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Backing cannabis reform in Parliament
https://www.libdemvoice.org/backing-cannabis-reform-in-parliament-71927.html
Marijuana Is About to Be Legal for Half of the U.S.
https://www.rollingstone.com/politics/politics-news/marijuana-legalization-midterm-results-1234628966/
New Missouri River entertainment district includes areas for Marijuana consumption
https://www.420intel.com/articles/2022/11/10/new-missouri-river-entertainment-district-includes-areas-marijuana-consumption
Appleton voters show overwhelming support for legalizing Marijuana
https://www.420intel.com/articles/2022/11/10/appleton-voters-show-overwhelming-support-legalizing-marijuana
Minnesota Governor Says Marijuana Legalization Will Be ‘One Of The First’ Bills To Pass With Democrats In Control
https://www.marijuanamoment.net/minnesota-governor-says-marijuana-legalization-will-be-one-of-the-first-bills-to-pass-with-democrats-in-control/
Depends if you shorted at the year high of $19 and change, probably feel pretty good
How do you think those shorters feel today?
Supporters of recreational marijuana look forward to future efforts
https://www.arkansasonline.com/news/2022/nov/10/supporters-of-recreational-marijuana-look-forward/?news-arkansas
Minnesota Senators Signal Plans To Advance Marijuana Legalization In 2023 With New Democratic Majority
https://www.marijuanamoment.net/minnesota-senators-signal-plans-to-advance-marijuana-legalization-in-2023-with-new-democratic-majority/
Calgary Co-Op Unveils Rebranding
https://progressivegrocer.com/calgary-co-op-unveils-rebranding
Local medical Marijuana suppliers react to IM 27 failing
https://www.420intel.com/articles/2022/11/10/local-medical-marijuana-suppliers-react-im-27-failing
Czech Republic to coordinate with Germany on legalizing Cannabis
https://www.420intel.com/articles/2022/11/10/czech-republic-coordinate-germany-legalizing-cannabis
massive shorting is taking place now .... fasten belts boys and girls ..
Dozens Of Rhode Island Cities Vote To Allow Marijuana Businesses And Sales In Their Jurisdictions
https://www.marijuanamoment.net/dozens-of-rhode-island-cities-vote-to-allow-marijuana-businesses-and-sales-in-their-jurisdictions/
you do not have to be a man of science to figure out that the price , in coming days , will be going down like a rock ..
Pot Prohibition Continues Collapsing, and Psychedelic Bans Could Be Next
https://reason.com/2022/11/09/pot-and-psychedelics-rack-up-wins-at-the-ballot-box/
That explains it well... Lol
?????????? ????????????????????
@BryanPassifiume
OCS is featuring some of their new drops coming out at the end of this month, and their edible selection looks revolting.
I’m not sure why they think this is what people want. With Canada’s THC limit on edibles, all you’d end up with is maple syrup with an odd aftertaste
Australia,s warning from the man who knows better.
Carbon-busting hemp could help transform Scottish agriculture to zero emissions
https://theconversation.com/carbon-busting-hemp-could-help-transform-scottish-agriculture-to-zero-emissions-192477
Shareholders don’t have a clue.
Easy… Cannabis ignorance.
Read : lpees don’t know what they are doing.
Bunk stays on the shelves or get destroyed.
Lpees are not users.
Heads purchase from heads who grow and actually use refer.
After all these years? Can,t make a penny??
Move over and let Jimmy take over these canna naive losers.
Doomed.
manipulation and hype
New Mexico sets record for Recreational Cannabis sales
https://www.420intel.com/articles/2022/11/09/new-mexico-sets-record-recreational-cannabis-sales
How do you explain this… Up 10+ percent?
Maryland And Missouri Become Latest States To Legalize Weed
https://www.forbes.com/sites/irisdorbian/2022/11/09/maryland-and-missouri-become-latest-states-to-legalize-weed/?sh=766e86a07847
7 ways to include hemp in your diet
https://www.hindustantimes.com/lifestyle/health/7-ways-to-include-hemp-in-your-diet-101667979979358.html
UPDATE 1-Canopy Growth posts smaller loss on higher demand, improved margins
https://www.reuters.com/article/canopy-growth-results/update-1-canopy-growth-posts-smaller-loss-on-higher-demand-improved-margins-idINL4N32539S
Nov 9 (Reuters) - Pot producer Canopy Growth Corp reported a smaller second-quarter core loss on Wednesday, helped by higher sales of its cannabis-infused drinks and cost-cutting measures.
devastating report
revenue $117M ... smaller by 10%
net loss $221M !
net loss /sh = 0.47/sh .... when expected = 018/sh
FASTEN BELTS boys and girls ..
naive people think that legalization of marijuana on federal level in USA will change position of Canopy .... hehehehehe , fasten belts boys and girls tomorrow !
Adult use cannabis markets in four states voting on pot could see $2.8 bln in sales by 2026
https://www.marketwatch.com/story/adult-use-cannabis-markets-in-four-states-voting-on-pot-could-see-28-bln-in-sales-by-2026-mjbizdaily-2022-11-08?siteid=rss
Congress Will Hold A Marijuana Hearing One Week After Five States Vote On Legalization Ballot Measures
https://www.marijuanamoment.net/congress-will-hold-a-marijuana-hearing-one-week-after-five-states-vote-on-legalization-ballot-measures/
We don’t need his permission.
We simply overgrow this old fart.
Biden Says Marijuana Reform Depends On Students’ Votes, And White House Touts Pardons As ‘Equity’ Move
https://www.marijuanamoment.net/biden-says-marijuana-reform-depends-on-students-votes-and-white-house-touts-pardons-as-equity-move/
Dana to the rescue.
https://pot.tv/video/2017/09/24/dana-larsen-blasts-hesa-committee/
Polls Show Support for Recreational-Use Marijuana in Missouri
https://www.riverfronttimes.com/news/polls-show-support-for-recreational-use-marijuana-in-missouri-38844990
New Mexico Pot Sales Hit Record in October
https://hightimes.com/news/new-mexico-pot-sales-hit-record-in-october/
Moderate Sell
8 Ratings
1 Buy
3 Hold
4 Sell
Based on 8 analysts giving stock ratings to Canopy Growth in the past 3 months
Looks like New York pot shops will open soon!
https://www.420intel.com/articles/2022/11/07/looks-new-york-pot-shops-will-open-soon
Croptober is here big time.
Poor Lpees bunk...
Home / Cultivation
Cannabis growers report bumper harvest amid overproduction, low prices
Bonno
November 7, 2022
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Learn from top cannabis industry business leaders including Berner (Cookies), Nancy Whiteman (Wana Brands), Chris Walsh (MJBiz) and many more at MJBizCon in Las Vegas (Nov. 15-18). Register to attend.
Image of cannabis that's ready to be harvested
Add the best outdoor marijuana crop in years to an already flooded market, and it’s like taking sand to the beach.
Cannabis cultivators across the United States and Canada are reporting this year’s fall harvest – known in the industry as “croptober” – produced a stellar crop of DANK thanks to favorable growing conditions and little to no adverse weather events.
That might sound good on the surface.
But with growers in states such as California, Colorado, Michigan, Washington and Canada already seeing rock-bottom wholesale prices, a flood of cheaper, outdoor-grown flower hitting the market in the coming months could push prices even lower.
“That was actually one of the cleanest air-quality years we’ve had. There’s going to be a lot of really good pot out there,” said Jeremy Moberg, a cannabis grower in Washington state.
“Probably going to add to the overproduction problems and woes that you’re hearing a lot about.”
Limited wildfire impact, no early freezes and warm days well into October all led to optimal growing conditions across the country.
“It’s been phenomenal,” said Van McConnon, a cannabis consultant based in Boulder, Colorado.
“As good as any harvest we’ve had in the last 10 years.”
One silver lining for growers in states such as California and Colorado is that the continuous low prices have caused some larger cultivators to opt out of planting and instead leave their fields fallow this year, reducing competition somewhat.
MJBizDaily spoke with cultivators and industry analysts in Michigan, Colorado, California, Washington state, New Mexico,Vermont and Canada to see how the fall harvest shaped up.
Here’s what they said.
Michigan
Michigan might not be the first state people think of when it comes to outdoor-grown cannabis, but that would be an oversight.
The state has more than a million sun-grown plants tagged in the seed-to-sale tracking platform Metrc, according to John McLeod, co-founder and head of markets at Cloud Cannabis Co., a vertically integrated marijuana company based in Troy, Michigan.
Growing conditions this year have been ideal for outdoor cannabis, he added. No natural disasters or extreme weather events to disrupt the harvest.
“Michigan has been able to do that very nicely. We have really good water. We have a really good summer grow season. “It’s pretty ideal weather for outdoor cultivation here.”
Yet prices for that sun-grown flower are on the lower end of the spectrum, according to McLeod.
And while this year has been a good growing year, that many plants being harvested for such low prices might lead some outdoor growers to scale back their production next year, he added.
“You might see (growers) that say, ‘Hey, look, growing a whole season outdoor and only getting $100 or $200 per pound, it really doesn’t average out at the end of the day,'” McLeod said.
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Colorado
In past years, outdoor growers in southern Colorado have encountered early September freezes and snowstorms that caused millions of dollars in crop loss.
Other parts of the state have had to contend with wildfires and hailstorms.
But that largely hasn’t happened this year. Warm temperatures carried into October, and growers reported favorable conditions.
A strong crop means a lot of supply.
But McConnon said some of the larger outdoor farms with dozens of acres in production decided not to plant this year, so the smaller grows might have an opportunity to find buyers.
The smaller and midsize growers have also reduced capacity as prices have fallen.
“The wholesale market has just fallen through the floor,” McConnon said.
“I’ve never seen and, frankly, never anticipated prices like this.”
In July, for example, the wholesale price of cannabis flower in Colorado dropped to an all-time low of $709 per pound, down from $1,309 the previous year.
California
Raging wildfires the past few years have been a major factor affecting Emerald Triangle farmers in Northern California.
The fires destroyed cannabis grows and ruined nearby flower with smoke.
That wasn’t as much of an issue this year.
On the flip side, early fall rains can also be damaging, and some growers might have experienced that this year.
But overall, this has been a “pretty good year,” said Doug Chloupek, the CEO and founder of Juva Life, a cannabis grower and life science research company with a cultivation arm in Stockton.
“We had hot summers with a slightly more temperate climate leading into the October harvest here with our cooler nights,” Chloupek said.
“So I would expect that we’ll actually see some really nice quality flower coming from the traditional full-term, sun-growers out there.”
Similar to Colorado, a trend among cannabis growers in California this year was to let fields go fallow.
“Those are probably the smartest people,” Chloupek said.
“The overproduction of cannabis cannot be absorbed into the legal supply chain, which has created the falling price of cannabis.”
Chloupek characterized the economic situation for marijuana businesses in California as a “perfect storm of price catastrophe.”
Earlier this year, the average price per pound of cannabis flower was about $750 to $1,100 for quality, big buds and $300-$450 for smalls.
“The next two years are going to be survival of the fittest because people have run out of liquidity and the capital markets have dried up,” he added.
“The well to go back to save your company on its deathbed no longer exists.”
Washington state
The outdoor cannabis season started off wet and cloudy in Washington, where Moberg operates a sun-grown cannabis farm near Riverside, in the north-central part of the state.
But the weather reversed later in the summer to hot and dry, staying that way through October.
“So if I were going to say in a word (how the season went), it would be ‘great,'” Moberg said. “With some challenges.”
The sustained hot weather meant the plants required more water than in other years, for example.
If growers had access to water, that meant their plants were able to mature fully as the cultivator tapered off irrigating.
Like Colorado and California, Washington has traditionally had some of the lowest wholesale prices for cannabis in the country.
But Moberg isn’t sure how this year’s good growing season will impact the overproduction problem.
For one, some people in the state also decided it wasn’t financially wise to plant this year.
“From what I hear from everybody, there was a drastic reduction in what was planted this year,” Moberg said.
Another factor: Moberg said the state’s regulatory agency, the Liquor and Cannabis Board, temporarily tightened its enforcement of people growing beyond their canopy limits this summer, which helped to curb the oversupply.
New Mexico
The New Mexico summer was mild without any major events affecting outdoor cannabis operations, according to Duke Rodriguez, CEO and president of Ultra Health, based in Bernalillo, New Mexico.
“The regulated market had a successful outdoor season,” he said, adding that he expects a glut of outdoor-grown cannabis this year.
Among the more than 600 growers licensed in the state, Rodriguez said a lot of the new licensees are outdoor growers.
“Because the newbies have leaned heavily toward being outdoors, that’s where we’re going to see this flooding, and it’s going to be massive,” he added.
That anticipated glut has already dropped the price of wholesale flower in the market.
Earlier this year, Ultra Health was paying $1,500 a pound wholesale.
Rodriguez said his company is now buying wholesale pounds of flower for $850 and can buy lots of more than 1,000 pounds at that price.
“The bottom has fallen out,” he said.
Vermont
One outlier is the relatively new recreational marijuana market in Vermont, where prices are still in the $3,000 a pound range on the upper end of the wholesale market.
The fall growing season saw some rain in September.
That caused some outdoor growers to take down their plants early and dry them with the hopes of salvaging the yield, said Jason Mielcarek, director of cultivation at Ceres Collaborative in Burlington, Vermont.
The early moisture and humidity made it harder for the plants to fight off pathogens and botrytis.
“But the stronger genetics did well,” Mielcarek added.
“Anything that made it to October – October has been fantastic.”
Mielcarek said the weather stayed dry and sunny as temperatures cooled.
Growers are hoping those prices will remain high into the new year.
“Due to the lack of supply and the new (adult-use) market, that demand is so high,” Mielcarek said.
“Everyone can pretty much sell whatever they grow at this point.”
They have been successfully treating elders in nursing homes in Israel for many years. The prohibition of cannabis is just so bogus
Legalizing marijuana in the U.S. could have a positive impact for nursing home residents
https://kjzz.org/content/1822523/legalizing-marijuana-us-could-have-positive-impact-nursing-home-residents
Fitch chops Canopy rating, citing cannabis producer’s Constellation link.
Canopy Growth’s planned entry into the U.S. marijuana market has hit another hurdle – this time over the cannabis producer’s ties to its largest investor.
Fitch Ratings downgraded its credit assessment of the Ontario, Canada-based Canopy to CCC-, one of its lowest ratings.
CCC carries “substantial credit risk” such that default is a real possibility.
t’s the second time in six months that Canopy’s credit rating has come under scrutiny from Fitch.
The New York-based ratings company said it believes the strategic link between Canopy’s biggest investor, alcohol giant Constellation Brands (CBI), and the licensed cannabis producer “has materially diminished” after Canopy announced its plan to speed its entry into the U.S. THC market.
“As such, Canopy’s ratings no longer benefit from a one-notch uplift from its standalone credit profile,” Fitch said.
In a statement to MJBizDaily, a Canopy spokesperson said Constellation Brands remains vested in Canopy’s success as a major shareholder “and fully supports this strategy as the best way to position Canopy for near- and long-term success.”
The spokesperson added that Canopy is making the move to take its destiny into its own hands by fast-tracking its entry into the U.S. marijuana market and taking full ownership of its investments there.
Constellation executives touched on their commitment to Canopy and the cannabis industry in a conference call with analysts on Oct. 6.
After being asked how long Constellation is willing to “wait” for U.S. legalization and how he views the alcohol company’s stake in the cannabis producer changing, Constellation CEO William Newlands said, “I wouldn’t expect you to see the size of our investment in that change.”
Newlands admitted he “failed miserably” in predicting the pace of U.S. legalization but also said he’s “hopeful” there will soon be progress.
In its latest update, Fitch said it downgraded the long-term issuer default ratings for Canopy Growth from CCC to CCC-.
Fitch also lowered the credit rating of the senior secured term loan facility from B/RR1 to B-/RR1.
Fitch’s action comes less than a week after Canopy announced a plan to speed its entry into the American market.
Rather than waiting for the United States to legalize at the federal level, Canopy launched Canopy USA, which would purchase the three American marijuana businesses Canopy had agreed to buy after the U.S. ended prohibition, pending various approvals.
Canopy’s proposal calls for Canopy USA, not Canopy Growth, to own the assets, and the Canadian business would hold nonvoting, exchangeable shares in Canopy USA.
“Fitch believes the transaction, as proposed, is subject to material execution risks including regulatory, shareholder and exchange approval,” the credit ratings agency said.
Stock exchange risk
Fitch isn’t the first to raise concerns about the deal.
The New York-based Nasdaq stock exchange objects to Canopy’s plan to eventually consolidate the financial results of Canopy USA.
By contrast, the Toronto Stock Exchange (TSX) suggested that the proposed structure is compatible with the exchange’s rules.
Neither the TSX nor the Nasdaq would answer specific MJBizDaily questions.
“Canopy’s credit agreement contains affirmative covenants to comply with all policies and listing requirements of public securities exchanges,” the Fitch notice acknowledged, adding: “A failure to remain listed on at least one exchange would be a condition for an event of default.”
Fitch noted that Canopy USA would need to maintain funding separate from its parent company.
https://mjbizdaily.com/fitch-chops-canopy-rating-citing-cannabis-producers-constellation-link/
Nasdaq objects to Canopy plan to consolidate US cannabis revenue
The Nasdaq stock exchange objects to Canopy Growth’s plan to eventually consolidate the financial results of Canopy USA, according to a regulatory filing by the Canadian company with the U.S. Securities and Exchange Commission.
The disclosure raises questions about whether the Ontario-based cannabis producer could keep its shares listed on the Nasdaq if it proceeds with its current plan to enter the U.S. marijuana market more quickly.
https://mjbizdaily.com/nasdaq-objects-to-canopy-plan-to-consolidate-us-cannabis-revenue/
Marijuana Companies And New Jersey Governor Team Up To Urge Consumers To ‘Buy Legal’
November 3, 2022By Kyle Jaeger
New Jersey’s governor is teaming up with a coalition of major cannabis brands to launch a campaign meant to educate and encourage consumers about the risks of buying marijuana products outside of regulated markets.
The U.S. Cannabis Council (USCC) is leading the “Buy Legal” effort, which was announced on Thursday in New Orleans at the Black CannaBiz Expo.
Marijuana companies including Canopy Growth, Columbia Care, Cresco Labs, Cronos Group, Curaleaf, Jushi, PAX, Viola and Wana are signed on as partners for the campaign, which is also being supported by New Jersey Gov. Phil Murphy (D).
“Since adult-use cannabis became legal in our state in 2021, the New Jersey Cannabis Regulatory Commission has established a well-regulated adult-use cannabis market that has catalyzed economic growth in our local communities and established minimum standards for safe products,” Murphy said in a press release.
“But like many other products, cannabis is not immune to the persistent illegal market, which poses a serious risk to consumers,” he said.
“As states like New Jersey continue to refine a regulatory framework for adult use of cannabis, our local businesses and consumers would greatly benefit from the resources that the Buy Legal campaign provides.
This campaign will help protect the ability of local, regulated cannabis enterprises to continue to do business in a way that is safe and accountable, and protect the safety of consumers while reinvesting in communities.”
The campaign will involve promoting a “Buy Legal” label for marijuana products that meet the coalition’s standards.
Via Buy Legal.
“Cannabis consumers need to understand where they can buy high-quality, safe, and tested cannabis products, and minority cannabis businesses owners deserve the resources that a national campaign like this can provide in order to encourage customers to shop at their businesses,” USCC CEO Khadijah Tribble said in a press release on Thursday.
Former NBA player and CEO of Viola Al Harrington added that the campaign “comes at such an important time in the cannabis industry.”
“To truly create equitable opportunities for generational wealth in our community, things like this must be done,” he said. “Now more than ever it’s imperative to educate consumers on the importance of buying regulated, safe products in order for the legal cannabis industries to survive.”
Part of the urgency, the campaign said, is that people continue to buy marijuana products in unregulated markets across the U.S., even in states where cannabis is legal for adult use. That comes with a set of public health and safety concerns that the organization hopes to help ameliorate. But how? Growing at scale is a serious challenge.
“As one of the first Black women to own a licensed dispensary in the U.S., I am concerned about the proliferation of unregulated cannabis enterprises that are not required to meet the same testing and safety standards as businesses like mine,” Linda Mercado Greene, CEO of Anacostia Organics in Washington, D.C., which is a founding partner of the campaign, said.
“A customer can’t possibly know what’s in an unregulated supply, and if someone is harmed by an unregulated product, that sows distrust in our industry and ultimately hurts licensed, regulated cannabis businesses,” she said.
For the marijuana companies participating in the campaign, it seems like a win-win scenario—where consumers are both being encouraged to buy from licensed businesses including those owned by those very corporations, while they argue that there’s also a public health and policy interest in helping to stamp out illicit sellers.
But it also comes at a time of heightened tension where supporters of unlicensed legacy sellers of cannabis, including those that operate so-called “gifting” shops in places like the District of Columbia, New York and elsewhere are pushing back against proposed crackdowns.
The Buy Legal website, for its part, points out that the 2019 electronic vape lung injury crisis has been widely linked to unlicensed products being sold outside of a regulated marketplace, which was the subject of a recent study that indicated that state-level legalization may have provided a “protective” factor in the health crisis.
It also discusses the broader concern about consumers being exposed to contaminated cannabis products in unregulated spaces, the lack of potency labeling accuracy in the illicit market and the unsanctioned marketing trend where some operators have sought to sell marijuana items under major brand names that they aren’t actually affiliated with.
“Legal cannabis is more than just consumption; it’s empowerment,” the campaign site argues. “Buy Legal is a national campaign that seeks to unite the industry and cannabis culture around a safe, legal and regulated marketplace. We believe that every American should understand the benefits of high-quality, regulated cannabis products purchased from the legal market.”
Some cannabis experts suggest growing better cannabis instead.
MASSIVE CROPTOBER LEGACY CROP HAPPENING NOW!!!
Prices are dropping like snowflakes.
Stock market bunk weed is doomed.
Home / Cultivation
2022 US hemp harvest projected to shrink by nearly half of last year’s
MJBizDaily
November 2, 2022
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Join us Nov. 15-18 to gain valuable insights from the industry’s top growers including Ruben Lindo (Blak Mar Farms), Will Perry (Magic Hour Cannabis), Jesce Horton (LOWD) and more. Register to attend MJBizCon.
This year’s U.S. hemp harvest is expected to shrink by 46% compared to 2021, according to commodity exchange PanXchange.
According to the Colorado-based exchange, the sharp decrease stems from lower demand for CBD, with close to 75% of CBD extract being used for delta-8 and delta-9 THC products.
The release of the PanXchange report was first reported by Hemp Today.
About 36,925 acres of hemp were harvested in 2021, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service.
This year, however, only 20,000 acres is expected to be harvested, including:
6,400 to 6,800 acres of hemp flower.
8.200 to 9,100 acres of hemp fiber.
4,800 to 5,000 acres of hemp grain.
Jody McGinness, executive director of the Hemp Industries Association, told Denver alt-weekly Westword that smaller harvests will help cultivators better manage previous oversupply.
“There was a very large boom-and-bust cycle that took place in the first couple of years of hemp, and that essentially meant that after 2019 and 2020, many, many farmers had leftover stocks of hemp – in some cases, all of their harvests – that they were never able to sell,” McGinness said.
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Happy and iv love the company management.
Fitch chops Canopy rating, citing cannabis producer’s Constellation link.
Matt Lamers, International Editor
November 3, 2022
Image depicting a deep decline
Canopy Growth’s planned entry into the U.S. marijuana market has hit another hurdle – this time over the cannabis producer’s ties to its largest investor.
Fitch Ratings downgraded its credit assessment of the Ontario, Canada-based Canopy to CCC-, one of its lowest ratings.
CCC carries “substantial credit risk” such that default is a real possibility.
It’s the second time in six months that Canopy’s credit rating has come under scrutiny from Fitch.
The New York-based ratings company said it believes the strategic link between Canopy’s biggest investor, alcohol giant Constellation Brands (CBI), and the licensed cannabis producer “has materially diminished” after Canopy announced its plan to speed its entry into the U.S. THC market.
“As such, Canopy’s ratings no longer benefit from a one-notch uplift from its standalone credit profile,” Fitch said.
In a statement to MJBizDaily, a Canopy spokesperson said Constellation Brands remains vested in Canopy’s success as a major shareholder “and fully supports this strategy as the best way to position Canopy for near- and long-term success.”
The spokesperson added that Canopy is making the move to take its destiny into its own hands by fast-tracking its entry into the U.S. marijuana market and taking full ownership of its investments there.
Constellation executives touched on their commitment to Canopy and the cannabis industry in a conference call with analysts on Oct. 6.
After being asked how long Constellation is willing to “wait” for U.S. legalization and how he views the alcohol company’s stake in the cannabis producer changing, Constellation CEO William Newlands said, “I wouldn’t expect you to see the size of our investment in that change.”
Newlands admitted he “failed miserably” in predicting the pace of U.S. legalization but also said he’s “hopeful” there will soon be progress.
In its latest update, Fitch said it downgraded the long-term issuer default ratings for Canopy Growth from CCC to CCC-.
Fitch also lowered the credit rating of the senior secured term loan facility from B/RR1 to B-/RR1.
Fitch’s action comes less than a week after Canopy announced a plan to speed its entry into the American market.
Rather than waiting for the United States to legalize at the federal level, Canopy launched Canopy USA, which would purchase the three American marijuana businesses Canopy had agreed to buy after the U.S. ended prohibition, pending various approvals.
Canopy’s proposal calls for Canopy USA, not Canopy Growth, to own the assets, and the Canadian business would hold nonvoting, exchangeable shares in Canopy USA.
“Fitch believes the transaction, as proposed, is subject to material execution risks including regulatory, shareholder and exchange approval,” the credit ratings agency said.
Stock exchange risk
Fitch isn’t the first to raise concerns about the deal.
The New York-based Nasdaq stock exchange objects to Canopy’s plan to eventually consolidate the financial results of Canopy USA.
By contrast, the Toronto Stock Exchange (TSX) suggested that the proposed structure is compatible with the exchange’s rules.
Neither the TSX nor the Nasdaq would answer specific MJBizDaily questions.
“Canopy’s credit agreement contains affirmative covenants to comply with all policies and listing requirements of public securities exchanges,” the Fitch notice acknowledged, adding: “A failure to remain listed on at least one exchange would be a condition for an event of default.”
Fitch noted that Canopy USA would need to maintain funding separate from its parent company.
“Fitch will continue to review Canopy’s corporate structure and exposure to U.S. THC assets that are federally illegal and whether that increases rating concerns,” the ratings company said.
Fitch also noted “significant execution risks” in Canopy’s premiumization strategy and an uncertain path to profitability, highlighting significant lost market share in Canada.
“This has delayed production of a consistent, higher-quality supply at commercial scale and generated weak operating results with an uncertain path to profitability,” according to the Fitch note.
“Canopy hopes to counter these issues with a change in its genetics and cultivation strategy to higher quality cannabis with the right attributes … for the premium and mainstream flower, pre-rolls, edible and vape markets, while using the value segment as an outlet strategy.”
Let,s HOPE they succeed.
Growing cannabis at scale is a challenge.
On that point, Constellation’s executives said during the analyst conference call they continue to believe that Canopy’s focus on “premiumizing” its cannabis branded portfolio in Canada “is appropriate,” and they remain supportive of Canopy’s efforts to strengthen their emerging consumer packaged goods brand distribution.
Fitch said further negative rating actions could be taken if the company’s “premiumization” cultivation strategy fails, or if it pursues a repayment of the remaining 2023 notes that Fitch considers a distressed debt exchange, if liquidity appears constrained, such that a default is probable.
Canopy shares trade as WEED on the Toronto Stock Exchange and as CGC on the Nasdaq.
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