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IM Cannabis Merger Scrapped, Cel AI Gets a New CEO, & More from Intercure

Cel AI 


Cel AI, formely Cellular Goods, has published its interim results as it continues to shift its focus away from its struggling cannabis operations and towards new technologies.

It also announced that Mike Edwards, who was brought in as Executive Director in January following the departure of the former interim CEO, Darcy Taylor, has now been promoted to CEO and Chairman of the board.

According to its latest financial figures, published on May 28, the company is still struggling to carve out a consumer base for its cannabinoid-based skincare range, which launched in 2021.

Despite numerous partnerships with companies such as Sephora and fellow cannabinoid retailer Chill Brands to expand its reach, Cel AI says it ‘faced challenges in achieving growth due to the complex development of the cannabinoid industry’.

As such, its sales fell by 42% in the six months to February 2024, seeing revenues drop from an already low base of £31k to £17.9k year-on-year.

While this represented a gross profit of £10.2k, Cel AI’s total loss for the period eclipsed its revenues at £601.2k.

This was significantly down on the previous period’s loss of £1.8m however, as the company implemented what it described as ‘drastic’ cost-cutting measures.

As of February 2024, Cel AI’s cash position stood at £1m, down from £1.77m in August 2023.

Faced with stagnant sales of its CBG beauty products, Cel AI says it is now refocusing on its investment in its new AI-driven project, Cel, which will assist customers in making ‘the best skincare decisions’.

The company hopes this new direction will allow it to ‘leverage our expertise in the wellness industry more effectively and lucratively’, and open up new revenue streams.

Looking ahead, the company says it has made a ‘solid start’ to the second half of the year, launching a new social media campaign in continued efforts to ‘raise brand awareness, showcase our products’ benefits, and foster community engagement’.

Despite significantly reducing its cash burn, some investors have questioned whether its AI product will be able to generate revenue before the company runs out of runway.

Given its continued struggle to raise its share price or its revenues meaningfully, it is unlikely the company will opt for a capital raise on the public markets in the near future.



Israel’s largest cannabis company, Intercure, has received an ‘overweight’ rating by cannabis equity analyst Zuanic & Associates.

After starting its coverage of the largest seller of medical cannabis outside of North America last week, Zuanic said investors could see a 5x return due to its potential exposure in the US, Israel and Germany.

According to the analyst’s note, Intercure has ‘strategic value’ due to its experience in the Israeli market, which it suggested was five years ahead of Germany.

With over 98% of its sales coming from the more mature Israeli market, Zuanic said that the recent changes to its medical cannabis regime could provide a significant boost for Intercure in the coming months.

Despite its income and production being impacted by the war in Gaza in Q4, 2023, Intercure has been consistently profitable over the last two years, and its sales are expected to bounce back in double digits over the next period.

Furthermore, with an expected 2-3x increase in demand in its domestic market, Zuanic suggested that Intercure’s ability to produce ‘quality flowers at scale under strict GMP standards’ made it an attractive prospect.

Outside of Israel, Intercure is poised to expand into the flourishing German medical cannabis market this year, having signed with a local partner that will facilitate direct sales to pharmacies, enabling the company to keep capital expenditure to a minimum.

Following the recent passage of Germany’s cannabis act, which saw cannabis removed from the list of narcotics, Zuanic believes the market could have an annual run rate of $2bn by the end of 2025, potentially rising to $8bn if 3-4% population penetration is achieved.

The report added that Intercure also had the opportunity to expand its international operations in the US ‘down the road’ if the government moves to federally legalise cannabis.

IM Cannabis


Elsewhere in Israel, IM Cannabis announced that its planned merger with Kadimastem has now been scrapped.

Last month, Business of Cannabis reported that IMC had signed a preliminary term sheet with Israeli company Kadimastem, seeing its share price jump in double digits.

According to an update this week, this agreement has now been terminated, though the reasons were not disclosed.

Now the company will need to pay back the $300,000 loan it received from Kadimastem, which it says will occur in three installments by July 31, 2024, along with any interest accrued during that time.

Following the collapse of the deal, IMC says it will now renew its focus on the German market, where it already operates.

“After the April 1st legalisation in Germany, we are seeing that the accelerated growth in April is continuing through May,” IMC’s CEO Oren Shuster said.

“We believe this is just the beginning, as we anticipate that Germany could become one of the most significant legal markets in the world. We are continuing to explore all options, focusing on providing the best value for our shareholders.”

Yesterday, the company announced that it had closed a non-brokered private placement of secured convertible debentures, raising $2m to ‘support its expansion in Germany’.

These debentures, which mature on May 26, 2025, can be converted into common shares at a price of $0.85 per share and will only incur interest in the event of default.

Meanwhile, the company says it is continuing to focus on ‘active cost management’, having reduced its general and administrative expenses by 49% in 2023.

Building on this success, the company is now focused on further cutting its financial costs by renegotiating existing debt.

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