TLDR – TDR News highlights – January 29th / 30th

Cannabis Highlights:

Grown Rogue International Inc. (CSE: GRIN | OTC: GRUSF), a craft cannabis company, has changed its financial year end from October 31 to December 31. The company will report its financial statements for the 12 months ending October 31, 2023, within 120 days, followed by a report for the 2 months ending December 31, 2023. Subsequently, Grown Rogue will follow a standard calendar reporting cycle. This change aims to align the company’s financial reporting with its business planning and outdoor harvest cycle. More details are available in the Notice of Change of Financial Year End filed on SEDAR+.

High Tide Inc. (NASDAQ: HITI) (TSXV: HITI) reported a significant 37% increase in revenue for the fiscal year 2023, reaching $487.7 million. Accompanying this growth was a 40% rise in free cash flow and a 110% increase in adjusted EBITDA, indicating notable improvements in cash flow management and operational efficiency despite encountering challenges in the e-commerce segment.  From my perspective as an independent analyst, these achievements reflect clear progress, but there’s potential for even more substantial growth, particularly in areas like same-store sales, to fully capitalize on the expanding cannabis market.

In Washington State, the House Regulated Substances and Gaming Committee passed a bill to legalize marijuana home cultivation, reducing the allowable plant count from six to four per person and a maximum of ten per household. The committee also revised a separate bill, replacing a proposed ban on high-THC cannabis sales to under-25s with a requirement for retailers to warn about high-potency product risks. Some lawmakers, including Rep. Kristine Reeves (D), raised concerns about child safety, equity issues, and the bill’s lack of guidelines for plant waste disposal.

Ohio has proposed rules for its new adult-use marijuana program, focusing on licensing and fee changes. The state seeks feedback on these proposals until February 9. Governor DeWine and GOP leaders want to expedite the sales process, allowing existing medical dispensaries to begin adult sales sooner. The aim is to align the legal possession of marijuana with the availability of regulated sales.

New York State Senator Kirsten Gillibrand (D-NY) and Congressman Jerrold Nadler (D-NY) advocate for fully descheduling marijuana, not just rescheduling it. They emphasize the need for legalization and expunging non-violent marijuana convictions to correct the war on drugs’ impact. Despite DEA resistance and President Biden’s opposition, their push seeks to address the harms of criminalization and inform drug policy more effectively.

Psychedelics Highlights:

FSD Pharma Inc. (NASDAQ:HUGE)(CSE:HUGE) has appointed Dr. Sanjiv Chopra to its board, replacing Nitin Kaushal. The company also engaged SBS Intl Group LLC, Draper, Inc., and Carriage House Capital, Corp. for financial and investor relations services. These agreements include option issuances and vesting schedules. Additionally, FSD Pharma contracted IR Agency, Beyond Media, and Issuer Direct for digital community building, market awareness, and website management.

Crypto Highlights:

Invesco Ltd. (NYSE: IVZ) and Galaxy Asset Management have reduced the Sponsor Fee of the Invesco Galaxy Bitcoin ETF (BTCO) from 0.39% to 0.25%. For the first six months, Invesco will waive fees on the first $5 billion of BTCO’s assets, setting the total expense ratio at 0%. BTCO invests in physical bitcoin, tracked by the Lukka Prime Bitcoin Reference Rate.

CME Group Inc. (CME) saw a surge in Bitcoin futures trading, with daily contracts up nearly 50% this month, post the SEC’s approval of Bitcoin spot ETFs, as reported by The Financial Times. Traders are using a “cash and carry” strategy for arbitrage, which has gained traction since the ETF introduction. JPMorgan analyst Nikolaos Panigirtzoglou noted that spot ETFs might deepen the crypto market and influence derivatives trading, similar to the role of ETFs in equities for price discovery.

AI Highlights:

Cyngn Inc. (Nasdaq: CYN) has been awarded its 19th U.S. patent, US-11,851,074-B2, focusing on safety in autonomous vehicle (AV) technology. This addition in 2023 brings their total U.S. patents to 19, with more pending. Cyngn’s latest patent enhances its AI-powered AV solutions, which are part of its DriveMod suite, designed to integrate into various vehicle types for industrial use. The company’s technology aims to address industrial challenges like labor shortages and safety through scalable autonomous driving solutions. Cyngn’s Enterprise Autonomy Suite, including DriveMod, also offers fleet management and data-driven analytics tools.

Super Micro Computer, Inc. (NASDAQ: SMCI) experienced a nearly 10% increase in its stock price, reaching a record high in extended trade on Monday, following its projection of higher-than-expected quarterly sales. The San Jose-based company’s announcement, indicating March-quarter net sales between $3.7 billion and $4.1 billion, surpassed the consensus analysts’ estimate of $2.87 billion. This report also positively impacted Nvidia’s shares, contributing to its record high. Super Micro, with significant customers like NASA and Japan’s NEC, has seen its stock more than triple since May 2023. The surge is attributed to strong demand for AI servers and the company’s effective utilization of generative AI, as stated by CEO Charles Liang.

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