As the cannabis industry matures, he believes that operators with strong, profitable business models will shine. “Investors need to focus on grabbing these companies now before their value becomes more widely recognized,” he said.
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Cannabis rescheduling seems to be right around the corner. Want to understand what this means for the future of the industry? Hear directly from top executives, investors, advocates, and policymakers at the 19th Benzinga Cannabis Capital Conference in Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.
Photo: Courtesy of Kindel Media via Pexels
As cannabis rescheduling inches forward, the conversation surrounding its impact on traditional banking and capital markets has intensified. Pablo Zuanic, an equity analyst covering cannabis and psychedelics, shared his thoughts during a recent interview, shedding light on what rescheduling could mean for the industry’s financial future. Zuanic, who will speak at the upcoming Benzinga Cannabis Capital Conference, believes that while rescheduling holds promise, its timeline and impact remain uncertain.
A Long-Awaited Move
Zuanic explained that the Biden administration is committed to cannabis rescheduling, a process that began in October 2022. However, completing the process is proving to be complex. “Rescheduling is something that President Biden wanted to get done expeditiously in his term but done in a deliberate, systematic way, following the rules of the Controlled Substances Act,” he said. While the timeline is uncertain, many are closely watching for developments that could come before the 2024 election.
However, as Zuanic pointed out, there’s a possibility the process might extend beyond the current administration. “All scenarios are on the table,” he said, suggesting that while a final ruling could arrive before the election, it’s equally possible it may be delayed. Zuanic believes that should Vice President Kamala Harris win the election, she would likely continue the rescheduling process into her first term.
The Banking and Capital Markets Question
One of the most pressing concerns regarding rescheduling is how it will affect cannabis businesses’ access to traditional banking services and capital markets. Currently, most cannabis companies are unable to access these services due to the plant’s classification under federal law.
Zuanic noted that the completion of rescheduling could be accompanied by additional guidance from the Department of Justice. “Yes, there will be some form of accompanying memorandum at some point that would make it easier for banks to operate in the industry and for U.S. exchanges to uplift [cannabis stocks],” he said.
The uncertainty lies in how comprehensive the rescheduling process will be. Zuanic acknowledged that the industry could see some progress if a memo from the DOJ clarifies how federal agencies will treat cannabis-related businesses. He also mentioned the potential for the long-discussed Safe Banking Act to pass as part of other legislation. “There’s still the possibility that Safe Banking can get done attached to a crypto bill,” he said.
A Delicate Balance
While rescheduling offers hope for progress, Zuanic stressed that it’s a careful balancing act. The administration must ensure the process is thorough enough to withstand legal challenges. “If they rush it in the lame-duck, they could make it even more susceptible to legal challenges or even a CRA review,” he explained. This caution is necessary to avoid setbacks that could further delay much-needed reforms.
With federal rescheduling on the horizon, the cannabis industry remains hopeful for more accessible banking and capital market opportunities. As Pablo Zuanic prepares to share his insights at the Benzinga Cannabis Capital Conference, many in the industry will be paying close attention to the future of cannabis financial services in the U.S.
Cannabis rescheduling seems to be right around the corner. Want to understand what this means for the future of the industry? Hear directly from top executives, investors, advocates, and policymakers at the 19th Benzinga Cannabis Capital Conference in Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.
Image: Shutterstock
Tuesday, Capricor Therapeutics Inc (NASDAQ:CAPR) entered into a binding term sheet with Nippon Shinyaku Co., Ltd., a Japanese pharmaceutical company, for the commercialization and distribution in Europe of Capricor’s lead asset, deramiocel, for Duchenne muscular dystrophy (DMD).
DMD is a genetic disorder characterized by progressive weakness and chronic inflammation of the skeletal, heart, and respiratory muscles.
In June, Capricor Therapeutics released three-year results from the ongoing HOPE-2 open-label extension study with CAP-1002 in boys and young men with DMD.
According to the results, patients treated with CAP-1002 continued to show benefits after three years of treatment compared to an external comparator dataset of similar DMD patients.
The company also announced the long-term benefits of deramiocel, showing increased cardiac function based on several different measures.
The potential transaction covered by the term sheet is similar to the existing Commercialization and Distribution Agreements with Nippon Shinyaku in the United States and Japan, with an opportunity for global product reach.
In addition, Nippon Shinyaku has agreed to purchase approximately $15 million of Capricor common stock at a 20% premium to the 60-day VWAP.
Nippon Shinyaku will purchase around 2.79 million common shares at $5.36 per share.
Capricor will be responsible for developing and manufacturing deramiocel for potential approval in the European Union, the U.K., and several other countries in the region.
Nippon Shinyaku will be responsible for the sales and distribution of deramiocel in those territories.
Capricor will also receive an upfront payment of $20 million, additional development and sales-based milestone payments of up to $715 million, and a double-digit share of product revenue.
The potential milestones from the combined agreements now total approximately $1.5 billion.
“With the addition of the upfront payment and equity investment, we will be able to extend our runway into 2026 and be well-positioned to advance toward potential approval of deramiocel in the United States and beyond. Furthermore, these funds will provide necessary capital for commercial launch preparations, manufacturing scale-up, and product development for Europe,” said Linda Marbán, Capricor’s CEO.
The company plans to start FDA rolling submission in the 2024 third quarter.
Price Action: CAPR stock is trading higher by 6.55% to $4.69 premarket at the last check on Tuesday.
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Tuesday, La Rosa Holdings Corp (NASDAQ: LRHC) announced that it has entered into a non-binding Letter of Intent to acquire a real estate brokerage firm with over 950 agents and offices in multiple states.
The firm also offers a proprietary cloud-based Software-as-a-Service (SaaS) platform tailored for real estate agents and generated more than $19.0 million in revenue for 2023.
CEO Joe La Rosa expects the brokerage firm’s advanced SaaS platform to play a pivotal role in driving continued innovation and value delivery to La Rosa’s agents.
The financial terms of the acquisition were not disclosed.
The acquisition will also help it expand its presence in states, enabling it to launch its ancillary services, such as title insurance, property management, and other complementary offerings, in the newer markets, the company said.
Joe La Rosa eyes over 4,000 agents by year-end and expects the acquisition to prove instrumental in accomplishing its goal.
Lar Rosa projected an annualized revenue run rate of $100 million by the end of 2024, backed by its strategic focus on acquisitions and the rapid expansion of its agent base.
The company expects to be profitable in 2025, supported by its growing revenue streams and efficient integration of new agents and technology.
Price Action: LRHC stock closed lower by 4.82% at $0.8500 on Monday.
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