Capital 10X Growth Navigator – February 1st 2022

Cannabis

Verano Acquires Goodness Growth

Consolidation in the cannabis sector continues, Verano (CSE:VRNO) announced today a proposed acquisition of Goodness Growth Holdings (CSE:GDNS); this deal will increase Verano’s footprint to 18 states. It is an all stock transaction valued at $413 million, $2.39/share; Goodness Growth subordinate voting shareholders will receive 0.22652 of a Verano Share for each share held.  Verano notches a quality portfolio (New York, New Mexico, Minnesota) at a discounted valuation.

US Senate Candidate Smokes Marijuana in Campaign Ad Focusing on Weed Criminalization

A candidate seeking to represent Louisiana in the U.S. Senate released a campaign ad on marijuana issues. In the ad that went viral with over 6 million views, Democrat Gary Chambers sits in an armchair smoking a cannabis blunt and cites statistics about the harms of criminalization. The ad is titled “37 Seconds” referencing a study that found police in the U.S. make a marijuana-related arrest every 37 seconds on average.

In a tweet Mr. Chambers said, “I hope this ad works to not only destigmatize the use of marijuana, but also forces a new conversation that creates the pathway to legalize this beneficial drug and forgive those who were arrested due to outdated ideology.”

States that have Legalized Marijuana earn $10 billion in Cannabis Tax Revenue

States that legalized marijuana have collectively garnered significant cannabis tax revenue since the first legal sales started in 2014, according to a report released by the Marijuana Policy Project (MPP). 18 states thus far have moved to end prohibition, taxing and regulating marijuana sales. The report found that of December 2021, sales have translated into about $10.4 billion in tax revenue -revenue that doesn’t include separate medical cannabis programs. States can now use this money to fund various programs and initiatives.

Psychedelics

Psychedelics Study on Suicidality

A new paper in the American Chemical Society journal “Pharmacology and Translational Sciences” suggests psilocybin could reduce suicidality in patients facing a life-threatening cancer diagnosis. In cancer patients assessed as having an elevated level of suicidal ideation, a single session of psilocybin assisted psychotherapy significantly reduced their level suicidal ideation within hours, an effect that persisted for months.

Mindset Pharma Enters into Pharmaceutical Manufacturing Agreement

Mindset Pharma Inc. (CSE: MSET) (FSE: 9DF) (OTCQB: MSSTF) announced that it has entered into a pharmaceutical manufacturing agreement with a leading contract development and manufacturing organization (CDMO), for the pharmaceutical grade batches of Mindset’s next-generation drug candidate, MSP-1014.

In preclinical trials, MSP-1014 has shown improved efficacy and safety compared to first-generation psilocybin. Also, it has demonstrated pharmacological diversity making it potentially suitable for both in clinic treatment approaches and as a take-home medicine. MSP-1014 is not a scheduled substance based on current guidance from regulators in Canada and the USA. With MSP-1014’s unique structure and Mindset’s innovative synthesis process, we anticipate a lower cost and more simple manufacturing process than psilocybin that well positions MSP-1014 for rapid commercialization.

FDA clears MindMed’s IND Application for MM-120 Drug Trial

MindMed (NASDAQ: MMED) (NEO: MMED) announced that the U.S Food and Drug Administration (FDA) has cleared MindMed’s Investigational New Drug (IND) application, allowing the Company’s Phase 2b dose-optimization trial MM-120 for the treatment of Generalized Anxiety Disorder (GAD) to proceed.

The clinical hold on the IND was lifted following MindMed’s rapid responses for additional information related to the participant monitoring protocol in the upcoming study. MindMed is working with study investigators and clinical trial sites to prepare for participant enrollment, which is expected to start early 2022.

HAVN Life Agreement to Supply Psilocybin to Mycotopia Therapies

HAVN Life Sciences Inc. (CSE: HAVN) (OTC: HAVLF) signed an agreement to supply naturally-derived psilocybin to Mycotopia Therapies (OTC:TPIA) for their psychedelic therapies. Mycotopia Therapies uses psilocybin to treat people dealing with anxiety, depression, bipolar disorders, PTSD, ADHD, autism, and addictions.

The psilocybin provided to Mycoptopia Therapies will come from HAVN Labs’ Jamaican facility where it works directly with Hypha Wellness to produce regulated medical psilocybin. The partnership between HAVN Life and Hypha Wellness was finalized in March 2021 and allows HAVN to optimize and refine their distribution and efficiency.

Resources & Mining

Energy Transition Saw Record Investment in 2021

Bloomberg New Energy Finance reported that global investment in the energy transition totaled $755 billion in 2021 – a new record – off the back of rising climate ambitions and policy action from countries around the world. In our view this significant investment continues to underscore the strong global demand for green and electric metals.

Sierra Metals: 2021 Full Year Production Results – Navigating COVID Headwinds. Compelling Valuation & Dividend.

Sierra Metals  (NYSE:SMTS, TSX:SMT)  posted full year 2021 production results that were challenged by unprecedented COVID-19 operational headwinds. Consolidated copper equivalent production was 89.9 million pounds; a decrease of 24% from 2020.

Efforts are underway to normalize operations and the company expects that it will take until the end of Q2 2022 to catch up. The latest wave of COVID-19 infections is anticipated to reduce workforce levels at their operations in both Peru and Mexico during Q1 and potentially Q2.

Sierra Metals is one of the cheapest in the entire copper universe trading at an 80% valuation discount vs. peers. Additionally, the company recently initiated an annual dividend of $0.03 per common share resulting in a very attractive dividend yield of 2.2%; 1% higher than the dividend yield on the S&P 500 index.

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Sierra Metals is a market awareness client of Capital 10X.

HAVN Life is a market awareness client of Capital 10X.

Mindset Pharma is a market awareness client of Capital 10X.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

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