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Cannabis Industry News

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Cannabis sector News

Last week was a tough week for cannabis stocks as ETFs plummeted with disappointing earnings reports. The ETFMG Alternative Harvest ETF (NYSE: MJ), the AdvisorShares Pure Cannabis ETF (NYSE: YOLO),  The Cannabis ETF (NYSE: THCX), the Amplify Seymour Cannabis ETF (NYSE: CNBS) all lost around 6% on average. Even the SPDR S&P 500 ETF Trust (NYSE: SPY) was down 0.4%. The major disappointment was delivered by Aurora Cannabis Inc. (NYSE: ACB)’s beyond disappointing fourth-quarter earnings report. But, the overall industry is not doing bad at all as 2020 will be remembered as a pivotal year.

Expanding market

Despite wreaking havoc on many industries across the world, the legal pot business saw booming revenues as more and more countries legalized marijuana. BDS Analytics Inc., a Boulder-based cannabis market intelligence and research company projected retail cannabis industry is projected to hit $19.7 billion in sales in 2020, marking a 38% jump. Moreover,  BDS predicts growth will persevere as sales are expected to reach $47.2 billion by 2025. These results are confirmed by another study by LeafLink, Flowhub, and Vangst that each approached the cannabis industry from a different vantage point – wholesale, dispensaries) and employment. Together, they found that sales stabilized at 40% growth rate, implying growth will remain even after the pandemic.

What happened with Aurora?

The Edmonton, Canada-based company reported a loss of $2.5 billion for the fiscal year. Total net revenue of $54.1 million dropped 5% from the previous quarter. More specifically, revenue for consumer cannabis in the recreational market dropped 9% to $26.7 million. Revenue for medical cannabis only increased 4% as net revenue was $24.2 million, helped by market growth in Canada and Europe. Continuing operations resulted in a loss of $1.40 billion. The shares plummeted following the results, already being down 91% over the past 12 months, reducing the company’s market value to a fraction of its former size.

Departure of Peltz

The past year has been a tough one for Aurora and it doesn’t seem to be getting any easier as on Monday, the billionaire investor Nelson Peltz resigned as advisor. Aurora brought in Peltz after Canadian competitors Canopy Growth (NYSE: CGC) and Cronos Group (NASDAQ: CRON) locked up multibillion-dollar investments from global liquor giant Constellation Brands (NYSE: STZ) and Virginia-based Altria (NYSE: MO), hoping that he will strike a similar deal with his connections to major U.S. consumer goods firms like PepsiCo (NASDAQ: PEP) and Mondelez International (NASDAQ: MDLZ). Being a director of fast-food holding firm Wendy’s Co. (NASDAQ: WEN) and Procter & Gamble (NYSE: PG), he seemed like the perfect person to help the company expand internationally. It was a good idea, but Aurora ended up losing more than $2.6 billion since Peltz joined last year as it failed to catch up to its competitors.

A top line jump that didn’t find its way to bottom line

During the fourth fiscal quarter, The Supreme Cannabis Co. Inc. (OTC: SPRWF) saw its recreational net revenue skyrocket 373% YoY but ended up reporting a  loss of $139 million in the fiscal year ending June 30 due to a ripple effect of closed dispensaries and offices. 

News

The first and only real estate company on the New York Stock Exchange belonging to the regulated U.S. cannabis industry, Innovative Industrial Properties Inc. (NYSE: IIPR), keeps growing. Last week, it revealed it bought a property in Lakeland, Florida, for roughly $19.6 million.

Curaleaf Holdings Inc. (OTC: CURLF) announced it is collaborating with actor and cannabis entrepreneur Jim Belushi to launch a new vape pen.

CBD is also expanding its footprint in pharmaceuticals as CURE Pharmaceutical Holdings (OTC: CURR) agreed to acquire CBD products company Sera Labs Inc. for $20 million.

Expansion – product, market and range of treatment

Miami-based medical cannabis company PharmaCielo (OTC: PCLOF) revealed it is significantly expanding its product portfolio. With a two-year expansion plan, PharmaCielo is constructing a vertically integrated medical marijuana treatment center to extend the range of quality products that are being offered to patients in Florida.

MediPharm Labs Corp. (OTC: MEDIF) revealed a two-year partnership with a Rio de Janeiro, Brazil-based distributor, positioning the company to take a share of the largest medical cannabis market in Latin America.

IM Cannabis Corp. (OTC: IMCNF) launched its medical cannabis brand in the German market via four distributors through which it will be available to every pharmacy in the country that is licensed to distribute narcotics.

Pharmaceuticals plc ( NASDAQ: GWPH) confirmed that TGA authorized the Epidyolex, the first FDA approved CBD medicine for severe epilepsy in children, to treat Lennox-Gastaut syndrome (LGS) or Dravet syndrome.

New entrant

On September 23, CEO Jason Vegotsky and COO Arun Kurichety launched Petalfast. Both founders are former executives of KushCo Holdings Inc. (OTC: KSHB). With the acquisition of A.P. Keaton’s award-winning cannabis marketing business, the Petalfast team combines cannabis experience with spirits industry expertise to deliver unique solutions and growth for cannabis brands, something the industry still hasn’t seen.

Bright outlook

The industry was not immune to pandemic-induced bottlenecks that clogged industry pipelines, sales funnels and supply chains but studies indicate booming revenues that are here to stay. As for companies, brand building is a different deal. It has been successfully done for years in the consumer-packaged goods and foods & beverages but very few have done it in the expanding cannabis space. The opportunities are there but in order to capitalize on them, companies need to patch up their weaknesses first.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

Retailers Are Hoping for a Better 2021

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This week, three major retailers provided a glimpse of hope that the world is returning to normalcy- or at the very least, consumer behavior is. Although The Gap, Inc. (NYSE: GPS) came short on sales estimates, Kohl’s Corporation (NYSE: KSS) and Nordstrom Inc (NYSE: JWN) topped estimates, although they have other issues to deal with.

Kohl’s posted better-than-expected earnings, but activist investors aren’t pleased

Kohl topped Wall Street’s estimates and pointed to stronger growth in 2021. Net income amounted to $343 million but sales dropped to $5.88 billion from $6.54 billion a year earlier despite online sales jumping 22% from a year earlier as they accounted for 42% of total sales.

In 2020, the company added more than 2 million new customers in 2020 thanks to its Amazon (NASDAQ: AMZN) returns service, a third of which are millennials. But the group of activists looking to seize control published a letter to shareholders saying the board seems to be content performing just slightly better than the worst companies in retail. Facing pressure from activist investors whose attempt to seize control was rejected at the end of last month, the company will reinstate its dividend and buy back shares.  The retailer has a market cap of $8.99 billion, which is bigger than Nordstrom’s and Macy’s.

Nordstrom sales drop despite digital surge

Fourth-quarter sales and earnings topped analysts’ estimates owed to stronger online demand and growth at its Nordstrom Rack business. The department store chain warned that it is still working through impacts from delayed holiday shipments by selling excess inventories during the first quarter, hoping to be back to normal inventory levels by the second quarter. Its quarterly net revenues of $3.64 billion dropped $893 million from fiscal 2019’s quarter, despite digital sales increasing 24% compared to the same period and contributing 54% to total sales. The digital surge wasn’t enough to move the needle and net income shrank to $33 million compared to $193 million a year earlier. Although consumer behavior remains uncertain, the retailer is calling for fiscal 2021 sales to grow more than 25%. The retailer has a market cap of $5.93 billion, which is less than Kohl’s but greater than Macy’s.

Gap misses sales but forecasts return to sales growth in 2021

Ongoing store closures overseas in Europe, parts of Asia and Canada weighed on Gap’s fourth-quarter results, with sales coming up short of estimates. The apparel retailer swung to a profit, thanks to its efforts to sell more merchandise at full price and closing underperforming stores.

For the quarter ended January 30th, Gap reported net income of $234 million, or 61 cents per share, compared with a loss of $184 million, or 49 cents per share, a year earlier. Net sales fell about 5% to $4.42 billion from $4.67 billion a year earlier. The company showed continued strength at its Old Navy and Athleta brands which cover basics and workout gear. But its namesake Gap brand and Banana Republic brands saw another quarter of sales declines. Overall online sales were up 49%, representing 46% of net sales during the quarter.

For fiscal 2021, Gap is calling for net sales to be up a mid- to high-teens percentage, as the company is hoping return to a more normalized, pre-pandemic level of net sales in the second half of the year which depends on customers soon returning to its stores and spending more money on apparel as they resume social activities.

Many retailers are facing shipping headwinds

Backlogged ports in the U.S. and heightened shipping costs continue to hit all kinds of businesses, from those selling apparel and shoes, to appliances and at-home fitness equipment. Moreover, as shoppers do return to stores, the persisting problem could make it even more difficult for retailers to plan their inventories and keep their shelves stocked with goods. COVID-19 will be put to an end by vaccines but the uncertainty that the pandemic created will be more difficult to mend as its long-term impact on consumer behavior is still unknown.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Zoom Is Doing Great But Can It Continue Being a Necessity?

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On Monday, Zoom Video Communications (NASDAQ: ZM) shares rose 11% in extended trading after the company reported fiscal fourth-quarter earnings, beating top and bottom-line expectations and issuing strong guidance.

As COVID-19 made physical contact impossible one year ago, video conferencing became a necessary work tool.  Microsoft Corporation (NASDAQ: MSFT) benefited from the trend thanks to its Microsoft Teams and Google Meet enabled Alphabet Inc. (NASDAQ: GOOG) to take a piece of the pie, but Zoom’s share price has almost quadrupled last year, resulting in a market value of more than $100 billion.

Q4

The video-calling software maker reported its revenue grew 369% YoY in the quarter that ended on January 31st, after growing 367% in the third quarter and losing fewer customers than executives had expected. Revenues soared to $883 million, up from $188 million the year before. Based on formal accounting rules, Zoom’s net income rose from $15 million to $260 million, or 87 cents a share. Gross margin expanded from previous quarter’s 66.7% to 69.7%.

The company also posted gains among small customers as it had 467,100 customers with more than 10 employees at the end of the fiscal fourth quarter, nearly five times as many as it had before the pandemic hitor up 470% on an annualized basis, compared with 354% growth in the previous quarter. It ended the quarter with $4.24 billion in cash, cash equivalents and marketable securities, significantly up from previous quarter’s $1.87 billion. The video conferencing start-up turned in a surprisingly strong performance in the latest quarter during which Covid-19 vaccines were intensively administered and predicted faster than expected growth in the coming year. The news sent Zoom’s shares up nearly 10 per cent in after-market trading on Monday, valuing it at $131billion. They are still more than 20 per cent below their highest level reached back in October, before investors started thinking about the impact of pandemic restrictions.

FY2021

For the year characterized by lockdowns across the globe, sales quadrupled to $2.65 billion with Zoom’s app being downloaded nearly half a billion times or twice as many times as Google’s video chat app, as reported by Apptopia.

FY2022

Despite predictions that its service will play a less central role in the lives of many workers and students in 2021, Zoom expects revenues for its next fiscal year to grow by 43 per cent to $3.76 billion to $3.78 billion, compared to Wall Street projections of about $3.5 billion. It also predicted pro forma earnings per share of $3.59 to $3.65, higher than the $2.96 a share analysts had pencilled in. Still, churn rates remain higher than they were before the pandemic and the trend is expected to persist as people begin to travel.

For the undergoing Q1, adjusted EPS are expected to be between 95 cents and 97 cents with revenue in the range between $900 million and $905 million in revenue. The outlook is significantly brighter than 72 cents and $829.2 million that Refinitiv gathered analysts penciled in.

“Zoom fatigue”

A possible major bump in the road was recently identified by a study from the Silicon Valley Itself that was published on February 23rd in the journal of Technology, Mind and Behavior. Researchers from Stanford University found that all those hours of video calls take more of a toll on our brain and body than regular office work. Seemingly never-ending video calls leave us utterly drained, even though our most strenuous physical activity during the workday involved smiling at the camera. Although it concerns all video chat platforms, researchers named it “Zoom fatigue.” Researchers say Zoom fatigue has four main culprits: excessive and intense eye contact, constantly watching video of yourself at a frequency and duration that hasn’t been seen in the history of people, the limited mobility of being stuck at your desk, and more energy spent identifying social cues that is much easier to do in person. The “non-verbal overload” is a result that we are gifting even strangers with the behavior that is ordinarily reserved for close relationships. Although some issues can be easily resolved such as by removing our selfie from the user interface and going for an audio call, others might require a lot more effort.

Zoom’s prospects

Oddly enough, the founder of a company whose success is inextricably linked to the pandemic-fueled rise of remote work and home offices, Eric Yuan, himself admitted that everybody’s desperate to return to the office. But then again, the company knows too well it has to show no fear about the world going back to its pre-pandemic days if it wants to protect its equity value. The video call software company’s 2020 growth story will probably never be repeated and a post-pandemic slowdown is inevitable but Zoom’s betting on a new normalcy that combines in-person meetings with video calls.

Zoom has plans for an independent future. Like Salesforce.com,inc (NYSE: CRM), it is trying to take on Microsoft Teams with a suite of office collaboration products. The pandemic awarded Zoom with the sort of brand recognition that no money can’t buy. But Microsoft has $132 billion in its war chest and is busy improving Teams, so there’s no way it will relinquish its domination over workplace software willingly.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

News From The Vaccine World

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Less than a year before the COVID-19 started its relentless march across the globe Novavax (NASDAQ: NVAX) was facing delisting from the Nasdaq. The 33-year-old Maryland-based pharmaceutical company didn’t have a single approved shot after hundreds of millions of dollars invested in its R&D efforts. Wall Street likes to take bets on unproven biotech such as Moderna Inc (NASDAQ: MRNA), but it can be unforgiving of failure.  Fortunately, Novavax is now on the verge of getting approval in the UK, which will probably be followed by the US. Interim data have shown that its vaccine has an efficacy rate up there with the shots developed by Moderna, BioNTech (NASDAQ: BNTX) and Pfizer (NYSE: PFE), all of which are based on revolutionary mRNA technology. However, Novavax’ candidate s is cheaper and easier to transport and can be stored at room temperature for at least 24 hours. Additionally, the one-shot candidate by Johnson & Johnson (NYSE: JMJ) that can be kept at normal temperatures was granted an emergency use authorization during the weekend.

Merck and Johnson will join forces

Merck & Co Inc (NYSE: MRK) will manufacture the vaccine made by Johnson & Johnson (NYSE: JMJ) under an unusual deal that the Biden administration engineered to boost production of the single-shot ja which has been hampered by manufacturing delays.

The Biden administration helped to engineer the deal between the competitors after J&J, which was, experienced production hold-ups. J&J is the world’s largest healthcare company, but when it comes to vaccines, Merck has the expertise as it is one of the world’s largest vaccine makers with many approved shots.

Sanofi (NASDAQ: SNY) is another large vaccine maker that has fallen behind in the COVID-19 vaccine race and has agreed to help boost supplies of the J&J vaccine in Europe. Last month, it stated it would use its capacity to fill vials.

Novavax has finally stopped gasping for air

The CEO of Novavax, Stanley Erck, stated their candidate is more than 90% effective against the original strain, 86% effective against the U.K. strain and considerably less effective against the South African strain. According to forecasts, Novavax will generate more than $5 billion in revenue this year. As it is applying for approval for it flu shot, it will start studies on combining the Covid-19 and flu vaccine into a single shot later this year.

A story with a happy ending for everyone?

Novavax’s story resembles a Cinderella story as a little company that was on the verge of potentially closing has really been able to play with the big boys in the race for the Covid vaccine. The bottom line is that the US will have enough coronavirus vaccine doses for every adult by the end of May, which is sooner than anticipated, thanks in part to an unusual type of collaboration we didn’t see since World War II between two of the country’s largest drugmakers.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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