Rising High: Compass Pathways reports Q3 earnings

In this week’s “Rising High,” The Fly’s recurring series focused on cannabis and psychedelic stock news, The Fly looks back on earnings, an acquisition close and a credit facility origination.

COMPASS PATHWAYS REPORTS Q3 EARNINGS: On Thursday, Compass Pathways (CMPS) reported a third quarter loss per share of (56c), which compared to analyst estimates of a loss per share of (57c).  Cash and cash equivalents were $207M as of September 30, compared with $220.2M as of December 31, 2023. The company also said Q4 net cash used in operating activities is expected to be in the range of $37M to $43M and FY24 net cash used in operating activities is expected to be in the range of $114M to $120M. The cash position at September 30 is expected to be sufficient to fund operating expenses and capital expenditure requirements at least into 2026.

“Ensuring the success of our lead COMP360 program is our absolute priority. We remain confident that COMP360 can be an effective therapy for patients with serious mental illness and our focus on delivering new treatment options for patients living with treatment-resistant depression remains paramount,” said Kabir Nath, CEO. “The shift in the phase 3 pivotal program timeline has forced us to look carefully at our operations and ensure that every resource is focused on this goal. As such, we have made the difficult decision to reduce our workforce and exit activities that are not directly tied to the completion of the trials, regulatory filing and commercialization if approved. These are necessary strategic decisions that we believe will position the COMP360 program for success.”

PSYENCE BIOMEDICAL CLOSES ACQUISITION OF PSYLABS STAKE: Psyence Biomedical (PBM) announced Thursday the closing of its previously announced acquisition of Psyence Group’s 11.13% stake in privately held PsyLabs. PsyLabs is focused on the cultivation and production of psychedelic active pharmaceutical ingredients and extracts for use in research, clinical trials and drug development. As previously announced, Psyence Biomed and PsyLabs have an existing strategic partnership whereby PsyLabs has granted Psyence Biomed a worldwide, exclusive, royalty-bearing IP licensing agreement to supply pharmaceutical-grade, EU GMP nature-derived psilocybin to be evaluated in future clinical trials as a potential treatment for Alcohol Use Disorder and other Substance Use Disorders and for commercialization of the licensed product.

“We are very pleased to have acquired a direct interest in PsyLabs through this acquisition and intend to capitalize on the benefits of being one of the world’s few vertically integrated developers of psychedelic-based regulatory-approved therapeutics,” said Neil Maresky, Psyence Biomed CEO.

Psyence Group and Psyence Biomed have also entered into a debt-for-equity swap agreement pursuant to which Psyence Biomed has agreed to issue 845,394 Psyence Biomed common shares at a deemed price of 50c per common share to Psyence Group, in exchange for the discharging of the balance of the debt repayment obligation due under a promissory note, dated January 25, 2024, issued by Psyence Biomed to Psyence Group in connection with Psyence Biomed’s listing of its common shares on the NASDAQ in January. Psyence Group’s board of directors has, subject to the appropriate recusal of interested directors who are also directors of Psyence Biomed, approved the Debt Swap Agreement.

SAFE HARBOR ORIGINATES $1.07M CREDIT FACILITY: SHF Holdings d/b/a/ Safe Harbor Financial (SHFS) announced Tuesday that it has originated a $1.07M secured credit facility for a Missouri-based cannabis operator, the first tranche of a $5M commitment to refinance existing senior debt. The facility is secured by a portfolio that includes four retail dispensaries and a manufacturing facility in Missouri. The refinancing reduces the operator’s borrowing costs and will enable them to optimize their operations within the state’s growing cannabis market.

“Our competitively-priced financing solutions provide cannabis operators — who are often underserved by traditional banking institutions — with the means to achieve their business goals,” said John Foley, SVP of Commercial Lending. “Our ability to offer competitive rates and tailored lending solutions is a key differentiator for Safe Harbor, and this transaction highlights our commitment to fostering growth in the cannabis sector by providing access to bank-quality financial services. We are building on our credibility and expertise in cannabis underwriting, with the goal of helping more operators achieve financial stability and growth. Offering cannabis operators access to capital is a major component of Safe Harbor’s long term strategy to support the evolving needs of the cannabis industry, to grow our credit portfolio and deliver value to our investors.”

SKYE APPOINTS CHAIRMAN OF THE BOARD: Skye Bioscience (SKYE) announced Tuesday that the Board has appointed independent director Paul Grayson as Skye’s new Chairman of the Board.  Grayson currently serves as a member of Skye’s Audit, Compensation and Nominating and Corporate Governance Committees. Punit Dhillon, Skye’s CEO will continue to serve as a member of the Board. Grayson currently serves as CEO of Radionetics Oncology.

Dhillon commented, “We have a high bar with respect to how we operate Skye and saw this as a suitable juncture to increase independence of the Board and management in order to improve governance structures and enhance oversight capabilities. We could not be more delighted to have Mr. Grayson accept Skye’s Board nomination to the role of Chairman. His appointment further advances efforts to fully utilize the best talent at this crucial phase of Skye’s development journey.”

4FRONT CFO TRANSITIONS OUT OF ROLE: 4Front Ventures (FFNTF) announced Tuesday that Peter Kampian’s contract as CFO has ended as part of the company’s ongoing efforts, led by Canaccord Genuity, to streamline its capital structure and consolidate its financial operations to Illinois. The conclusion of the contract was not due to any disagreement with the company regarding its operations, policies, or practices. Kampian will be available to the company as a consultant if and when required. Michael Kronberg, who has been serving as Controller and is based out of the company’s flagship Matteson, Illinois facility, will assume the role of Interim CFO.

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Ascend Wellness (AAWH), Atai Life Sciences (ATAI), Aurora Cannabis (ACB), Avant Brands (AVTBF), Ayr Wellness (AYRWF), The Cannabist Company (CBSTF), Cannara Biotech (LOVFF), Canopy Growth (CGC), Cansortium (CNTMF), Chicago Atlantic (REFI), Clearmind (CMND), Clever Leaves (CLVR), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), Curaleaf (CURLF), CV Sciences (CVSI), Cybin (CYBN), Entourage Health (ETRGF), Enveric Biosciences (ENVB), Flora Growth (FLGC), Trees Corporation (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Hemp (HEMP), Heritage Cannabis (HERTF), High Tide (HITI), IGC Pharma (IGC), IM Cannabis (IMCC), Innovative Industrial Properties (IIPR), InterCure (INCR), Ispire Technology (ISPR), Lowell Farms (LOWLF), Lucy Scientific Discovery (LSDI), MediPharm (MEDIF), MindMed (MNMD), NewLake Capital (NLCP), Numinus (NUMIF), Optimi Health (OPTHF), Organigram (OGI), PharmAla (MDXXF), Planet 13 (PLNHF), Red White & Bloom (RWBYF), Relmada Therapeutics (RLMD), Reunion Neuroscience (REUN), RIV Capital (CNPOF), SNDL (SNDL), Stem Holdings (STMH), TerrAscend (TRSSF), Tilray (TLRY), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Verano (VRNOF), Village Farms (VFF) and Vireo Health (VREOF).