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Happy Friday, folks! Nico Rodríguez and Pato Liddle here, bringing you the last and only cannabis update you’ll need before you unplug for the weekend. Trump’s cabinet picks have everyone buzzing—Tulsi Gabbard offers a hopeful nod for reform, but Marco Rubio feels like a drag. Meanwhile, Q3 earnings brought mixed results, with some companies thriving and others facing tough losses. Let’s roll through it all so you can head into the weekend with a bit of relief.

Trump’s Cabinet: A Mixed Bag For Cannabis

With President-elect Trump's new cabinet picks, the cannabis industry is abuzz about the potential impact on federal reform. On one hand, Trump's nomination of cannabis advocate Tulsi Gabbard as Director of National Intelligence brings a glimmer of hope. Gabbard has a solid track record of pushing for cannabis legalization, which could signal positive shifts ahead.

Moreover, former GOP governor Chris Christie recently predicted Trump would push for descheduling, which could open doors for banking in cannabis. However, the selection of Marco Rubio as Secretary of State raises eyebrows due to his long-standing opposition to legalization, citing cannabis as a "gateway" drug.

Adding to the mix, new GOP Senate Majority Leader John Thune's opposition to marijuana reform suggests potential hurdles. Despite these challenges, industry leaders like Cronos CEO Mike Gorenstein remain cautiously optimistic, believing Trump might be more open to reform than anticipated. Glass House CEO Kyle Kazan echoes this sentiment, urging the industry to unite and work collaboratively on policy changes. While the path forward isn't without obstacles, many in the cannabis sector are hopeful that the new administration could usher in meaningful progress.

Q3 Earnings Roll Up Gains And Deep Cuts

While some companies managed to show solid revenue growth, persistent margin pressure, and net losses dominated the reports this week. Here’s what you need to know about the key figures from Glass House Brands, 4Front Ventures, Agrify, CV Sciences, and IM Cannabis.

• Glass House Brands reported a strong quarter with a 32% year-over-year revenue increase, reaching $63.8 million. Gross profit rose to $33.4 million, up from $26 million the previous year. However, the gross margin slipped to 52%, down from 54%, highlighting continued pricing pressure in California. Adjusted EBITDA doubled to a record $20.4 million, indicating improved efficiency, but the company did not disclose net loss figures, leaving questions about its bottom line as market challenges persist.

• 4Front Ventures narrowed its net loss to $6.4 million, an improvement from the $62.1 million loss in the same period last year. Revenue fell to $17.1 million, down from $23 million year-over-year, impacted by market headwinds. Gross profit plummeted to $3.7 million, compared to $9.3 million in Q3 2023. Despite the revenue drop, adjusted EBITDA turned positive at $1 million, suggesting a recovery path supported by increased production in Illinois and Massachusetts.

• Agrify’s revenue tumbled to $1.9 million from $3.1 million in the previous year. The net loss ballooned to $18.6 million, exacerbated by a $15 million hit from changes in the fair value of warrant liabilities. Gross profit shrank to $0.2 million. However, a recent $20 million convertible note financing deal with Green Thumb offers a much-needed cash infusion, providing a buffer as Agrify eyes strategic expansions, including acquiring a hemp-derived beverage brand.

• CV Sciences maintained relatively stable revenue at $3.9 million, down slightly from $4.1 million last year. The company’s gross margin rose to 46%, up from 45.1%, reflecting effective cost control measures. Net loss increased to $456,000 from $447,000 in the prior year. Adjusted EBITDA loss narrowed to $75,000, showing a significant improvement and edging closer to breaking even. 

• IM Cannabis posted strong growth in its German operations, with revenue from the region jumping 66% year-over-year to $4.1 million. Total revenue increased by 12% to $10.2 million. Gross profit improved to $2.3 million, while the EBITDA loss narrowed by 68%, coming in at $366,000. The net loss was halved to roughly $733,000. 

Innovations Shaking Up The Weed Industry

The cannabis scene is buzzing with fresh ideas, and Nico has been exploring the latest innovations that are reshaping how businesses operate and connect with consumers in the cannabis world.

Custom Cones USA is helping brands stand out in the crowded pre-roll market by offering customizable options like colored tips, designer cones, and even glass filter tips. They're also introducing cannabis humidors to keep products fresher longer—talk about upping the game!

Meanwhile, Garden Greens is taking a page from sneaker culture by intentionally running out of strains to build hype. "It's like a sneaker drop," says CEO Joshua Krane. Their perpetual harvest cycle allows them to rotate and test new strains, keeping consumers eager for the next exclusive release.

On the tech front, Azuca is revolutionizing edibles with a whole-plant infusion process that ensures a fast-acting, predictable experience—no more waiting hours for that gummy to kick in. Their starch encapsulation technology makes cannabinoids water-soluble, delivering consistent effects and reducing waste for manufacturers.

Lastly, brands are tapping into Reddit communities to spot market trends before they hit dispensaries. Caleb Chen of The Highest Critic highlights how unfiltered reviews from cannabis enthusiasts help companies tailor products to consumer desires, focusing on specific effects and unique terpene profiles rather than just THC levels.

These innovations underscore a shared goal: to make cannabis products more reliable, customizable, and appealing to today’s discerning consumer. Creativity is alive and well in the cannabis world, proving that thinking outside the box leads to big rewards.

Weekend Weed Reads:

• Ground Cannabis Dust Is A Hazardous Chemical, Confirms Massachusetts Regulator

• Tilray Joins German Cannabis Fiesta With First Locally Grown Strains

• Uruguay's Cannabis Industry Struggles Amid Export Barriers, Price Drops

• New Study Charts Adverse Events In Psychedelic-Assisted Therapies

• FDA Endorses CaaMTech's Psilocin Drug Development For Depression Treatment

Our Writers Today

Nicolás holds a B.A. in International Relations, an M.A. in International Affairs, and an M.Phil in Public Policy. He is a doctoral student in Public and Urban Policy at The New School in New York City. After working for the United Nations in 2014, Nico pivoted his research to studying the relationship between the cannabis industry and economic development.

Patricio is a development economist with extensive experience in IT, finance, and banking. He writes about the economic and social opportunities obscured by over half a century of failed drug prohibition. Beyond his professional expertise, Pato is a committed advocate for social change, passionately working to promote harm reduction and reform drug policies.

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