One thing about ACB, they have developed and just started producing lower cost to make product with higher margins, so even if overall margins did decrease, ACB will be fine. One thing people are just figuring out is that accounting in Canada is different than in the US. They have to guess what the value of the product is with plant material and get taxed accordingly. If they guess high, then they can adjust it next quarter report which will look better.
The company said this about gross margin:
The decrease was primarily due to a lower average selling price per gram of dried cannabis, the impact of excise taxes on medical cannabis net revenues, and a temporarily lower proportion of cannabis oil sales in the company’s sales mix ratio. Also impacting gross margin were increased packaging requirements under the Cannabis Act and one-time ramp-up and optimization costs as our Sky facility was brought up to full production. The company anticipates that the launch of new derivative product lines, once allowed under Health Canada regulations, will contribute to improving margins.
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