Industry Overview - The U.S. cannabis sector is adjusting as February 2026 approaches, with a shift in focus towards sustainability and execution rather than rapid expansion [1] - Higher interest rates have prompted companies to reassess spending habits, making balance sheet strength increasingly important [1] - Revenue quality is prioritized over headline growth figures, with companies generating consistent sales standing out [1] Market Dynamics - State-level legalization continues to expand, with several markets maturing into stable revenue generators, providing predictable consumer demand [2] - Medical and adult-use programs are key growth drivers, while federal reform discussions linger as a potential catalyst for the sector [2] - Uncertainty regarding federal reform limits institutional participation in the cannabis market [2] Investor Behavior - Retail investors play a critical role in cannabis trading volume, with February marking renewed interest after year-end repositioning [3] - Tax-loss selling pressure typically fades by February, allowing fundamentally sound stocks to attract attention [3] - Dispensary count and geographic exposure are key evaluation metrics, with diversified operators reducing market-specific risk [3] Financial Discipline - Financial discipline is essential for long-term survival, with companies generating real revenue gaining investor credibility [4] - Companies relying on speculation face increasing pressure, highlighting the importance of operational efficiency and cost management [4] Company Profiles Planet 13 Holdings Inc. (PLNH) - Operates as a vertically integrated cannabis retailer, known for its large Las Vegas dispensary that attracts both tourists and locals [5][6] - Emphasizes experiential retail, blending entertainment and product selection to differentiate from traditional dispensaries [5] - Operates over ten dispensaries nationwide and produces its own cannabis products, targeting premium consumers [6][9] - Revenue has fluctuated due to pricing pressure, but the company continues to generate meaningful quarterly sales [9] - Management focuses on reducing operating expenses and improving margins while monitoring same-store sales trends [10][11] FLUENT Corp. (CNTMF) - Operates as a regional cannabis company with a significant presence in Florida, one of the largest medical cannabis markets [11][12] - Emphasizes controlled expansion and brand consistency, operating over thirty dispensaries nationwide [12][14] - Generates over $100 million in annual revenue, with modest growth affected by pricing pressure [14] - Management focuses on operational efficiency and improving liquidity, with moderate debt levels compared to larger peers [15] Verano Holdings Corp. (VRNOF) - One of the largest cannabis operators in the U.S., with a strong presence in states like Illinois and Florida [16][17] - Operates over 150 dispensaries and owns several cultivation facilities, supporting supply chain control [17][19] - Generates substantial revenue but continues to report net losses due to pricing pressure and elevated operating costs [19] - Management is focused on cost optimization and selective retail expansion, with future profitability dependent on margin recovery [20]

Core Viewpoint - LEEF Brands, Inc. has successfully completed the early conversion of all outstanding Canadian-dollar-denominated convertible debentures, totaling approximately CAD $237 million, which enhances the company's financial flexibility and supports future growth initiatives [1][3][9]. Financial Summary - The early conversion involved debenture holders settling their debentures into units at a conversion price of CAD $0.25 per unit, resulting in the issuance of approximately 946,309 units [2]. - The company reported a 24% year-over-year revenue growth and a doubling of gross margins in Q3, indicating strong operational momentum [3]. Management Commentary - The CEO of the company expressed gratitude towards debenture holders for their support and highlighted that the elimination of convertible debentures marks a new chapter for the company, allowing for enhanced balance sheet flexibility [4]. Strategic Rationale - The full early conversion strengthens the balance sheet by removing the remaining CAD convertible debenture debt, which positions the company for strategic growth initiatives in California and New York [9]. - The company retains two pieces of real estate debt, one for $4.2 million at 4% interest and another for $7 million at 0% interest, indicating manageable debt levels [9]. Company Overview - LEEF Brands, Inc. is a vertically integrated, multistate cannabis operator focused on extraction, manufacturing, cultivation, and product innovation, with operations in California and New York [5].

Core Viewpoint - The issuance of an executive order by President Donald Trump to reschedule cannabis from Schedule I to Schedule III under the U.S. Controlled Substances Act is a significant development for the cannabis industry, enhancing operational economics and enabling expanded medical research [2][3]. Company Summary - LEEF Brands, Inc. is a leading multi-state operator in the cannabis industry, focusing on extraction, manufacturing, and cultivation, with operations in California and New York [6]. - The rescheduling of cannabis to Schedule III will eliminate the 280E tax burden, improving cash flow and allowing LEEF to reinvest in its workforce, facilities, and long-term growth [3]. - The company operates state-of-the-art extraction and cultivation facilities and believes that the removal of 280E will strengthen balance sheets across the sector, providing more growth capital for expansion [3][4]. Industry Summary - The rescheduling of cannabis is expected to improve access to capital across the cannabis industry, potentially attracting institutional investors and broadening the pool of available lenders [4]. - Improved regulatory clarity may lower the overall cost of capital, creating opportunities for companies to fund growth and scale operations more efficiently [4]. - LEEF is also monitoring developments related to hemp-derived cannabinoids and potential Medicare coverage for certain CBD products, with a pilot program expected as early as 2026 [4].

Core Insights - LEEF Brands, Inc. has commenced operations at its extraction lab in Upstate New York, producing solventless concentrates and planning to introduce hydrocarbon capabilities next quarter, positioning the company to meet rising demand in a rapidly growing cannabis market [1][3] - All concentrate production for 2025 has been allocated to established brand partners and new in-state clients, indicating strong demand for LEEF's products [2] - New York's cannabis market generated over $1 billion in sales in 2024, with expectations to exceed $1.5 billion in 2025 and potentially surpass $2 billion in 2026, making it an ideal market for LEEF's concentrates [3] Company Developments - The operational launch in New York marks a significant milestone for LEEF, transforming it into a multi-state operator with a strong presence in two of the top ten cannabis markets in the U.S. [3] - The company expects meaningful revenue growth and higher margins as it scales operations in New York, alongside successful harvests in California [4] - LEEF's leadership team will participate in various industry and investor events in October, enhancing engagement with brand partners and stakeholders [5][6] Market Context - Concentrates account for approximately 55% of products sold in New York, highlighting the market's potential for LEEF's offerings [3] - The rapid transition from license acquisition to operational launch in New York reflects the company's strategic execution and market readiness [4]

Industry Overview - The U.S. cannabis industry is evolving with increasing legalization momentum and rising consumer demand [1][14] - Despite challenges such as oversupply and price compression, leading operators are positioning for future growth [1][14] - Multi-state operators with strong market share are expanding while maintaining financial discipline [1][14] Company Highlights Trulieve Cannabis Corp. (TCNNF) - Trulieve is one of the largest cannabis operators in the U.S., with over 190 dispensaries, primarily in Florida [3][5] - The company has a vertically integrated model, producing and selling a variety of cannabis products [3][6] - Recent financials show strong quarterly revenue and profitability, with effective cost-control strategies [5][6] Glass House Brands Inc. (GLASF) - Glass House operates large-scale greenhouses and a network of dispensaries in California, focusing on sustainable cultivation [7][9] - The company has maintained steady quarterly revenue and improved gross margins despite competitive pricing pressures [9] - Its cultivation capacity positions it as a cost leader in the U.S. market [7][9] Verano Holdings Corp. (VRNOF) - Verano operates over 140 dispensaries across 13 states, with a strong presence in Illinois, Florida, and New Jersey [10][11] - The company emphasizes quality control and cost efficiency through its vertically integrated operations [11][13] - Recent financial performance shows modest revenue growth and improved operating margins, despite industry challenges [13]

Core Insights - MediPharm Labs Corp. is positioned to benefit from the potential rescheduling of cannabis in the United States, which may change its classification from Schedule I to Schedule III [2][8] - The company holds unique FDA site registration and licenses that enable it to produce and distribute pharmaceutical cannabis products, giving it a competitive advantage in the market [7][8] Industry Overview - The US Federal Government is reviewing the rescheduling of cannabis, which could facilitate more research and recognition of its medical benefits at a federal level [2][8] - Rescheduling to Schedule III would significantly enhance the ability for US-based research on medical cannabis products, which is currently hindered by the Schedule I classification [8] Company Positioning - MediPharm Labs maintains top-tier pharmaceutical licenses and registrations, allowing it to lead in the global cannabis market [5][7] - The company has invested in advanced technology and facilities to produce high-quality cannabis products, ensuring compliance with Good Manufacturing Practices [6][7] - MediPharm has already shipped medical cannabis API and products to the US for research, including participation in NIH-funded clinical trials, demonstrating its operational capabilities [8] Recent Developments - In 2023, MediPharm acquired VIVO Cannabis Inc., expanding its reach to medical patients in Canada and internationally [10] - The company has filed a drug master file with the US FDA for CBD active pharmaceutical ingredients, which is essential for sourcing CBD for clinical trials [8]

Core Viewpoint - LEEF Brands, Inc. is increasing its private placement offering to issue up to 7,600,000 units at a price of C$0.25 per unit, aiming for gross proceeds of up to C$1.9 million [1][5]. Group 1: Offering Details - Each unit will consist of one common share and one common share purchase warrant, with each warrant allowing the purchase of an additional common share at C$0.30 for 24 months [2]. - The offering is conducted under the listed issuer financing exemption, meaning the securities issued will not be subject to a statutory hold period under Canadian securities laws [3]. Group 2: Use of Proceeds - The net proceeds from the offering are expected to be used for general working capital, supporting operations from the successful harvest at Salisbury Canyon Ranch, and accelerating operations in New York [4]. Group 3: Management Commentary - The CEO of LEEF Brands stated that the increased financing reflects investor confidence and positions the company for expansion in extraction operations, enhancing vertical integration and exploring new revenue streams [5]. Group 4: Company Overview - LEEF Brands Inc. is a leading extraction and manufacturing cannabis company based in California and New York, with a comprehensive supply chain and innovative manufacturing processes [6].

Core Insights - LEEF Brands Inc. is expanding nationally by acquiring a Type 1 Cannabis Processor License in New York, marking a significant milestone for the company [2][4] - The New York cannabis market has seen rapid growth, projected to reach $1.5 billion in retail sales in 2025, presenting a substantial opportunity for LEEF to leverage its extraction capabilities [3] Company Developments - The acquisition of the Type 1 Cannabis Processor License allows LEEF to engage in extraction, blending, infusion, packaging, labeling, and branding of its products, positioning it as a multi-state operator [2][3] - LEEF plans to replicate its successful California operations in New York, tailored to meet the specific demands of the local market [3][4] Market Context - The New York cannabis retail market grew from $160 million in 2023 to $1 billion in 2024, indicating a strong upward trend [3] - Concentrates account for approximately 55% of cannabis products sold in New York, highlighting the potential for LEEF's extraction capabilities to support growth in the region [3] Industry Engagement - LEEF will participate in the Benzinga Cannabis Capital Conference in Chicago on June 9-10, 2025, to connect with investors and industry leaders [5][6] - The executive team aims to build partnerships and share the company's growth story at the conference [7]