IM Cannabis
IM Cannabis has seen its share price skyrocket by over 65% this week, despite reporting a 10% decline in revenues and over $10m in net losses in 2023.
During an investor call to discuss its Q4 results on April 01, IMC’s CEO Oren Shuster shed new light on the upcoming potential merger with Israel-based Kadimastem.
He also touted the company’s strong footholds in Germany and Israel, both of which implemented major reforms to their medical cannabis frameworks on April 01 set to significantly streamline the prescription process, both of which are expected to lead to a boon in growth.
Germany’s recently passed cannabis act is set to remove the substance from the list of narcotics, massively reducing the burden on prescribing doctors. In Israel, the government has implemented a similar overhaul of its system, moving cannabis from a ‘last resort treatment’ to a ‘first-line treatment’.
Mr Shuster said he expects the latter will ‘drive substantial growth in the Israeli cannabis market’, while IMC’s German team ‘is extremely excited to have the relative freedom to operate within the new regulatory structure’
Although the company is poised to benefit from these landmark changes in both of its operating markets, its financial performance in Q4 may have muted investors’ enthusiasm.
In the final quarter of 2023, IMC reported a 26% drop in revenues year-on-year to CAD$10.7m, which it attributed to disruption in its supply chain, a decrease in sales and currency fluctuations due to the ongoing war. For the full year, revenues also fell by 10% to C$48.8m
Q4 gross profits fell 68% from C$2.6m to C$0.8m, again attributed to the ongoing conflict. However, for the full year, IMC’s gross profits grew slightly from C$9.2m to C$9.8m.
For the full year, IMC’s EDITDA fell from C$11.5m to C$8m, but its net losses also declined year-on-year from C$24.9m to C$10.2m.
As Business of Cannabis reported last month, IMC signed a ‘non-binding term sheet’ with the biotechnology company, which would see the companies combine. IMC shareholders would subsequently hold 12% of the new entity.
It was previously understood that the merger could see IMC join its Israeli peers in moving away from the cannabis industry and diversifying its operations elsewhere.
While Mr Shuster informed investors that the deal would ‘give the legacy cannabis business the freedom to focus on just that’, he suggested shareholders would retain stakes in its Israeli and German cannabis operations.
“The cannabis business in Israel and Germany, two of the highest value medical markets, are set to grow significantly this year. We expect that this process will accelerate the path to sustainable profitability of the cannabis business, which our shareholders will retain in addition to participating with 5% in Kadimastem business.”
“The idea is that all the assets that belong today to IMC will still belong to the existing shareholders of IMC, and it will be separated from the public vehicle. The structure is not final yet, so it’s difficult for me to say exactly what and how it will look like.”
Akanda Corp
Akanda Corp has seen its stock decline by over 20% this week, as it announced a number of new strategies for its remaining operations.
The NASDAQ listed company announced a new strategic plan to enter the ‘technology segments of the cannabis industry’, including blockchain, Bitcoin, and AI applications.
Cryptocurrency, the company suggests, could provide a solution to the cannabis industry’s limited access to banking, presenting an opportunity ‘for businesses to bank themselves’.
Furthermore, blockchain technology, the backbone of cryptocurrencies, could provide new solutions for quality control and supply chain tracking in the industry, helping protect Certificates of Analysis (COAs) from fraud and tampering.
Meanwhile, Akanda says it is ‘researching and possibly pursuing’ investments and partnerships in the artificial intelligence space, citing growing usage of the technology in the sector, including identifying individual strains to suit particular requirements or indications.
Coming off the back of the sale of its Portuguese cultivation and processing operations to Somai Pharmaceuticals, alongside a new ‘underwritten public offering financing’, Akanda says it is in a stronger financial position to strengthen its remaining subsidiary Canmart.
In a separate release, Akanda announced that it plans to ‘develop social shopping capability’ for Canmart, a UK based medical cannabis importer.
It hopes to achieve this by ‘intergrating with Meta’, the owner of Facebook and Instagram, allowing users to browse ‘shoppable videos’ and purchase without leaving the apps.
Crucially, however, Akanda notes that medical cannabis products cannot be sold via Meta (nor advertised), but ‘peripherals and non-plant touching accessories may’.
Interim CEO and Executive Director, Katie Field commented, “Canmart is making plans to capitalise on social shopping trends. This is in line with the company’s anticipated expansion through our UK business but also by entering ancillary technological segments that are supportive of our business model.”
MGC Pharmaceuticals / Argent BioPharma Limited
After announcing its intention to rebrand in February this year, MGC Pharmaceuticals has officially become Argent BioPharma Limited after the change was approved by shareholders on 18th March 2024.
As such, the company’s stock ticker on the Australian Securities Exchange (ASX) changed to RGT on Wednesday, April 03.
Its secondary listing on the London Stock Exchange (LSE) is also set to change on April 10, and its shares have been temporarily suspended while the change takes place.
It came just days after Argent announced the refinancing of 500,000 convertible loan notes, totalling $2,100,000, as part of a 2020 deal with Mercer Street Global Opportunity Fund.
As part of the refinancing, the two parties have agreed on a new minimum conversion price for the notes, dropping significantly from $10 to just $0.35.
Argent informed investors that the rebrand signalled it was ‘embracing comprehensive restructuring for a new biopharmaceutical era’.
As part of this restructuring, Argent says it will ‘leverage cutting-edge advancements in polypharmacology and nanotechnology’, but would retain its foothold in the cannabis space through its existing products CannEpil, CimetrA and CogniCann.
Moving forward, Argent says it is ‘committed to introducing new treatment options every four years’, leveraging its existing European research and development centre which will ‘play a crucial role’ in its drug development process.
Roby Zomer, Managing Director and CEO of Argent BioPharma, commented: “As Argent BioPharma emerges from MGC Pharma, it is well positioned in the new era in biopharmaceuticals, committed to providing accessible and impactful healthcare solutions on a global scale.
“This rebranding signifies our commitment to innovation and advancement in the biopharmaceutical landscape. We are excited to leverage our expertise in PolyPharmacology and Nanotechnology to pioneer ground-breaking treatments, addressing unmet medical needs and driving positive change in global healthcare.”
