Buzz on the Bullboards: Highlights from Bay Street to Wall Street

As investors reflect on the past week’s market movements, it’s clear that some notable shifts have taken place in the Canadian and U.S. stock markets. On Bay Street, the Toronto Stock Exchange witnessed intriguing developments, while Wall Street saw its own array of fluctuations.

One standout performer on the TSX was Canopy Growth (TSX:WEED, Forum), whose stock surged by more than 30 per cent on Wednesday. Investors rallied behind Canopy Growth as the cannabis company celebrated a significant milestone: the final approval by the German government legalizing cannabis. This approval not only marks a triumph for Canopy Growth but also signifies a monumental shift in the legal treatment and cultural acceptance of cannabis in Germany. Effective April 1, 2024, cannabis will officially be recognized as a non-narcotic in Germany, opening doors for enhanced medical cannabis access and paving the way for legal consumption among adult German consumers.

These changes present a unique opportunity for Canopy Growth to expand its commercial presence in the country through the German-based and world renowned Storz & Bickel vaporizer brand, as well as the company’s medical cannabis product offerings through Canopy Medical.

“This legislation represents a very important and long-overdue step to end the criminalization of cannabis in Germany and sets an important example for the whole of Europe,” Jürgen Bickel, managing director of Storz & Bickel GmbH explained in a news release.

For Canopy Medical, the classification of cannabis as a non-narcotic is expected to prompt more patients to proactively engage with their physicians regarding medical cannabis, paving the way for increased access, education and awareness.

“The re-classification of cannabis as a non-narcotic is a game-changer for patients and physicians who will be empowered to better explore cannabis as a viable treatment option for an expanded range of condition,” Tara Rozalowsky, chief growth officer and president, international, Canopy Growth, added. “We are thrilled to be able to continue serving the medical community by delivering high-quality cannabis products that meet patient needs and we look forward to increasing our already leading presence in the German medical cannabis market.”

Another stock that garnered attention this week was MediPharm Labs Corp. (TSX:LABS, Forum), a pharmaceutical company operating in the cannabis sector. MediPharm Labs stock jumped more than 6 per cent on Wednesday after the release of its financial results for the full year and three months ended December 31, 2023. The company reported a substantial increase in revenue, with full-year revenue soaring approximately 50 per cent to $33 million compared with the prior year’s $22 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also saw a remarkable improvement, jumping 50 per cent to -$10 million in 2023 from -$21 million in 2022. The fourth quarter of 2023 saw a notable increase in gross profit, reaching $2.2 million or 24 per cent, a significant improvement over the previous year’s $0.2 million or 4 per cent.

In a media release detailing this performance in full, the company’s CEO, David Pidduck, said MediPharm now has all the margins, operational expenditures and adjusted EBITDA results trending in the right direction.

“We also have a robust revenue pipeline with multiple partners in multiple markets. The transformation to a profitable growing company continues. Over the years we have invested in our infrastructure as a high-quality and high-capacity pharmaceutical grade manufacturer, allowing us to grow sales with new opportunities and markets, without additional investment into capital or resources,” he said.

Finally, PyroGenesis Canada (TSX:PYR, Forum) shares rose more than a per cent after the company made headlines with the release of its Q4 2023 financial results. The company continued to focus on advancing its updated business strategy, which revolves around a three-tiered solution ecosystem: Energy transition and emission reduction, along with commodity security and optimization, as well as waste remediation. Despite recording revenue of $3 million in the fourth quarter of 2023, representing a slight decrease compared with Q4 2022, PyroGenesis remained committed to its strategic objectives. For fiscal 2023, revenue amounted to $12.3 million, down from $19 million in fiscal 2022, as the company navigated through various market dynamics.

Within each vertical the company sees several potential solutions at different stages of commercialization.

“2023 was an interesting year for PyroGenesis, as we dealt with many of the issues associated with the growth and adoption of clean technology in a cautious economic environment,” P. Peter Pascali, president and CEO of PyroGenesis, said in a news release. “We navigated cash management challenges brought about by higher costs associated with commercializing our technologies, continued inflationary pressures on material and labour costs, longer sales cycles for system sales caused by the uncertain economic environment we are all facing, and multiple requests from potential customers to help them in their investigation of using plasma as a solution to their many problems. As much of this type of work is new-use proof-of-concept, profit margins are negligible, and timelines imprecise.”

He added that while many of these efforts did not yield large contracts or system sales during the year, the team cannot underestimate the impact these engagements have had, and are having.

Looking ahead to the upcoming week in the Canadian and U.S. stock markets, investors will likely remain vigilant amid ongoing geopolitical tensions and economic indicators. With earnings season in full swing, market participants will closely monitor corporate results for insights into business performance and future prospects. Additionally, developments in monetary policy and geopolitical events could influence market sentiment and direction.

As the week draws to a close, investors have witnessed an eventful period marked by notable developments in various sectors. From the legalization of cannabis in Germany to impressive financial results from companies such as MediPharm Labs and PyroGenesis, the market continues to present opportunities and challenges for investors. With a keen eye on upcoming market catalysts, investors are poised to navigate the dynamic landscape of the stock market in the weeks ahead.

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