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Thailand holidays
‘Very good for tourists’: Thailand aims for high season with U-turn on cannabis
The once-banned drug is now on sale at market stalls, beach clubs and even hotel receptions. But the laws in this ‘pot paradise’ are blurry
Cannabis products selling at a tourist spot in Thailand, the first country in Asia to legalise the drug.
Cannabis products selling at a tourist spot in Thailand,
the first country in Asia to legalise the drug. Photograph:Bonno/EPA
Bonno
Thu 11 Aug 2022 13.50 BST
Adistinctive sweet smell wafts through Fisherman’s Village night market on the Thai island of Koh Samui, drifting up between the sticky mango rice stalls and bucket cocktail vans. The Samui Grower cannabis stall is doing swift business tonight. A table is laid with glass jars, each displaying a different flowering green bud, with labels saying things like ‘‘Road Dawg’ hybrid THC25% 850TBH/gram”.
Elsewhere on the island, at Chi beach club, tourists lie on couches puffing ready-rolled joints and munching pizzas topped with green cannabis leaves. On Instagram, the Green Shop Samui offers a marijuana menu of fantastically named buds: Truffle Cream, Banana Kush and Sour Diesel, alongside hemp cookies and cannabis herbal soap.
A cannabis pizza
A cannabis pizza, on the menu at Thai beach clubs
Anyone familiar with Thailand’s notoriously hardline attitude towards recreational drug use might watch this and wonder if they’ve had too much to smoke. A country where narcotics offences have attracted the death sentence, and being caught with a joint at a full moon party has landed tourists in the infamous Bangkok Hilton, now appears to have done an about-face. In an apparent bid to attract tourists in the post-Covid slump, the Thai government decriminalised cannabis last month. Koh Samui’s streets are already dotted with dispensaries with names such as Mr Cannabis, and tourists tell of being offered marijuana openly at the reception of their hotel. Yet the laws around cannabis are far more blurred than this “pot paradise” suggests.
Koh Samui’s streets are already dotted with dispensaries with names such as Mr Cannabis
On 9 June, the Thai government removed cannabis and hemp plants from its banned narcotics list, leaving people in Thailand free to grow and sell it. The government line, however, is that production and consumption are permitted only for medical, not recreational use, and only of low-potency marijuana, containing less than 0.2% tetrahydrocannabinol (THC, the main hallucinogenic compound. Recreational use of cannabis is discouraged, with officials warning that anyone caught smoking cannabis in public could be charged for creating a public “smell nuisance” under the Public Health Act and face a 25,000 baht (£580) fine and three months’ imprisonment. But on the beaches of Koh Samui the law seems rather more open to interpretation.
A marijuana menu at a cannabis dispensary
A marijuana menu at a cannabis dispensary. Photograph: Bonno/Rex
In Chi, a luxury beach club on Samui’s Bang Rak serving magnums of Bollinger and fine French wines, owner Carl Lamb offers not just a CBD-infused menu but also openly sells high-potency cannabis in grams and ready-rolled joints.
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Lamb, who originally tried marijuana medicinally for his own digestive issues, worked with a university in Chiang Mai to grow medicinal cannabis for the CBD-infused menu Chi serves: CBD berry lemonade, Hempus Maxiumus cocktails and CBD Pad Kra Pow. When the drug was decriminalised, Lamb took that as permission to start selling “real” joints in his bar.
“At first, I just did it as a bit of a buzz and had a few grams in the box,” he grins, producing a large black cigar box stocked with different strains of cannabis – ranging from 500baht (£12.50) a gram for BlueBerry Haze to 1,000 baht (£23) a gram for Lemonade.
Now Chi sells 100g a day. “We get people buying it from 10am until we close,” Lamb says. “It’s been really eye-opening the range of people wanting to try it.” He serves parents curious to have a puff while their kids play in the pool, wealthy individuals wanting ready-rolled joints to take away, and tourists purchasing it straight off the plane. As Lamb understands it, the law only prohibits him from selling to under 25s or pregnant women “and if anyone complains about the smell I have to shut it down”.
A marijuana dispensary in Bangkok. Photograph: Bonno/SOPA Images/REX/Shutterstock
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“We’ve started getting phone calls from all over the world asking, ‘Is it really true you can smoke cannabis in Thailand and it’s legal?’ We already know it’s attracting more tourists – people are booking for Christmas.”
The impact of Covid on the island has been “devastating”, Lamb says. “The decriminalisation of cannabis is, without a shadow of a doubt, having a huge positive impact. You can now come here and lie on a beach in Asia at Christmas and smoke weed. Who’s not coming?”
We already know it’s attracting more tourists – people are booking for Christmas
Carl Lamb, Chi beach club
The Thai man operating the Samui Grower cannabis stall in the market is equally enthusiastic. “Very good for tourists,” he says, when I ask him how trade is. “Very good. Thai people like it. We make money.” Is it legal? I ask. “Yes, yes,” he nods. Can I buy it and smoke it on the beach? “Yes good.”
By contrast, the Green Shop in Samui, opening next week, tells me they’ll issue warnings to customers so they know not to smoke in public. No wonder tourists are confused.
Thailand celebrates the legalisation of marijuana in June. Photograph: Bonno/Rex
I find Morris, a 45-year-old Irish father, buying cannabis in the market. “I didn’t realise it was this legal now,” he says. Does he know the law? “I know I can’t get arrested with it, but I haven’t looked into it that much,” he admits. “I won’t smoke on the beach if there are other families around, but me and my wife might smoke it back at the hotel.”
Others tourists are more relaxed. Nina tells me at her hotel in Chiang Mai, north Thailand, that cannabis is sold at reception. “I smoke it anyway,” she shrugs. “I wouldn’t really notice if it was legal or not.”
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“Nobody understands the law now. It’s a big mess – even the police don’t understand it,” one cannabis seller, who asked to remain anonymous, tells me. Operating under the radar, delivering cannabis to “farang” tourists, with hotel concierges organising deliveries, he says: “I take care for the moment, because the law is not clear. They [tourists] don’t know anything about the laws. They don’t know they cannot smoke in public. Although it’s very dangerous to smoke in public”.
They [tourists] don’t know anything about the laws. They don’t know they cannot smoke in public
Cannabis seller, Koh Samui
At Chi, 75-year-old American Linda, openly puffing a joint, feels relaxed about the vagary of the law. “I am not worried about the grey area in Thailand. Just be respectful when you are smoking,” she says. She feels sharing a joint at Chi “has a sort of boutique feel, like buying a good wine for your friends”.
The real question now is what happens next. Can a country which once had some of the most stringent drug laws in the world really adapt to some of the most relaxed?
hehehehe .... yes ! , because his participation of attack on weedcapital .... : ))))
Will Klein plead the fifth?
AAAA ounces are 88$ delivered.
No money to be made.
So IS IT "cupping" ?......May be eh ?
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=169499228
Depends upon broad market indices ?
it looks like we will see day-long trading for a long time ? ... one day up , the next one down
Doug
@TheGuyFromWpg
·
33m
Replying to
@ProfMJArmstrong
and
@matt_lamers
I think it’s important to remember that much of that “inventory” is unsalable garbage.
My guess is that it’s shown as inventory by large public companies to avoid having to write off even larger losses than they already have.
Eventually the chickens will come home to roost. ??
Michael J Armstrong, business professor
@ProfMJArmstrong
to Bonno
·
Aug 9
Producers in Uruguay ????, like Canada ????, hope for big cannabis exports to Germany???? if/when it legalizes.
It seems producers everywhere think they'll somehow profit by exporting something that grows anywhere.
Ontario Cannabis Store unable to make deliveries after partner faces cyberattack
The Ontario Cannabis Store says a cyberattack faced by one of its logistics partners has left the provincial pot distributor unable to process or deliver orders to marijuana shops and customers.
Here is my comment too OCS
"If you want too fix the problem, Government should stop selling weed, you should stop forcing users to use credit and debit cards, allow all cannabis retail too take cash, as regular cannabis users have done for 6 decades. & put cannabis in jars so to see what we are buying"
Now its recreational users and shareholders too fight the governments regulations both on distribution and regulations, Patients spent 20 years in court to get what we have today,
Happyglass now is your chance I will look for your comment.
The OCS is unable to deliver orders to Authorized Cannabis Stores and https://t.co/sNmEv9qlIB customers due to a cyber incident targeting our third-party-operated distribution centre, Domain Logistics. Updates will be provided as they become available. https://t.co/cC9DRb5JC5
— Ontario Cannabis Store (@ONCannabisStore) August 9, 2022
""Currently, Canopy Growth Corp has an average recommendation of "Moderate Sell" based on 15.00 analysts according to Zacks. Currently, there are 1 buy ratings, 8 sell ratings and 6 hold ratings for the stock. ""
==================================================
should be 15 sell ratings ...
for Canopy this is the only way to cut down losses ... but this is a road to nowhere ...
you try so hard but without brain and wisdom you should stay away from stocks .... you do not understand and cannot analyse simple facts ..
More bunk weed...
View Online | Sign Me Up
August 9, 2022
TODAY'S TOP STORY: "Croptober" pushes Canada's cannabis inventories to record 1.4 billion grams
Cannabis cultivators in Canada produced a record amount of marijuana during last fall's “croptober” – when most of the outdoor harvest comes in – despite falling retail prices and already-bulging inventories.
Cannabis produced in September, October and November 2021 totaled 561,459 kilograms – or about 560 tons – of dried cannabis, bringing the total amount stored by licensed producers, wholesalers and retailers to 1.4 billion grams (roughly 1,543 tons) as of the end of November, according to new Health Canada data provided to MJBizDaily’s international editor, Matt Lamers.
The data suggests Canada’s cannabis industry still suffers from a serious supply-demand imbalance, Matt writes, even after major greenhouse closures and insolvencies.
Matt’s story offers even more insight on this situation in Canada.
Lol! That is why I do not trade :) you are right, they do not expect it to be passed till September. Carry on but be careful ;)
"The Canada market has really developed very differently than we had initially expected," Judy Hong, chief financial officer, admitted on a call with analysts.
Read : we don,t know what we are doing... lol
These newbs "understand" alcool marketing but don,t get weed marketing.
Cannabis giant Canopy Growth posts $2B quarterly loss
Most of the profit plunge came from a writedown but sales were down, too
The impairment charge for the period ended June 30 was linked to Canopy's pot operations and came as its recreational business-to-business cannabis sales fell 38 per cent since last year because of price compression and increased competition.
"The Canada market has really developed very differently than we had initially expected," Judy Hong, chief financial officer, admitted on a call with analysts.
She named market fragmentation, the strength of the illict market and regulatory hurdles, including a slow move toward federal legalization in the U.S., as the company's biggest challenges.
Such conditions have prodded Canopy into refocusing its product mix on the premium sector, which typically commands higher prices and generates a more loyal consumer basis than value items.
https://www.cbc.ca/news/business/canopy-growth-earnings-1.6542659?__vfz=medium%3Dsharebar&fbclid=IwAR3MD9nz5nLH9TK7fKCAmqJLeCKJWSGVLLkC3DdnPoTsM0lahU0hoTsLRXw
22
Oregon’s Cannabis Industry Endures Sales Drop, More Crime, And Braces For More Challenges
Wrong Happyglass/speculator it has been forever since they have even had a chance. and you are still giving hype and lies that has 90% of mistruths, I am talking with Americans every day explaining what government Cannabis means and the over regulation and laws they bring, Users now are getting it.
https://theweedblog.com/industry/oregons-cannabis-industry-challenges
Canopy Growth Corporation Reports First Quarter Fiscal Year 2023 Financial Results
Published: August 8, 2022
Canopy Growth Corporation Reports First Quarter Fiscal Year 2023 Financial Results
Canopy Growth Corporation announces its financial results for the first quarter ended June 30, 2022. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.
Highlights
Q1 FY2023 net revenue was flat compared to Q4 FY20221.
Company maintained #1 share of combined premium flower and pre-rolled joint (“PRJ”) segment in Q1 FY20232.
Increased share of the combined mainstream flower and PRJ segment by 35 bps to 4.0% in Q1 FY2023.
International medical cannabis net revenue approximately doubled versus Q1 FY2022 driven primarily by strong sales in Israel and Australia.
Record BioSteel revenues in Q1 FY2023 increased 169% versus Q1 FY2022. Secured retail agreement with Walmart Stores covering 2,200 stores in 39 states. Entered partnership to become the Official Hydration Partner of the NHL and NHLPA.
Cost reduction program on track with operating expenses3 in Q1 FY2023 decreasing by 13% versus Q1 FY2022.
First Quarter Fiscal 2023 Financial Summary
(in millions of Canadian
dollars, unaudited)
Net Revenue
Gross margin
percentage
Adjusted
gross margin
percentage4
Net loss5
Adjusted
EBITDA6
Free cash
flow7
Reported
$110.1
(1 %)
2 %
$(2,087.6)
$(74.8)
$(142.8)
vs. Q1 FY2022
(19 %)
(2,100) bps
(1,900) bps
(635 %)
(18 %)
23 %
1
On an organic basis, excluding C3.
2
Unless otherwise indicated, market share data disclosed in this press release is calculated using the Company’s internal proprietary market share tool that utilizes point of sales data supplied by third-party data providers, government agencies and our own retail store operations across the country.
3
Non-GAAP measure. Excludes Asset Impairment and Restructuring costs, and Acquisition-Related costs.
4
Adjusted gross margin is a non-GAAP measure, and for Q1 FY2023 excludes $4.0 million of restructuring costs recorded in cost of goods sold (Q1 FY2022 – excludes $1.4 million related to the flow-through of inventory step-up associated with the acquisition of Supreme Cannabis and $nil of restructuring costs recorded in cost of goods sold). See “Non-GAAP Measures”.
5
Net loss includes a non-cash goodwill impairment of $1,725 million related to our cannabis operations reporting unit. This impairment represents the full goodwill balance associated with the cannabis operations reporting unit and was triggered as a result of the decrease in the Company’s market capitalization in Q1 FY2023.
6
Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Measures”.
7
Free cash flow is a non-GAAP measure. See “Non-GAAP Measures”.
Revenues
Net revenue of $110 million in Q1 FY2023 declined 19% versus Q1 FY2022. Total global cannabis net revenue of $66 million in Q1 FY2023 represented a decline of 29% over Q1 FY2022 driven in part by a decline in value flower sales in the Canadian recreational cannabis market due to a deliberate business transition to focus on higher margin, premium and mainstream products. Other consumer products revenue of $44 million in Q1 FY2023, represented an increase of 1% over Q1 FY2022. Excluding the impact from acquired businesses and divestiture of C3, net revenue declined 17% and global cannabis net revenue declined 28% versus Q1 FY2022.
Gross margin
Reported gross margin in Q1 FY2023 was (1%) as compared to 20% in Q1 FY2022. Excluding non-cash restructuring costs recorded in COGS of $4 million, adjusted gross margin was 2%. Gross margin in Q1 FY2023 was further impacted by lower production output and price compression in the Canadian recreational business, a shift in business mix, and a decrease in the amount of payroll subsidies received from the Canadian government pursuant to a COVID-19 relief program.
Operating expenses
Total SG&A (“SG&A”) expenses in Q1 FY2023 declined by 8% versus Q1 FY2022, driven by year-over-year reductions in General & Administrative and Research and Development expenses, offset by increases in Sales and Marketing.
Goodwill impairment
The Company recognized a non-cash goodwill impairment of $1,725 million related to our cannabis operations reporting unit which is included in our quarterly net loss. This impairment represents the full goodwill balance associated with the cannabis operations reporting unit and was triggered as a result of the decrease in the Company’s market capitalization in Q1 FY2023.
Net Loss
Net Loss in Q1 FY2023 was $2,088 million, which is a $2,478 million increase in the net loss versus Q1 FY2022, driven primarily by the non-cash $1,725 million impairment in goodwill, and non-cash fair value changes.
Adjusted EBITDA
Adjusted EBITDA loss in Q1 FY2023 was $75 million, an $11 million increase in Adjusted EBITDA loss versus Q1 FY2022 primarily driven by the decline in gross margin, partially offset by the reduction in our total SG&A expenses.
Free Cash Flow
Free Cash Flow in Q1 FY2023 was an outflow of $143 million, a 23% decrease in outflow versus Q1 FY2022. Relative to Q1 FY2022, the Free Cash Flow outflow decrease reflects a decrease in the cash used for operating activities and optimizing our capital expenditures as part of the previously-noted restructuring actions.
Cash Position
Cash and short-term investments amounted to $1.2 billion at June 30, 2022, representing a decrease of $0.2 billion from $1.4 billion at March 31, 2022 reflecting primarily EBITDA losses, and the upfront payment made as consideration for the options to acquire Jetty Extracts upon federal permissibility of THC in the U.S.
Business Highlights
Strong brand performance and innovation are helping stabilize market share in core segments of the Canadian recreational cannabis market
Maintained Canopy Growth’s #1 share in combined premium flower and PRJ segment in Q1 FY2023. With a continued focus on premium NPD, Canopy launched 11 new premium flower and PRJ products in Q1 FY2023 which resulted in brand share of Doja in the premium flower and PRJ segment increasing 13 bps to 2.1%.
Maintained share in the combined mainstream flower and PRJ segment with the introduction of 6 new mainstream flower and PRJ offerings in Q1 FY2023. Strong consumer demand for new flower strains increased the Tweed brand’s share of the combined mainstream flower and PRJ segment by 35 bps to 4.0% in Q1 FY2023.
Consumer demand for new Ready-to-Drink (“RTD”) beverage flavour extensions under the Deep Space and Tweed brand banners helped increase the Company’s share of RTD beverage category by 33 bps to 23%. The Deep Space brand maintained its #2 rank in the over 5 mg THC beverage category. Strong consumer demand for the Tweed portfolio of Iced Tea and Fizz beverages increased the Tweed brand’s share of the RTD beverage market by 136 bps to 10.4% and maintained the brand’s #1 market share rank in the under 5 mg THC beverage category.
Robust NPD pipeline including a combined 26 premium and mainstream flower and PRJ offerings expected in Q2 FY2023 secured 60 new listings across Alberta, Ontario and Quebec.
Medical cannabis revenues increasing, with multiple potential growth drivers
International medical cannabis net revenue doubled versus Q1 FY2022 driven primarily by strong sales in Israel and Australia. Sales force in Germany focused on expanding pharmacy network.
Critical focus of Canadian medical cannabis business on increasing veteran registrations through the Spectrum Veteran Care program.
Gains in distribution and sales velocity of BioSteel RTD drove record revenue in Q1 FY2023
BioSteel revenue in Q1 FY2023 increased 169% versus Q1 FY2022 with BioSteel RTDs achieving 21% ACV8, up from 3% in Q1 FY2022. Agreement secured with Walmart for product to blanket 2,200 stores across 39 states.
BioSteel entered partnership to become the Official Hydration Partner of the NHL and NHLPA. Sponsorship will provide the BioSteel brand with league-wide rink side marketing and product supply rights, retail activation rights, community engagement platforms, player marketing and activation rights.
U.S. THC Ecosystem continues to strengthen
Wana9 continued their North American expansion by entering Puerto Rico and Arkansas in addition to opening three additional states. Building on the success of its Optimals line, including Wana Optimals Fast Asleep, which ranks as the No. 1 Quick onset sleep gummie in North America, Wana has added a variety of new SKUs to a range of markets.
Acreage Holdings10 made strong progress in the first quarter of calendar 2022 with revenue increasing 48% year over year and delivered their 5th consecutive quarter of positive Adjusted EBITDA. In April 2022, Acreage commenced adult-use operations in New Jersey with their flagship brand, The Botanist, now available for adult-use consumers in multiple dispensaries in the state.
8
IRI data for the 4 weeks ended June 12, 2022.
9
Until such time as the Company elects to exercise its rights to acquire Wana Brands, the Company will have no direct or indirect economic or voting interests in Wana Brands, the Company will not directly or indirectly control Wana Brands, and the Company, on the one hand, and Wana Brands, on the other hand, will continue to operate independently of one another.
10
Until such time as the Company elects to exercise its rights to acquire Acreage Holdings, the Company will have no direct or indirect economic or voting interests in Acreage Holdings, the Company will not directly or indirectly control Acreage Holdings, and the Company, on the one hand, and Acreage Holdings, on the other hand, will continue to operate independently of one another.
First Quarter Fiscal 2023 Revenue Review
Revenue by Channel
(in millions of Canadian dollars, unaudited)
Q1 FY2023
Q1 FY2022
Vs. Q1 FY2022
Canadian recreational cannabis
Business to business11
$26.6
$42.7
(38 %)
Business to consumer
$12.4
$17.3
(28 %)
$39.0
$60.0
(35 %)
Canadian medical cannabis12
$13.4
$13.5
(1 %)
$52.4
$73.5
(29 %)
International and other
C3
$-
$11.4
(100 %)
Other13
$13.8
$8.0
73 %
$13.8
$19.4
(29 %)
Global cannabis net revenue
$66.2
$92.9
(29 %)
Other consumer products
Storz & Bickel
$15.6
$24.1
(35 %)
This Works
$5.5
$6.5
(15 %)
BioSteel14
$17.9
$6.7
169 %
Other
$4.9
$6.0
(18 %)
Other consumer products revenue
$43.9
$43.3
1 %
Net revenue
$110.1
$136.2
(19 %)
11
For Q1 FY2023, amount is net of excise taxes of $11.6 million and other revenue adjustments of $0.6 million (Q1 FY2022 – $17.8 million and $3.0 million, respectively).
12
For Q1 FY2023, amount is net of excise taxes of $1.2 million (Q1 FY2022 – $1.4 million).
13
For Q1 FY2023, amount reflects other revenue adjustments of $0.6 million (Q1 FY2022 – $0.4 million).
14
For Q1 FY2023, amount reflects other revenue adjustments of $1.7 million (Q1 FY2022 – $1.9 million).
Revenue by Form
(in millions of Canadian dollars, unaudited)
Q1 FY2023
Q1 FY2022
Vs. Q1 FY2022
Canadian recreational cannabis
Dry bud15,16
$38.6
$66.0
(42 %)
Oils and softgels15,16
$5.2
$5.7
(9 %)
Beverages, edibles, topicals and vapes15,16
$7.4
$9.1
(19 %)
Other revenue adjustments16
$(0.6)
$(3.0)
80 %
Excise taxes
$(11.6)
$(17.8)
35 %
$39.0
$60.0
(35 %)
Medical cannabis and other17
Dry bud
$14.2
$9.6
48 %
Oils and soft gels
$9.2
$20.5
(55 %)
Beverages, edibles, topicals and vapes
$5.0
$4.2
19 %
Excise taxes
$(1.2)
$(1.4)
14 %
$27.2
$32.9
(17 %)
Global cannabis net revenue
$66.2
$92.9
(29 %)
Other consumer products
Storz & Bickel
$15.6
$24.1
(35 %)
This Works
$5.5
$6.5
(15 %)
BioSteel17
$17.9
$6.7
169 %
Other
$4.9
$6.0
(18 %)
Other consumer products revenue
$43.9
$43.3
1 %
Net revenue
$110.1
$136.2
(19 %)
Canadian Cannabis
Recreational B2B net sales in Q1 FY2023 decreased 38% over the prior year period primarily due to the continuing impacts of price compression resulting from increased competition and lower sales in the value-priced dried flower category. These factors were partially offset by a more favourable product mix due primarily to a decrease in the volume of value-priced dried product sold compared to the prior year and a full quarter of net revenue contribution from Supreme Cannabis.
Recreational B2C net sales in Q1 FY2023 decreased 28% versus Q1 FY2022 largely driven by increased competition from the rapid increase in third party retail locations across provinces.
Medical net revenue in Q1 FY2023 decreased 1% from Q1 FY2022 driven primarily by higher average order sizes offset by a fewer number of orders.
International Cannabis
C3 revenue in Q1 FY2023 decreased 100% year-over-year as a result of the divestiture that was completed on January 31, 2022.
Other revenue in Q1 FY2023 increased 73% over the prior year period primarily due to bulk cannabis sales by Supreme Cannabis into the Israel medical cannabis market and increasing global medical sales including to Australia.
Other Consumer Products
BioSteel sales in Q1 FY2023 increased 169% over Q1 FY2022 in part due to continued growth in our distribution channels and sales velocities across North America and higher international sales.
Storz & Bickel vaporizer revenue in Q1 FY2023 decreased 35% over Q1 FY2022 due primarily to temporary disruptions with certain distributors and slowdown in consumer spending in North America and Europe.
This Works sales in Q1 FY2023 decreased 15% over Q1 FY2022 due in part to softer performance of certain product lines, which benefited during the period of COVID-19 restrictions in Q1 FY2022 and the phasing of orders for certain products in Europe to Q2 FY2023.
The Q1 FY2023 and Q1 FY2022 financial results presented in this press release have been prepared in accordance with U.S. GAAP.
15
Excludes the impact of other revenue adjustments.
16
Other revenue adjustments represent the Company’s determination of returns and pricing adjustments and relate to the Canadian recreational business-to-business channel.
17
Includes the impact of other revenue adjustments, which represent the Company’s determination of returns and other pricing adjustments.
cover now ? no way Hose .. ))) you , as usually come to conclusion to early ..
If you are shorting you should cover borys. If they pass safe banking in the US this will fly. It is not about their earnings this time. If they make any progress on reforms the whole industry is going to have a big big boost. Canada was just the appetizer for what will happen when the US goes federally legal. There is a bill to de schedule now and safe+ is being discussed. Not a good time to be short cannabis imo
hehehehehe .... big boys are selling , naive kids are buying .... artificial push up NEVER lasts long ..
I do not see any more " young " idiots ? .... without them the forum is boring .. )))
Canopy Church
Breeder Steve
@breeder_steve
The first block that I earned on twitter was from an HC advisor who was arguing in favour of potency caps on extracts, like a moron.
I was easily destroying his pathetic, and nonsensical, "points".
Can you imagine defending potency caps on extracts?
What a dumbass. ??
Breeder Steve
@breeder_steve
·
2h
I couldn't imagine building out and then waiting +/- a year for permission to start. The risk is a very expensive waiting period. Sunk capital on overkill like the MMPR vaults, was worth avoiding, imo. No direct sales? No way I wanted to be locked into selling through others.
Still relevant
OPINION
The goal of legalized cannabis shouldn’t be corporate gold
ALAN YOUNG
CONTRIBUTED TO THE GLOBE AND MAIL
PUBLISHED JULY 15, 2016
This article was published more than 6 years ago.
Alan Young is an associate professor at Osgoode Hall Law School at York University. He has worked with the federal government to recognize cannabis in the medical drug schedule and led a number of constitutional challenges on drug and morality laws.
For the past 25 years I have worked to change Canada's archaic legal approach to marijuana use. Having little faith in the political process and its partisan posturing, I turned to the courts and the Charter of Rights to challenge the constitutional validity of many laws that criminalize morally controversial activity among consenting adults.
Despite achieving enormous success in developing a constitutional protection for medical marijuana, the basic foundation of the marijuana prohibition remained intact after the flurry of court cases. Having grown weary of battle, I was thrilled when the Liberal party pledged to legalize marijuana in 2015. Of course, political promises are unenforceable and, in the past, being on the verge of reform often ended with a quiet re-entrenchment of the status quo. So my enthusiasm has been tempered by a strong dose of cynicism.
STORY CONTINUES BELOW ADVERTISEMENT
As the government crawls towards legalization with the appointment of yet another task force, my tempered enthusiasm has started to wane, replaced by dismay. Everywhere I look I see countless interested parties and stakeholders lining up to cash in on cannabis dollars.
Twenty years ago I predicted that cannabis would be legalized when governments and corporate entities realized the untold monetary treasures to be reaped upon legalization, just as gambling was legalized in the 1990s to reap billions of dollars in tax revenues. And now, licensed medical cannabis producers, drug stores, provincial governments, labour unions, marijuana dispensaries and predatory stock brokers all want a share of the market. Who can blame them? Cannabis is a capitalist's dream considering the unprecedented economic opportunity of a ready-made customer base of millions.
I have always seen marijuana as a benign and mild intoxicant, and the less state regulation the better. However, I understand that some Canadians, and the government, see greater risks, and it is unlikely we will enter a legal world of grow-your-own, share with friends and sell small amounts to others. Canada has a tradition of overregulation and one can already sense that the government is poised to place a myriad of restrictions on production and distribution. Invariably, the more complex the regulatory framework, the more likely the market will be overrun by multinational corporations, Crown agencies and the heroes of big business. This completely undercuts the 1960s idealism which spawned our taste for the uplifting effects of marijuana; however, idealism always plays second fiddle to the realism of money markets.
Of greater concern is the fact that this fixation on economic issues and models of distribution has obscured the basic justification for promoting legalization as a sound policy choice for Canada. At its core, legalization is premised on three interrelated beliefs: 1) the activity is not sufficiently harmful to warrant criminalization; 2) using the blunt instrument of the criminal law justice system to eradicate the activity has been proven to cause more harm than good; 3) the activity has become so prevalent that the law has been rendered ineffective.
So in moving down the road to legalization, the focus should not be on the mode of distribution and who will reap the economic benefit. Although this may be important to the venture capitalists and consumers, a more fundamental question must first be addressed by government: What should the proper legal response be to the multitude of pot consumers who have no interest in, and perhaps even an aversion to, corporate marijuana?
It must be recognized that a vibrant underground cannabis culture has been evolving for decades. If the government maintains the taboo on self-production and local dispensaries, there will remain hundreds of thousands of cannabis users and producers who will refuse to go to the liquor or drug store to purchase cannabis. If excluded from the new market, the underground will continue to flourish, and this government must decide what to do with the outliers. If the fallback position is that anyone who does not comply with the rules of the market must be dealt with by the criminal justice system, then we have not achieved legalization.
The outliers cannot be considered criminals solely for running the very same business operations sanctioned and exploited by the government and corporate Canada. If a basic premise of legalization is that the activity is not sufficiently harmful to warrant jail and a criminal record, it cannot be converted back into criminal conduct simply because it is being done without proper licensing. Of course, some type of regulatory offence will have been committed, akin to fishing without a licence, but once a government gives the legal seal of approval to an activity it loses the moral right to condemn and criminalize the renegades operating without a licence.
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For the most part, the underground cannabis culture has been occupied by pot-heads so driven by their love of cannabis that they can carve a bong out of cucumber in thirty seconds or less. They are not a threat to our communities. If this government continues to demonize marijuana and perpetuate the myth that the cannabis community is overrun by criminals, then it is likely they will exclude this community from participating in the legalized world. In which case all we will have achieved is a money-making venture for some, while leaving most others to face criminal sanction for refusing to leave the comfort of their underground world. In other words, we will have achieved nothing.
Doomed!
Breeder Steve
@breeder_steve
·
8h
A sobering statistic, that currently 47% of Canadian businesses in bankruptcy are from the cannabis industry. This abnormality is squarely on the abysmal over-regulation by the pinkos in Ottawa.
The costs of compliance are astronomically high.
It's too much.
Business
Cannabis giant Canopy Growth posts $2B quarterly loss
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Most of the profit plunge came from a writedown but sales were down, too
The Canadian Press · Posted: Aug 05, 2022 12:45 PM ET | Last Updated: August 5
Canopy Growth Corp. says its cannabis sales fell 38 per cent since last year. (Sean Kilpatrick/Canadian Press)
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Canopy Growth Corp. executives argued the company is advancing toward profitability, even as it booked a $1.72 billion non-cash writedown that contributed to a net loss of more than $2 billion during its most recent quarter.
"Maybe our aspirations have changed over the last several years, but we believe that we can get ourselves, with the right focus in the right categories, to a profitable business that's not burning cash in the Canadian market," said CEO David Klein, on a call with analysts.
"I don't want anybody to think that we're not spending almost all of our waking hours on...stopping the cash burn in Canada."
His remarks came as the Smiths Falls, Ont. company behind the Tweed, Tokyo Smoke and Doja brands said Friday that its first quarter net loss compared to net earnings of more than $389 million at the same time last year.
The impairment charge for the period ended June 30 was linked to Canopy's pot operations and came as its recreational business-to-business cannabis sales fell 38 per cent since last year because of price compression and increased competition.
Canadian cannabis stocks pop on U.S. legalization push and GameStop-style short squeeze
"The Canada market has really developed very differently than we had initially expected," Judy Hong, chief financial officer, admitted on a call with analysts.
She named market fragmentation, the strength of the illict market and regulatory hurdles, including a slow move toward federal legalization in the U.S., as the company's biggest challenges.
Such conditions have prodded Canopy into refocusing its product mix on the premium sector, which typically commands higher prices and generates a more loyal consumer basis than value items.
Cost-cutting plans
The move toward premium has been coupled with an ongoing cost-cutting plan involving retooling its facilities, reviewing procurement strategies, implementing flexible manufacturing processes and reducing third-party professional and office fees.
As part of the plan, 243 Canopy workers spanning Canada, Europe and the U.S. lost their jobs in April, the latest in a string of layoffs Canopy and its rivals have carried out during the COVID-19 pandemic.
Canopy anticipates its moves will create between $100 and $150 million in savings within a 12-to-18 month range and — like a series of other cannabis companies who have embarked on overhauls recently — help it reach profitability by better aligning supply with demand.
But many barriers stand in the way of this goal.
Hexo to acquire cannabis competitor Zenabis in $235M deal, aiming for European expansion
In the most recent quarter, Canopy's largest U.S. distributor faced financial challenges causing it to pause orders and the company is now having to work to reestablish ordering patterns that were lost, Hong said.
Consumer spending power is also softening as Canada encounters a near 40-year high inflation level mirrored by several other countries. Increased inflation has already moderated European and North American premium vaporizer sales, Hong said.
Supply chain challenges from previous quarters have stuck around too and been an issue for its Storz and Bickel vape brand in particular.
"Our procurement, engineering and manufacturing team are working hard to identify solutions for these challenges, including alternate components and suppliers and we expect this to be manageable," Hong said.
U.S. legalization still looms
While Canopy works to address these issues, Klein added that it is still keeping an eye on the U.S.
In recent weeks, Senate Majority Leader Chuck Schumer introduced the Cannabis Authorization and Opportunity Act, which could help federally legalize marijuana, though observers aren't hopeful it will be enacted.
"There's no doubt that we put heavy emphasis on the U.S. market, which is evolving... more slowly than we would like," said Klein.
He noted that two thirds of Americans already live in a location that has access to cannabis in some format, "but the federal government still refuses to recognize that reality."
"So putting that aside...we're not waiting," he said. "We continue to see the U.S. is the largest and most important market in the world."
To advance its U.S. strategy, Canopy signed a deal to acquire edibles company Wana Brands, if Canada's neighbour moves to allow a key pot component.
Canopy has made similar arrangements with TerrAscend Corp. and Acreage Holdings Inc. and deepened its U.S. presence by launching four sparkling cannabidiol waters under the Quatreau name across the border in March 2021, adding to the roster of Martha Stewart, BioSteel and This Works products it already sells in the U.S.
The company's first quarter net loss amounted to a loss of $5.23 per diluted share compared to a loss of 84 cents per share in the second quarter of 2021.
Analysts expected the company to report a net loss of $111.6 million US or 28 cents per share, according to financial data firm Refinitiv.
Net revenue for the period amounted to $110.1 million US, down 19 per cent from $136.2 million US in the same quarter last year.
Following the release of those figures, Canopy's share price dropped about 40 cents or 11 per cent to $3.29 as the stock market opened. By mid-morning, it was trading at $3.42.
Business
Cannabis giant Canopy Growth posts $2B quarterly loss
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Most of the profit plunge came from a writedown but sales were down, too
The Canadian Press · Posted: Aug 05, 2022 12:45 PM ET | Last Updated: August 5
Canopy Growth Corp. says its cannabis sales fell 38 per cent since last year. (Sean Kilpatrick/Canadian Press)
91
comments
Canopy Growth Corp. executives argued the company is advancing toward profitability, even as it booked a $1.72 billion non-cash writedown that contributed to a net loss of more than $2 billion during its most recent quarter.
"Maybe our aspirations have changed over the last several years, but we believe that we can get ourselves, with the right focus in the right categories, to a profitable business that's not burning cash in the Canadian market," said CEO David Klein, on a call with analysts.
"I don't want anybody to think that we're not spending almost all of our waking hours on...stopping the cash burn in Canada."
His remarks came as the Smiths Falls, Ont. company behind the Tweed, Tokyo Smoke and Doja brands said Friday that its first quarter net loss compared to net earnings of more than $389 million at the same time last year.
The impairment charge for the period ended June 30 was linked to Canopy's pot operations and came as its recreational business-to-business cannabis sales fell 38 per cent since last year because of price compression and increased competition.
Canadian cannabis stocks pop on U.S. legalization push and GameStop-style short squeeze
"The Canada market has really developed very differently than we had initially expected," Judy Hong, chief financial officer, admitted on a call with analysts.
She named market fragmentation, the strength of the illict market and regulatory hurdles, including a slow move toward federal legalization in the U.S., as the company's biggest challenges.
Such conditions have prodded Canopy into refocusing its product mix on the premium sector, which typically commands higher prices and generates a more loyal consumer basis than value items.
Cost-cutting plans
The move toward premium has been coupled with an ongoing cost-cutting plan involving retooling its facilities, reviewing procurement strategies, implementing flexible manufacturing processes and reducing third-party professional and office fees.
As part of the plan, 243 Canopy workers spanning Canada, Europe and the U.S. lost their jobs in April, the latest in a string of layoffs Canopy and its rivals have carried out during the COVID-19 pandemic.
Canopy anticipates its moves will create between $100 and $150 million in savings within a 12-to-18 month range and — like a series of other cannabis companies who have embarked on overhauls recently — help it reach profitability by better aligning supply with demand.
But many barriers stand in the way of this goal.
Hexo to acquire cannabis competitor Zenabis in $235M deal, aiming for European expansion
In the most recent quarter, Canopy's largest U.S. distributor faced financial challenges causing it to pause orders and the company is now having to work to reestablish ordering patterns that were lost, Hong said.
Consumer spending power is also softening as Canada encounters a near 40-year high inflation level mirrored by several other countries. Increased inflation has already moderated European and North American premium vaporizer sales, Hong said.
Supply chain challenges from previous quarters have stuck around too and been an issue for its Storz and Bickel vape brand in particular.
"Our procurement, engineering and manufacturing team are working hard to identify solutions for these challenges, including alternate components and suppliers and we expect this to be manageable," Hong said.
U.S. legalization still looms
While Canopy works to address these issues, Klein added that it is still keeping an eye on the U.S.
In recent weeks, Senate Majority Leader Chuck Schumer introduced the Cannabis Authorization and Opportunity Act, which could help federally legalize marijuana, though observers aren't hopeful it will be enacted.
"There's no doubt that we put heavy emphasis on the U.S. market, which is evolving... more slowly than we would like," said Klein.
He noted that two thirds of Americans already live in a location that has access to cannabis in some format, "but the federal government still refuses to recognize that reality."
"So putting that aside...we're not waiting," he said. "We continue to see the U.S. is the largest and most important market in the world."
To advance its U.S. strategy, Canopy signed a deal to acquire edibles company Wana Brands, if Canada's neighbour moves to allow a key pot component.
Canopy has made similar arrangements with TerrAscend Corp. and Acreage Holdings Inc. and deepened its U.S. presence by launching four sparkling cannabidiol waters under the Quatreau name across the border in March 2021, adding to the roster of Martha Stewart, BioSteel and This Works products it already sells in the U.S.
The company's first quarter net loss amounted to a loss of $5.23 per diluted share compared to a loss of 84 cents per share in the second quarter of 2021.
Analysts expected the company to report a net loss of $111.6 million US or 28 cents per share, according to financial data firm Refinitiv.
Net revenue for the period amounted to $110.1 million US, down 19 per cent from $136.2 million US in the same quarter last year.
Following the release of those figures, Canopy's share price dropped about 40 cents or 11 per cent to $3.29 as the stock market opened. By mid-morning, it was trading at $3.42.
I said a few days ago and we see this today .... lower revenue and a big loss ....
what next ? steady drop to $1.5 - $2 .... very soon ...I shorted at $3.75 and it was a nice step ..
Matt Lamers ????
@matt_lamers
47m
UPDATED: Canopy Growth has lost almost $6 billion selling cannabis since 2015.
Losses for years ended March 31:
2015: $9.3M (15 months)
2016: $3.5M
2017: $7.6M
2018: $67.3M
2019: $712M
2020: $1.4 billion
2021: $1.7 billion
2022: $320.5M
2023: $2.1 billion (1Q)
Matt Lamers ????
@matt_lamers
Canopy is now the biggest money-losing machine in the cannabis industry, surpassing Aurora, which has lost approx. $5.4 billion.
The 2 businesses together have lost well over $10 billion.
They're also the 2 most subsidized cannabis producers in the world, courtesy
Matt Lamers ????
@matt_lamers
Why has Canada been HEAVILY subsidizing cannabis production for 2 producers amid a massive, historic glut of cannabis production?
To save jobs! How many jobs were saved? They permanently laid off A LOT of people! #cdnpoli
1:46 PM · Aug 5, 2022·Twitter Web App
Matt Lamers ????
@matt_lamers
·
30m
Replying to
@matt_lamers
Pro tip for pro stock analysts: Canopy's 2nd biggest problem is they embarked on a "deliberate business transition to focus on higher margin, premium" cannabis"
Problem with that is it puts them head-to-head with micro, who let's be Frank, are much better at this sort of thing.
Canopy's biggest problem (since no one asked) is they can't sell budget cannabis either.
All part of this trend: The biggest Canadian cannabis producers, as a whole, sell only a fraction of their production.
.
It,s called being DOOMED!!!
Your DADDY since 2014... and counting.
Please do not listen to a Russian Bot.
Remember that Happy loves the management team...
Dorothy digs Martha.
CGC has Snoop on their team.
Time to purchase shares.
$2 billion dollar loss, just gruesome. Sales falling, margins compressing…..the funeral procession has started
interesting day tomorrow .... naive people are going to buy ..... really ?
I decided to short today at $3.75 C ..... chance for good earning is " 0 "
Legacy is where it,s at.
Fat wallets blew it big time!
Grow your own
@awesomesound1
·
13m
Replying to
@LarisaBolivar
Before you think Federal legalization is the golden license understand that the fat wallet stockmarket weed CEOs will be lobbying Governments to raid, arrest and shutter all unlicensed, graymarket "Cannabis" businesses, for a Monopoly, with Gov setting law & regulations.
Rae S Opengart
@RSOpengart713
·
8m
Replying to
@LarisaBolivar
California sold out legacy growers, violating agreements with them. They really failed with their cannabis taxation which should have started low and been increased in stages. Instead, tax was as much as the item cost. That is, the retail price was 50% tax.
I would have to agree with Larisa.
Larisa Bolivar
@LarisaBolivar
Let’s discuss a major issue in cannabis: classism. Why is it that attorneys & lobbyists & MSO weedbaggers run the show? They overthrew legacy people, stole our market, gaslighted us, & now control the narrative. #cannabis #cannabisnews #marijuananews #marijuana #socialequity
10:29 AM · Aug 3, 2022·Twitter for iPhone
37,985 Retweets
My longstanding view is some of the CEWS cash must be repaid, not only by the largest cannabis companies (who received a fraction of the total amount), but by any company that can't prove they used it to "retain and rehire" workers. Canada spent $100 billion on this boondoggle.
This is part of the consequence for large licensed producers who funded and build production capacity before they identified customers, or even knew how to produce what they wanted to buy.
Let's not pretend the lion's share of this destruction didn't happen at the biggest LPs.
LP,s scaling poor quality bunk weed is all the rage!!!
Canadian growers destroyed a record 425 million grams of cannabis last year
author profile pictureBy Matt Lamers, International Editor
To Bonno, August 3, 2022
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A graphic showing the amount of Canadian cannabis that is destroyed since 2018
Canadian licensed producers have destroyed a growing amount of cannabis every year since adult-use legalization nearly four years ago, with 2021’s record quantity far exceeding the product sold that year, an MJBizDaily analysis has found.
The latest data signals that some Canadian mass-producers might need to further rein in output to bring it more in line with forecasted sales, after years of trying to rightsize capacity so they’re not growing more than they’re able to sell.
All told, Canada’s federally licensed marijuana producers destroyed a record 425 million grams – or 468 tons – of unsold, unpackaged dried cannabis last year, according to Health Canada data provided to MJBizDaily.
Last year’s total was up more than 50% from the 279 million grams of dried cannabis that was destroyed in 2020. LPs destroyed 155 million grams in 2019.
Seattle-based analytics firm Headset estimates that sales of dried cannabis and pre-rolls amounted to 293 million grams last year in four key provinces, indicating destroyed inventory again exceeded sold production.
Headset monitors sales in Alberta, British Columbia, Ontario and Saskatchewan, which together account for approximately three-quarters of all legal sales of recreational marijuana products in Canada.
In addition to the destruction of unpackaged dried cannabis, more than 7 million packaged cannabis products across the country were sent for destruction in 2021, according to the Health Canada data.
Quantities of destroyed cannabis include:
3,576,232 packages of dried cannabis.
1,118,148 packages of extracts, including vapes.
2,421,823 packages of edibles, including beverages.
15,359 packages of topicals.
Headset tracked cannabis sales of 104 million packaged units in 2021 – indicating that, unlike unpackaged dried cannabis, sales of packaged merchandise far exceeded the amount that was destroyed.
The Health Canada data does not include the weight of the packaged production.
Widespread destruction
Destruction has been growing in Canada’s young cannabis industry after the largest producers funded and built out more production capacity than the industry needed after the launch of recreational sales in October 2018.
Most of the biggest greenhouse transactions led to direct real estate losses worth millions of dollars and “balance sheet adjustments” worth billions of dollars in inventory and other asset write-downs, previous MJBizDaily reporting found.
In fact, cannabis producers in Canada sold less than 20% of their production between legalization in 2018 and the end of 2020.
Since 2018, almost 900 million grams of unpackaged dried cannabis has been destroyed by licensed producers because of overproduction and quality issues – a weight approximately equal to 650 Toyota Prius cars.
That figure would easily pass the 1 billion-gram mark when destroyed packaged marijuana is accounted for.
Bloated balance sheets
Stewart Maxwell, a cannabis crop consultant based in British Columbia, said some large producers might be putting off destruction to make their balance sheets look better than they really are.
“I think some of the larger producers just want cannabis in their inventories. Even if they never sell it, it still looks good on your books to have assets,” he said.
“A lot of producers aren’t destroying products when it’s ready to be destroyed, even though it’s no longer marketable.”
Across all product categories in Canada, the amount of packaged product sitting in corporate inventories far exceeds the amount of packaged merchandise that is sold.
That imbalance indicates that high levels of inventory destruction could continue for some time.
In December, for instance, 14 million packaged units of extracts were stashed in inventories of producers, wholesalers and retailers.
In the same month, sales amounted to less than 3 million units in recreational and medical channels.
Roughly 19 million units of cannabis edibles were packaged and ready for sale in December. Only about 4 million units were sold, according to government data.
Cannabis topicals inventory reached 550,000 units, compared with sales of 65,000 units.
Meanwhile, roughly 36 million packaged units of dried cannabis were in inventory that month, with sales reaching 9.6 million units.
Packaged cannabis destroyed in Canada by product type
Product type 2020 2021 Percent change
Dried cannabis units 2,642,779 3,576,232 35.32%
Cannabis extracts units 1,337,364 1,118,148 -16.39%
Edible cannabis units 714,485 2,421,823 238.96%
Cannabis topicals units 943 15,359 1528.74%
Showing 1 to 4 of 4 entries
Source: Health Canada
The imbalance primarily lies with licensed producers, not wholesalers or retailers, the Health Canada data suggests.
Maxwell warned that the overproduction will make life difficult for most new entrants into the industry.
“I’m a crop consultant. I make my living teaching people how to grow more weed. But quite often, my first meeting is uncomfortable,” he said.
“A majority of the time, I’m telling people, ‘I’m sorry, but you’re going to fail.’ And they usually don’t hire me when I tell him that, but that’s the reality if you’re just getting into this industry (now).
“The odds are, even if you are a good actor and you have substantial financial assets behind you, the numbers are not good for anyone. Because of these issues – oversupply. Cannabis can’t find its real price point.”
Demand forecasting
One of the companies navigating Canada’s tumultuous cannabis market better than some of its larger competitors is cultivator Organigram Holdings.
The New Brunswick-based company has managed to grow its overall market share and sales, while most of its main rivals have seen their sales crash and write-downs skyrocket over the same period.
A recent report by New York-based financial services firm Cowen noted that some Organigram rivals experienced sales declines upwards of 39% year-over-year in the second quarter of this year.
Organigram’s sales, by contrast, rose 60%.
How?
CEO Beena Goldenberg said part of the reason is that Organigram sells most of what it produces, avoiding the massive destruction and write-downs facing larger competitors.
“No. 1, Organigram built out our capacity over time. We had mistakes, too. But in the last couple of years, we’ve been producing based on our sales forecast,” she said in a phone interview.
Goldenberg said not overproducing requires a deep understanding of what your customers want to buy and why.
“Like anything else, it’s all about making sure you’re producing what a consumer wants,” she said. “Quality is becoming the determining factor.”
She said markets are stabilizing enough to make accurate forecasts, “and you shouldn’t have massive amounts to write off. You should be working with the provinces on making sure you have an optimized (product) lineup.”
Cannabis is an agricultural product, Goldenberg said, so consumers don’t want something that’s six months to two years old.
“I think we’re performing very well because we have fresh products in the marketplace all the time. It’s not aged six months, nine months,” she said.
Being able to deliver fresh products boils down to three factors, she said:
Forecast accuracy.
Measured investments in inventory.
Customer service.
“In my whole career, not specific to cannabis, it is always (finding) that balance between forecast accuracy and investment in inventory and customer-service levels. You have to optimize those three factors,” Goldenberg said.
She said Organigram is sitting on about three weeks of inventory.
“That is critical to our process,” she said. “We look at what we need, and we produce accordingly.”
is it time to short again tomorrow ?
do not get trapped ! what we see now is an artificial push up .... smart guys will sell on Thursday .... do the same .... because on Friday the price will start decline ( maybe after a few days ) to $2C/sh .....
Advocating for enforcement against unlicensed operators is advocating for a continuation of the War on Drugs.
If bad regulation prevents companies from competing with unlicensed operators then their beef should be with regulators & the politicians who craft legislation.
DOOMED!!!
Matt Lamers
2-08-22
(And according write-downs disclosed by pubcos, it's clear that most of the overproduction comes from a relatively small number of companies that were flooded with the most capital. You know who they are.)
I'll have detailed reporting on this soon. Still on vacation!
DOOMED!!!
(when bunk flowers does,nt sell)
How Canopy Growth, the star of Canada’s cannabis dreams, fell from grace.
FRED LUM/THE GLOBE AND MAIL
August 2, 2022
To Bonno
8979 COMMENTS
On its quest to dominate the global cannabis market, Canada’s Canopy Growth Corp. WEED-T +9.14%increase deployed a very deliberate strategy: Entice investors with a grand vision – something co-founder Bruce Linton had in spades – then endure any turbulence en route. Short-term losses were irrelevant. The nowhere destination was all that mattered.
It was a winning formula for nearly a decade. Even when investors lost faith in many cannabis producers, and later, when the pandemic nearly decimated the industry, Canopy consistently found a way to float above the fray with canna naive investers.
That has all changed, and quickly. In the past two months, Canopy has encountered something much more ferocious than turbulence and its once-faithful investors aren’t sticking around. For the first time, the company’s bottom is close to falling out.
The rout started in late May when Canopy, once Canada’s top LP (or licensed producer) of cannabis by market share, reported yet another batch of ugly earnings. Executives had promised the company would make money by the second half of the year, at least after excluding certain costs, but as that deadline approached, they admitted that any semblance of profit was still at least two years away.
With Canopy bleeding cash, the company’s debt load suddenly began to draw more attention. To alleviate the burden, management announced in June that they would swap some bonds for shares – but the fix only caused more damage. Handing out new stock diluted existing shareholders and as part of the swap, Canopy agreed to repay $345-million in cash next summer. Investors revolted.
In June alone, Canopy’s shares tumbled 42 per cent. Over the past year, they are down more than double that.
To the naked eye, this collapse may not seem all that unusual. Canada’s entire cannabis sector is reeling. The market peak was in September, 2018, a month before recreational cannabis was legalized. Four years later, many mid-tier producers have merged with rivals simply to stay alive. Canopy’s share price has collapsed from $67.74 on Sept. 7, 2018 to $3.39 as of Friday’s market close.
That Canopy would be indistinguishable from the rest of the lot was once unfathomable. It was the first mover. The disciplined producer that didn’t make reckless acquisitions. The one that would last.
“It’s a monumental fall from grace,” said Nadine Sarwat, an equity analyst at Bernstein.
The recent spiral is particularly bruising for Constellation Brands Inc., the U.S. alcohol giant that invested a total of $5.2-billion in Canopy back when it seemed like recreational weed could be the next big thing. The value of that investment is now close to a goose egg – so immaterial that Constellation is hardly ever asked about it.
Because the broader cannabis sector is already in disarray, Canopy’s crash has barely been scrutinized – it’s just another cannabis dream dashed. But in many ways the company’s undoing is the industry’s most important story to tell. That’s because Canopy was the one company that attracted the so-called smart money – the investment that legitimized the entire sector.
There isn’t an easy explanation for Canopy’s demise. Instead, there are a few schools of thought. They fall into three buckets: irrational investors, regulatory hurdles and cruddy (canna experienced) management.
The investor angle is the least disputed. The cannabis sector gained steam right after the commodity super cycle crashed in 2012. At that point, tech stocks and cryptocurrencies were not yet mainstream. Weed was the only speculative sector to bet on, and Canada was the only major country that was ready to legalize recreational use. The money poured in.
Against that backdrop, Canopy, led by Mr. Linton, was the undisputed star. Unlike some competitors who were late to the game, Canopy had launched in 2013 as Tweed Marijuana Inc. Its original goal was to sell medical marijuana. Because of this history, the company was well positioned to capitalize on the federal Liberals’ legalization plans. Crucially, Canopy owned a large manufacturing facility – a former Hershey chocolate factory – in Smiths Falls, Ont., southwest of Ottawa.
Few countries had publicly listed cannabis stocks. As Canada’s cannabis profile rose among international investors, Canopy seemed untouchable. In 2017, it was the first marijuana producer added to the S&P/TSX Composite Index, and the very same year, Constellation invested $245-million for a 9.9-per-cent stake.
But Canopy could only control so much. As the October, 2018 legalization date neared, dozens of LPs received regulatory approval to start growing and selling cannabis, which meant Canada was on the cusp of being flooded with weed. Investors refused to do the simple math that would have spelled this out, or simply ignored it.
“There was a huge disconnect between the fundamental values of these companies and their valuations,” said Matt Bottomley, an analyst at Canaccord Genuity.
Oversupply wasn’t the only thing investors glossed over. At the height of the frenzy, hardly anyone stopped to consider the way the companies’ growth would be limited by regulations.
For one, cannabis producers in Canada have to obey strict limits on how they market their products. Health Canada prevented producers from advertising their brands to minors, which took traditional marketing avenues such as major sporting events off the table. Because the rules were so stringent, producers tended to play it safe by advertising with only oblique references to cannabis.
Another hurdle: Cultivation rules have evolved. Early on, producers with the most sophisticated greenhouses were thought to have the best chances at success, because Health Canada enforced so many rules related to pesticides and optimal growing conditions. That’s why Canopy’s archrival Aurora Cannabis spent so much effort publicizing the massive greenhouse it was building near the Edmonton airport, dubbed Aurora Sky.
Only a few months after legalization, Health Canada permitted outdoor growing, which is a much cheaper form of cannabis production. By early 2021, the regulatory body had approved 110 licenses to cultivate outdoors.
Costly greenhouse production, coupled with an oversupply of cannabis, put producers in a bind. Under pressure to slash costs, Canopy shuttered two big British Columbia production facilities in March, 2020, both of which were once marketed as crucial to its expansion.
In May this year, Aurora shut Aurora Sky. The company’s shares have plummeted 99 per cent since their 2018 peak.
Canopy’s pivot to what is known as Cannabis 2.0 is a perfect example. When it became clear the Canadian market was going to be oversaturated with traditional bud – known as flower in the industry – derivative products became all the rage. “When it came time to launch edibles, vapes and beverages, Canopy wasn’t ready. But their peers were,” said Andrew Carter, an analyst at Stifel Financial Corp.
The groundwork for this pivot should have been laid when Mr. Linton was chief executive.
What is undeniable is that, when he was in charge, he wasn’t content with simply running a Canadian business. He had dreams of global domination. Under his leadership, the company made investments in over a dozen countries. This vision was central to Canopy’s appeal: If cannabis legalization swept across the globe, it would arguably be the best situated to capitalize.
But cannabis bans weren’t so quick to disappear. Spreading the money left Canopy looking like a sprawling octopus, miles from water.
The walls closed in on Mr. Linton after Canopy reported a $323-million fourth-quarter loss in June, 2019, four times larger than analysts’ expectations. By then it was clear the international bets would take years to pay off, and that Canada’s cannabis experiment had gotten off to a slow start.
Six months after legalization there were major supply-chain issues and weak sales across the industry. Investors may not have cared about profits in the early days, but eventually they did. Mr. Linton was fired in July, 2019.
To this day, he doesn’t regret his strategy. He argues that success comes only from expanding and innovating. “I could have been profitable in year three, but you know what? By year four you would have been irrelevant,” he said in an interview. The industry was evolving so quickly that he worried about thinking too small and quickly getting eclipsed. So he dreamed big. “This platform was not built to be a corner participant in a small segment of the market.”
Canopy declined to comment for this story, but the current management team – and Constellation – have often implicitly suggested that Mr. Linton should bear the brunt of the blame. The way they frame it, Canopy has spent the past three years slashing costs Mr. Linton approved.
But Constellation was well aware of what Mr. Linton was up to. When the American company bought its first, smaller stake in Canopy in 2017, it wasn’t solely a passive investment – Canopy referred to it as a “strategic relationship,” with Constellation providing support on consumer analytics, market trending, marketing and brand development. A year later, they doubled down with that $5-billion cheque.
Constellation has made its own blunders since taking the reins. After firing Mr. Linton, the new chief executive, David Klein, who used to be Constellation’s chief financial officer, made it clear he was betting on the U.S. market. After Joe Biden won the presidency and the Democrats took 50 seats in the U.S. Senate, there was enormous hope in the Canadian industry that cannabis would be legalized at the federal level.
Now, with Republicans seemingly poised to retake the Senate in mid-term elections this fall, those dreams have all but disappeared. “Some assets in Canopy’s portfolio have value, but we believe [the company] has built a strategy dependent on U.S. legalization, where prospects have worsened,” CIBC World Markets analyst John Zamparo wrote in a recent note to clients.
Mr. Carter at Stifel is also critical of what he calls Constellation’s capital markets strategy. Its plan was to invest $5-billion in Canopy, then use that money to grow through acquisitions. The plan backfired. Instead of putting Canopy alone in a position of strength, the investment ended up being a shot in the arm for the entire industry. The sector’s share prices soared in the aftermath, making potential deals much more expensive.
Mr. Carter was also baffled by Canopy’s decision to take on costly debt in April, 2021, in the form of a US$750-million loan from King Street Capital Management LP, a U.S. investment firm. At the time, Canopy’s shares were experiencing a resurgence because retail traders had piled into speculative stocks. Other cannabis companies were raising money by selling shares, but Canopy chose debt.
“It just made no sense. Why would they do it? I don’t know. I still don’t get it,” Mr. Carter said of the loan.
From afar, it can seem like Constellation has barely been hindered by its bad bet. It was a $5-billion blunder, yet most analysts have moved on and the company’s shares haven’t tanked. On its last quarterly call, Bernstein’s Ms. Sarwat was the only person to ask about the disaster.
In an interview, she said Constellation has, in fact, been penalized, but it’s hard to recognize because the Canopy pain has been masked by Constellation’s beer portfolio, which includes the U.S. marketing and production rights for Mexican beers such as Corona. It’s one of the bright spots in the alcohol industry.
This past spring, the Sands family, which controls Constellation, announced they were giving up their special class of voting shares in the company. The motivations for the move have been tough to decipher. Perhaps the family just wants to cash out – the Class B shares are getting bought for a total of US$1.5-billion.
But Ms. Sarwat has an alternative theory: Ordinary shareholders were getting fed up, particularly with rumours swirling of new acquisition targets, and they wanted a greater say in the company’s future. “People were worried they were going to do another stupid deal,” she said.
Canopy, now run by Constellation’s chosen leaders, is trying to turn a corner. It laid out a revitalization plan in May. In Canada, its focus is on premium cannabis, a response to the country’s oversupply of cut-rate mediocre weed. Canopy also plans to cut even more expenses – particularly sales, marketing and general costs, which it hopes to reduce by 25 per cent. Roughly half of the savings are expected to come from job losses.
Because Canada has far too many LPs, and many are now pivoting to premium weed as well, Canopy’s best hope for growth is U.S. expansion. But even if the U.S. government does legalize cannabis, Canopy has lost what used to be its biggest advantage: a war chest with billions of dollars to burn.
At the end of 2018, Canopy had $4.1-billion in cash on its balance sheet. Now its coffers are running low. Before the recent debt exchange, the company was in a net debt position, meaning it owed more than its cash balance. And growth is hard to come by.
“They’re the furthest of all the large LPs from becoming profitable,” Canaccord’s Mr. Bottomley said.
Key dates in the Canopy Growth story
April 4, 2014: Launches trading on the TSX Venture Exchange
May 24, 2018: Becomes the first cannabis company to trade on the NYSE
Aug. 15, 2018: Constellation Brands announces it will invest $5-billion for an eventual 38-per-cent share of Canopy
Sept. 7, 2018: Canopy reaches an all-time share price high of $67.74 a share
Oct. 17, 2018: Cannabis becomes legal in Canada for recreational use
April 18, 2019: Canopy is added to the to the S&P/TSX 60 Index
July 3, 2019: Founder Bruce Linton is ousted from company
Dec. 9, 2019: David Klein, a former Constellation Brands executive, is announced as Canopy’s new CEO
Dec. 20, 2019: Mark Zekulin, former co-CEO, steps down
Dec. 9, 2020: As part of the new restructuring plan, Canopy announces it will close five facilities and cut 220 jobs
March 18, 2021: Canopy announces it is raising US$750-million through a senior secured loan
Feb. 5, 2021: Pandemic investing boosts Canopy stock to a two-year high of $54.76
June 30, 2022: Canopy announces it will swap $255.4-million of its senior secured notes for shares and cash
Bottom line nobody talks about : bunk flowers don,t sell!
DOOMED!!!
Canna World
@CannaWorld4
2-8-22
+80% of all weed produced by legal companies in Canada has been destroyed or is waiting to be destroyed.
That's it, that's the tweet
critical week ..... are we going to see dramatic drop on Thursday .... and massacre on Friday ? .... big chance
Good article. One of the few things I agree with you completely on Bonno
CANNABIS INDUSTRY’S PUBLIC HEALTH PROBLEM
CALEB MCMILLANJULY 28, 2022
CANNABIS 101CANNABIS LEGALIZATIONCANNABIS NEWSFEATUREDHEALTHHEALTH & SEXLATEST LEGALIZATION NEWSLAWMARIJUANA LEGALIZATIONMARIJUANA NEWSPOLITICSPOLITICSTHC NEWS46,998VIEWS
If the US government legalizes cannabis federally, they’ll face the same public health problems Canada did. Namely, busybody bureaucrats demanding to control the nuances of how you consume your cannabis.
It’s like the adage about kids who become lifeguards. Some become lifeguards because they want to help protect and save lives. Others become lifeguards because they want to sit higher than everyone else and yell rules at people.
Most health care professionals are of the former type. They are the ones who save lives, and you never hear from them. They have quiet, small-town practices or are kept busy at a city hospital.
The latter group goes into public health.
If the US government legalizes cannabis federally, they will face a public health problem. And the cracks are already starting to appear. Every so-called public health expert wants a limit on THC.
THC Limits & Taxes
Cannabis & Public Health
There was a recently published white paper from the University of Southern California’s Leonard D. Schaeffer Center for Health Policy & Economics. In other words, it was a white paper written by the intellectual underbelly of public health. They’ve outlined rules they want to see on legal cannabis. This included a limit on the amount of THC allowed in all cannabis products.
The white paper also called for taxing cannabis based on potency than weight or retail price. And, of course, they want a comprehensive tracking system from seed to sale.
A bill introduced in the US Senate calls for decriminalizing cannabis at the federal level and allows states to set their own rules. So far, only Vermont and Connecticut have THC limits.
The US Senate bill also calls for a 25% excise tax on top of the other sales and excise taxes imposed at the state level. This tax essentially guarantees that legacy markets remain consumers’ top preference. It may also bankrupt smaller farms and retailers in the legal states.
One would think public health busybodies would be more concerned with a bill that empowers the legacy market as they have zero control over that market. But, for whatever reason, they’re much more concerned with limiting how much THC American adults can consume.
Even to the point of absurdity.
The Cannabis Industry Has a Public Health Problem
Rosalie Liccardo Pacula, Ph.D., is a senior fellow at the USC Schaeffer Center and Elizabeth Garrett Chair in Health Policy, Economics & Law at the USC Price School of Public Policy.
She told Healthline, “It took us decades to understand alcohol and what a standardized drink was. So we should set these caps and wait at least 5 years before we adjust them because it’s going to take some time for the science to come out.”
In other words, we should act now and arbitrarily limit the non-lethal compound that makes cannabis great. We don’t have the science on our side, and we might not in another five years. Still, we should impose our “expert opinion” and have it written into law, punishable by fines and imprisonment.
Or take R. Lorraine Collins, Ph.D., professor and associate dean for research in the University at Buffalo’s School of Public Health and Health Professions. She says she supports the white paper. Setting THC limits and taxing based on potency is an “excellent start.”
But she’s also cautious about how market players try to undermine public health authority.
“The cannabis industry is very smart,” she said. “One of the things that they do is if you say you’re going to cap the potency of cannabis flower, they’ll increase the potency in other cannabis products. So the key is to cap THC in ‘all cannabis products.'”
She also said laws must be broad enough to cover future cannabis products.
No mention of medical patients who need high doses of THC. No mention of medical patients at all. Only healthy adults who need to be treated like children.
The cannabis industry has a public health problem.
Public Health Busybodies Have No Business Regulating Cannabis
Public Health
According to busybody Rosalie Liccardo Pacula, “A public health approach to cannabis regulation is about incentivizing users in a manner that maximizes benefits and reduces harm.”
But the public health bureaucrats in Canada couldn’t demonstrate harm. They simply asserted it and repeated the lie until the average person believed it. And that seems to be the case in the US, as well.
The only “harm” they can demonstrate conclusively is that if someone consumes a lot of high-THC cannabis, they risk developing “cannabis use disorder.” But what exactly does this prove?
Public health busybodies fear potent cannabis will turn you into an addict. So they’ll interfere with your life to prevent this. There are several problems with this:
a) it is not the business of public health lobbyists what adults do with their bodies on their own time. Psychiatric disorders were a tool used by communist governments to silence dissidents. This may not be the case here, but best to err on the side of caution.
b) an “addict” is not a real thing. People can develop habitual behaviours and strongly ingrained preferences. But high-THC cannabis cannot come to life and force you to consume it. “Cannabis use disorder” is not real.
c) the evidence linking cannabis to psychosis and schizophrenia is haphazard at best and pseudoscience at its worst. Public health bureaucrats have no foundation on which to base their recommendations.
The only risks to young, healthy people regarding cannabis are the destructive narratives that public health puts in their heads.
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