Tag: Financials

Week in Weed – December 21, 2024

Written by Staff on December 21, 2024. Posted in Business, Cannabis News, Government, International.

This week in cannabis news, StratCann looked at the federal government committing to “exploring” a single harmonized cannabis excise stamp and the industry’s reaction, as well as MediPharm’s plans to sell its ABcann facility to Kensana Health, and Greenway Greenhouse’s plan to acquire Choice Growers’ brands.

We also spoke with researchers in BC who are looking at the impact of cannabis use on driving, and covered a 7-day suspension notice for an Ontario retailer for providing a third-party delivery service, selling cannabis outside the province, and selling more than 30 grams at a time.

BC’s third cannabis farmgate store, Weeds, received provincial approval and hopes to open in the new year. Also, Health Canada may begin requesting supporting evidence for some medical cannabis authorizations.

In financial news, Organigram released its 2024 fiscal report, and Aurora announced a distribution partnership between MedReleaf Australia and The Entourage Effect.

In law enforcement news, RCMP in Nova Scotia shut down an unlicensed cannabis storefront.

And we published the ninth instalment of the Good Weed Board.

In other cannabis news

A new update in Gazette II amended the Regulations Amending the Food and Drug Regulations and the Cannabis Regulations to reflect the new food additives framework, including the revised Lists of Permitted Food Additives.

The federal government shared a new update on the planned renewal of its funding for the existing Federal framework for the legalization and regulation of cannabis in Canada.

Craft Kings Cannabis Group announced its acquisition of BC Green Farms Ltd, located in Duncan, British Columbia. The move triples Craft King’s cultivation space.

Delta 9 is well-poised to become Manitoba’s cannabis superstore thanks to its upcoming acquisition by FIKA Company, shares FIKA CEO Mark Vasey with the Winnipeg Free Press. All Delta 9 stores currently operating in Manitoba will continue to operate under the same name, but the number of products they will carry will expand from around 200 to 800.

During the holiday season, the SQDC will offer in-branch and online services, according to a modified schedule, between Tuesday, December 24, 2024 and Thursday, January 2, 2025.

HYTN Innovations Inc. announced its successful export of cannabis to the United Kingdom’s 4C LABS.

Edmonton Police say charges have been laid against a 19-year-old man in connection with a series of robberies that targeted cannabis and convenience stores in Calgary and Edmonton. StratCann covered those robberies here. The suspect is believed to be connected to 17 robberies in Calgary and four in Edmonton, which occurred between Sunday, September 1, 2024, and Monday, December 16, 2024.

Cannara Biotech Inc. announced that it will be relying on CSA Coordinated Blanket Order 51-913 for an exemption from the requirements to send proxy-related materials for its upcoming annual general meeting to be held on January 30, 2025, at 11:00 a.m., due to the current delays and suspension of mail service in Canada as a result of the nationwide strike of the Canadian Union of Postal Workers that commenced on November 15, 2024.

A staff report in Melfort, Saskatchewan, recommends against limiting the number of cannabis shops in the town about two hours northeast of Saskatoon. In October, Into the Weeds Cannabis and Saskabuds Cannabis requested that Council consider limiting the number of cannabis retail stores in Melfort to two. Director of Community Services Rob Lok said Council will decide whether to limit the number of cannabis stores in the city at their next council meeting on January 13.

A new research paper examines the establishment of a mass spectrometric fingerprint of the most common phytocannabinoids in electrospray ionization in positive ion mode.

An unlicensed pot shop in downtown London has reopened three weeks after it was riddled with bullets in an overnight shooting that remains unsolved.

High Tide Inc. announced the openings of its 190th and 191st Canna Cabana branded retail cannabis locations in Canada: the 84th in the province of Alberta and the 76th in the province of Ontario.

MTL Cannabis Corp. announced that it has fully repaid its 13.25% mortgage, which was originally issued by MTL’s predecessor company to a private lender prior to the Company’s business combination with Canada House Cannabis Group.

Tilray Brands, Inc. will release its financial results for the second quarter ending November 30, 2024, before the financial market opens on January 9, 2025. The company also announced the expansion of its holiday-themed Redecan ‘Wrapped & Redee’ Redees Hemp’d line.

A recent CBSA seizure that focused on illegal tobacco shipments in Vancouver also included 4.2 kilograms of cannabis.

A recent study suggests that Canadian cannabis researchers tend to be “morally ambivalent” about cannabis industry sponsorship of research. They are motivated to conduct high-quality research and generate evidence for population health benefit, yet they have concerns over the potential for research agenda bias created by these relationships which could be harmful to population health. This first study of its kind was led by the Centre for Addiction and Mental Health (CAMH).

Trial dates have been scheduled for April 2025 in a case that began with a constitutional challenge over four years ago involving 10 defendants charged with operating unregulated cannabis stores on Wahnapitae, Henvey Inlet, and Garden River First Nations.

The Research Society on Marijuana (RSMJ) published a special issue with 12 research papers on cannabis in Canada post-legalization in the journal Cannabis, an open-access peer-reviewed journal dedicated to the scientific study of marijuana/cannabis from a multidisciplinary perspective.

An investigation by Durham police into an armed man led to the discovery of a cannabis grow operation with a large quantity of plants in excess of their licence. With the assistance of the Drug Enforcement Unit and the OPP-led Provincial Joint Forces Cannabis Enforcement Team, investigators seized dry cannabis and just under 29,000 cannabis plants.

Business in Vancouver looked at trends in wholesale cannabis sales in BC, with some insight into a topic StratCann readers have been aware of for months now.

International cannabis news

More than 20 workers at the Cannabis 21+ dispensary in San Diego, California, voted to join UFCW Local 135. In addition to Cannabis 21+, UFCW Local 135 represents over 400 cannabis workers in San Diego and Imperial Valley’s cannabis industries.

The future of the US hemp industry remains on the line as lawmakers once again put a five-year farm bill reauthorization package on the back burner and instead agreed to a one-year extension in the final days of the current Congress, reports the Cannabis Business Times.

The government in the Netherlands recently announced that as of April 7, 2025, coffee shops in municipalities participating in the nation’s Closed Coffee Shop Chain Experiment will only be allowed to sell regulated cannabis.

The founders of Weedmaps want to call it quits on the company’s stock and have offered to take the cannabis store-finder service private for about $100 million.

California issued a voluntary recall for multiple Flavorz integrated vaporizer products due to the presence of methylene chloride, and another voluntary recall for multiple Connected pre-roll and flower products due to the presence of Aspergillus spp., and due to inaccurate labeling that reports more cannabinoid content than the products contain.

Organigram reports net revenue of $159.8 million and net loss of $45.4 million in 2024

Written by Sarah Clark on December 18, 2024. Posted in Financials.

Organigram reported $247.2 million in gross revenue and $159.8 million in net revenue for fiscal year 2024, ended September 30, but a net loss of $45.4 million.

This represents an increase from $233.6 million in gross revenue for the previous fiscal year (which was 13 months), $161.6 million in net revenue, and a $248.6 million net loss. Organigram reports incurring $87.3 million in excise taxes in fiscal year 2024.

The company’s gross margins nearly doubled in the most recent fiscal year, from 16% to 30%, while operating expenses were down significantly.

The most significant growth in sales for Organigram in fiscal year 2024 were adult-use, recreational non-medical sales of cannabis flower, and infused pre-rolls.

In that category, cannabis flower sales, net of excise duty, were $91.2 million, up from $82.1 million in the previous year. Vapes were $2.2 million, down from $3.8 million in 2023. Hash was relatively level at $11.3 million compared to $11.2 million in 2023. Infused pre-rolls jumped significantly to $12.2 million from just $2.9 million the previous year. Edibles were $21.4 million, compared to $22.1 million in 2023. Ingestible oils and extracts were $4.7 million, up from $4.3 million.

On the medical use supply chain side, sales dropped from nearly $3 million in 2023 to $1.7 million in 2024, while sales of flower and oil on the international market dropped from $18.9 million in 2023 to $9.7 million in 2024. Wholesale and other sales were $5.4 million compared to $2.1 million in 2023.

Since Q4 2023, the amount of dried flower yield per plant in grams and flower harvested in kilograms has increased or stayed level, quarter over quarter.

Organigram’s net revenue in Q4 2024 was the highest the company has reported in the preceding eight quarters.

As of September 30, 2024, the company had unrestricted cash of $133,426, up from $51,757 at September 30, 2023. The company attributes the increase primarily to the proceeds from the follow-on British American Tobacco (BAT) investment and the offering of units that closed on April 2, 2024.

In December, following the end of the most recent fiscal reporting period, Organigram also acquired Motif, which included a cash component of approximately $50 million and roughly $5 million in transaction costs. The funds to finance this acquisition were not drawn from the Jupiter Pool created by BAT.

The acquisition of Motif made Organigram the number-one LP in Canada in terms of market share. It also added two purpose-built facilities to its portfolio, focusing on cannabis extraction, processing, manufacturing, and distribution.

Organigram expects to close the third tranche from the follow-on BAT investment in the amount of $41.5 million on or about February 28, 2025.

“Fiscal 2024 was a transformative year where our entire team delivered on multiple fronts,” said Organigram’s CEO Beena Goldenberg. “We received significant funding from BAT when capital for the cannabis industry was scarce. We made smart, strategic investments, including into seed-based technology and automation, which is increasing efficiency. We have also expanded our international footprint through a $21 million investment in Sanity Group, a leading German cannabis company, as well as through several new supply agreements to provide products to patients in Australia and the UK. As we integrate recently-acquired Motif into the Organigram ecosystem, we head into Fiscal 2025 as Canada’s #1 LP and we are very excited for the next phase of our growth plans focused on efficiency, consumer-centric innovation, and international expansion.”

Organigram’s biggest brand, SHRED, brought in $225 million in annual retail sales as of the end of Q4 Fiscal 2024.

Organigram sells into four international medical supply markets: Australia, Germany, the UK, and Israel. The company has also completed strategic investments in two U.S.-based companies: OBX and Phylos.

Organigram also completed its EU-GMP audit in November 2024 and is awaiting the results.

Organigram is one of the companies mentioned in an ongoing investigation by the Israeli government into allegations of Canadian cannabis companies engaging in “product dumping” in the Israeli medical cannabis market. A ruling on that investigation is expected in 2025, says Organigram. The Israeli Ministry of Health, which regulates medical cannabis distribution in Israel, has said they oppose the Anti-Dumping Commissioner’s decision on the basis that it is biased, inconclusive, and harmful to patients in Israel.

A report of an independent registered public accounting firm, included in Ogranigram’s annual report, says the Moncton-based cannabis company has not maintained effective internal control over financial reporting as of September 30, 2024, based on criteria established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway (COSO).

Federal government “exploring” single harmonized cannabis excise stamp

Written by David Brown on December 16, 2024. Posted in Business, Cannabis News, Government.

The federal government will explore a single, harmonized federal excise duty stamp as part of a red tape reduction measure outlined in its 2024 Fall Economic Statement.

More info on the proposal is expected as part of Budget 2025, which is anticipated in February 2025.

The move from requiring producers to use 13 different provincial and territorial excise tax stamps to a single, harmonized stamp is something the industry has said would save cannabis producers time and money. In a meeting in October, The Cannabis Council of Canada (C3) called for such changes, saying they would go a long way toward addressing some of the logistical challenges the current tax stamp program creates.

Paul McCarthy, the president of C3, says he’s happy to see the government acknowledging the issue, but is frustrated that this announcement used a lot of vague wording rather than committing to immediate action.

“What they should be doing is implementing this,” says McCarthy. “It will help businesses. There’s no downside for anybody anywhere, but they still want to wring their hands and look at it more. Talk about a government that is not in touch with the needs of the sector.”

McCarthy adds that he was cautiously optimistic that the fall 2024 statement would have included some movement on the tax, but also acknowledges that expectations have been low due to the complexity of such a change. Although the industry has been asking for the excise rate to be lowered, many in the industry say a single stamp would at least relieve some of the financial burdens associated with the current stamp regime.

“To cut red tape for growing businesses and help them to succeed, the 2024 Fall Economic Statement also announces the government’s intent to explore a transition from cannabis excise duty stamps specific to each province and territory to a single, national stamp. This would make it easier for regulated cannabis producers to ignite new business opportunities in other provinces. More details will roll out in Budget 2025.”

In a post on C3’s website, McCarthy added: “The government’s continued neglect of the cannabis sector is alarming. Their unfair taxation policies are creating an unsustainable environment for legal businesses, forcing many to close their doors and driving consumers back to the illicit market.”

Earlier this year, Orville Bovenschen, President of Pure Sunfarms, told StratCann that such a move could save his company around a million dollars a year. However, these savings would not be limited to just larger companies like Pure Sunfarms.

“It’s not just us,” said Bovenschen. “If you look at small producers, medium-sized producers, it’s very complicated for them as well. A change like this can make it easier for us to operate and become more profitable. I think this is much easier to achieve before we get to the bigger issue of the excise tax itself.”

While changing the actual excise rate is complicated, he added, solutions like these could make more sense in the more immediate term.

“I think it could be an achievable win. Nothing is easy but I think it can be a much needed win for everybody. For the government, for us. I don’t think there’s a single person that isn’t aligned with this idea of having one single stamp for the entire industry.”

Janeen Davis, VP of sales at DEALR Cannabis (formerly JVCC), which distributes cannabis, often from micro cultivators and processors, in BC and Ontario, says the change will definitely help the company save time and money, even if it doesn’t go as far as she would like to see in terms of lowering the actual excise rate itself.

“We spend so much time just managing our stamp inventory for the provinces,” explains Davis. “Managing stamp inventory can be a major administrative burden to all processors in Canada, and I think if there were just one excise stamp, it would be something to celebrate.”

Gord Nichol, the owner of North 40 Cannabis, a micro producer in Saskatchewan, says the move doesn’t address “the giant elephant in the room” that is the need for lowering the excise rate itself, especially for smaller producers like his company.

“Excise tax reduction for micro processors is the only issue that might save me”, Nichol tells StratCann.

Such a move would require the support of the provinces, who receive 75% of every dollar the federal government collects from the federal excise tax.

Some in the industry, speaking with StratCann strictly on background, have also suggested that the recent stepping down of Chrystia Freeland from the role of Finance Minister could bode well for efforts at lowering the excise rate itself. In the past, some have suggested that Freeland was one of the main last-minute impediments to such changes in previous federal budgets.

$11 billion in cannabis sales has created 151,000 new jobs and added $43.5 billion to Canada’s GDP

February 1, 2022

Streamlining excise stamps could go a long way to relieving regulatory burden, costs

October 10, 2024

The rocky road to excise duty reform

February 28, 2024

Galaxie Brands exits CCAA, announces major new partnerships and strategic growth

Written by Contributor on December 13, 2024. Posted in Financials.

Puslinch, Ontario – December 10, 2024 – Galaxie Brands, a leader in cannabis co-packing and automation, proudly announces the successful conclusion to the Companies Creditors Arrangement Act (CCAA) process, marking the start of a new exciting chapter.

Bolstered by strengthened partnerships, major new client relationships, and operational enhancements, Galaxie is well-positioned to redefine excellence in full-service co-manufacturing, covering cannabis packaging, manufacturing, storage and logistics.

In a significant step forward, Galaxie Brands has brought on large co-manufacturing clients to produce and pack pre-rolls for their flagship brands, with current production of several hundred thousand PRs per month, expected to increase in the coming months. This partnership underscored Galaxies’ reputation for delivering high-quality, automated co-packing solutions and highlights its commitment to working with industry leaders to bring best-in-class products to market.

Throughout the CCAA process, Galaxie not only maintained operations but achieved significant milestones, including deepening partnerships with TobaGrown/TobaRolling in Manitoba. Together, Galaxie provided the horsepower to TobaGrown’s presence in Manitoba, enabling an uninterrupted supply to the existing SKUs in-market at a winning price point. The companies continued forward, launching multiple successful products bolstering Galaxie’s portfolio and expanding TobaGrown’s presence in the MB market. These efforts include producing pre-rolls, sourcing premium flower, excising, and shipping products back to Manitoba. Continuing into December, TobaGrown will be launching a line of AIO vapes, infused pre-rolls and blunts, and an expanding line of edibles. The collaboration was pivotal in generating strong revenue and positioning both companies for sustained success.

With a focus on automation, cost efficiency, and client-first service, Galaxie specializes in pre-creation (standard, infused and coated), pre-roll packaging, flower packaging and edibles. The company’s state-of-the-art facility enables it to deliver industry-leading turnaround times and pricing, making it the preferred partner for cannabis producers across Canada.

Guiding Galaxies’ future is a new Chief Operating Officer, Richard Aranha, who has extensive experience in cannabis operation and supply chain management, and brings fresh energy to the company leadership. Formally with TGOD for six years and BZAM following the merger, Aranha held key roles such as Facilities Engineer, Supply Chain Director and Director of Continuous Improvement. His engineering background and deep understanding of the cannabis industry are instrumental in driving Galaxie’s automation strategy and operational excellence.

“Galaxie is the perfect launchpad for mid-sized companies across Canada, as is evidenced by the growth of TobaGrown portfolio and sales – with our very significant capacities, we are able to offer companies the ability to scale, enjoy low production costs and keep COGS at a minimum, avoid the challenges of having to manage fluctuating labour requirements, and to serve nearly every major market in Canada in all major product categories. Galaxie is positioned for turn-key services for brands of all sizes to be able to enter and grow in the market. Given our position as a service provider to so many brands, we find ourselves in the nexus of many different verticals – our scale enables efficiencies that we are determined to pass on to our customers to form an unbeatable overall ecosystem of value. I am privileged to lead the Galaxie team.” said Mr. Aranha.

Under Aranha’s leadership, Galaxie has implemented and streamlined processes, enhancing transparency and efficiency. These improvements reflect Galaxie’s commitment to providing the best quality and value in the industry.

As the company looks to the future, Galaxie is focused on building additional partnerships with licensed producers, expanding the market presence of brands it works with, and delivering innovative solutions tailored to its client’s needs. The company is poised to become Canada’s top choice for automated co-packing and manufacturing services.

About Galaxie Brands

Galaxie Brands is a licensed producer and copacker of cannabis and cannabis products, specializing in pre-roll creation, pre-roll packaging, and flower packaging. Operating from its advanced facility and Puslinch, Ontario, Galaxie is committed to providing unmatched quality, efficiency, and value to its partners across Canada.

For media and related inquires, contact Jeremy Bouvet, National Marketing Manager, Galaxie Brands: [email protected].

Sponsored Content by: Galaxie Brands

Court rejects Final Bell’s equity claims against BZAM monitor, again extends stay of proceedings

Written by Sarah Clark on December 6, 2024. Posted in Business, Financials, Producers.

A judge has approved a motion to extend the stay of proceedings between Final Bell and BZAM, and has been again postponed, this time to January 13, 2025. The court ruled that Final Bell’s equity claim falls behind the claims of all other creditors.

The court also approved a motion to authorize the bankruptcy filing of cannabis cultivator 9430-6347 Québec Inc. to file an assignment in bankruptcy. The company’s federal cannabis licence was listed as revoked on request earlier this year.

The monitor in the case involving the dispute between BZAM and Final Bell Holdings, Cortland Credit Lending Corporation, had asked the court for a declaration that the claims of Final Bell against BZAM are subordinate to Cortland’s claims against BZAM.

Cortland argued, and the court agreed, that the trial of Final Bell’s claim will likely be moot “as there will be no cash proceeds available to which the constructive trust could attach.”

Final Bell had opposed that motion and argued that it should have been entitled to the opportunity to prove its fraudulent misrepresentation claim. Final Bell says that BZAM made fraudulent misrepresentations to it that Final Bell relied on when the company entered into a share exchange agreement with BZAM. It also alleged that Cortland was aware of those fraudulent misrepresentations.

The judge rejected these claims, siding with the monitor.

The case surrounds BZAM’s announcement in late 2023 that it would be acquiring Final Bell, which was quickly followed by BZAM filing for and receiving CCAA protection a few months later in February 2024. Final Bell argues the CCAA filing contradicts assurances BZAM had given the company before signing the agreement.

That deal saw BZAM acquiring Final Bell Canada by issuing $13.5 million in equity in BZAM and granting Final Bell $8 million in promissory notes. At the time, the deal was said to make BZAM the fifth-largest Canadian LP.

Final Bell reacted to BZAM’s announcement at the time by saying it believes that the company’s initiation of CCAA Proceedings constituted an “improper use of creditor protection legislation to evade its creditors, defraud shareholders, and facilitate a related party going private transaction at an unjustified discounted value in order to circumvent a customary going private transaction requiring shareholder and creditor approval.”

“There is a second principal reason that Final Bell’s claim, even if ultimately successful, cannot rank in priority to the super priority DIP Lender’s Charge of Cortland,” writes the judge. “The claim of Final Bell is an “equity claim” as defined in the CCAA. As such, the claim of Final Bell ranks behind the claims of all creditors, not just creditors with court-ordered priority charges.”

“In asserting its late-breaking claim for a constructive trust, Final Bell is seeking to elevate what is inescapably an equity claim into a claim of not only a creditor, but a first-ranking creditor with priority over the Court-ordered super priority DIP Lender’s Charge. Such is expressly not permitted under the CCAA, within which the definition of “equity claims” should be given an expansive interpretation.”

However, the judge was also careful to note that he was not making any determination about the merits of Final Bell’s fraudulent misrepresentation claim against BZAM, but that if such a claim were successful, there would be no assets left over to address any findings in their favour.

As Cortland’s motion was successful, it is entitled to its costs of $150,000 inclusive of fees, disbursements, and HST, to be paid by Final Bell within 30 days of December 2, 2024.

Organigram acquires Motif Labs, making it Canada’s largest cannabis company by market share

Written by Sarah Clark on December 6, 2024. Posted in Cannabis News.

Organigram Holdings Inc. has acquired cannabis extractor Motif Labs Ltd. for $90 million in a stock and cash deal.

The move, consisting of $50 million in cash and $40 million of Organigram common shares, says the company, makes Organigram the largest cannabis company with a combined market share of 12.4%. Motif holds 21.2% and 9.4% share of the Canadian vape and infused pre-roll markets, respectively, according to data from Hifyre.

This will mean the combined companies will have a combined market share of 21.7% for vapes, 9.6% for pre-rolls, including 16% for infused pre-rolls, 14.1% for concentrates, 21.6% in the hash category, 11.2% in cannabis flower and 47% in milled flower, and a 19.2% market share of cannabis gummies.

“This deal is about a leading public cannabis company joining forces with Canada’s top private licensed producer,” said Paolo De Luca, Chief Strategy Officer at Organigram in a press release. “We are extremely excited about leveraging our combined competitive advantages and respective market positions to continue to grow in Canada and beyond.”

Located in Aylmer, Ontario, Motif is a Canadian leader in the vape and infused pre-roll categories with a portfolio of brands like BOXHOT and Debunk, Boondocks, and Rizlers, and wholesale sales and services for external brands. The company grew from $35 million in net revenue in 2022 to $79 million in 2023 and has generated approximately $86 million in the past year. Motif also has a storage facility in London, Ontario, which Organigram plans to use as a distribution hub.

The Aylmer facility provides Organigram with monthly production of 1,350 kgs of distillate, 400 kgs of high-value hydrocarbon extracts, 750k infused pre-rolls capacity, and 1 million units of vape filling capacity.

The cannabis extractor can produce 1,350 kg of distillate per month and 400 kg of hydrocarbon-derived extracts. The company can also produce THCA, an increasingly popular cannabinoid among consumers.

Said Beena Goldenberg, CEO of Organigram: “The highly complementary acquisition of Motif establishes Organigram as Canada’s largest cannabis company by market share and accelerates our vision to be a leading cannabis company across all major categories, driven by a relentless focus on the consumer of today and tomorrow.”

Mario Naric, CEO and Founder of Motif, said: “This is a landmark transaction in our industry and the Motif team is thrilled to be joining forces with Organigram to create Canada’s undisputed leader with deep capabilities in all major cannabis categories.”

Organigram reported net revenue of $41.1 million for the third quarter of 2024 and net income of $2.8 million, compared to a loss of $213.5 million in the same reporting period in 2023.

The majority of the company’s net revenue for the three months ended June 30, 2024, came from sales in Canada’s non-medical “adult use” market ($36.5 million or 89%), while just 6% of sales ( $8.3 million) were to the international markets and 1% of sales ($325,000) were into Canada’s medical cannabis market.

Sale of cannabis flower was 58% of Organigram’s business in Q3 2024, at an average cost of $1.50 per gram, down from $1.67 per gram in the same quarter in 2023 and $1.51 from Q2 2024.

In May 2024, Organigram announced a three-year supply agreement with Avida Medical in the UK, with the potential to supply 1,700 kilograms of indoor-grown dried cannabis flower to Avida. In June, it announced a plan to acquire a minority stake in Berlin-based cannabis company Sanity Group, expanding Organigram’s footprint in Europe.

In August, Organigram announced new nanoemulsion technology in collaboration with British American Tobacco. Organigram was one of three Canadian cannabis companies named in a report from the Israeli government that proposes levies on Canadian cannabis products entering the country.

In September, Organigram closed on its second round of funding from British American Tobacco.

This is the second of three rounds of funding from BT DE Investments Inc., a wholly-owned subsidiary of BAT. Plans for the partnership between British American Tobacco and Organigram were announced in late 2023, with an investment of nearly $125 million from BAT.

At the time, Organigram said most of the $124.6 million investment would be used to create a strategic investment pool named Jupiter, focusing on emerging cannabis opportunities, including geographic expansion.

The first round of funding closed on January 23, 2024. The third round of funding is expected in early 2025.

Motif was the largest privately owned cannabis business in Canada prior to the completion of the transaction.

Entourage Health sees increased revenue from bulk sales and new value-focussed brand

Written by Sarah Clark on November 29, 2024. Posted in Financials.

Entourage Health Corp. reported a net loss and comprehensive loss of nearly $8.4 million from $13.6 million in revenue and $9.5 million in net revenue for the three months ended September 30, 2024 (Q3 2024).

Revenue was up from the previous quarter (Q2 2024) and the same quarter in the previous year (Q3 2023), which the company says is primarily due to an increase in bulk B2B sales.

The company sold nearly twice as much cannabis at twice the price compared to the same quarter last year. Kilograms equivalent sold rose by 59% to 6,246 kilograms compared to Q3 2023, while the weighted average cost per gram of inventory on hand increased by 93% from $0.58 to $1.12.

Net loss and comprehensive loss were also down from the previous year Q3 2023, and the previous quarter, which the company attributes in part to a recent increase in its adult use sales with the introduction of new products and operational enhancements.

Of the $9.5 million in net revenue, $3 million were medical sales, $5.5 million were adult-use sales, and about $1.1 million were bulk sales. Medical sales were down year-over-year by 7%, and adult-use sales declined by just 1%. There were no recorded bulk sales in the same quarter in the previous year.

The company says the decrease in medical sales is due to lower patient renewal rates and reduced basket sizes, which it says is consistent with seasonality experienced in previous years.

The average selling price per gram for medical sales was $2.85 in the most recent quarter, $1.91 for adult use sales and $0.46 in bulk sales. The average selling price for medical use was up 5%, and also down 5% for adult use year-over-year. The average selling price (net of excise taxes) per gram declined from $2.23 in Q3 2023 to $1.53 in Q3 2024.

The company attributes the overall decline in the selling price for adult-use cannabis to the higher proportion of sales in its value-focused Dime Bag brand.

“Our increase in net revenue for Q3 reflects the success of our strategic shift into different markets, allowing us to diversify and tap into new opportunities,” said Vaani Maharaj, CFO of Entourage. “While the adult-use and medical segments faced shifts in market dynamics, initiatives like the launch of our Dime Bag value brand are helping us address evolving consumer needs and expand into new segments. These efforts demonstrate our adaptability and commitment to growth in a competitive industry.”

The company’s selling, general and administrative expenses, including salaries and benefits, dropped by 32% year-over-year.

The company sells under the brands Color Cannabis, Saturday Cannabis, and Dime Bag, and under Starseed Medicinal in the medical cannabis stream. It also sells products under its health and wellness brand Syndicate Cannabis.

As of September 30, 2024, Entourage held adult-use distribution agreements in Ontario, Quebec, Alberta, Manitoba, Saskatchewan, and British Columbia. The company sells dried cannabis flower, pre-rolls, vapes, cannabis oils, topicals, edibles, and a “micro inhaler”.

Entourage is now producing over two million cannabis pre-rolls per month.

Ayurcann reports record sales growth, but continued loss in Q1 2025

Written by Sarah Clark on November 29, 2024. Posted in Financials.

Ayurcann Holdings Corp. reported a net loss of $356,711 from $14.8 million in gross revenue and $8.3 million in net revenue for the three months that ended September 30, 2024 (Q1 2025).

This represented a 25% increase in gross revenue compared to the same reporting period from last year (Q1 2024). The company’s net loss in the most recent quarter was a significant improvement on the $2.7 million loss the company reported in the previous quarter ended June 30, 2024, but an increase from the $208,999 loss reported in the same period in the last year.

Excise fees for the three months ended September 30 were nearly $6.4 million. Most of the company’s product sales were B2C ($14.1 million) while B2B sales were $188,566.

As of the three months ended September 30, 2024, the company’s accumulated deficit was $14.7 million, primarily due to a reverse takeover transaction from 2021.

Ayurcann was the number one producer of vapes in Ontario and a top five pre-roll manufacturer by volume in Ontario during the most recent reporting period, based on data from Hifyre IQ and the Ontario Cannabis Store Data, respectively.

“Our business model and disciplined execution have enabled Ayurcann to expand both locally and nationally,” said Igal Sudman, Ayrucann CEO in a press release. “By focusing on innovation, building strong partnerships, and growing our signature brands—such as Fuego, Xplor, Xplor LevelX, and Happy & Stoned—we continue to deliver consistent quarter-over-quarter growth. Our vision remains clear: to become a dominant player in the cannabis industry.”

The company has also announced the appointment of Yisroel Zuchter as Ayurcann’s new CFO, replacing Roman Buzaker, effective December 2, 2024. Buzaker will remain the company’s President, COO, and a director of the Company.

In a recent investor presentation, the company said it has over 70% Canada-wide store penetration, with products in Ontario, Alberta, BC, Saskatchewan, Manitoba, New Brunswick, and Yukon, with over 80 unique SKUs. Over half of the company’s sales (55%) were in Ontario.

Ayurcann recently reported a nearly $4 million net loss for its year-end fiscal filing.

MTL Cannabis reports record Q2 2024 revenue

Written by Sarah Clark on November 28, 2024. Posted in Financials.

MTL Cannabis Corp brought in $1.3 million in net income from $26.4 million in total revenue for the three months ended September 30, 2024 (Q2 2024).

This represented an increase in total revenue from the previous quarter ($25.8 million in Q1 2024) and the same quarter in 2023 ($24.2 million in Q2 2023). However, the company saw net income drop from $2.2 million in Q1 2024 and $3.4 million in Q2 2023, the latter representing a 63% year-over-year decline.

The company incurred nearly $5.6 million in excise tax in the most recent quarter.

As of September 30, 2024, MTL had an expected yield of 562 grams of dried flower per plant, up from 548 grams as of March 31, 2024. The estimated selling price was $1.79 per gram of dried flower as of September 30, up from $1.76 in the previous quarter. The cost to complete and sell a gram of cannabis was $0.80 per gram dried flower in the most recent quarter, down from $0.87 in the previous quarter.

“We are immensely proud of our record-breaking results this quarter, demonstrating momentum in our strategic growth and ability to deliver sustainable value for shareholders,” said Michael Perron, CEO of MTL, in a press release. “These results reflect the high quality of our team and their efforts to deliver the best products and services to our customers and medical patients.”

MTL is the parent company of: Montréal Medical Cannabis Inc., a licensed producer operating from a 57,000 sq ft licensed indoor grow facility in Pointe Claire, Québec; Abba Medix Corp., a licensed producer in Pickering, Ontario that operates a leading medical cannabis marketplace; IsoCanMed Inc., a licensed producer in Louiseville, Québec, growing best-in-class indoor cannabis in its 64,000 sq. ft. production facility; and Canada House Clinics Inc., operating clinics across Canada that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from simple and complex medical conditions.

As of September 30, 2024, MTL now has an estimated total production capacity of 19,500 kg per annum after recently completed retrofits and expansions of both Abba and ICM, representing an additional estimated 2,500 kg and 8,000 kg, respectively.

In addition to selling cannabis products in the Canadian medical and non-medical “adult use” market, MTL has established export channels into Germany, Australia, Poland, Portugal, and the UK. The company says it has completed several shipments focused on the German market.

Dried flower, pre-rolls, and hash products represent more than 70% of MTL’s sales in both the Canadian and international markets.

The Good Shroom reports net profits of $40,000 for 2024

Written by Sarah Clark on November 27, 2024. Posted in Financials.

The Good Shroom Co. Inc., cannabis and cannabis-infused products for the Canadian market, reported $3.9 million in net revenue in the year ended July 31, 2024, with net profits of $40,603.

This is up significantly compared to a net loss of $452,140 in the previous year.

The majority of The Good Shroom’s sales (more than 96%) are from cannabis products. In addition to cannabis products, The Good Shroom also produces a line of branded instant tea and coffee-based beverages under the brand Teonan.

The company currently sells cannabis products primarily in Quebec but also has some listings in Alberta, Ontario, and Prince Edward Island as of Q1 of the current fiscal year. They sell edibles, capsules, and dried flower, as well as hash-infused pre-rolls.

A total of 89% of the company’s revenues were from one customer (93% for the year ended July 31, 2023). The Good Shroom sells under the brand Seul CBD. Suel CBD also offers products under the Astro Nutas, Nordique Royale, Spring Hill, Velada, and OG Jerk brands, including an array of uniquely infused edibles like beef jerky and pepperettes.

“Achieving profitability in an industry as challenging as ours is an accomplishment we take pride in,” said Eric Ronsse, CEO of The Good Shroom Co. Inc. “While this milestone reflects the strength of our asset-light business model and financial discipline, our focus remains firmly on the future—continuing to innovate, expand, and deliver lasting value.”

One way The Good Shroom says it has increased profit margins in its most recent fiscal year is by focusing on products with a lower federal excise rate like dried flower or edibles, rather than extracts or concentrates like hash. This resulted in an excise tax cost as of July 31, 2024, at $742,623 compared to $897,338 in the prior year.

“For example,” the company notes in its report, “typically a hash product in the concentrates category, depending on size, would cost $6-$9/unit in excise. However, by comparison all products in dried flower categories of standard 3.5 gram size only cost $3.50/unit in excise. Others such as edible cannabis products also have much lower excise, on average $0.10/unit, and CBD-only products have no excise at all.”

Sales of The Good Shroom’s Teonan instant beverages were $157,258 for the year ended July 31, 2024, compared to $184,674 for the comparable period last year.

The company was first licensed as a micro processor in November 2019 before scaling up to a standard processing licence in October 2023. The Good Shroom recently released a THC-infused oral pouch in the Alberta market.

Year-over-year increase in both net revenue, loss for Greenway in Q2 2025

Written by Sarah Clark on November 27, 2024. Posted in Financials.

The Greenway Greenhouse Cannabis Corporation reported net revenue of $1.8 million in Q2 2025 but an operating loss of $770,347 and loss and comprehensive loss of $1 million.

Gross and net revenue for the Ontario cannabis company were up from the same period in the previous year (Q2 2024), from nearly $1.2 million. However, loss also increased year-over-year, up from a $662,213 loss and comprehensive loss for the three months ending September 30, 2023.

However, for the six months ending September 30, 2024, the company’s net revenue was $4.2 million, up from $2.4 million in the six months ended September 30, 2023. Loss income and comprehensive loss income for the former was down slightly ($1.6 million) from the latter ($1.8 million).

The company says its net revenue over the last eight quarters has fluctuated due to the volatile conditions of the wholesale cannabis market and seasonality. It attributes the fluctuation in its net income (loss) to unrealized gains from biological assets, share-based compensation, and gross margin fluctuations over the last eight quarters.

Greenway’s primary business model is to cultivate, bulk package, and wholesale dry flower to other cannabis companies. In addition to wholesale sales, Greenway sells cannabis through its brands, EPIC Cannabis Co. and MillRite, with pre-rolls and 7-gram SKUs of flower. MillRite saw a 71% increase in total units sold from the previous quarter (Q1 2025).

The company has a licensed indoor nursery as well as a separate licensed greenhouse for standard cultivation. The nursery is currently used to store and maintain mother plants and genetics and to propagate clones and vegetative plants for the greenhouse.

The nursery allows Greenway to use nearly all of its 167,000 square foot canopy at the greenhouse for flowering cannabis.

On October 4, 2024, the company announced that it had surpassed 30,000 kg of product sold since its inception. Net sales price per gram increased to $1.22 in Q2 2025 from $0.84 in Q3 2024.

The estimated selling price of dry flower per gram was $1.10 in 2024 and 2023. The expected average yield of grams per plant in 2024 was 125 grams, down from 170 grams in 2023. The post-harvest cost to complete and sell, per gram, increased to $0.55 in 2024 from $0.45 in 2023.

Greenway says the average price on the wholesale cannabis market price saw an increase over the previous year, which it primarily attributes to the reduction in total production capacity in the industry as some cannabis companies disappear, and an increased demand for Canadian cannabis on the international market, a trend seen across the industry.

“As a team, we are elated to see that last year’s revenues increased by over 50% year over year, and by over 70% so far this fiscal year,” said Jamie D’Alimonte, CEO of Greenway. “We have sold more product at a higher average price this year than last, and this performance reflects our focus and commitment to producing quality cannabis, and finding the best partners and pathways to bring it to consumers. We have also seen our MillRite brand maintain itself as the #2 ranked pre-roll in its size category, while achieving the #2 Indica and Sativa pre-roll in the size category over the same time. Quarter over quarter, we have seen the total number of units sold increase by over 70%. Our plan to deliver high quality, affordable products to Ontario users is working. I look forward to introducing additional SKUs in the New Year.”

Cannara Biotech reports net income of $5 million in Q4 2024

Written by Sarah Clark on November 25, 2024. Posted in Financials.

Cannara Biotech Inc. brought in $22.1 million in net revenue from its cannabis operations in the three months ended August 31, 2024 (Q4 2024), and a net income of $5 million.

This represented a year-over-year increase in net revenue for the company compared to $17.4 million in net revenue in the same quarter in the previous year, but a decrease in net income from $5.5 million.

Cannara owns and operates two Quebec‐based cultivation facilities. The first, in Farnham, is 635,000 sq ft, of which 170,000 sq ft is licensed for cultivation, with 414,000 sq ft of leased warehouse space.

The second, a greenhouse facility in Valleyfield, is home to 600,000 sq ft of growing space and a 200,000 sq ft rooftop greenhouse.

The company also has two real estate operations related to the Farnham Facility.

Gross revenue from Cannara’s real estate operations for Q4 2024 was $943,948, while net income was $876,810. This represents a slight increase from the same period in 2023, with net revenue of $928,449 and net income of $861,315.

Total net income for Cannara, including both its cannabis operations and retail holdings, minus a $2.1 million net loss categorized as “other,” was $3.8 million for the three months ended August 31, 2024.

On August 16, 2024, Cannara announced that it had achieved its highest national market share of 3.2% in July 2024, based on estimated sales data provided by HiFyre Retail Analytics, Licensed Producer Sales Nationally, for the period of July 2024, placing Cannara as the 9th largest licensed producer in Canada by market share.

As of August 31, 2024, Cannara’s distribution network services seven provinces: Québec, Ontario, Saskatchewan, Alberta, British Columbia, Manitoba, and Nova Scotia. Québec and Ontario are currently the most significant markets. The company sells under the brands Tribal, Nugz, and Orchid CBD. Cannara has also completed sales of cannabis to Israel.

As of August 31, 2024, the Company and its subsidiaries had 363 employees.

“Fiscal 2024 was a transformative year for Cannara, showcasing the resilience of our business model and the strength of our execution strategy,” said Zohar Krivorot, President & CEO. “With a 3.2% national market share and a leading position in Québec, we have proven our ability to deliver sustained growth in a challenging cannabis market. By investing in our state-of-the-art production facilities, powered by the lowest-cost electricity in the country, we continue to produce premium cannabis products at an unmatched value. Our three flagship brands—Tribal, Nugz, and Orchid CBD—launched in 2021, have not only endured the challenges of this competitive industry but continue to thrive, achieving quarter-over-quarter growth.”

The Hash Co completes asset transfer, name change

Written by Sarah Clark on November 22, 2024. Posted in Financials.

Following an announcement in May, the company formerly known as The Hash Co. has now sold most of its assets to a number company (1000592191 Ontario Inc.) and changed its name to Street Capital Inc.

The Hash Co. announced on May 29, 2024, that it had entered into an asset purchase agreement with 1000592191 Ontario Inc. (191 Ontario). This included physical inventory and intellectual property relating to HashCo’s business for a total cash purchase price of $350,000 plus the value of the Company’s physical inventory on closing.

In a subsequent press release on November 18, the asset transfer was said to be to 1000894579 Ontario Inc. (579 Ontario). The asset sale constitutes a “related party transaction” of the company as the vice president of production of Hash Co./Streets Capital is also the president and a director of 579 Ontario.

The Hash Co had relied on a partnership with Ontario-based Medz Cannabis Inc. for processing

The company’s cash balance as of its most recent quarterly report, June 30, 2024, was $9,401, representing a decrease of $15,466 from $24,867 as of December 31, 2023.

Total assets were $176,187, representing a decrease of $85,548 from $261,735 as of December 31, 2023.

Total liabilities were $705,096, representing an increase of $47,138 from $657,958 as of December 31, 2023.

Product sales for the three months ended June 30, 2024, were $127,950, up from $95,463 in the same quarter in 2023. Net loss and comprehensive loss for the three months ended June 30, 2024, was $22,514, compared to a loss of $211,443 in the same period in the previous year.

Simply Solventless reports another profitable quarter as sales continue to increase

Written by Sarah Clark on November 21, 2024. Posted in Financials.

Simply Solventless Concentrates Ltd. brought in net revenue of nearly $5 million for the three months ended September 30, 2024 (Q3 2024), with gross profits of almost $2 million and $424,446 in net and comprehensive income.

Gross revenue for the Calgary-based company increased 70% from the previous quarter (Q2 2024), net revenue increased 71%,, and gross margins increased 14%.

Year-over-year, net revenue increased by about 75% from $1.3 million in Q3 2023, while gross profit increased by approximately 72% from $547,009. Net income increased by about 71% from $121,216 in Q3 2023.

This most recent quarter for Simply Solventless Concentrates (SSC) Q3 2024 is the first quarter to include the operations of CannMart Inc., which SSC acquired on September 12, 2024.

On September 25, SSC also announced plans to acquire ANC Inc., another Alberta-based cannabis company focusing on pre-roll manufacturing. However, the deal didn’t close until October 18, 2024, excluding it from the most recent quarterly report ending September 30.

Jeff Swainson, President & CEO of SSC, stated: “Q3 2024 was another transformational quarter for SSC as we closed an oversubscribed $3.85 million financing, closed the CannMart acquisition, integrated CannMart’s operations, announced the acquisition of ANC, and again exceeded quarterly guidance. In the last three quarters we have profitably increased gross revenue from $7.0 million in the fiscal year 2023 to $28.6 million annualized in Q3 2024, a growth rate of 309%, with annualized Q3 2024 NNI of $0.06 per share. More importantly, we are working hard to achieve another strong quarter in Q4 2024, which will include the operations of both CannMart and ANC. We will issue Q4 2024 guidance in the near future.”

ANC was first licensed as a micro cultivator in 2019 and later received its micro processing licence. The company then scaled up to a standard licence, focusing on seed production and pre-roll manufacturing, something they have become well-known for in the industry. The acquisition will give SCC the ability to manufacture pre-rolls in-house, giving the parent company a new avenue for its own products to reach consumers.

SCC is known for brands like Astrolab and Frootyhooty. CannMart has operated as CannMart, CannMart Marketplace, CannMart Labs, 1000501971 Ontario Inc (Zest), and CannMart MD. Net revenue from CannMart in 2023 was $13.5 million, which came from sales to its major wholesale customers, but that year it reported a net loss of $6.3 million.

Decibel: Q3 2024 marks shift in focus from domestic to international market

Written by Sarah Clark on November 21, 2024. Posted in Financials.

Decibel Cannabis Company Inc. brought in $24.1 million in net revenue for the three months ended September 30, 2024, with a net loss of $585,000 in their most recent Q3 2024 financial report.

Gross revenue for the cannabis company was down 13% year-over-year, from $46.5 million in Q3 2023 to $36.9 million in Q3 2024, which the company says is primarily due to a decline in net Canadian recreational sales and international sales.

This was an increase in net revenue from the previous quarter ($22.1 million) but a decline in net income of $122,000.

Net Canadian recreational sales for the three months ended September 30, 2024, were $23.8 million, a decrease of 12% from the same period in 2023. Decibel says the decline was driven by increased competition in the infused pre-roll segment, and a seasonal slowdown in demand for pre-roll and vape products.

International sales for the three months ended September 30, 2024 were $309,000, down from $500,000 in Q3 2023. Decibel attributed the decrease to the halt of exports to Israel as the Company transitioned to a new partner. This was partially offset by exports to new partners in the United Kingdom and Australia.

Calgary-based Decibel is one of the Canadian companies named in an investigation by the Israeli government into claims of “product dumping”, with the Israeli government initially recommending a floating levy or tariff of 63% for Decibel products sold in Israel. The most recent recommendation dropped that proposed rate to 2%.

Decibel incurred nearly $12.8 million in excise taxes in the most recent quarter, 34.9% of its gross Canadian recreational sales.

“Decibel has been very deliberate about reducing our current liabilities by ~5mm this quarter. Maintaining discipline over time will result in a stronger balance sheet,” stated Decibel CEO Benjamin Sze in a company press release. “This marks the last quarter where our primary focus is on Canadian domestic recreational sales. While we continue to integrate AgMedica into our portfolio, it is encouraging to see there is significant demand internationally for Decibel flower.”

Decibel is a vertically integrated cannabis company with two licensed cultivation facilities and a licensed manufacturing facility. Decibel also acquired a third licensed cultivation facility upon acquiring AgMedica Bioscience Ltd., a subsidiary of Atlas Global Brands, which the company completed on October 28, 2024 (Q4 2024). Decibel also acquired GreenSeal Nursery, Ltd., a licensed nursery, in connection with the deal.

AgMedica is a licensed cannabis producer focusing on international distribution to seven countries, including Australia, Denmark, Germany, Israel, Norway, Spain, and the United Kingdom.

Quebec cannabis business facing excise challenges

Written by Staff on November 21, 2024. Posted in Financials.

Quebec cannabis business QcGoldtech, connected to former Montreal police chief Yvan Delorme, owes more than half a million dollars in unpaid taxes, reports The Montreal Journal.

The company allegedly owes $217,000 under the Quebec Sales Tax Act and reportedly failed to return to the state the amounts it collected in sales tax between March and August 2024. The federal government says it is owed nearly $294,000 in unpaid taxes between March 1 and September 30 of this year.

Revenu Québec and the Canada Revenue Agency established a “hypotheque legal”, giving them creditor’s rights against three pieces of property and a facility connected to QcGoldtech, continues the exclusive report.

Delorme was director of the Montreal Police Department from 2005 to 2010 where he worked for nearly thirty years.

The company’s communications manager told the Montreal Journal that with a high excise tax and no financial assistance from the provincial government, its finances “remain a constant challenge.”

The company has a facility in Saint-André-Avellin, a former slaughterhouse, and in Notre-Dame-de-la-Paix. It also operates with an outdoor licence in Saint-Sulpice.

Both facilities offer dozens of jobs in the Petite-Nation region. The SQDC carries several products from QcGoldtech, including dried flower, pre-rolls, and oils.

The last press release posted on the company website was in 2022. It’s currently currently hiring for three positions.

According to recently tabled documents in the House of Commons, $4,718,514 worth of excise tax on cannabis has been written off as uncollectible as of September 21, 2024. All 12 companies with excise tax written off as uncollectible by the CRA are located in Ontario.

The largest amount for a single company’s uncollected excise tax debt is $1,922,621 from April 2024, while the smallest is $136,095 from September 2024. Of the 11 companies listed, seven show a debt incurred in 2024, three from 2023, and one from 2022.

As of January 31, 2024, the federal government says it has collected $3.4 billion ($3,418,794,702) in federal cannabis excise, with nearly $2.7 billion going back to the provinces and territories ($2,659,784,658).

These amounts reflect the CRA’s administration of Cannabis Duty and Information Returns provided by the licensed cultivators, producers, and packagers of cannabis and/or cannabis products on behalf of the federal, provincial, and territorial governments.

Canada’s federal excise tax for dried cannabis flower is effectively $1 per gram, with 75% of this going back to the provinces, and an ad valorem rate of 2.5% of the dutiable amount for the cannabis product. (Other cannabis products are taxed at a flat rate of $0.0025/milligram of total THC).

CCAA filings for cannabis companies have shown significant amounts of unpaid cannabis taxes owed to the Canada Revenue Agency. One recent CCAA listing showed $345,622.38 owed to the CRA. In a recent creditor protection filing, another company showed nearly $5.4 million owed to the CRA for source deductions and excise tax.

According to Insolvency Insider, 47 cannabis-related businesses in Canada have filed for creditor protection (CCAA) since 2019. Another ten have filed for bankruptcy, 13 have filed for receivership, and 21 have filed for a Notice of Intention (NOI) to make a Proposal under the Bankruptcy and Insolvency Act, allowing financially troubled corporations to restructure their affairs.

Herbal Dispatch sees year-over-year growth driven by increased domestic sales, exports

Written by Sarah Clark on November 20, 2024. Posted in Financials.

Herbal Dispatch brought in $3.3 million in gross revenue and $2.7 in net revenue for the three months ended September 30, 2024 (Q3 2024), for a net loss of $388,156.

Gross sales for the cannabis e-commerce platform and non-medical cannabis provider were up 120% from the same quarter in the previous year ($1.5 million). Net revenue grew to $2.7 million in the third quarter of 2024 from $1.2 million in Q3 2023 (up 132%), and to $7.6 million year-to-date in 2024 from $2.6 million last year (up 191%).

However, gross sales and net revenue were both down from the previous quarter (Q2 2024), as was net income, which was $59,000 in the previous three-month period, the company’s only net gain in the past eight quarters.

The company says its year-over-year growth in recreational cannabis sales was driven by several factors, including the expansion of its listings in new retail locations across British Columbia, the expansion of sales to include the Liquor Distribution Branch of the Government of British Columbia commencing in Q3 last year, and the introduction of new products and brands, including the “Happy Hour” brand launched earlier this year.

The company says it has products in 1,740 stores in Ontario, 486 in BC, 187 in Manitoba, and more than 3,800 across Canada. Herbal Dispatch sells under the brands HD Craft, Happy Hour, Golden Spruce, Nature’s nu, and Hero Dispatch.

The BC-based cannabis company also saw growth in export sales, propelled by strong demand and growing customer relationships with customers in Australia and Portugal.

“We are encouraged by our strong revenue growth and achieving positive adjusted EBITDA,” said Philip Campbell, Herbal Dispatch’s President and CEO. “As we look toward 2025, we are focused on developing new profitable sales channels and efficiently scaling our operations. Our goals include expanding domestic sales across Canada and growing our export sales in both established markets, such as Australia and Portugal, and new international markets.”

Alberta sold $673.5 million worth of cannabis in 2023-2024

Written by David Brown on November 20, 2024. Posted in Alberta, Cannabis News, Financials.

The Alberta Gaming, Liquor and Cannabis Commission (AGLC) brought in $63.9 million in net revenue from $673.5 million worth of cannabis sold in the province for the year ended on March 31, 2024, reporting $10.8 million in net income after expenses.

This is up from the $60.4 million in net revenue in the previous year but down from the $18 million in net revenue for the 2022-2023 fiscal year. This is due to higher operating expenses and significantly lower profit from operations in the most recent year.

This figure does not include an additional $210 million in cannabis tax revenue collected by the Government of Alberta for the year ending March 31, 2024. The province’s additional 6% markup on cannabis products contributed to net revenue of $38.1 million.

Net income for the AGLC for all the files it manages (cannabis, liquor, and gaming) was $2.3 billion in the most recent fiscal year.

The 2022-2023 fiscal year was the AGLC’s first profitable year from cannabis sales.

The number of licensed cannabis stores at the end of March 2024 was down slightly from previous years, with 752 compared to 756 in the two previous years.

Every product category except for dried flower, milled flower, beverages, topicals and seeds saw total dollars sold increase.

Sales of dried flower were relatively flat at $207.4 million compared to $206.9 million in the 2022-2023 fiscal year, and down from $226.5 million in 2021-2022, likely reflecting ongoing price compression as well as a shift in the market to concentrates and vape pens.

Despite this decline in total revenue, the volume of dried cannabis sold continued to increase, reflecting declining retail prices. The province sold 65,127 kg in the 2024 fiscal year, up from 59,121 in the previous year and 59,490 in 2022.

The number of vapes sold and total sales also increased, as did pre-rolls, extracts (significantly so), edibles, and beverages.

Other highlights from the AGLC’s 2023-2024 fiscal report:

The AGLC estimates it saved the cannabis industry more than $4 million through the reduction of listing fees for cannabis SKUs, among other procedural changes.
Another nearly $3 million in estimated cost savings for the industry through the amendment of storage requirements.
Alberta expanded access to legally regulated cannabis with temporary retail sales at events (i.e. festivals) and extended hours of operations approved, increasing revenue-generating opportunities.
The AGLC conducted 3,442 inspections of cannabis retailers, with a 98% compliance rate.
The province spent $2.1 million on its Cannabis Sense education program.
The province is currently developing a recycling plan that will allow for cannabis containers to be recycled.
As of March 31, 2024, Alberta had 2,356 cannabis SKUs listed for sale, up from 2,085 in 2023 and 1,664 in 2022.

Noya Holdings seeking approval of $3.8 million stalking horse deal, extension of stay of proceedings

Written by Sarah Clark on November 19, 2024. Posted in Financials.

Following filing for creditor protection earlier this month, Noya Holdings Inc. and Noya Cannabis Inc. are seeking approval of a stalking horse deal for approximately $3.8 million from an unnamed company.

The company is also seeking an order extending the stay of proceedings to and including March 7, 2025.

Filed on behalf of Noya on November 12, the document states that the stalking horse purchaser may be a related party to the company. A stalking horse bid is a bid on a bankrupt company’s assets and is the first bid offered to a bankrupt company before a public auction takes place.

Noya filed for creditor protection after its senior secured creditor, Lending Stream Inc., demanded payment and issued BIA notices regarding these debts in September. The owner of Lending Stream is the brother of the owner of the Applicants.

Another secured creditor that provided loans to NHI 1955185 Ontario Inc. is another secured creditor. As of September 30, 2024, 195 had loaned approximately $3.8 million to NHI, the approximate dollar figure associated with the proposed stalking horse deal. The numbered company is owned or controlled by the parents or relatives of the owner of the applicants.

A stalking horse agreement is usually structured as a purchase of the company’s retained assets by way of a share sale and “reverse” vesting approval order.

The proposed timeline of the stalking horse sales process is a notice of sales process published on December 6, 2024, finalizing the schedule of assumed liabilities in the stalking horse agreement by December 31, 2024, with a bid deadline of January 27, 2025, an auction on Wednesday, February 5, 2025, and a hearing of the ale approval motion no later than February 14, 2024.

Noya also seeks $400,000 to be made available through a DIP loan for the company’s operation throughout the sale process. The company argues that without the loan, it will be unable to continue to operate or complete the sale.

Noya Holdings Inc. (NHI) and Noya Cannabis Inc. have applied for creditor protection in an initial order posted on November 6, 2024. Noya’s monitor in the case is BDO Canada Limited.

NHI is the holding company, and through its wholly-owned subsidiary, NCI, it operates a cannabis manufacturing and production business. The affidavit of Noya CEO Zaid Reda says the company’s business has focussed primarily on being a wholesale business-to-business service or product provider over time. The company is insolvent and faces liquidity challenges. A motion record for the company says the primary value of Noya is “dependent on a few, key, large customers and derived from its ability to seamlessly and continuously fulfil the order requirements of these key customers.”

If it is unable to continue operations, it could lose these key wholesale customers.

NCI currently employs 18 employees. The unnamed stalking horse purchaser is expected to maintain the employment of “substantially all” of the employees.

NCI blames its current position on “lower than expected demand, oversupply and downward price pressure in domestic markets.” as well as the ongoing illegal cannabis market which it says has impacted demand for legal products.

NCI’s federal cannabis production licence from Health Canada is currently scheduled to expire on December 21, 2028.

Avicanna reports $6.3 million in net revenue and decreasing losses in Q3 2024

Written by Sarah Clark on November 15, 2024. Posted in Financials.

Avicanna Inc. reported net revenues of $6.3 million at the end of Q3 2024, with a comprehensive loss of $922,077, down from a loss of just over $1 million in the same period in 2023 and from a $2.8 million loss in the previous quarter.

The company is an international biopharmaceutical company focused on cannabinoid-based products and operates the medical cannabis care platform MyMedi.ca, the Medical Cannabis brand RHO Phyto, as well as focusing on R&D and clinical development.

The company acquired Medical Cannabis by Shoppers Drug Mart in 2023, which it transitioned to the MyMedi platform.

North American net revenue for the nine months ended September 30, 2024, was $17.5 million, compared to $10.4 million for the nine months ended September 30, 2023. The increase over the nine-month period was a direct result of the acquisition of Medical Cannabis by Shoppers and the introduction of MyMedi.

Of those, revenue channels in Canada for the company sold 144,756 units in the nine months ended September 30, 2024, compared to 118,265 in the same period in 2023, a 22% increase.

The company reported a $2.8 million gross margin by segment in North America in the three months ended September 30, 2024, or 51%, for a consolidated gross margin of $3.6 million including its presence in South America.

Tilray’s Aphria RX facility launches its first German-grown cannabis

Written by David Brown on November 15, 2024. Posted in Cannabis News.

Tilray Medical has launched its first commercial-grown medical cannabis flowers from its Aphria RX GmbH facility in Germany.

The product will be sold as “Grown in Germany”, explains Tilray’s chief strategy officer and head of international, Denise Faltischek.

“We are excited to launch our Made in Germany premium cannabis products, which marks a significant milestone in our mission to deliver the highest-quality medical cannabis products to patients in Germany,” adding that this helps expand the company’s brand and products in the German market.

Tilray received the first cannabis cultivation licence issued under Germany’s new Cannabis Act in July. This licence allows Aphria RX to cultivate and manufacture cannabis for medical purposes in Germany.

The American cannabis company, which operates in Canada, the United States, Europe, Australia, and Latin America, was the first to receive a cannabis production licence in the country. Canadian cannabis company Aurora and the German company Demecan are also now licensed for production in the country.

In February 2024, Germany passed the German Medical Cannabis Act, expanding the country’s medical cannabis laws.

Aphria RX has been present in the medical cannabis space in Germany since March 2019, when the company was awarded a licence for the cultivation of medical cannabis in Germany from the German Federal Institute for Drugs and Medical Devices (the “BfArM”).

Anyone who wishes to cultivate, produce, trade, import, export, dispense, sell, otherwise place on the market, obtain or acquire cannabis for medicinal purposes or cannabis for medical-scientific purposes in Germany requires a permit from the German Federal Institute for Drugs and Medical Devices.

Canadian cannabis companies increasingly exploring export market

June 14, 2023

Aurora Cannabis receives additional German licences

July 25, 2024

Delta 9 selects bid from SISP

Written by Sarah Clark on November 15, 2024. Posted in Financials.

Delta 9 Bio-Tech has selected a bid for the purchase of some of its assets through the SISP process that began earlier this year.

If approved by the court, the purchaser will receive 17 of Delta 9’s grow pods, along with intellectual property and some enumerated personal property, as part of the sales and investment solicitation process.

The application will be held before the court on November 15.

On July 15, 2024, Delta 9 Bio-Tech Inc. and four related entities were granted an initial order by the Court of King’s Bench of Alberta under the Companies’ Creditors Arrangement Act (Canada) (CCAA).

On July 24, 2024, the Court approved a sales and investment solicitation process (SISP) to solicit interest in, and opportunities for, a sale of, or investment in, all or part of Bio-Tech’s assets and business operations.

On September 11, 2024, the court granted an order extending Delta 9’s stay of proceedings pursuant to the Amended and Restated Initial Order (ARIO) first granted in July, up to and including November 1, 2024. That extension was to November 1 and has now been extended to January 31, 2025.

Among Delta 9 Bio-Tech’s assets is a 95,000-square-foot cannabis cultivation and processing facility located in Winnipeg, Manitoba, which contains 297 modular “grow pods”. These are retrofitted shipping containers used by some micro cultivators. The company says they are customized for flowering, trimming, cloning, research, testing, support, and storage.

Delta 9 is a vertically integrated group of companies that touches cannabis cultivation, processing, extraction, wholesale distribution, retail sales, and business-to-business sales.

Through the SISP process, Delta 9 and its Monitor selected the highest and only serious bid, the one for 17 of the grow pods along with related intellectual property. The bid price has been redacted in the monitor’s report.

Delta 9’s Monitor sought confirmation from SNDL, the first-ranking secured creditor of the purchased assets, but had not yet received a response when the monitor’s fourth report was filed on November 13.

In a press release earlier in July, Delta 9 said that the CCAA process was in the best interest of the company and its shareholders, especially in light of recent “aggressive” actions by its creditors, namely recent demand notices from SNDL Inc. on May 21 and July 12 and SNDL’s recent acquisition of all the Company’s senior secured debt for $21 million.

SQDC records record profits as consumer demand shifts to lower-margin products

Written by David Brown on November 14, 2024. Posted in Financials.

The Société québécoise du cannabis (SQDC) recorded a new record for net revenue in its second quarterly report for the 2024-2025 fiscal year.

The provincial cannabis agency’s total sales were $173.7 million in Q2, 34,675 kg of cannabis, up from $151.7 million from 27,498 kg in the same quarter of the previous fiscal year, an increase of 26%. This resulted in net and overall sales of $29.4 million compared to $24.9 million for the same quarter of the previous fiscal year, a nearly 15% increase from Q2 2023.

The SQDC documented 4.4 million transactions in the most recent quarter, compared to 3.6 million for the same quarter in the 2023-2024 fiscal year, at an average selling price of $5.76 per gram, all taxes included, for all cannabis products combined.

This is down from the average selling price of $6.34 per gram in Q2 2023, which the SQDC attributes to a growing demand for low-cost products and concentrate-type products that it says have a lower average selling price per gram than other product categories.

The SQDC opened two new locations in the most recent quarter, the Donnacona branch and its hundredth branch in Richelieu in Montérégie. The SQDC has not added many stores in the last few years, with the agency saying it is focussing more on refining the consumer experience in its stores rather than constant expansion.

In a recent interview with StratCann, SQDC president and CEO Suzanne Bergeron says the organization has spent the first six years of legalization gathering consumer data to better meet consumer needs, even within the sometimes strict confines of Quebec’s rules that ban many edibles, concentrates, and vape products.

“We’re starting to get a good amount of data on consumer preferences, what they like and dislike, [as well as] what keeps them in the illicit market vs coming into the SQDC,” she said. “Knowing that, we’re able to refine the strategy on how we’re going to adapt our stores so when they come in they feel welcome.”

The provincial government brought in $43.9 million in its share of cannabis taxes, while another $17.5 million went to the federal government. Cannabis sales in Quebec provided the provincial government with $73.3 million in revenue. The province says it reinvests these profits into prevention and research into cannabis.

Net sales in the most recent quarter were also up by one million from the previous quarter when the Société québécoise du cannabis brought in $23.9 million in net sales from $162.9 million in sales.

Medipharm Labs reports increased revenue, decreased losses in Q3 2024

Written by Sarah Clark on November 14, 2024. Posted in Financials.

Medipharm Labs brought in $9.8 million in net revenue in the three months ended September 30, 2024 (Q3 2024) and $3.1 million in gross profit, but a net loss of $2.8 million.

Net revenue was up 15% from $8.5 million in the same quarter the previous year, while net loss declined from $4.3 million. Gross profit increased year-over-year from $2.4 million and $3.4 million in the previous quarter (Q2 2024).

The bulk of the company’s net revenue came from sales into the Canadian market ($6.2 million), increased from $5.9 million in the same quarter in 2023. Another $2.5 million in sales were in Australia, up year-over-year from $2.2 million, $1 million in Germany (up from $319,000 in Q3 2023), and $62,000 in other international sales (up from $5,000).

Of the sales in the Canadian market, $1.7 million were in the adult use and wellness markets, while $3.7 million were in the medical markets.

Medipharm’s Beacon cannabis brand increased to $400,000 in the most recent quarter, up from $135,000 in all of 2023.

The company reported its best quarter wholesale sales ($2.5 million) in the Australian market in Q3 2024 since acquiring Beacon Medical Australia PTY Ltd. in the second quarter of 2023. Medipharm attributes this growth to the addition of new high-potency flower and the recent launch of cannabis oils, vapes, and live resin vape cartridges.

The company says it also has additional commitments for sales into new international markets and is currently completing various international regulatory registrations, including the UK, Brazil and New Zealand.

Medipharms also says the completion of its move of medical sales and distribution from its Hope, BC facility, the former Canna Farm facility, to Barrie, ON, has resulted in cost savings. The company still hopes to sell the Canna Farms facility, one of the first licensed in Canada.

Medipharms also operates Harvest Medicine Inc., a medical cannabis clinic. Although new medical registrations in Canada have declined, Medipharms says its medical sales have stayed consistent, showing good customer retention.

David Pidduck, CEO of MediPharm Labs, commented, “MediPharm accomplished several important milestones in Q3 that will position us well for profitability in 2025. MediPharm has successfully diversified its business. As a global GMP player, our international sales grew 37% vs. Q3 2023, resulting in over 35% of revenue from outside Canada.

“We have a strong presence in the Canadian medical channel and growing B2B sales. Additionally, MediPharm continues to launch new products and build on our very broad product line in the Canadian adult use and wellness channel. This diversity has contributed to our balance sheet strength and our ability to capitalize on future growth opportunities in various countries, product categories, and channels.”

MediPharm Labs was founded in 2015. The Barrie, Ontario facility holds GMP certifications from Health Canada, the Australian Therapeutic Goods Association, and ANVISA (Brazil). The Barrie Facility obtained EU-GMP certification from the LAVG in July 2024. These GMP certifications have been accepted in other international markets, such as Brazil and the European Union.

MediPharm owns two wholly-owned subsidiaries, Canna Farms and ABcann. ABcann’s operations focus on European Union Good Manufacturing Practices related to cultivation and packaging for international markets.

In 2021, MediPharm Labs received a Pharmaceutical Drug Establishment Licence from Health Canada, becoming the only company in North America to hold a domestic Good Manufacturing Licence for the extraction of natural cannabinoids.

Record net revenue for Rubicon Organics despite softened demand and price compression in key markets

Written by Sarah Clark on November 14, 2024. Posted in British Columbia, Financials.

Rubicon Organics brought in $13.5 million in net revenue in Q3 2024, the three months ended September 30, 2024, its highest revenue in eight consecutive quarters, but a net loss of $168,498.

Net revenue was up compared to the same period in the previous year ($10 million) and the previous quarter ($12.1 million). Net losses have steadily declined over the last three quarters.

The BC-based certified organic cannabis producer has seen year-over-year quarterly revenue growth from Q1 2022 until Q2 2023, which the company attributes to increased demand in key provinces. In the most recent quarter, for the three months ending September 30, 2024, the company reported its highest net revenue achieved in one quarter.

Rubicon sells three flagship brands: their “super-premium” Simply Bare Organic, premium brand 1964 Supply Co, cannabis wellness brand Wildflower, and the Homestead Cannabis Supply brand. The company says it currently has over 294 unique SKUs available for sale across Canada, with over 99% coverage of the addressable market in both non-medical and medical sales channels.

Total operating expenses increased year-over-year from $3.4 million to $3.7 million, but general and administrative expenses decreased by $19,887. The company expects to continue its year-over-year growth in net revenue, much of this from its branded products that are produced using external capacity and thereby deliver lower gross margins.

In the last two quarters of 2023, Rubicon saw a decline in net revenue, which it says is due to softened demand and price compression in Alberta, Ontario, and Quebec, as well as overall economic challenges facing consumers.

The company incurred $4.3 million in excise taxes from $17.8 million in product sales, up from $2.9 million in excise taxes from $13 million in sales in the three months that ended September 30, 2023.

“Rubicon Organics record net revenue for both Q3 and year-to-date 2024 reflects our strength and position as Canada’s leading premium House of Brands,” said company CFO Janis Risbin. “Rubicon Organics continues to innovate and expand our product offerings, solidifying a strong market share in premium flower, pre-rolls, edibles, and more. I’m particularly proud of the success of our 2024 vape launch, which has already achieved 55% distribution in just six months. Looking ahead, we expect to drive further growth in Canada and beyond, as we intend for new market entry in 2025.”

Rubicon’s 125,000-square-foot hybrid greenhouse is certified by the Fraser Valley Organic Producers Association (FVOPA) for organic cannabis cultivation.

Cronos reports increased cannabis sales in Canada, abroad

Written by Sarah Clark on November 12, 2024. Posted in Financials.

The Cronos Group reported USD$34.3 million in net revenue, $3.6 million in gross profit, and $7.3 million in net income in its third quarter 2024 report for the three months ended September 30, 2024 (all figures in USD).

This represented a significant year-over-year increase in net revenue and income for the cannabis producer, with a 38% increase of $9.5 million from the three months ended September 30, 2023. Cronos attributes this to an increase in sales domestically and in the international market.

However, gross profit was down 9% year-over-year, representing a decrease of $0.4 million from the third quarter in 2023. Cronos attributes this loss mainly to inventory-related purchase accounting adjustments resulting from the Cronos GrowCo transaction on July 1, 2024. This loss was also somewhat offset by higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel, and higher cannabis flower sales in other countries.

The bulk of Crono’s cannabis sales are in Canada and Israel. For the three months ending September 30, 2024, $26.3 million of those sales were for cannabis flower, while $7.8 million were for cannabis extracts. From those sales, $24.1 was in Canada’s medical and non-medical cannabis market, $7.3 million was in Israel, and $2.9 million was from sales in other countries.

Cronos also recently announced a $51 million (CAD$70 million) expansion of Cronos Growing Company Inc. (Cronos GrowCo) to address increased international demand for its cannabis. Cronos GrowCo reported preliminary unaudited net revenue to third parties, excluding sales to the Company, of approximately $2.7 million in the second quarter of 2024. Q3 2024 represents the first quarter where Cronos consolidates Cronos GrowCo’s results in its financial statements.

The company’s adjusted gross profit in Q3 2024 was a 170% increase from the same quarter in 2023.

“Our results this quarter demonstrate that our long-term strategy is working,” said Mike Gorenstein, Cronos chairman, president and CEO. “With record net revenue and a disciplined approach to operating expenses, Cronos operates more efficiently and effectively than ever before, and we anticipate long-term margin improvement.

“Our consolidation of Cronos Growing Company has further strengthened our supply chain, which we anticipate will lead to improved margins and allow us to meet the increasing global demand for high-quality cannabis. With an industry-leading balance sheet, we are well-positioned to expand into new legal markets and drive future growth opportunities.

“As international demand continues to rise, particularly in markets like Germany, the UK, and Australia, the investments we’ve made in our infrastructure and global partnerships are paying off.”

In Q3 2024, Cronos brand Spinach was the top-selling cannabis brand in Canada, according to Hifyre. The brand’s edibles were in the number one position with a 17.2% market share in Q3 2024, while its flower products held the number one spot with a 6% market share.

In September, Cronos joined a group of cannabis cultivators that had filed an administrative petition in the District Court of Jerusalem, Israel, against the Trade Levies Commissioner and certain Israeli and Canadian businesses in relation to the Israeli government’s concerns about “product dumping” into their domestic market from Canadian cannabis companies.

The Israeli government had proposed a levy on Canadian cannabis products, which could be as high as 369% on Cronos products. In their most recent quarterly report, Cronos says that on November 10, 2024, Israel’s Trade Levies Commissioner published final findings under which Cronos would be subject to a proposed duty of 175%, pending a ruling from an advisory committee. The report says Cronos Israel was the largest importer from Canada among all importers in 2023.

Cronos closing cannabis fermentation facility in Winnipeg, Manitoba

August 8, 2023

Cronos enters into deal to sell, leaseback Peace Naturals Campus

November 27, 2023

Net revenue, net loss up for Cronos in Q2 2024

August 8, 2024

Noya Holdings Inc. and Noya Cannabis Inc. apply for creditor protection

Written by Sarah Clark on November 8, 2024. Posted in Business, Cannabis News, Financials.

Noya Holdings Inc. and Noya Cannabis Inc. have applied for creditor protection in an initial order posted on November 6, 2024. Noya’s monitor in the case is BDO Canada Limited.

As part of the cannabis company’s CCAA filing, the court has ordered that all relevant Health Canada and cannabis excise licences held by Noya Cannabis Inc. (NCI) and related companies shall be preserved and maintained during the pendency of the stay period. This included NCI’s ability to sell cannabis inventory, as well as any applicable licence renewals.

The balance of the relief sought by the applicants will be heard in a comeback hearing by the court on November 15, 2024. According to documents online, the applicants’ are insolvent and cannot meet their liabilities as they become due. They have determined that a CCAA proceeding is required to complete a sale process and otherwise address their current challenges by restructuring their operations.

Noya’s known list of creditors shows nearly $10.3 million owed in secured credit and $2.7 million owed to unsecured creditors. Secured creditors are Lending Stream Inc., Terrascend Corp (Gage Growth Corp), and 1955185 Ontario Inc. Unsecured creditors include the Canada Revenue Agency, Health Canada, Pure Sun Farms, High Tide, Kiaro Brands, Ignite International Brands (Canada) Ltd., HiFyre, and many others.

Noya Holdings Inc. (NHI) is the parent company of NCI and 2675383 Ontario Limited (267). First licensed in 2017, NCI holds a cannabis cultivation and processing licence, and 267 holds a micro-cultivation cannabis licence. Both are located in Ontario. The applicants currently employ 18 employees.

Lending Stream Inc. is the applicants’ senior secured creditor. As of August 31, 2024, NHI was indebted to Lending Stream pursuant to a convertible debenture in the approximate amount of nearly $1.9 million. According to records, the owner of Lending Stream is the brother of the applicant’s owner. 1955185 Ontario Inc. is another secured creditor that provided loans to NHI. As of September 30, 2024, 195 had loaned approximately $3.8 million to NHI. The numbered company is owned or controlled by the parents or relatives of the owner of the applicants.

The applicants are also facing various contingent claims in excess of $5 million, including from Pure Sunfarms Corp., Ignite International Brands (Canada) LTD, and 10805696 Canada Inc. o/a Mauve & Herbes. These claims, say documents filed online, are mostly related to contractual disputes and are unsecured.

Noya and its related companies (the applicants) are up-to-date with payments to the Canada Revenue Agency with respect to employment insurance and Canada Pension Plan deductions but owe excise tax remittances and HST remittances.

Auxly reports record-breaking Q3 results

Written by Sarah Clark on November 8, 2024. Posted in Financials.

Auxly Cannabis Group Inc. reported $33.3 million in net revenue in its third quarter of 2024, a new company record and an increase of 18% year-over-year and 14% quarter-over-quarter.

The cannabis company’s net income was $3.3 million, down from $32.6 million in the same quarter in the previous year. However, its Q3 2023 net gains were mostly driven by the gains on the extension of the maturity of its Imperial Brands Debenture. Excluding the gains on that extension, net income in the most recent quarter increased by $17.5 million year over year.

About three quarters (76%) of the company’s cannabis sales originated from sales to British Columbia, Alberta and Ontario. Auxly sells under the brands Parcel, Back Forty, Foray, Doescann, and Kolab Project, and provides wholesale bulk sales of dried cannabis to various licensed producers in Canada.

Dried flower retail sales increased by over 12% compared to the previous quarter. Pre-roll retail sales increased by nearly 19% quarter-over-quarter. Auxly branded products represented approximately 50% of the top ten vape SKU’s nationally.

Hugo Alves, CEO of Auxly, commented: “Our continued focus on efficient revenue growth and enhanced profitability has delivered another record-breaking quarter of financial results, highlighted by an 18% year-over-year increase in net revenue and record adjusted EBITDA of $8.3 million.

“Our commitment to providing consumers with exceptional products that help them live happier lives enabled us to grow national market share in our core product categories of dried flower, pre-rolls and vapes; and has elevated Back Forty to the #1 brand in Ontario by dollars sold. We remain focused on creating long-term shareholder value. I am excited for the future and proud of the tremendous efforts of our talented and dedicated team in delivering these results.”

Auxly operates Auxly Charlottetown in PEI, where the company does most of its cannabis 2.0 product development, and Auxley Leamington where it grows and processes dried flower. In May 2024, the company sold its Auxly Ottawa facility for $1.7 million and applied the proceeds from the sale to support its ongoing operations. The Company does not currently have any active international operations.

Featured image of Auxly’s Leamington, Ontario facility

Canadian cannabis sales down, international sales up for Canopy in Q2 2025

Written by Sarah Clark on November 8, 2024. Posted in Financials.

Canopy Growth Corporation reported nearly $74 million in revenue in its second fiscal quarter of 2025, but a net loss of $128.3 million.

The second quarter of 2025, covering the three months ended September 30, 2024, saw a year-over-year decline in revenue, from $82 million in Q2 2024, but a decrease in losses, which were $324.8 million for the three months ended September 30, 2024.

Net revenue for the Canadian cannabis producer was $63 million, with $18.4 million coming from Canadian adult-use sales, $18.7 coming from Canadian medical cannabis sales, $10.1 million coming from international cannabis sales, and $15.9 million from its vaporizer company, Storz & Bickel.

Net revenue from Canadian adult-use cannabis sales was down 24% from $24.1 million in the same quarter last year, while Canadian medical cannabis revenue was up 16% from $16.2 million. International medical sales revenue was up 12% from $9 million in Q2 2024, while revenue from Storz & Bickel was up 32% from $12 million.

Canopy attributes the decline in revenue from the non-medical cannabis market in Canada to lower sales volumes, “which were partially affected by supply constraints for certain products as a result of financial difficulties with our contract manufacturers and lower sales velocity due to continued increase in price competition.”

The company attributes the year-over-year increase in revenue from domestic medical cannabis revenue to an increase in the average size of medical orders placed by its customers, which it says is primarily due to an increase in the percentage of insured customers and a more extensive assortment of cannabis product choices offered to its customers.

Canopy’s international sales increased from Q2 2024 because of the increased shipments of flower products in Europe, especially Poland and Germany, offset by a decline in Australian medical business due to greater competition in that market.

The company also incurred nearly $11 million in excise tax in the most recent quarter.

“We delivered a solid second quarter led by strong growth across our Storz & Bickel, Canadian medical, and European cannabis businesses and we are well positioned to accelerate momentum in the second half of our fiscal year,” said David Klein, Canopy’s CEO. “In addition, we remain highly optimistic about the momentum building within Canopy USA as this strategy was uniquely designed to succeed independent of the need for federal legalization.”

Canopy Growth announces more layoffs as part of “Strategic adjustments”

April 26, 2022

Canopy Growth reports $216 million loss in most recent quarterly report

February 9, 2024

Canopy Growth operating at less of a loss than a year ago

November 10, 2023

Cannabis exports increase for Village Farms in Q3 2024

Written by Sarah Clark on November 7, 2024. Posted in Financials.

Village Farms International, Inc. sold USD$36.5 million worth of cannabis in Canada in the third quarter of 2024, with $9.6 million in gross profit, and $1.2 million in net income (all figures in US dollars).

Village Farms’ Q3 2024 results are for the three months ended September 30, 2024.

Village Farms is the parent company of Pure Sunfarms, a greenhouse cannabis grower based in BC.

The company also sells cannabis products in the US: CBD-based health and wellness products, including ingestible, edible and topical applications.

Village Farms’ US cannabis sales in Q3 2024 were $3.9 million, bringing in $2.5 million gross profit but a $192,000 loss after all associated expenses, before taxes.

This most recent quarter’s Canadian cannabis sales are up 27% from $28.8 million in the same quarter in the previous year, but down from $40.7 million from the previous quarter.

Gross profit on Canadian cannabis sales was down slightly from $9.9 million in Q3 2023, and net income before taxes was down from $1.9 million. The company attributes the decrease in net income primarily to an increase in tax provisions and an increase in selling, general and administrative expenses.

US cannabis sales figures were also down year over year, from $5 million in sales in Q3 2023, with $3.2 million in gross profit and income before taxes of $79,000.

Village Farms International operates two cannabis facilities for the Canadian legal adult use (recreational) market and for export to international markets like Israel, Germany, Australia, and the United Kingdom. The company’s Canadian Cannabis segment comprises Pure Sunfarms in BC and an 80% ownership in Rose LifeScience in Quebec.

The company also holds one of only ten licenses to participate in the Dutch recreational cannabis program. In the most recent quarter, its ownership of Netherlands producer Leli Holland increased from 85% to 100%.

Some 75% of the company’s cannabis sales were in Canada, down from 80% in the same quarter last year, while 25% were in various international markets, up from 20% in Q3 2023.

Branded cannabis sales were $45 million, non-branded sales were $7.4 million, and international sales were $1.4 million for the three months ended September 30, 2023.

The company attributes its 27% year-over-year increase in sales to an 18% increase in net branded sales and a 66% increase in non-branded sales. The increase in net branded sales was because of increased market share across the flower, pre-roll and milled categories. The increase in non-branded sales was from “improved industry supply dynamics and pricing supported by a shift of many producers toward asset-light models and sales of non-brand-spec inventory. International sales increased by 94% primarily due to higher sales to Germany, the United Kingdom, and Australia.”

In the most recent quarter, the company incurred $17.7 million in excise duties (Canada’s $1 per gram cannabis tax), representing 39% of gross branded sales. The cannabis producer says the Canadian excise duty is its single largest cost of participating in the branded adult-use market in Canada.

“As we close out fiscal year 2024, we are focused on driving more profitable sales in Canadian Cannabis, prioritizing profitable growth as we manage inventory levels with evolving supply dynamics and increasing international demand,” said Michael DeGiglio, president and CEO of Village Farms International.

“We are looking forward to more exciting catalysts for our business in fiscal year 2025, with continued international expansion and contributions from sales in the Netherlands. We believe our Netherlands business has the potential to become a strong contributor of profitability and cash flow generation, driven by more favourable pricing and taxes in the Dutch market compared to Canada.”

“We are also increasingly benefitting from our international cannabis focus. Exports from Canada increased 111% from the third quarter last year, with continued increases in sales to our German, Australian, and UK partners. Our EU-GMP certification was also recently renewed, and we are optimistic heading into next year about our opportunities to expand our international business with additional markets and customer wins. In the Netherlands, we received final approval to commence cultivation, are in production now, and remain on target to begin sales to participating jurisdictions in the first quarter of 2025.”

International sales increase for Aurora Cannabis, but company reports $13 million loss in Q2 2025

Written by Sarah Clark on November 6, 2024. Posted in Financials.

Aurora Cannabis brought in $81.1 million in net revenue in the three months ending September 30, 2024, and reported a net loss of nearly $13 million in the company’s newest quarterly report.

Net revenue was up 3% in Q2 2025 from the previous quarter and 29% from the same quarter in 2024. This increase was driven by a 30% and 41% increase in medical cannabis sales, respectively. In the same time frame, non-medical “adult use” cannabis sales dropped 10% and 13%, respectively.

Medical sales were assisted by strong growth in the international sector. Sales of medical cannabis in Canada were $26.3 million, while sales through international sales channels were $35 million, for a total of $61.3 million.

Non-medical sales were $10.4 million, while Aurora brought in another $750,000 in wholesale bulk cannabis net revenue. The company also incurred $7.8 million in federal excise tax in the most recently reported three-month period.

“Our strong quarterly results demonstrate Aurora’s leadership in global medical cannabis and ability to capitalize on opportunities within rapidly growing markets such as Australia, Germany, Poland, and the UK,” said chairman and CEO Miguel Martin in a press release.

“International revenue increased 93% to $35 million, exceeding Canadian Medical revenue for the first time, and contributing 57% to total global medical cannabis revenue. The Bevo plant propagation segment also grew a robust 21% during its seasonally lowest quarter, proving the efficacy of our diversified operating model.”

Just under $15.1 million of Aurora’s international sales were in the Australian market, while $20 million were in Europe and $26.3 million were in Canada.

Aurora’s major subsidies include Aurora Cannabis Enterprises Inc., Aurora Deutschland GmbH, TerraFarma Inc., Whistler Medical Marijuana Corporation, Bevo Agtech Inc., CannaHealth Therapeutics Inc., ACB Captive Insurance Company Inc., Indica Industries Pty Ltd. (MedReleaf Australia).

The cannabis producer reported an increase in the average selling price of indoor cannabis, from $4.88 on March 31, 2024, to $5.74 as of September 30. The weighted average fair value less the cost to complete and the cost to sell a gram of dried cannabis produced at Aurora’s Indoor cannabis cultivation facilities was $4.39 per gram (March 31, 2024 – $3.76 per gram).

Aurora Cannabis receives patent related to autoflower cannabis

September 17, 2024

Aurora and UBC partner on research to breed fruity-smelling cannabis

October 2, 2024

Aurora Cannabis receives additional German licences

July 25, 2024

SNDL posts $3.8 million in adjusted operating income from its cannabis businesses in Q3 2024

Written by Sarah Clark on November 5, 2024. Posted in Financials.

SNDL posted $236.9 million in revenue in the third quarter of 2024, with an $18.5 million loss.

Q3 2024, which includes the three months ending September 30, 2024, saw the Alberta-based company remain relatively level, year-over-year, in terms of revenue, but a 13% increase in net losses from the same period in 2023. In its previous quarterly report, SNDL reported a $4.6 million loss in adjusted operating income.

The company, which operates cannabis and alcohol businesses, posted net revenue of $81.1 million from its retail cannabis operations and $25 million from its cannabis operations. SNDL reported $4.4 million in adjusted operating income from its retail cannabis operations and a $578,000 loss on its cannabis production businesses.

Retail cannabis net revenue was up 7.4% from the same period in the previous year at $75.5 million, and adjusted operating income was up from $3.4 million. Net revenue from SNDL’s cannabis operations was up from $21 million in Q3 2023, while its adjusted operating loss was down from $14.2 million.

SNDL is Canada’s largest private-sector cannabis retailer by store count, operating 187 locations in the most recent quarter under its three retail banners: “Value Buds”, “Spiritleaf”, and “Superette.” Same-store sales increased 2.3% in Q3 2024 compared to Q3 2023. As of November 4, 2024, the Spiritleaf store count was 81 (20 corporate stores and 61 franchise stores), the Superette store count was four corporate stores, and the Value Buds store count was 102 corporate stores.

SNDL also brought in $4 million through its “proprietary data licensing program” in the third quarter of 2024.

“We are pleased with the substantial progress reflected in our results for the third quarter of 2024 as we advance towards sustainable profitability,” said Zach George, Chief Executive Officer of SNDL. “Our team delivered a record gross margin, positive cash flow and free cash flow, and closed the quarter with over a quarter billion dollars in unrestricted cash and zero debt. We are materially improving our operational performance while executing multiple strategic initiatives that we believe will solidify our foundation and drive sustained, profitable growth.”

On November 4, SNDL also announced that it had successfully closed its acquisition of the Indiva Group’s business, a move the company says will make it a leader in producing cannabis edibles in Canada.

The acquisition includes Indiva’s facility in London, Ontario, and a portfolio of owned and licensed brands like Pearls by Grön, No Future gummies and vapes, Bhang chocolate, Indiva Blips tablets, Indiva Doppio sandwich cookies, and Indiva 1432 chocolate. Indiva boasts a portfolio of seven brands and 53 listed SKUs, all manufactured in the company’s 40,000-square-foot production facility.

Indiva entered creditor protection this past June.

SNDL acquires the rest of Nova Cannabis

August 13, 2024

SNDL agrees to deal for four NOVA-operated Value Buds in BC

April 2, 2024

SNDL announces successful bid to purchase Indiva

August 29, 2024

New Brunswick sold nearly $27 million worth of weed in the second quarter of 2024

Written by Sarah Clark on November 1, 2024. Posted in Financials.

Cannabis retailer sales in New Brunswick included nearly $27 million worth of cannabis in the three months ended September 29, 2024.

The figures come from Cannabis NB’s recently released Q2 2024 financial report, shared on October 30.

The provincial agency and the handful of private retailers that serve the legal cannabis market in New Brunswick sold $26.9 million worth of cannabis in the second quarter of 2024, up 6.6% from the same quarter in 2023.

Gross profit was $12.7 million, up 0.8% year over year, with net income at $6.8 million, a 1.9% increase from the same quarter in the previous year.

In addition to year-over-year increases, sales were also up from the previous quarter (Q1 2024), which was $24.7 for the three months that ended June 30, 2024. Gross profit was up $700,000 from the last quarter, while net income increased by about $900,000.

Dried flower sales were 51.7% of total sales in the most recent quarter, while concentrates were 32.9%. Edibles were 6.9% of total sales, beverages 2.8%, accessories 2.7%, extracts 2.4%, topicals 0.5% and clones 0.1%

A recent annual report from Cannabis NB shows that while dried cannabis flower continues to be the majority of sales, its market share, like in many other provincial markets, is shrinking as concentrates sales increase. New Brunswickers prefer more “convenient” cannabis products as the market continues to shift to products like vape pens, concentrates, and pre-rolls, especially infused pre-rolls, notes the report.

Dried flower sales still represented just over half (50.6%) of sales by category, down from 52.5% in 2022-2023, with concentrates and extracts at 35.2%, up from 33.5% in the previous year. Sales of edibles were the third largest product category, with 7.4% of sales by category.

The newest annual figures from the provincial cannabis agency Cannabis NB show $93.8 million in total sales for the year ended March 31, 2024, a 12.4% increase from the previous year. From this, the provincial agency generated $22.7 million in net income, a 24% increase from the previous year.

While dried cannabis sales still increased year-over-year, whole flower sales in the Picture Province were just over 30% of overall sales, while infused pre-rolls now represent 15% of total concentrate sales.

Key product sales trends for the second quarter (July 1, 2024 to September 29, 2024) compared to the second quarter last year were (July 3, 2023 to October 1, 2023):

sales of dried flower increased 8.3%, up $1.1 million
extracts sales increased 2.1%, up $13.1 thousand
sales of accessories decreased 18.3%, down $0.2 million
sales of edibles decreased 5.4%, down $0.1 million
sales of infused beverages increased 12.6%, up $0.1 million
sales of topicals decreased 29.7%, down $0.1 million
concentrates sales increased 10.3%, up $0.8 million

Cannabis NB also licensed its newest cannabis FarmGate partner, Pinnacle Farms, in the most recent quarter. The Cannabis NB FarmGate program allows licensed New Brunswick cannabis producers to sell their own products onsite at their facilities.

Ayurcann sees record annual growth as its reach expands across Canada

Written by Sarah Clark on October 29, 2024. Posted in Financials.

Ayurcann brought in $25.1 million in net revenue for the fiscal year ended June 30, 2024, up from $12.5 million the year prior, an increase of 101%.

Gross Revenues from sales in the most recent fiscal year were $45.8 million, up from $22.4 million in the previous year.

Despite these increases, the Ontario-based cannabis producer still reported a nearly $4 million net loss for the year, although losses were down from $5.3 million in the previous year.

Ayurcann operates a fully licensed 13,585-square-foot extraction and manufacturing facility based in Pickering, ON. The company earns revenue from the extraction and processing of cannabis oil-based products. It processes its own biomass cannabis and the biomass of other companies.

The company sells 60 unique SKUs under the ‘Fuego’, ‘XPLOR’ and ‘Happy and Stoned’ brands in the BC, Alberta, Ontario, New Brunswick, Yukon, Manitoba, and Saskatchewan markets.

Ayurcann is the top producer of vapes in Ontario, based on reporting by Hifyre IQTM, as of March 30, 2024, and a top five pre-roll manufacturer by volume in Ontario as of March 30, 2024, based on data produced by the Ontario Cannabis Store as of March 30, 2024.

“As the cannabis industry continues to mature in Canada, we are thrilled to witness the steady growth of our revenues across the country,” said Igal Sudman, CEO of Ayurcann, in a press release. “Despite the challenges posed by an increasingly competitive environment and retail price compression, Ayurcann’s business-to-consumer focus has enabled us to expand our market share in multiple provinces.

“With over 70% penetration in dispensaries and a diverse range of 80 products across vape, concentrate, and flower categories, the success of our in-house brands has been transformative for Ayurcann. We’re proud to have made a lasting impact in the market, continuing to build on our growth trajectory,”

By focusing on cost-efficient development, manufacturing and promotion of its own brand vape and flower products, as well as discontinuing all of its non-core products and services, the company says it was able to increase its gross margin by over 4.2% year over year, from 29.5% in fiscal 2023 to 33.7% in fiscal 2024.

As of June 30, 2023, the company’s accumulated deficit was $14.4 million. As of June 30, 2024, Ayurcann had a working capital deficit of $2.4 million. As of June 30, 2024, the company has incurred $20.2 million in excise tax, up from $9.6 million the previous year.

The company’s management has forecasted that the expected expenditure levels and contracted commitments will not significantly exceed Ayurcann’s net cash inflows and working capital for the next 12 months. The company’s ability to continue as a going concern is dependent, as noted in its audited annual report, “upon its ability to obtain additional financing, achieve profitable operations in the future, and the continued support of shareholders and forbearance of creditors.”

New Brunswickers prefer convenient cannabis products

Written by David Brown on October 28, 2024. Posted in Cannabis News, Financials, Government, New Brunswick.

New Brunswickers prefer more “convenient” cannabis products as the market continues to shift to products like vape pens, concentrates, and pre-rolls, especially infused pre-rolls, according to a new annual report from Cannabis NB.

Sales of dried flower still represented just over half (50.6%) of sales by category, down from 52.5% in 2022-2023, with concentrates and extracts at 35.2%, up from 33.5% in the previous year. Sales of edibles were the third largest product category, with 7.4% of sales by category.

In the most recent fiscal year, Cannabis NB brought in eight of its planned nine private retail cannabis locations, part of a commitment to diversify the retail market and bring stores into more remote regions of the province. Total sales in the private retail channel were more than $2.8 million.

New Brunswick also has 25 Cannabis NB locations in the province and seven approved cannabis farmgate locations. The provincial cannabis agency also supports the local cannabis industry by working with local producers who currently contribute 21.5% of total sales. Cannabis NB says they expect this number to continue to grow as more locally-made products become available.

There were 279 products from New Brunswick producers available in the province as of March 31, 2024 (out of 1,927 from across Canada). Whole flower was the largest category, with 58 SKUs, followed by cannabis accessories at 46 and concentrates at 42. The province carried 19 clone SKUs in 2023-2024, the most of any province. Ontario is the only province that eclipses New Brunswick producers in terms of available SKUs (848).

Cannabis NB was the first ever cannabis board in Canada to host a consumer-facing education event, the New Brunswick Cannabis Expo, with over 1,400 attendees. The Cannabis Expo is a cannabis education trade show that’s expertly crafted for 19+ New Brunswickers who consume cannabis.

“For us, delivering for the people of New Brunswick means generating revenue to support the province, while consistently prioritizing safety, responsibility, and top customer service,” writes Cannabis NB president and CEO Lori Stickles in the annual report.

Cannabis NB begins process for ten new private cannabis stores

September 6, 2022

NB Munis want to know where their share of cannabis tax revenues went

May 24, 2023

New Brunswick’s sixth cannabis farmgate set to open soon

June 13, 2023

Manitoba brings in almost $40 million in revenue from cannabis sales in 2023-2024

Written by David Brown on October 28, 2024. Posted in Financials.

Manitoba sold $153.6 million worth of cannabis in the fiscal year ended March 31, 2024, bringing in $39.5 million in net revenue for the province.

Cannabis operations revenues for the Manitoba Liquor & Lotteries Corporation increased $22.7 million from the prior year, while net income and comprehensive income and total allocation to the Province of Manitoba increased by $8.3 million.

MBLL says this growth was mainly driven by the addition of 35 new retail locations. The province had 205 licensed private retail cannabis locations open throughout the province as of the end of March 2024, compared to 177 last year. Seven existing locations closed in the most recent fiscal year.

Sales of dried flower again dominated, with $92.9 million in sales, compared with $82.2 million in the previous fiscal year. Extracts were the next highest-selling product category, with $50 million in sales, up from $39.1 million the previous year.

There were $10.1 million worth of cannabis edibles sold in the year ended March 31, 2024, compared to $9.1 million in the previous year. Sales of cannabis topicals were worth $567,000, up from $424,000 in the previous year.

Manitoba also expanded its cannabis distribution options in the most recent fiscal year, allowing licensed producers to warehouse cannabis products with a licensed cannabis distributor, as well as implementing a twenty-day purchase order deadline and a five-day receiving requirement.

The MBLL says these changes have brought more cannabis inventory into the Manitoba market and closer to the retail network, improving the lead time and fulfillment cycles experienced by retailers.

In 2024-25, the MBLL says its cannabis operations will focus on technology initiatives, including the automation of its federal cannabis tracking requirements and the automation and enhancement of cannabis performance metrics and reporting.

For context, while the MBLL brought in $39.5 million in net revenue for cannabis sales, it brought in $89.9 million from casinos, $313.8 million from alcohol sales, $45.1 million from The Manitoba Lottery, $45.2 million from online gaming, and $199 million from video lotto. Cannabis sales were about 5% of the total $732.5 million combined net revenue from all these sources.

MBLL will host a virtual Q&A with President and CEO Gerry Sul on October 30, 2024.

Decibel Cannabis to acquire AgMedica Bioscience, expanding export potential

Written by Sarah Clark on October 28, 2024. Posted in Cannabis News.

Calgary-based Decibel Cannabis Company Inc. has closed on its acquisition of AgMedica Bioscience Ltd., a subsidiary of Atlas Global Brands.

The deal comes from an exchange with Callisto Capital Corp for a $6.3 million unsecured convertible debenture. The deal still requires the final approval of the TSX.

The purchase gives Decibel better access to export markets. Decibel projects that AgMedica could contribute $30 million in net revenue and $4 million in EBITDA in 2025, totalling an anticipated $130 million of net revenue and $25 million of adjusted EBITDA in 2025 on a pro-forma basis.

“I am excited to announce the acquisition of AgMedica,” said Benjamin Sze, CEO of Decibel, in a press release. “An EU GMP certification is an international standard that Decibel has been contemplating for quite some time; this acquisition accelerates that timeline.

“The AgMedica facility becomes the cornerstone of our international strategy as it allows us to extend our products and brand to the rest of the world. Furthermore, this marks the first step of Decibel’s new strategy as we execute on profitable growth opportunities enhanced by synergistic and accretive transactions.”

Decibel expects the deal to significantly expand its international footprint by using Agmedica’s EU GMP certification to enable export of flower and various extract products to seven countries, including Australia, Denmark, Germany, Israel, Norway, Spain, and the United Kingdom. This adds EU GMP and IMC-GAP certified annual flower production of 5.1 metric tonnes per annum, which, when combined with Decibel’s GACP facility, expands the total metric tonnes per annum of exportable flower to more than 12.

The deal also includes Decibel’s acquisition of GreenSeal Nursery Ltd., a licensed cannabis nursery.

AgMedica’s parent company, Atlas Global Brands Inc. is currently in a creditor protection process (CCAA). Atlas Biotechnologies Inc. and Atlas Growers Ltd had previously gone into receivership in 2023.

Following completion of the transaction, AgMedica will enter into a five-year industrial lease for the AgMedica facility in Chatham, Ontario, as well as a sale and leaseback agreement with Callisto, pursuant to which specific equipment belonging to AgMedica was transferred to Callisto and leased back to AgMedica for a nominal cost for the term of the AgMedica facility lease. AgMedica has the option to repurchase the equipment at the end of the lease term for a nominal value.

Decibel’s Q3 2024 financial report is expected on or about November 21, 2024, and is projected to have net revenue between $23 to $25 million.

Atlas Global Brands granted CCAA protection

June 21, 2024

Court approves RVO for Atlas Global Brands against CRA’s objections

October 10, 2024

Canada’s wholesale cannabis market shifting from buyers’ to sellers’

August 19, 2024

Cannabis sales up 24% in Newfoundland and Labrador from last year

Written by David Brown on October 28, 2024. Posted in Financials.

There was $87.6 million worth of cannabis sold in Newfoundland and Labrador in the 2023-2024 fiscal year, a nearly 24% increase from the previous year.

Some $57.9 million of that was dried flower sales, $21.1 million was extracts and concentrates, $8.3 million was “ingestible” cannabis products, and $0.3 million was from cannabis topical sales. These sales include products self-distributed by local licensed producers (direct delivery).

This is an increase from $70.7 million in sales in the previous year. In the most recent fiscal year, sales of extracts and topicals were twice those of 2022-2023’s $10.8 million in sales. Sales of cannabis vapes were not allowed until late 2022.

In the most recent fiscal year, ended March 31, 2024, Newfoundland and Labrador Liquor Corporation (NLC) regulated and distributed to 55 licensed cannabis retailers across the province, an increase of 14 from the previous year. The NLC also operates an online cannabis store.

NLC estimates that 84% of the illicit cannabis market in the province has been captured, an increase from 65% in the previous year and 25% four years ago.

The agency attributes this increase in part to the increase in the number of new cannabis stores as part of its Rural Expansion Plan. Cannabis sales through the network of privately-owned Licensed Cannabis Retailers (LCRs) were 24.1% higher than the previous year.

In addition to seeking to strengthen the presence of legal cannabis stores in the province, NLC says it works with local cannabis producers by providing support through its product listing process and providing provincial cannabis producers with premiums for the products they sell in the province. In 2023-24, the total support provided to local cannabis producers was $2.1 million.

Despite the estimated increase in adoption of the legal cannabis market, NLC says there is still a significant portion of the province that does not have easy access to legal sources. It expects to license more new stores to address these needs. A request for proposal for four new stores closed in September of this year.

There are, as of publication of this article, 59 stores listed. All but three are located on the island of Newfoundland. Cannabis sales are through Tier 1 stores that are only allowed to sell cannabis and cannabis accessories, or Tier 4 stores, which are in existing retail locations such as a general store.

There are currently four federally licensed cannabis producers listed as active in Newfoundland and Labrador: KRFT, Atlantic Cultivation, BeeHigh Vital Elements, and Oceanic Releaf.

PEI sold nearly $25 million worth of cannabis in 2023-2024

Written by David Brown on October 28, 2024. Posted in Financials.

PEI Cannabis, the provincial agency that manages cannabis sales in the province, sold $24,966,165 worth of cannabis in the year ended March 31, 2024, a total of 5,074 kilograms of weed.

This represented just over $3 million in revenue for the province, up from a target of $1.1 million and just over the previous year’s revenue of $2.9 million. All earnings are distributed to the PEI government. PEI Cannabis also contributed $3.8 million in excise tax revenue to provincial coffers.

Sales of dried flower were 43.2% of all sales in the province, while pre-rolls were 24.56%. Concentrates were the next largest category at 14.83% of sales, edibles were 5.85%, ingested extracts were 3.67%, and beverages were just 1.98%.

PEI Cannabis operates five stores in the province. The most recent opened in Stratford in January 2024. The Charlottetown location posted 54% of sales, Summerside was nearly 24%, and Montague was almost 14%.

Online sales were one-half of one percent of total sales, but those purchases were, on average, much larger basket sizes than those made in-store at $89.59. The O’Leary PEI Cannabis store saw the second-largest average basket size at $42.55, with all other stores ranged from $37.33 to $40.59.

Online basket sizes increased significantly from the previous year where they were $41.11.

“Mainstream” (42%) and “Value” (38%) categories were the most typical product types sold, while “Craft” was 20%.

PEI Cannabis served 622,367 customers in the year ended March 31, 2024. The population of PEI is around 175,000. The Prince Edward Island Cannabis Management Corporation is a wholly-owned Crown Corporation.

PEI is home to cannabis producers like Auxley, FIGR, FOG Organics, Mila, Green Island Genetics, Remidose, and Retro. All of the province’s annual reports can be found here.

Preliminary approval of US$8 million settlement in Aurora Cannabis investor lawsuit

Written by Sarah Clark on October 18, 2024. Posted in Financials.

Aurora Cannabis could end up paying more than $8 million (US) to put to rest allegations that it inflated its stock price in order to mislead investors.

On October 10, 2024, a US federal court judge gave preliminary approval to an $8.05 million cash settlement between Aurora Cannabis Inc. and investors who say Aurora misled them with a $21.7 million round-trip, “sham transaction” between Aurora and another Canadian cannabis company called Radient Technologies Inc.

Radient Technologies Inc. was a Canadian extract maker with ties to Aurora, alleges the lawsuit. Radiant revoked its cannabis licence in 2023. In 2017, Aurora made a CAD$6.2 million investment in Radiant.

A final approval hearing has been set for January 28, 2025. The settlement would apply to investors who purchased Aurora’s common stock on the New York Stock Exchange between October 23, 2018, and February 28, 2020.

For their part, Aurora has denied these allegations. The plaintiffs alleged that Aurora came up with this transaction in order to achieve a desired projection of positive adjusted EBITDA for the fourth fiscal quarter of 2019, ending June 30, 2019.

In their defence, Aurora argued that plaintiffs could not prove loss causation related to the October 9 and October 17, 2019 dates, noting that Aurora’s stock “traded downward in lockstep with other cannabis stocks,” according to court records.

The suit began in 2019 and has gone through several rounds of complaints since that time.

h/t to law360.com

Q3 2024 net revenue sets record for Avant Brands, but reports $2.5 million loss

Written by Sarah Clark on October 15, 2024. Posted in Financials.

Avant Brands generated $9.6 million in gross revenue and $8.5 million in net revenue in Q3 2024, but reported a net loss of $2.5 million after all associated costs.

While losses compared to $1.3 million in revenue in Q3 2024, the company saw an increase in the amount of cannabis sold, a continued push into international exports, and a decrease in the cost of sales.

Gross and net revenue were company records, as was the $5.1 million generated from export wholesale revenue in the three months ending August 31, 2024. Avant sold the equivalent of 3,087 kg of cannabis in this three-month period, a $2 million increase over $6.5 million of net revenue in the same period in 2023 from the sale of 1,558 kg of cannabis.

The company’s cost of sales was $4.3 million in the three-month period ending August 31, 2024, down from $4.5 million in Q3 2023.

Gross margin as a percentage of net sales increased compared to the same period in the previous year, which Avant attributes to growth in “high margin export wholesale revenue and production improvements leading to increased yields and lower average cost per gram.”

Recreational revenue accounted for 33% of net revenues in Q3 2024, with domestic wholesale revenue totalling 7% and export wholesale revenue comprising 60% of net revenues. This compares to 61% for recreational revenue in Q3 2023, with the remainder coming from export wholesale revenue at 36% with domestic wholesale revenue.

Avant Brands Founder & CEO Norton Singhavon said in a press release:

“Avant Brands is on a strong trajectory, and our Q2 2024 results demonstrate the effectiveness of our strategic initiatives. We are capitalizing on the growing international demand for premium cannabis products, while also achieving record profitability. With a focus on international markets and operational excellence, we are well-positioned for long-term success.”

Avant Brands operates several production facilities: 3PL Ventures in Vernon, BC, The Flowr Group Okanagan in Kelowna, BC, Avant Craft Cannabis in Edmonton, Grey Bruce Farms in Tiverton, ON, Tumbleweed Farms in Chase, BC, and Greentec Bio-Pharm in Kelowna, BC.

Court approves RVO for Atlas Global Brands against CRA’s objections

Written by Sarah Clark on October 10, 2024. Posted in Financials.

Following the granting of creditor protection earlier this year, a court approved a reverse vesting order (RVO) on October 7 for Atlas Global Brands, a company behind a handful of cannabis brands in Canada.

The move comes over the “emphatic” objections of the Canada Revenue Agency (CRA), which it argued were “extraordinary.” The CCAA in June was issued by the Ontario Securities Commission, and steps were taken by CRA following Atlas’s failure to remit source deductions, among other issues.

A list of Atlas Subsidiary AgMedica’s creditors as of June 20, 2024, shows an amount owing of $24.2 million, including nearly $5.4 million owed to the CRA for source deductions and excise tax. AgMedica owns Canadian cannabis brands like D*gg Lbs, GreenSeal, and Electric Lettuce.

While the Court heard the Crown’s objections (representing the CRA) to the RVO, it sided with AgMedica, who argued that the CRA’s claims did not take precedence over the claims of its lender and first mortgagee (the AgriRoots mortgage of $16.5 million and the Shalcor DIP Facility).

In its response to these arguments, the Crown used “colorful and emphatic terms” to argue that such a move would “send a signal to the market” and render the court “beholden to the tyranny of the market.”

The court ultimately disagreed, arguing that they see this not as “succumbing to the tyranny of the market, but rather adhering to and enforcing the legislation as written.” Instead, the court said that any claims against the directors and officers in respect of unpaid taxes can be channelled to insurance, leaving the CRA in “no worse position than it would be in a bankruptcy scenario.”

The reverse vesting order decision, said the court, will allow AgMedica Purchased Entities to carry on its business activities as a going concern, to the benefit of employees, vendors, suppliers, and its customers. The court also extended the current stay to the end of October 2024.

AgMedica owns a production and distribution facility in Chatham-Kent, Ontario and primarily operates on the international market.

The AgMedica Transaction for which the ARVO was sought is based on a bid from Shalcor (the DIP Lender) on behalf of the LP Purchaser, and 2596690 Ontario Inc. (AgriRoots, the first mortgagee) on behalf of the Facility Purchaser (together the “AgMedica Purchasers”) to acquire AgMedica, Greenseal Nursery, Ltd. (“Nursery”), a licensed cannabis nursery in Stratford that owns and manages over 1000 cannabis plants’ genetics, and 5047346 Ontario Inc. (“504”), which owns the Chatham Facility (together the “AgMedica Purchased Entities”).

The RVO allows a purchaser to vest out the target’s liabilities and unwanted assets and to acquire shares of a new entity created for the transaction.

h/t to Insolvency Insider

Atlas Global Brands granted CCAA protection

June 21, 2024

Alberta issues recall for AgMedica Vertical cannabis beverages

June 8, 2020

Is the CCAA process being taken advantage of?

September 9, 2024

Freedom Cannabis seeks more time to resolve lease dispute

Written by Sarah Clark on October 3, 2024. Posted in Financials.

Freedom Cannabis says it needs more time to finalize the terms of its Sales Investment and Solicitation Process (SISP) and Stalking Horse Agreement to resolve issues with its current landlord, including an outstanding debt.

The company is seeking an extension of the current stay of proceedings for two more months. The previous stay was to expire on October 11. The company now seeks to have the stay extended through December 19, 2024

At the date of the initial order filed earlier this year, Freedom was in default under its lease agreement, with total arrears as of August 1, 2024, of approximately $2,396,456. Then, between December 2022 and April 2024, Freedom says it made monthly lease payments in the amount of $85,000. Lease payments were then reduced to $50,000 per month in April 2024 and thereafter until the initial order was granted.

After that, Freedom paid its landlord the sum of $38,709.68 for the pro-rated August rent, and $50,000 for the September rent.

Freedom leases approximately 111,600 square feet of space at a facility located in Acheson, Alberta. The company is also looking at other facilities to operate out of.

As of August 3, 2024, Freedom’s liabilities included a balance of approximately $9,488,016 owing to the Canada Revenue Agency (CR) due to unremitted excise duties.

Four20 Premium Markets’s NOI proceedings continued

Written by Sarah Clark on September 23, 2024. Posted in Financials.

Four20 Premium Markets had its Notice of Intent (NOI) proceedings continued under the CCAA on September 19.

The parent companies of cannabis retail chain Four20 Premium Markets first filed a notice of intent to make a proposal under the Bankruptcy and Insolvency Act on May 29.

The companies 420 Premium Markets Ltd., 420 Investments Ltd., and Green Rock Cannabis Ltd (GRC)., filed the notices of intent following a $9.8 million judgment against 420 for repayment of a bridge loan and related interest and costs to Tilray subsidiary High Park Shops Inc. High Park was created for the purpose of the acquisition of Four20.

Tilray had initiated litigation against 420 after a failed attempt by Tilray to purchase 420 for approximately $110 million in 2019.

At the time, Four20 had six licensed cannabis retail locations and another 16 locations secured in Alberta. The retailer currently lists 35 locations in Alberta and Ontario.

Four20 then filed a statement of claim against Tilray in 2020 in an Alberta court for $110 million plus $20 million in damages after Tilray chose to end its deal to buy the retailer, with Four20 saying the BC-based cannabis producer had not acted in good faith.

In August, the proposal proceedings of 420 Parent, 420 Premium, and GRC commenced under Division I of Part III of the Bankruptcy and Insolvency Act and were extended to September 26, 2024.

Tokyo Smoke begins Stalking Horse sale process

Written by Sarah Clark on September 19, 2024. Posted in Financials.

Tokyo Smoke has now entered into a share subscription agreement with its parent company, pursuant to which the parent company, TS Investments Corp., will acquire all of the issued and outstanding shares of Tokyo Smoke.

A judge endorsed the agreement on September 18 and announced by Tokyo Smoke on September 19. The purchase price is around $77 million, and the buyer is obliged to take on certain liabilities of Tokyo Smoke.

As part of the stalking horse agreement, Tokyo Smoke was also approved to restructure its previously announced CCAA process from August. This will allow Tokyo Smoke to open the sale and investment solicitation process (SISP).

The Company has obtained approval from the Court in its restructuring proceedings commenced under the Companies’ Creditors Arrangement Act (the “CCAA“) to implement a sale and investment solicitation process (the “Sale Process“) to seek interest in and opportunities for a sale, restructuring, recapitalization or other form of reorganization of the Company’s business for a purchase price above the purchase price being offered by the TS Investments Corp under the stalking horse agreement. TS Investments Corp is Tokyo Smoke’s sole shareholder.

Interested bidders can participate in the two-phase sales process beginning September 20, 2024. The first phase has a goal to solicit non-binding letters of interest. The deadline to submit letters of interest compliant with the sale process terms is 5:00 pm Eastern Time on October 21, 2024. The second phase will seek binding agreements from compliant parties, with bids to be submitted by 5:00 pm Eastern Time on November 11, 2024.

The consummation of any bid, including the bid submitted by the Buyer under the Stalking Horse Agreement, is subject to closing conditions that are customary for transactions of this nature under the CCAA, including compliance with the applicable bidding procedures and approval of the Court.

Tokyo Smoke notes that it began the restructuring proceedings under the CCAA in order to align its operations with current market and regulatory conditions, which it says have changed significantly since the initial licensing regimes were introduced. Tokyo Smoke intends to exit from CCAA protection as a stronger business, better positioned to continue providing premium products to its customers over the long term while continuing to provide jobs to its dedicated employees across Canada.

Toko Smoke’s monitor in the process, Alvarez and Marsal, will post on its website, as soon as practicable, any modification, amendment, variation or supplement to the bidding procedures and inform the bidders impacted by such modifications.

An updated service list posted on September 17 includes Canopy Growth, National Cannabis Distribution, Health Canada, Canada Revenue Agency, the Attorney General of Canada, Ontario Ministry of Finance, the AGCO, Alberta Ministry of Justice, the government of Newfoundland and Labrador, the Manitoba LGCA, the government of Manitoba Department of Finance and Taxation Division, the SLGA, and Saskatchewan Finance.

A list of Tokyo Smoke’s creditors from August 30 shows more than $94 million owed to secured and unsecured creditors.

High Tide reports second consecutive quarter of net income

Written by Sarah Clark on September 16, 2024. Posted in Financials.

High Tide reported $825,000 in net income from $35.5 million in gross profit and $131.7 million in revenue in the three months ended July 31, 2024.

The company behind retail cannabis chain Canna Cabana says its 6% year-over-year growth in revenue was driven by an increase in the number of stores, from 154 the same quarter last year to 180 as of the current quarter (Q3 2024), as well as increases in same-store sales.

Net income was up from a $3.6 million loss in Q3 2023. This is High Tide’s second consecutive quarter of positive net income.

The Alberta-based company reported $115.7 million in revenue from cannabis and CBD products and another $7 million in consumption accessories. High Tide also brought in just over $9 million in revenue from its data analytics program (Cabanalytics Business Data and Insights Platform), as well as advertising and other revenue.

High Tide’s brick-and-mortar retail stores brought in 94% of revenue from sales.

While the majority of High Tide’s sales are in the Canadian market, it also operates its e-commerce platforms in the US such as Smoke Cartel, Grasscity, Daily High Club, DankStop, NuLeaf Naturals and FABCBD, as well as USA sales on its international e-commerce platforms. In addition, High Tide operates a warehouse that primarily services its e-commerce operations.

Some 94% of High Tide’s revenue came from the Canadian market, while about 6% came from these US holdings. The company continues to see a decrease in revenue from USA and international operations, down 33% in the most recent quarter. High Tide blames this on the weakening CBD sector on the international market and a decrease in consumer spending on accessories “due to economic pressures.”

“Over the last year, the High Tide team has presented investors with compelling proof points as to how we’re different than other retailers, and our third quarter results offer even further evidence of this,” said Raj Grover, Founder and Chief Executive Officer of High Tide.

“Our numbers continue to drive home the fact that we are a well-managed, innovative company that has grown responsibly while continuing to build value for shareholders. Numbers don’t lie and this quarter’s record revenue, positive net income and free cash flow, for the fifth consecutive quarter, sit in stark contrast to some of our big-name competitors recently filing for bankruptcy protection or shutting down completely. Unlike these competitors, we are generating strong free cash flow from our operations, which has been powering our organic growth trajectory in recent months. This has allowed us to grow our cash on hand balance to $35.3 million, the highest ever.”

Featured image via Google Maps

High Tide to launch Queen of Bud branded products through Canna Cabana

September 12, 2024

High Tide Inc. reports increased revenue, declining losses, in newest quarterly report

March 15, 2024

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July 4, 2022

Safari Flower successfully exits creditor protection

Written by David Brown on September 6, 2024. Posted in Business, Cannabis News, Ontario.

Although entering into creditor protection can sometimes mean the end of the road for a business, one cannabis company used the process to successfully restructure and grow their business.

Ontario’s Safari Flower Co. entered into CCAA protection on January 12 of this year, saying at the time that the company intended to use the restructuring process to effect a reverse vesting orders (RVO) transaction with one of its secured lenders that can be used as a way to inject cash into a company.

Then, on August 26, Safari successfully exited from creditor protection. The company’s CEO says Safari is now well positioned to continue to cultivate cannabis as GACP accredited, process cannabis flower under EU-GMP law, and export finished medical products directly to emerging markets abroad like Germany. Safari has already exported nearly one metric ton of cannabis.

“We have worked very hard to accelerate our positive earnings strategy post-CCAA and created value for our stakeholders by targeted product manufacturing for the German medical market and by focusing volume on very few customers whose core business and growth trajectory are synergistic to Safari’s,” says CEO Dr. Brigitte Simons in a company press release.

“This mindset has enabled us to use working capital carefully for the step-wise scale and velocity of high quality cannabis product entrants sold under successful brand partnerships, such as Enua Pharma GmbH. Safari Flower Co. also provides services to other Canadian cannabis producers who wish to sell their products to international distribution partners. The company has successfully exported approximately 940 kg of cannabis flower to Europe and Australia since January 2024.”

David Hyde with Hyde Advisory, assisted Safari Flower Co. through the restructuring process, says he and his team are “pleased to have played a part in the renewal of Safari Flower, having now emerged from CCAA with fresh funding and a clear path to business success. This is a far cry from where the business was only a year earlier.”

“Not all CCAA processes are the same, as we’ve learned from managing a number of them in the cannabis sector,” he adds. “If the underlying business is strong, a well-run Sale and Investment Solicitation (“SISP”) process can lead to the discovery of a buyer committed to leading the company out of CCAA and to new levels of success.”

The cannabis industry in Canada has experienced significant financial challenges. At least 72 cannabis companies filed for some form of creditor protection in 2023 according to listings by Insolvency Insider Canada, which focuses on the Canadian insolvency market. Several more have since filed for CCAA in 2024.

One of the most common filings is for the Companies’ Creditors Arrangement Act (CCAA), which allows insolvent companies to restructure their businesses and finances.

With proper planning, a company can take this step to avoid declaring bankruptcy, Dina Kovacevic, Editor at Insolvency Insider, told StratCannn earlier this year.

Typically, she explained, if a cannabis company is in trouble, it can either file for CCAA protection or a notice of intent to make a proposal, an “NOI” under the Banking and Insolvency Act. This is, ideally, a step taken to avoid being put into bankruptcy or receivership by a creditor or a company declaring bankruptcy themselves.

One of the most significant points Kovacevic highlighted was that distressed companies should ensure they take steps in advance if they see themselves running into long-term financial issues.

“If a company is facing financial issues and it wants to restructure, it doesn’t just want to go out of business, and perhaps it fears that its secured lender is going to put it into receivership. I’d say that it has several options. The first option is to try to work with its creditors and suppliers on an out-of-court restructuring plan. The second would be to file for CCAA protection and even in that type of situation, I would say that the company should be getting key creditors on board before the filing. You don’t want to surprise people.”

Heritage Cannabis announces completion of sale to Hab Cann

Written by Sarah Clark on August 29, 2024. Posted in Financials.

Heritage Cannabis Holdings Corp. announced on August 29 the completion of the company’s sale to a stalking horse bidder called HAB Cann Holdings Ltd.

The company behind a handful of cannabis brands like RAD, Purefarma, Premium 5, Pura Vida, Dank Drops and others had first sought creditor protection in April.

That decision at the time was largely informed by Heritage’s senior secured lender, BJK Holdings Ltd., demanding payment in full of $8.4 million owed by the Heritage group.

In April, the court approved a stalking horse subscription agreement involving Heritage and Heritage West as vendors, with BJK and HAB Cann Holdings Ltd. as the purchasers.

The President of Hab Cann is listed as David Thiessen. A person by the same name is listed as working at BJK in a press release in 2021.

The common shares of Heritage were delisted from the Canadian Securities Exchange at the close of business on August 26, 2024, and from the OTC Pink at the close of business on August 28, 2024.

The purchased entities are Heritage Cannabis Holdings Corp., Heritage Cannabis West Corporation, Heritage Cannabis East Corporation, and Purefarma Solutions Inc.

The Heritage Group lists some $25.3 million in secured and unsecured debt to more than 200 creditors, including $6.8 million owed to BJK Holdings, and nearly $13.4 million to the Canada Revenue Agency for excise and sales tax.

The principal terms of the stalking horse agreement say the purchaser, Hab Cann, will “determine which employees it will assume and employ prior to Closing. In the event that no conditional offer of employment is made to an employee or an employee who receives an offer of employment rejects such offer, such employee shall be deemed to be a “Terminated Employee”.”

The purchase price includes a call for a release of “all amounts outstanding and obligations payable by the applicants under the Senior Loan Agreement and all related loan and security documents, which amount as of June 14, 2024 was $6,837,059.71 (excluding legal fees and expenses).”

Nextleaf reports increased revenues, losses in Q3 2024 report

Written by Sarah Clark on August 29, 2024. Posted in Financials.

Nextleaf Solutions brought in over $4 million in revenue in their most recent quarterly report for the three months ending June 30, 2024, with $884,344 in gross profit but a $317,264 loss.

Total revenue increased significantly from the same period last year when the company brought in about $2.7 million in revenue. Still, losses were up considerably compared to the $419,875 in profit the company reported in Q3 2023.

Nextleaf says the increase in losses was primarily due to “significant share-based payment expenses” totalling approximately $914,000, and “the overall economic environment” as market conditions softened, consumer spending slowed, and operating costs increased. Revenue growth is attributed to expanded product reach and an increase in distribution channels.

The company reported incurring $961,484 in excise duties from their $4 million in sales.

“We’re entering a new phase of our long-term growth strategy,” says Emma Andrews, Interim Nextleaf CEO. “We are committed to building a sustainable legacy and this involves expanding our marketing tactics, investing deeper into inventory, innovation, and product development to remain competitive. Staying true to our DNA we are uncompromising on quality.”

“Building equity through consumer brands takes time. I’ve led teams through a 10x scale-up before and understand the patience, resilience, ingenuity, and stamina required to make it happen. Our Q3 results show the incremental progress made in a few short months, and the exponential potential ahead of us as we continue to scale.”

Nextleaf introduced five new products in the most recent quarter, including Glacial Gold CBN:CBD 10:10 Softgels 10-pack, Atmosphere Twisted Citrus All-in-One 2g Vape, Pure Distillate Banger All-in-One 1g Vape, alongside Crafty Cuts dried craft flower and Crafty Cuts Sampler Prerolls under the brand Miracle Valley.

For the nine months ending June 30, 2024, the company brought in $12.8 million in revenue from wholesale sales. Over half of this ($7.4 million) was sold in BC, while another $5.3 million was sold into the rest of Canada.

The company plans to release a comprehensive update within the next 30 days relating to market and consumer insights, additional product launches expected in 2024, and SKU performance metrics in various regions.

Greenway reports increasing revenue, declining losses

Written by Sarah Clark on August 28, 2024. Posted in Financials.

Greenway Greenhouse Cannabis Corporation reported net revenue of nearly $2.4 million in the first quarter of 2025 ended June 30, 2024, and a $541,478 loss after operating expenses.

The Ontario cannabis producer, which sells under its EPIC Cannabis Co. and MillRite brands, as well as in the B2B wholesale market, saw a 104% increase in net revenue compared to the same period in 2023, along with a 94% increase in grams or grams equivalent sold compared to Q2 2023. This is the second reporting period Greenway has included sales of its branded products.

Greenway’s losses were also down significantly from the same period in the previous year and the previous quarter.

“We are thrilled to announce a record-breaking quarter, achieving a record net revenue, EBITDA, and achiev[ing] a positive net cash flow provided by operating activities,” said Jamie D’Alimonte, CEO of Greenway.

“This performance reflects our focus and commitment to producing quality cannabis and finding the best partners and pathways to bring it to consumers. We achieved this while still keeping our cost of production low and our yields high. This combination is what we believe separates us from other public cannabis companies in Canada.”

The company also recently received CUMS-GAP and GACP certifications for the purpose of international sales. Subsequently, Greenway says it has now harvested its first crop, intended for export.

Greenway expected an average yield per plant of 125 grams in 2024, down from 170 grams in 2023, with the estimated selling price of dried flower staying level at $1.10 per gram. The post-harvest cost to complete and sell that gram of cannabis increased from $0.45 in 2023 to $0.45 in 2024.

Greenway’s EPIC Berry Sunset products became available for purchase in Ontario in this most recent quarter. Greenway operates a cannabis nursery facility in Kingsville, Ontario, and a flowering and processing facility in Leamington, Ontario. It is a majority-owned subsidiary of Sunrite Greenhouses Ltd.

As of June 30, 2024, Greenway reports a working capital deficiency of $940,130 and an accumulated deficit of $18,294,141. The company says it has insufficient cash to pay creditors for its current working capital obligations and operations for the next twelve months. Its ability to continue as a going concern depends on its ability to get sufficient additional funding and generate enough revenues and positive cash flows from its operating activities to meet its obligations and fund its planned investments and operations.

Entourage focuses on expansion despite market challenges: Q2 2024

Written by Sarah Clark on August 27, 2024. Posted in Financials.

Entourage Health Corp. reported net revenue of $9.3 million before excise duties and discounts, but a loss of $10.3 million in its Q2 filing for 2024.

For the three months ended June 30, 2024, the Ontario-based cannabis producer’s revenue decreased by 9% to $12.2 million, compared to nearly $13.4 for the same period in 2023.

Entourage’s loss and comprehensive loss in Q2 2024 increased from a $6.3 million loss in Q1 2024, and a $9.9 million loss in Q2 2023.

“Overall, our year-to-date performance aligns with our expectations and prior achievements. As we move into Q3 and beyond, we are optimistic about the opportunities ahead,” said George Scorsis, CEO and Chair. “This quarter, we focused on the launch of new products and offerings under all our Entourage Brands. The expansion of Dime Bag resulted in significant traction, achieving over 90% distribution in Ontario. We remain dedicated to bringing variety to our consumers and are confident that these efforts will drive improved financial results as we progress through the year.”

The company says the higher loss in Q2 2024 is the result of lower sales and gross margin across its portfolio, which was offset by lower SG&A expenses due to effective cost management and operational efficiencies.

Most of the company’s $9.3 million in sales in the three months ended June 30, 2024, were split evenly between the medical and non-medical supply streams (~$4.1 million each), while about 11% were bulk B2B sales ($1 million).

While revenue from non-medical sales dropped 29% compared to the same period in the previous year, bulk sales increased by 351%. Medical sales stayed relatively level, with a slight 1% decrease compared to Q2 2023.

This amounted to nearly 1.4 million grams of cannabis sold in the medical stream in the three months ended June 30, 2024, 2.1 million grams sold in the non-medical adult-use supply stream and 2.5 million grams sold in bulk, for a total of more than 6.1 million grams of cannabis. This represented a 40% increase in total grams sold compared to the same period in 2023.

The average selling price of a gram of cannabis sold in the medical supply stream was $2.97, while adult-use was $1.95, and bulk sales were $0.39 a gram, for a total average price of $1.52 a gram. This represented a 7% decrease in price in the medical supply stream and an 83% decline in the price in the bulk supply stream, while adult-use non-medical sales stayed level compared to Q2 2024.

The company had $8.4 million worth of cannabis on hand as of June 30, 2024, along with $2.2 million in extracts.

Entourage sells under the brands Color Cannabis, Saturday Cannabis, and Dime Bag in the non-medical stream and through its Starseed Medicinal medical platform and its health and wellness brand Syndicate Cannabis.

Entourage produces dried flower, pre-rolls, oils, capsules, edibles, topicals, vapes, and a heat-free “micro inhaler” for sale in Canada in the medical and adult-use markets.

It sells non-medical products in the Ontario, Alberta, BC, Manitoba, and Saskatchewan markets. Medical sales in Canada are nationwide. The company also has an arrangement with Australia Pty Ltd., a fully-owned subsidiary of Lyphe Group Ltd., for the sale, execution, and fulfillment of its first international order of medicinal cannabis to Australia

“We have achieved stability despite a challenging environment, highlighting the resilience of our business model and the strength of our long-term strategy,” said Vaani Maharaj, CFO. “Although Q2 presented its share of market fluctuations, our steady performance over the past six months demonstrates our commitment to overcoming these obstacles. As we move forward, our focus on execution and capital efficiency will be key to driving future growth and success.”

As a going concern, Entourage reports it has material debt obligations that come due within the next twelve months, noting that it has suffered recurring losses from operations and requires additional financing to fund its business and operations.

If Entourage is unable to raise the additional capital needed and subsequently renegotiate the payment terms of its outstanding loans and borrowing, the company’s financial report says it will be unable to meet its financial obligations. As of June 30, 2024, the company had a working capital deficiency of $163,248,157 and an accumulated deficit of $382,153,256. Management plans to fund the operations through existing cash positions, as well as looking at different strategies with its lender.

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Cannabis sales stay strong in New Brunswick

Written by David Brown on August 20, 2024. Posted in Cannabis News, Government, New Brunswick.

Cannabis sales bounced back in New Brunswick in the three months that ended June 30, 2024, following seasonal declines in the previous quarter from January through March.

Total product sales in the province for the quarter were $24.7 million, up 12.6% compared to the same quarter in the previous year. The provincial cannabis agency also brought in $5.9 million in net sales, up 15% from the same period in 2023.

Cannabis sales have continued to increase in the province annually, with consistent spikes in Q2, covering July, August and September, and declines in Q1, covering the first three months of the year.

Cannabis NB operates 27 stores in 18 communities in the province, along with nine private stores since the province began allowing them in 2023. There are also six cannabis farmgate locations in New Brunswick that allow cannabis producers to have a retail store on-site.

The agency’s 2024-2026 strategic plan says legal cannabis sales in the province have been approaching about 50% of the total cannabis market and includes plans to increase the number of retail outlets and products available, as well as exploring on-site consumption and customer loyalty programs.

Competition in the market has helped to bring prices down, continues the report, noting that while some of the big LPs are “struggling and trying to recover from over-investing” in incorrect market assumptions, “many new LPs and micro-producers are being licensed that have learned from the challenges at launch, and are approaching the industry with better information and a more sustainable plan.”

The organization also plans to establish a comprehensive loss prevention program to reduce risk. A Cannabis NB employee was recently charged with stealing more than $5,000 worth of products and cash. The case has been adjourned to September 6.

Auxly reports profitable quarter as it consolidated operations, products

Written by Sarah Clark on August 15, 2024. Posted in Financials.

Auxly Cannabis Group Inc. reported $43.4 million in net revenues from cannabis sales in the three months ended June 30, 2024, and net income of $2 million in its Q2 2024 report.

Net revenues were up 33% over the same period of 2023, which Auxly attributes to its increased focus on the sale of cannabis flower and vape products. This was partially offset by what it says was price compression in the adult-use recreational market.

This is the second in the past eight quarters that the company has reported net income rather than a net loss.

Net income increased 116% from Q2 2023, which the company says is mostly due to improved operational stability from the consolidation of its dried flower and pre-roll manufacturing to the Auxly Leamington greenhouse facility following the sale of its Ottawa facility.

In addition to its wholesale bulk cannabis sales, the company sells cannabis products under the brands Parcel, Back Forty, Foray, Dosecann, and Kolab Project, including dried flower, pre-rolls, vapes, edibles, and concentrates. It sells products in all Canadian provinces and two territories, Yukon and the Northwest Territories.

In May 2024, Auxly also launched its first branded product in Quebec: Back Forty large format 0.75g three-pack pre-rolls.

Although Auxly’s offices are based in Toronto, the company’s primary cannabis facility is in Charlottetown, PEI, for cannabis processing, analytical testing and research under the federal Cannabis Act. Auxly also operates a cultivation and processing facility in Leamington, Ontario. In May 2024, it sold its Auxly Ottawa facility for $1.7 million.

The company does not have any currently active international operations.

Excise taxes on Auxly’s $43.3 million in sales for the three months ended June 30, 2024, were $14.3 million. The Company says it will have insufficient cash to fund its operations for the next 12 months if its sales do not improve or decline.

In a company press release, Hugo Alves, CEO of Auxly, commented: “After our best start to a year ever, we are thrilled to report our best Q2 in history, with exceptional financial performance setting a new Q2 record in revenue and all-time records in gross margin and adjusted EBITDA. Our commitment to product quality, innovation and operational efficiency continues to drive our success. We are particularly proud of our significant gains in market share across all three of our core product categories, especially in the vapor segment where we are currently leading the growing all-in-one category, securing an impressive 32% share of the market.

“This success is a testament to the collective efforts of our talented and dedicated employees, who work hard every day to create quality cannabis products that help our consumers live happier lives. We will be expanding the all-in-one vape portfolio with new flavour profiles under Back Forty throughout the second half of the year, while also launching a new innovative vape format under our Kolab Project brand, available in September. These achievements reflect our drive for continued growth and innovation, our dedication to reaching new financial milestones and delivering exceptional results for our shareholders. As we look ahead, we remain passionately committed to our consumers, focused on surpassing expectations, leading with excellence and achieving sustainable, profitable growth.”

Lower demand, overall economy blamed for second quarter of Rubicon losses

Written by Sarah Clark on August 15, 2024. Posted in Financials, Other.

Rubicon Organics Inc. reported $12.1 million in net revenue in the three months ended June 30, 2024, but a loss of $454,164 in its Q2 2024 report.

This represents an increase in net revenue for the BC cannabis company compared to Q2 2023 (7%) but also an increase in losses. The company says it has experienced a decline in net revenue over the past two quarters due to softened demand in Alberta, Ontario, and Quebec, and the overall economy in Canada.

Rubicon sells various cannabis products, including flower, topicals, and edibles, in Canada under the Simply Bare, 1964 Supply Co, Homestead, and Wildflower brands. Rubicon also recently began selling cannabis vapes under the 1964 brand.

For the period ended June 30, 2024, Rubicon determined the weighted average fair value less costs to sell cannabis was approximately $1.41 per dried gram, up from $1.45 per dried gram as of December 31, 2023.

The company says it observed a year-over-year downturn in both the premium flower and pre-rolls categories from Q2 2023 to Q2 2024, with pre-rolls experiencing a more pronounced decline than premium flower.

“Rubicon Organics’ house of premium brands remains the #1 premium licensed producer in Canada,” said Margaret Brodie, Rubicon’s CEO, in a press release. “I expect this leadership position to grow with our entry into the vape sector where two strains were launched in Q2 2024. I’m proud to report that we have already seen our national distribution hit over 40% of stores in the first two months of sales to July. I expect this growth momentum to continue as we expect to have five vape strains in market by year-end,”

Simply Solventless reports another profitable quarter

Written by Sarah Clark on August 15, 2024. Posted in Financials.

Simply Solventless Concentrates reported net and comprehensive income of $1.2 million from net revenue of $2.9 million in the three months ended June 30 in the company’s Q2 2024 financial report.

The company’s net revenue was up 26% from its previous quarterly report and 60% from the same period in 2023. Net income increases by 143% and 5% compared to the same periods.

The Alberta-based cannabis company says its gross revenue increased due to increased branded product sales for its Astrolab, Frootyhooty, and Lamplighter brands, available in Alberta, Ontario, and Saskatchewan with infused pre-rolls and vapes.

Excise taxes on Simply Solventless’ (SSC) $4.2 million in gross revenue in Q2 2024 were $1.3 million. SSC has achieved net revenue and positive EBITDA in seven of the past eight quarters and positive adjusted EBITDA for eight straight quarters.

On June 25, 2024, the company entered into a services agreement and share purchase agreement with CannMart Inc., a cannabis company located in Etobicoke, Ontario for $2.5 million. SCC recently acquired Lamplighter, as well, in January 2024.

In a recent interview, Jeff Swainson, President and CEO of SSC, said the company plans to move the production of many of CannMart’s products to SCC’s underutilized facility in Alberta. In the past, these products have been exclusively produced by third parties for CannMart.

As of June 30, 2024, the Company had a working capital surplus of $5,909,655, compared to $4,263,711 as of March 31, 2024.

Swainson stated in a press release: “SSC has established a track record of revenue growth and profitability which has resulted in strong strategic positioning within the Canadian cannabis industry. We will seek to continue to leverage this positioning to capitalize on opportunities resulting from industry headwinds, and to finish the second half of 2024 stronger than the first half.

Decibel Cannabis Company posts positive net income, decline in international sales

Written by Sarah Clark on August 14, 2024. Posted in Financials.

In the three months ended June 30, 2024, Decibel Cannabis reported $22.1 million in net revenue and $122,000 in net income.

While net revenue was relatively flat compared to the previous quarter, net revenue was up significantly from a loss of $3.5 million in Q1 2024. On a year-over-year basis, Decibel net sales were down compared to the same quarter in 2023, but the $122,000 in net income was up from a $423,000 loss in Q2 2023.

Of the $33.7 million in gross revenue in Q2 2024, Decibel reported incurring $11.5 million in excise tax (34.2%) and a $12.9 million cost of goods sold. The bulk of the company’s sales were in the Canadian non-medical market, while international sales were just $37,000 in Q2 2024, down from $1.1 million in Q2 2023.

Decibel attributes this decline to the halt of exports to Israel as the company transitioned to a new partner. This was partially offset by Decibel’s first export to Australia.

Decibel is one of three companies named in a recent report by the Commissioner for Trade Levies at the Ministry of Economy and Industry that proposes possible levies on Canadian cannabis products.

The company has now received regulatory approval to export flower and vape products to the UK, with the first shipment expected in Q3 2024.

“Decibel has shown good discipline reducing our current liabilities by ~5mm this quarter,” writes Benjamin Sze, Decibel’s Chief Executive Officer, in a press release. Market share has been challenged, but early indications from Qwest relaunch suggest we will regain market share in flower. A continued focus on execution and capital efficiency will serve as the platform for future growth.”

Increased gross profits, decreased losses in MediPharm’s Q2 2024 report

Written by Sarah Clark on August 14, 2024. Posted in Financials.

MediPharm Labs posted a gross profit of $3.4 million in the three months ended June 30, 2024, but a net loss of $2.6 million.

The Company’s Q2 2024 gross profit was up significantly from the $855,000 reported in the same quarter in 2023, while net loss was down from $2.9 million, which the company attributes to product mix, production efficiencies, cost reductions, and an increase in international sales.

Net revenue was up 8% year-over-year, which MediPharm attributes to increased sales of dronabinol, international sales of oil in Germany, and international sales of vapes in Australia.

MediPharm has sold into ten international markets and conducts business in Australia, Germany, and Brazil. The company is partnered with STADA Arzneimittel AG, Europe’s fourth-largest generic drug company, which supports its business segment in Germany. MediPharm’s Beacon Medical Brand also helps to strengthen its presence in the Australian market. It also recently launched Canadian-produced GMP Beacon Medical Brand cannabis oil and inhalation cartridges in the Australian medical market through Beacon Medical Australia.

MediPharm reports an increase in the expected average fair value of cannabis flower at $1.80 per gram and $0.07 for trim, compared to $1.48 per gram for flower products and $0.07 for trim as of June 30, 2023.

MediPharm Labs operates out of two manufacturing facilities in Ontario, the Barrie Facility and the Napanee Facility. It has recently begun shutting down operations at its Canna Farms facility in BC.

On June 20, 2024, the Company entered into a licensing agreement with Remidose Aerosols Inc. to acquire the exclusive global rights for advanced cannabis products.

David Pidduck, CEO of MediPharm Labs, commented, “We are very pleased with our Q2 results, showcasing substantial improvements in both revenue and profitability. The strategic initiatives implemented, including cost reductions and operational efficiencies, are yielding positive results. We are particularly encouraged by the continued growth in our international sales and the progress in innovation of non-combustible cannabis formats.”

Greg Hunter, CFO of MediPharm Labs, added that “Q2 2024 was a major step in the right direction towards profitability and becoming cash flow positive. Our revenue and Adjusted EBITDA were both the highest in over three years and Q2 put MediPharm on the verge of profitability. Revenue was $10.3M or 8% higher than prior year and Adjusted EBITDA⁽¹⁾ loss was $0.1M which is $3.1M better than prior year and $0.8M better than Q1 2024. Our cash burn was approximately $1M resulting in a cash balance of $16M with less than $3M of debt at the end of Q2 2024. MediPharm is in a strong financial position to capitalize on our strong suite of licences, global customer contracts and assets as we strive for profitability in the back half of 2024.”

SNDL acquires the rest of Nova Cannabis

Written by Sarah Clark on August 13, 2024. Posted in Financials.

SNDL Inc. announced on August 13 that it will acquire all of Nova Cannabis’s issued and outstanding common shares for approximately $40 million.

SNDL and Nova Cannabis had previously announced the termination of their implementation agreement from December 20, 2022, which would have, in part, seen SNDL vending into Nova’s retail network under the Value Buds, Spiritleaf, and Superette banners located in Ontario and Alberta.

The plan had been repeatedly delayed due to what it said was continued review by an unnamed provincial regulator.

The new acquisition secures SNDL’s control of the remaining approximately 34.8% of shares in Nova Cannabis, giving it 100% ownership of the retail chain. SNDL also manages several investments, which include Canadian cannabis companies like Indiva, Delta 9, and Nova Cannabis, along with several US cannabis companies.

“Today’s announcement by our Alberta-based corporations underscores our commitment to sustainable performance in Canadian cannabis,” said Zach George, SNDL’s Chief Executive Officer. “We are committed to building a consumer-centric model at scale, supported by SNDL’s robust shared service model, access to capital, and a well-developed cannabis retail pipeline. These factors are integral to the achievement of sustained profitable growth.”

Nova reported record revenue in their most recent quarterly report covering the three months ended June 30, 2024.

The company reported a record of $69.2 million in revenue for the three months ended June 30, 2024, the company’s second quarter of 2024. This translated to $16.8 million in gross profits and $859,000 in net and comprehensive earnings, up from a $333,000 loss in the previous quarter.

Nova’s revenue had declined in the past three quarters from a peak of $67.7 million in Q3 2023 to $67.4 million in Q4 2023 and $64.3 million in Q1 2024.

Nova announced it had opened its one hundredth Value Buds store on June 30, 2024. As of August 1, 2024, the company owned and/or operated 100 stores in Alberta, Saskatchewan, British Columbia, and Ontario.

The Alcohol and Gaming Commission of Ontario (AGCO) has rules preventing cannabis producers like SNDL from directly or indirectly owning or controlling more than a 25% interest in any licensed Ontario cannabis retailer.

However, following SNDL’s initial acquisition of Nova’s then-parent company, Alcanna Inc., in 2022, the companies created a special agreement for the sale of retail stores located in Ontario to a separate company called Spirit Leaf Ontario Inc. As of August 2024, the company has 35 locations in Ontario.

There are also 36 Value Buds locations in Ontario as of publication.

In response to a request fro comment, the AGCO told StratCann via email that the agency is aware of the recent announcement made by SNDL.

“The regulator carefully scrutinizes all transactions involving cannabis retail licensees to assess their eligibility under the Cannabis Licence Act,” writes a media representative with the agency. “That process is currently active and so we can offer no further comment at this time.”

Note: This article has been updated to include comments from the AGCO.

Organigram reports first net income in several quarters

Written by Sarah Clark on August 13, 2024. Posted in Financials.

New Brunswick’s Organigram Holdings Inc. reported net revenue of $41.1 million for the third quarter of 2024 and net income of $2.8 million, compared to a loss of $213.5 million in the same reporting period in 2023.

Organigram’s net income increased from the previous quarter in 2024, up from a $27.1 million loss in Q2 2024. This is only the second quarter of net income the company has reported in the last eight quarters.

Sale of cannabis flower was 58% of Organigram’s business in Q3 2024, at an average cost of $1.50 per gram, down from $1.67 per gram in the same quarter in 2023 and $1.51 from Q2 2024.

Organigram reports having harvested 21,420 kg of dried flower during Q3 2024, up from 18,604 kg of dried flower in Q3 2023. The company says it expects Canada-wide legal sales to total $6 billion in calendar 2028.

“We are pleased to report a strong third quarter, highlighted by a 25% year-over-year increase in net revenue, and a significant improvement in adjusted EBITDA”, said Beena Goldenberg, Chief Executive Officer. “Our strategic investments and partnerships, both domestically and internationally, have positioned us for growth and diversification, particularly in the European market with our investment in Sanity Group. Furthermore, the preliminary results from our landmark PK study on our latest patent pending nanoemulsion technology demonstrate our ongoing commitment to innovation and expanding our product offerings. I continue to be very proud of our dedicated team for their hard work and contributions to these achievements.”

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Freedom Cannabis receives creditor protection to pursue restructuring and sales process

Written by Sarah Clark on August 13, 2024. Posted in Financials.

Freedom Cannabis Inc. announced on August 13, 2024, that it and its subsidiaries sought and received an order for creditor protection from the Alberta Superior Court of Justice pursuant to the Companies’ Creditors Arrangement Act (CCAA).

In an email announcement shared by the Alberta-based cannabis producer, it says “difficult but necessary decision to commence CCAA proceedings was made after careful consideration of the Company’s financial position while evaluating all available alternatives and engaging in significant consultation with legal and financial advisors.”

Freedom reports that it needs CCAA protection due to its default under certain material operating agreements and the possibility that the Canada Revenue Agency will not renew its cannabis excise licence.

Freedom had initially sought, and the court established an initial stay of proceedings to August 8, 2024, providing Freedom Cannabis time to restructure its business, engage with key creditors and stakeholders, identify and assess potential restructuring options and review other strategic alternatives to maximize the value of the company for their stakeholders. That process has now been extended to August 18, 2024, and Freedom seeks to extend it again until August 28.

KPMG is the monitor.

Freedom is a privately owned company that has been operating in the Canadian cannabis industry since 2017. Its head office is located in Acheson, Alberta, where it employs around 100 people.

An increasing number of cannabis companies in Canada have been seeking CCAA protection as the industry experiences significant price compression, high excise taxes, and increased competition. Such protection can provide an opportunity for companies to restructure their finances to address creditor concerns.

Galaxie Brands receives CCAA protection

Written by Sarah Clark on August 12, 2024. Posted in Business, Cannabis News, Government, Producers.

The parent company of cannabis packager Galaxie Brands was issued an order pursuant to the Companies’ Creditors Arrangement Act (CCAA) on August 6, on application by The Vancor Group Inc.

The Vancor Group is the largest creditor of Equipment Co., Galaxie Brands’ parent company, which owns the equipment Galaxie uses to conduct business. Galaxie Brands is a licensed producer of cannabis under the Cannabis Act and operates as a producer and co-packer of cannabis and cannabis products.

Galaxie Brands processes cannabis into various products for sale to its customers and provides packaging services at its facility in Puslinch, Ontario. However, neither Galaxie nor Equipment Co. cultivates, manufactures, or grows cannabis flower.

Galaxie’s primary customers include other cannabis producers and provincial partners across Canada, including those in Ontario, British Columbia, Nova Scotia, Yukon, and New Brunswick.

Vancor has invested over $2.7 million in Equipment Co and Galaxie Brands on an unsecured basis. That debt has now matured as of May 31, 2024, and more than $2.1 million in outstanding debt is owed to Vancor. KPMG Inc. has been appointed as monitor of the CCAA process for Vancor.

Vancor is owned by Corry Van Iersel, who also owns True North Cannabis, a chain of cannabis stores in Ontario.

While Galaxie’s production licence is not set to expire until February 2028, the company’s excise licence, set to expire on October 16, 2024, must be submitted by September 16, 2024.

Beginning around September 2023, Galaxie Brands also entered into a payment plan with Health Canada to pay licensing fee arrears.

The plan considers a monthly payment of approximately $15,000 to Health Canada for these arrears. As of August 2024, Galaxie owes about $30,481.05 to Health Canada on account of annual licensing fees for 2023.

As of August 2024, Galaxie is also said to have owed the Canada Revenue Agency (CRA) around $4.1 million in unremitted excise tax. In May, the CRA requested that Galaxie prove it has enough money to continue operating and work on a payment plan.

KPMG, the Proposed Monitor, reports that the CRA is the beneficiary of a $535,000 surety bond issued by Trisura Guarantee Insurance Company as security for Galaxie Brands’ excise tax obligations.

Galaxie Brands also has around $569,000 in arrears related to Harmonized Sales Tax (HST) remittances to the CRA.

Equipment Co and Galaxie also owe some $2 million in accounts payable, primarily to suppliers, shipping and logistics services companies, and other cannabis licensed producers.

The main goal of the CCAA Proceedings is to stabilize Equipment Co and Galaxie’s businesses and to allow them to be sold to address these debts through a court-ordered process.

Galaxie’s sales for the period of August 3 to November 1, 2024, are just over $4 million, with a closing cash balance of -$1.4 million.

In 2023, BZAM completed its disposal of Galaxie Brands Corporation via a share purchase agreement, which it had acquired when it took over the Green Organic Dutchman who had taken over Galaxie Brands in 2021.

Galaxie’s brands include WAGNERS, Highland, ZIP, Stunnerz, Glob Headz, Lite Label, Munchie Box, and Cannabis Cartel.

BZAM granted CCAA protection due to ongoing financial challenges

February 29, 2024

Navigating the world of bankruptcy, restructuring in the cannabis industry

February 5, 2024

Delta 9’s monitor files sale and investment process notice

August 3, 2024

Canopy reports increased gross profits and loss in Q1 2025

Written by Sarah Clark on August 9, 2024. Posted in Financials.

Canopy Growth Corporation reported $23 million in gross profit in Q1 2025, a 67% increase from Q1 2024, but also posted a $127 million loss, a nearly 204% increase from Q1 2024’s loss of $41.9 million.

This is a decrease in net revenue and net loss from the previous quarter, Q4 2024, in which Canopy reported $72.8 million in net revenue and a net loss from continuing operations in fiscal 2024 of $483.7 million for the three months ended March 31, 2024.

Despite continued losses, Canopy CEO David Klein remains positive.

“The fundamentals of our business continue to strengthen, and our focus on profitable revenue generation is yielding clear results as we set the stage for growth in the second half of fiscal 2025. With our core businesses delivering adjusted EBITDA profitability and primed for growth, paired with Canopy USA’s positioning to benefit from near-term market opportunities in the U.S., Canopy Growth is advancing rapidly and is well established for multi-market cannabis leadership.”

Net revenue from Canadian cannabis sales, both medical and non-medical, for the three months ended June 30, 2024, was $37.7 million. Cannabis sales in international markets brought in another $10.1 million and sales for Storz & Bickel were $18 million, for a total of $66.2 million in net revenue.

The company reported incurring $7.5 million in excise tax from Canadian adult use (non-medical) sales in Q1 2025 and $2.1 million in excise from medical sales.

The segmented gross margin for Canadian cannabis sales was $12.1 million, while international cannabis markets were $3.6 million, and Storz & Bickel was $7.3 million. After a $29.1 million operating loss and $93.9 million in other expenses, loss before income taxes was $123 million.

While $37.7 million of Canopy’s sales in the three months ended June 30, 2024, were from Canada, $15.5 million were from Germany, $8.6 million were from the US, and another $4.4 million were from other parts of the globe.

Canopy attributes a year-over-year decrease in Canadian adult-use cannabis sales to “supply constraints for certain products as a result of financial difficulties with our contract manufacturers and lower sales velocity due to increased price competition.”

The company attributes its year-over-year increase in Canadian medical cannabis sales to an increase in the average size of medical orders, an increase in the percentage of insured customers, and a more extensive assortment of cannabis product choices offered to its customers.

These increases were somewhat offset by a year-over-year decrease in the total number of medical orders, which Canopy says is due to an increasing number of adult-use cannabis retail stores across Canada. As of June 21, 2024, there were 3,663 authorized retail cannabis stores in Canada, down from 3,689 in March, but this number is still higher than the same reporting period in the previous year.

Canopy’s international cannabis sales remained relatively stable compared to the same quarter in 2024, which it says is due to increased sales in Poland and decreased sales in Australia.

Revenue from sales of Canopy’s control of Storz & Bickel was $18.5 million in the first quarter of fiscal 2025, up from $18.1 million in the first quarter of fiscal 2024. Canopy attributes this 2% increase in year-over-year sales to the growth of its Mighty vaporizer and contribution from its newly launched portable vaporizer in the third quarter of fiscal 2024.

The gross margin for Canopy’s Canada cannabis segment was $12.1 million in the first quarter of fiscal 2025, or 32% of net revenue, compared to a $300,000 loss in the first quarter of fiscal 2024, or -1% of net revenue.

Canopy has two cannabis cultivation facilities in Canada: a greenhouse facility in Kincardine, Ontario and its DOJA facility in Kelowna, British Columbia. The Kincardine facility has European Union Good Manufacturing Practices (“EU GMP”) certification which allows for export to medical markets in Europe and other medical cannabis markets around the world.

The company also operates a processing facility at its flagship site in Smiths Falls, Ontario.

Canopy sells in Canada under the Tweed, 7Acres, DOJA, Vert, Hi Way, Deep Space, Wana, and Spectrum brands, while international sales are under Canopy Medical and Spectrum Therapeutics.

Increased Canadian cannabis sales for Village Farms in Q2 2024

Written by Sarah Clark on August 8, 2024. Posted in Financials.

Village Farms International, Inc. brought in USD$40.7 million in cannabis sales in Canada in the second quarter of 2024, $10.7 million in gross profit, and $1.4 million in net income (reported in US dollars).

While cannabis sales in Canada increased by $12.7 million compared to the same quarter in 2023 ($28.1 million), gross profits on those sales actually declined slightly from $10,716,000 to $10,705,000. Branded sales in the Canadian cannabis market were $50.4 million, while non-branded sales were $8.3 million.

The company attributes the increase in cannabis sales in the Canadian market primarily to a 32% increase in net branded sales and an 182% increase in non-branded sales. The latter increase is attributed to “improved supply conditions and pricing created by the shift of many producers to asset-light models, including sales of non-brand-spec inventory.”

The company reports incurring excise duties on its Canadian cannabis sales of $20 million (CAN$27 million) for the three months ended June 30, 2024, or 39% of gross branded sales. Village Farms says the Canadian excise duty is the single largest cost of participating in the branded adult-use market in Canada.

Pure Sunfarms was one of three Canadian cannabis companies named by the Israeli Commissioner for Trade Levies at the Ministry of Economy and Industry in an investigation into “product dumping” of Canadian cannabis into the Israeli market. The preliminary report proposes a 74% levy on imports from Pure Sunfarms.

Village Farms International operates two cannabis facilities for the Canadian legal adult use (recreational) market and for export to international markets like Israel, Germany, Australia, and the United Kingdom. The company’s Canadian Cannabis segment is made up of Pure Sunfarms in BC and an 80% ownership in Rose LifeScience in Quebec.

International sales increased by 9% in Q2 2023, primarily due to higher sales to Germany and the UK. These were partially offset by lower sales to the Australian cannabis market.

The company also holds 85% ownership of LeliHolland, which has one of ten licenses to cultivate cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program. Located in Drachten, the facility is targeted to begin production in the fourth quarter of 2024.

In the US, Village Farms owns Balanced Health, which focuses on consumer CBD products. It had $4.3 million in sales and $12.3 million in losses.

The company also sells produce and energy through its renewable natural gas project.

Village Farms posted sales of $92.2 million in the three months ended June 30, 2024, and a loss, including non-controlling interests, of $23.6 million.

Featured image via Twitter

Net revenue, net loss up for Cronos in Q2 2024

Written by Sarah Clark on August 8, 2024. Posted in Financials.

Cronos brought in its highest quarterly net revenue yet at $27.8 million in the second quarter of 2024 but still reported a net loss of $8.8 million (reported in US dollars).

Cronos Group Inc. saw a 46% ($8.7 million) year-over-year increase in net revenue, which the company attributes to increased domestic and international sales.

The company’s gross profits also increased, up $3.2 million in the three months ending June 30, 2024, from the same reporting period in 2023.

Cronos’ net loss of $8.8 million is up from a $2.4 million loss in the previous quarter, and up from a $5.7 million net loss in Q2 2023.

Net revenue for the three months ended June 30, 2024, was $38.7 million, with $10.9 million in excise taxes. Cost of sales was another $21 million, while sales at marketing were $4.3 million out of $21.9 million in total operating expenses.

Net revenue from cannabis flower sales was $20.7 million in Q2 2024, while net revenue from cannabis extracts was $7 million, a 47% and 43% year-over-year increase respectively. The majority of these sales were in Canada ($19.8 million), while $6.9 million were to Israel and $1 million to Germany and the United Kingdom (up 46%, 27%, and no material change compared to the same quarter in 2023, respectively.

Israel is in the process of considering adding levies to cannabis imported from Canada. Cronos also operates Cronos Israel, which has a nursery, cultivation, and distribution licenses. It is in the process of constructing a custom-built greenhouse and manufacturing facility for cannabis.

“Cronos achieved its highest quarterly net revenue on record in Q2 2024 at $27.8 million, up 46% year-over-year,” said Mike Gorenstein, Chairman, President and CEO of Cronos. “The top line was propelled by 46% growth year-over-year in Canada, 27% growth year-over-year in Israel, growth in Germany and the initiation of sales in the United Kingdom. These results reflect the hard work and dedication of our entire team, reinforcing our confidence in sustained growth and success,”

In 2023, Cronos purchased approximately $21 million of biomass from GrowCo, and GrowCo sold approximately $20 million to third parties.

Cronos sells its cannabis under the brands Spinach, Lord Jones, and Peace Naturals.

Aurora Cannabis shows increase in net revenue, finally reports net income

Written by Sarah Clark on August 7, 2024. Posted in Financials.

Aurora Cannabis reported an increase in net revenue and net income in the three months ending July 30, 2024, driven by increased exports, domestic medical sales, and plant propagation sales.

The cannabis company reported $83.4 million in net revenue in the first quarter of 2025, a 12% increase from the previous quarter compared to $74.7 million in the same quarter in 2024.

The company also reported $5.1 million in net income, up from a $28.3 million loss in the same period last year and a $20.8 million loss in the previous quarter (Q4 2024).

Medical sales revenue was $47.2 million, a 13% year-over-year growth, while non-medical sales were $11.5 million, a 10% YOY decline.

Net revenue from wholesale bulk cannabis sales was $1.6 million, up from $371,000 in the same quarter in the previous year.

Aurora attributes its increase in medical cannabis sales in Canada as a result of additional product offerings to both insurance and non-insurance-covered patients.

The increase in exports was primarily due to increased sales to Australia. Aurora’s main medical markets are currently Canada, Germany, the UK, Poland, and Australia, as well as the Caribbean, South America and Israel. MedReleaf Australia is also seeking to expand sales into New Zealand.

Aurora is one of three active in-country producers of medical cannabis in Germany and recently received its production and R&D license under the new cannabis law. The company intends to use this facility to serve not only the German market but also all medical markets in Europe and any future opportunities for non-medical sales in the region. However, it says it has no current plans to expand production in Germany.

Aurora also reported a significant increase in revenue from plant propagation from its Bevo vegetable and ornamental plants operation in the former Aurora Sky facility in Edmonton, Alberta. Revenue from plant propagation brought in another $23 million, a 16% YOY increase and a 122% increase from the previous quarter. Aurora attributes these increases to the “seasonality” of the Bevo business, “which delivers higher revenue in the late winter and spring months as orders are fulfilled.”

The company reported $8.6 million in excise taxes from $91.9 million in revenue from sale of goods, $2.9 million from medical sales, and $5.7 million from non-medical “consumer” sales.

Aurora sells medical products under the brands CanniMed, +Aurora, MedReleaf, and WMMC. Non-medical brands include Greybeard, drift, San Rafael ’71, and Tasty’s.

Aurora Cannabis receives additional German licences

July 25, 2024

Aurora Cannabis says to expect legal action to protect their genetic library

February 10, 2022

Aurora Cannabis’ growth buoyed by increased medical exports, cut flower business

November 9, 2023

Christina Lake Cannabis reports increasing losses in Q1, Q2 2024

Written by Sarah Clark on August 2, 2024. Posted in Financials.

Christina Lake Cannabis reported a loss and comprehensive loss of nearly $1.6 million from $3.3 million in sales in the three month period ended May 31, 2024.

The company released their Q1 and Q2 2024 financial statements on June 25, 2024, with $1.2 million in losses in Q1 from just under $3 million in sales.

As at May 31, 2024, the Company had working capital of $4,957,122 (2023 – $6,009,129), which consisted of cash of $1,427,361 (2023 – $1,468,028), receivables of $1,746,747 (2023 – $1,846,669), prepaid expenses of $54,221 (2023 – $462,322), inventory of $3,928,919 (2023 – $5,654,514), and assets held for sale of $581,767 (2023 – $nil).

Current liabilities, being accounts payable and accrued liabilities, the current portion of loan and current portion of convertible debentures, were $2,781,893 (2023 – $4,004,171).

Christina Lake Cannabis’ (CLC) operates a facility on a 32-acre property that includes over 950,000 square feet of outdoor grow space, offices, propagation and drying rooms, research facilities, and a facility dedicated to processing and extraction. Christina Lake Cannabis also owns a 99-acre plot of land adjoining its principal site.

The company focuses its production on extracts and distillate for its B2B client base, with cultivars specifically developed for outdoor cultivation for the purpose of extraction. CLC has determined the fair value, less costs to sell, and less incremental processing costs of cannabis distillate to be $1.53 per gram. The average harvested yield of biomass is 1,306 grams per plant, with an average yield from dried biomass to distillate of 6% to 9% depending on the cultivar.

In November 2022, the company reported an average selling price of $3 a gram for dried flower. In November 2023, that had dropped to $1.90.

On June 1, 2024, CLC entered into a 24-month rental agreement for equipment with a monthly payment of $1,700 per month. The company has the option to purchase the equipment at the end of the rental period. A director of CLC owns the rental company.

SNDL releases Q2 2024 results

Written by Sarah Clark on August 2, 2024. Posted in Financials.

SNDL Inc. brought in $228.1 million in net revenue in the second quarter of 2024, a gross profit of $58.1 million, and a $4.6 million loss in adjusted operating income, announced in their most recent quarterly report ending June 30, 2024.

The Alberta company, which operates liquor and cannabis retail stores as well as cannabis production, saw the bulk of its revenue from its liquor stores, followed by cannabis retail and cannabis production.

Adjusted operating income from SNDL’s liquor retail was $8.2 million, while its cannabis retail was $2.3 million. Its cannabis operations showed an adjusted operating loss of $13 million.

Net revenue from SNDL’s cannabis retail was $76 million, up from $71.9 million in the same quarter in 2023. The company attributes this increase to newly opened and acquired stores and an increase in “proprietary licensing arrangements,” and brought in $3.8 million from its proprietary data licensing program.

It also reported same-store sales growth of 2.3% year-over-year.

As of August 1, 2024, SNDL has 82 Spiritleaf stores (20 corporate and 62 franchise stores), 100 Value Buds stores, four Superette stores, and one Fireside Store. SNDL owns 65% of Nova Cannabis, which operates Value Buds. SNDL’s 187 stores across Canada represent 10% of private cannabis stores in the country.

SNDL also manages several investments, which include Canadian cannabis companies like Indiva, Delta 9, and Nova Cannabis, along with several US cannabis companies.

Its brand portfolio in the Canadian cannabis market includes Top Leaf, Contraband, Palmetto Vacay, Versus, Value Buds, Grasslands, and Bonjak. It operates a cannabis processing facility and an edibles facility in BC, a cannabis beverages facility in Ontario, and a cultivation facility in New Brunswick.

Net revenue for SNDL’s cannabis operations was $25 million for the three months ended June 30, 2024, up from $20.9 million in the same quarter in 2023. Gross profit after cost of sales was 12.7%, or $$3.2 million, from bulk and packaged sales.

The company says the increase in net revenue is from increased distribution and operational efficiencies.

SNDL to lay off 106 employees as part of restructuring

July 16, 2024

Delta 9 receives CCAA protection, enters into agreement with FIKA following “aggressive” SNDL move

July 15, 2024

Featured image via SNDL.com

Record revenue in Q2 2024 for Nova Cannabis

Written by Staff on August 1, 2024. Posted in Financials, Other.

Nova Cannabis Inc. has released its interim consolidated financial statements and management’s discussion and analysis for the three and six months ended June 30, 2024.

Nova’s revenue had declined in the past three quarters from a previous peak of $67.7 million in Q3 2023 to $67.4 million in Q4 2023 and $64.3 million in Q1 2024.

As of June 30, 2024, the Alberta-based retail chain owns and/or operates 99 locations across Alberta, Ontario, and Saskatchewan, primarily under its “Value Buds” and “Firesale Cannabis” banners.

The company currently has 61 cannabis stores in Alberta, 34 in Ontario, three in BC, and one in Saskatchewan. It has about a 19% market share in Alberta and a 4% share in Ontario.

Nova’s approach with their Value Buds and Firesale stores is to gain market share by operating in the near term at profit margins of 14-17%, around half that of many other cannabis stores.

Value Buds also sells products under its Value Buds label from its parent company, SNDL.

While Nova says its financial performance and liquidity have improved since the year ended December 31, 2023, it also notes that its ability to continue as a going concern relies on the ongoing support of its majority shareholder, SNDL, through the Revolving Credit Facility and the management and administrative services agreement made effective March 22, 2021.

SNDL is the parent company of Nova Cannabis, and as of June 30, 2024, SNDL Inc. holds an approximate 65% ownership interest in Nova.

On April 1, 2024, Nova and SNDL extended the maturity date of the Revolving Credit Facility to March 31, 2026, and amended the Revolving Credit Facility to remove SNDL’s right to demand repayment before the maturity date, subject to certain conditions. Nova and SNDL also agreed to increase the annual base fee payable by Nova under the Service Agreement from $1.25 million to $5.8 million per year.

On March 31, 2022, SNDL completed its acquisition of all of Alcanna Inc.’s issued and outstanding common shares, including its majority-owned subsidiary, Nova Cannabis Inc. This acquisition brought Alcanna’s ownership of cannabis stores in Alberta, Saskatchewan, and Ontario, along with liquor stores in Alberta and BC.

Those Ontario stores operate under Spirit Leaf Ontario Inc.’s licence to comply with Ontario regulations that don’t allow producers like SNDL to directly or indirectly own or control more than a 25% interest in any licensed Ontario cannabis retailer.

Earlier this year, SNDL Inc. agreed to assign its rights to own or operate four Dutch Love stores to Nova Cannabis Inc., giving Nova a footprint in BC’s retail cannabis space.

“For the three months ended June 30, 2024, cash provided by operating activities was $1.5 million, a $1.1 million decrease from the $2.6 million cash provided by operating activities for the same prior year period. The decrease in cash provided is primarily related to the decrease in non-cash working capital items of $0.7 million.

“On August 1, 2024, the Company had a cash and cash equivalents balance of $ 5.3 million.”

Nova’s Diesel and Berries SKUs were launched in May in Alberta and Ontario in 14 gram and 28 gram flower and 28 x 0.5 gram pre-roll formats, representing the Company’s first pre-rolls in the market.

Nova’s most recent quarterly report also notes that it continues to use its “proprietary data licensing program” to “deliver continued margin and revenue expansion through program optimizations and its ability to provide market-driven solutions”.

The company boasts that its access to its broad data and analytics “allows the opportunity to realize incremental revenue through intellectual property optimization.”

Its proprietary licensing brought in $3.8 million in the most recent quarterly report, up from $2.7 million in the same quarter in 2023. Proprietary licensing revenue was just under $3.3 million in Q1 2024, up from $1.5 million in Q1 2023.

Nova’s previous quarterly report noted that the increase in proprietary licensing revenue was due to an “updated proprietary licensing services agreement, scalable for customers’ needs, which allows customers to purchase specific sales data to assist them with planning for current and future product decisions.”

Decrease in net revenue, increase in losses for Greenway Cannabis in annual report

Written by Sarah Clark on July 30, 2024. Posted in Financials.

Greenway Cannabis reported a $4.7 million loss from $5.2 million in net revenue for the year ending March 31, 2024.

This is a decrease in net revenue ($5.6 million in 2023) and an increase in loss and comprehensive loss ($2.6 million in 2023) compared to the previous year. The Ontario cannabis producer reports incurring $3,641 in excise tax for the year ending March 31, 2024.

Greenway Greenhouse Cannabis Corporation operates a nursery facility in Kingsville and a flowering and processing facility in Leamington.

As of March 31, 2024, Greenway reports a working capital deficiency of $852,605 (compared to $419,683 for March 31, 2023) and an accumulated deficit of $17,752,663 (March 31, 2023 – $14,453,209).

The Company says it has insufficient cash to pay creditors for its current working capital obligations and operations for the next twelve months. Its ability to continue as a going concern is dependent upon its ability to obtain sufficient additional funding and generate sufficient revenues and positive cash flows from its operating activities to meet its obligations and fund its planned investments and operations. This indicates the existence of a “material uncertainty that may cast a significant doubt about the Company’s ability to continue as a going concern.”

Greenway sold the equivalent of 5,548,692 grams of cannabis in its most recent fiscal year, a 33% increase from the previous year. As of March 31, 2024, it had an average cash cost of $0.74 per gram and a weighted average cash cost per gram of $0.60 of finished goods inventory on hand.

Cash cost per gram sold increased in Q4 2024, but cash cost per gram in finished goods decreased to its lowest level in the past year.

“This year, we’ve achieved record sales volumes, dramatically reduced liabilities, launched our first consumer brands in Ontario, completed a $3.5m private placement, and subsequent to our year end received the accreditation necessary to begin exporting Greenway cannabis internationally,” said Jamie D’Alimonte, CEO of Greenway. “Our team has been working to open up new avenues for our products and to diversify our revenue. The next steps for our team is to continue to increase the value we get from every gram we produce, and to continue to expand into our cultivation area to meet our ever-increasing demand.”

On April 26, 2024, Greenway announced that it had received CUMS-GAP and GACP certification, providing a pathway to distribute its product internationally.

On June 13, 2024, Greenway announced its MillRite Pink Moon was launching in a 2 x .5 gram pre-roll format across Ontario. It has also had its first two brands and SKUs accepted by the Ontario Cannabis Store (“OCS”) through the Winter 2023-2024 product call.

MTL Cannabis reports $2.5 million in net income in 2023-2024

Written by Sarah Clark on July 29, 2024. Posted in Financials.

MTL Cannabis Corp. brought in $2.5 million in net income from $83 million in net revenue for its fiscal year ending March 31, 2024.

This is an improvement for MTL Cannabis Corp., formerly Canada House Cannabis Group Inc., which reported a $2.2 million loss for the previous year, ending March 31, 2023, from $31 million in revenue.

MTL’s gross profits for the most recent fiscal year were $26.4 million, after nearly $17.8 million in excise taxes, along with factors like operating costs and costs of sales.

As of the fiscal year ending March 31, 2024, MTL says it has completed retrofitting all three operating facilities, specifically Montréal Cannabis Medical Inc. and IsoCanMed Inc. in Quebec, and Abba Medix Corp in Ontario.

The retrofits allow MTL to expand its consolidated estimated cultivation capacity by up to 6,500 kg per year, bringing the total estimated cultivation capacity for the consolidated entity up to 19,500 kg a year.

“MTL’s Q4 and record full-year results represent the unwavering commitment from our team to delivering high-quality and consistent cannabis products and services to our customers and patients, while delivering strong results and fundamentals to our shareholders,” said Michael Perron, CEO of MTL. “As we move forward, MTL will continue to build on the foundation we have established and ensure that we continue to be a trusted partner to the ever-growing global cannabis industry.”

MTL Cannabis Corp. is the parent company of Montréal Medical Cannabis Inc. (MTL Cannabis), a licensed producer operating from a 57,000 sq ft licensed indoor grow facility in Pointe-Claire, Québec; Abba Medix Corp., a licensed producer in Pickering, Ontario that operates a leading medical cannabis marketplace; IsoCanMed Inc., a licensed producer in Louiseville, Québec growing best-in-class indoor cannabis, in its 64,000 sq. ft. production facility; and Canada House Clinics Inc., operating clinics across Canada that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from simple and complex medical conditions.

To calculate the fair value less costs of disposal of the Licensed Producers CGU and Canada House Clinics CGU, the Company used a post-tax discount rate of 27% (Canada House Clinics – 27%), a pre-tax discount rate of 39% (Canada House Clinics – 37%), a terminal growth rate of 3% (Canada House Clinics – 3%), and EBITDA projections based on past experience and management’s best estimates regarding future revenue growth considering internal and external available information. For the year ended March 31, 2024, the Company concluded that the recoverable amount of each CGU was higher than its carrying value, and accordingly, no goodwill impairment charge was recognized.

Tilray reports year-over-year increase in revenue, decrease in losses in Q4 2024

Written by Sarah Clark on July 29, 2024. Posted in Financials.

In its newest quarterly report covering the three months ending May 31, 2024, Tilray reports a net revenue of $229.9 million and gross profit of almost $82.4 million. All figures are in US dollars.

Although these were both increases from the same quarter in 2023, the company still reported a nearly $15.4 million loss. The company reports paying more than $22 million in federal excise taxes in the most recent quarter, a cost it says is eating into their profit margins, representing 31% of total revenue.

Tilray’s beverage alcohol business generated the highest revenue, at $76.7 million, followed by its cannabis business at $72 million. Its distribution business brought in another $65.6 million, while its wellness business brought in $15.7 million.

Revenue from Canadian medical cannabis in the most recent quarter was $6.4 million, while revenue from Canadian adult-use cannabis was $61.5 million. Tilray brought in just under $13 million in revenue from wholesale cannabis sales and $13.1 in international cannabis sales.

“Tilray Brands also successfully completed three acquisitions,” says Irwin D. Simon, Chairman and CEO, “the eight iconic craft brands from Anheuser-Busch Companies, LLC., HEXO Corp., and Truss Beverage Co.

“These acquisitions were strategic in fortifying Tilray’s house of brands, strengthening our operations, and positioning the Company as a leader across several industries and regions. In the U.S., Tilray Beverages is the fifth largest craft brewer and Tilray Wellness is the leader in hemp products. In Canada, Tilray Cannabis holds the number one recreational cannabis market share, while in Europe, it is the market leader in medical cannabis. Leading the convergence of cannabis, beverages, and wellness, Tilray Brands is poised to continue to disrupt the CPG industry globally.”

Tilray recently announced they received a cannabis production licence in Germany, expanding the number of cultivars they can grow at their Aphria RX facility in Neumünster. The facility gives Tilray the ability to serve not only Germany’s medical cannabis market but also other nearby future and emerging cannabis markets in Europe.

Tilray receives first new commercial medical cannabis licence in Germany

July 22, 2024

Tilray reports $46 million loss in Q2, 2023, compared to net loss of $62 million in the prior year quarter

January 9, 2024

Israel opens “anti-dumping” investigation into cannabis imports from Canada

January 26, 2024

Delta 9 receives amended and restated order for creditor protection through Sept 15

Written by Sarah Clark on July 26, 2024. Posted in Business, Cannabis News, Producers.

Delta 9 Cannabis, the Manitoba company granted CCAA protection on July 15, due to expire on July 25, has now received an extension of a stay of creditor claims until September 15, 2024.

In a press release earlier this month, the company stated that obtaining CCAA protection is in the best interest of it and its shareholders, especially in light of recent “aggressive” actions by its creditors, namely recent demand notices from SNDL Inc. on May 21 and July 12 and SNDL’s recent acquisition of all the Company’s senior secured debt for $21 million.

Those creditor claims are now held off until September 15, giving Delta 9 and FIKA several more weeks to address them.

On July 15, Delta 9 also announced that it had entered into a binding term sheet for the FIKA Company to act as a plan sponsor to its CCAA proceedings. Through this process, FIKA would acquire Delta 9’s retail cannabis and distribution business while also assisting with a sale and investment solicitation process for the assets of the licensed cannabis production business. In exchange, Delta 9 would receive equity in FIKA.

FIKA will participate in and fund the costs of Delta 9’s CCAA proceedings through interim financing and present one or more plans of compromise or arrangements to Delta 9’s creditors. Under the agreement, FIKA will provide up to $3 million to fund the costs of the CCAA proceedings and up to $13 million to repay the secured obligations owing to SNDL Inc.

The newest extension, granted after a court hearing on July 24, Delta 9 and its subsidiaries—Delta 9 Logistics Inc., Delta 9 Bio-Tech Inc, Delta 9 Lifestyle Cannabis Clinic Inc., and Delta 9 Cannabis Store Inc.—includes the approval of the $16 million FIKA has offered in interim financing, as well as a key employee retention plan in the amount of $650,00.

In an affidavit posted on July 22, Delta 9 CEO John Arbuthnot says Delta 9’s current excise tax arrears are approximately $7,800,000. The affidavit continues that in November 2023, the company applied to the Canada Revenue Agency (CRA) for relief of interest and penalties “due to financial hardship.” Arbuthnot believes there is a chance to reduce that amount by approximately $2 million.

Because of Delta 9’s tax arrears, the CRA moved to only renew the company’s excise licence on a 30-day basis, beginning in December 2023. Delta 9 Bio-Tech was also required to enter into a payment plan to address its owed excise tax in monthly payments of $50,000.

To keep the licence renewed, the company must make not only the $50,000 payment but also the go-forward monthly excise tax amount, which Arbuthnot says is a significant financial strain on the company.

The Toronto Stock Exchange (TSX) has scheduled the delisting of Delta 9’s common shares on the TSX for August 22, 2024, for failure to meet the TSX’s continued listing requirements. Trading in the Common Shares is currently halted on the TSX.

Delta 9 receives CCAA protection, enters into agreement with FIKA following “aggressive” SNDL move

July 15, 2024

Delta 9 Bio-Tech Inc.

April 2, 2020

SNDL to lay off 106 employees as part of restructuring

July 16, 2024

Cannara Biotech reports strong Q3 2024 results

Written by Sarah Clark on July 26, 2024. Posted in Financials.

Cannara Biotech Inc. announced its fiscal third quarter 2024 financial and operating results for the three and nine-month periods ended May 31, 2024, with $19.5 million in revenue and just over $2 million in net income.

Just under $1 million of the company’s net revenue in Q3 2024 came from its two Quebec cannabis operations, with the rest from its real estate operation.

Cannara owns and operates two Quebec‐based cultivation facilities. The first, in Farnham, is 635,000 sq ft, of which 170,000 sq ft is licensed for cultivation and 414,000 sq ft of leased warehouse space.

The second, a greenhouse facility in Valleyfield, is home to 600,000 sq ft of growing space and a 200,000 sq ft rooftop greenhouse.

Cannara sells products under the brands Tribal, Nugz, and Orchid CBD, under which they sell an array of dried flower, vapes, concentrates, pre-rolls, and accessories. The company reports a 9.7% market share in Quebec, 2.9% in Ontario, 3.13% in Alberta, 0.82% in BC and 0.40% in Saskatchewan in the most recent quarter.

Out of the $26 million in revenue from cannabis sales in Q3 2024, the company owed just over $8 million in excise tax. Although revenue after tax was still $18.3 million, operations costs and expenses pared this down to $992,177 in net income.

This was a decrease from the same quarter in 2023, which saw $20 million in revenue from sales of goods from its cannabis operations but just under $4.2 million in net income from cannabis operations. This was due to much higher segment operating income and lower losses from changes in fair value of inventory sold.

“The cannabis industry is navigating a highly competitive landscape with significant price compression due to challenging conditions,” stated Nicholas Sosiak, Chief Financial Officer of Cannara.

“Despite these pressures, Cannara’s resilience is evident in our increased net revenues of $19.5 million versus this time last year and our thirteenth consecutive quarter of positive Adjusted EBITDA, totalling $2.8 million this quarter. We also achieved an operating income of $3.6 million and generated $1.2 million in free cash flow this quarter. While price compression has impacted our growth quarter over quarter, we believe current industry conditions are unsustainable for many of our competitors with less scale and higher costs.

“We fully expect a return to stronger pricing and demand as those who cannot compete cease to operate. Cannara’s ability to generate positive cash flows in this environment helps us navigate these dynamic market conditions and is a testament to our strength to succeed. We are investing in sales and marketing to expand our distribution and capture more market share from competitors, setting the stage for future success as market conditions improve. Our focus remains committed to profitable growth and steady cash flow, delivering high-quality, innovative products to Canadians through our leading brands.”

Wholesale cannabis sales, CPI increase in May

Written by Staff on July 19, 2024. Posted in Business, Cannabis News, Retail.

Wholesale cannabis sales increased to $553 million in May after a steep decline in April, following record-high rates in March 2024.

Cannabis continues to outperform much of the Canadian economy, with sales declining in five of seven sectors. Excluding petroleum products and other hydrocarbons, as well as oilseed and grain, wholesale sales fell 0.8% in May across Canada.

Wholesale cannabis trade and inventories also saw an increase in May, rising to $294,102 from $289,764 in April. The previous high point was $301,077 in November 2022.

The most recent monthly retail cannabis sales figures show sales rebounded in February and April after dropping to their lowest in nearly a year in January 2024.

While wholesale cannabis sales in May were around $553 million, this was more than double what cigarette and tobacco product merchant wholesalers brought in, at about $228 million.

Wholesale merchants’ sales of cannabis, seasonally adjusted, were up 12.1% in May 2024 from May 2023 and up 19% from April 2024 to May 2024.

Meanwhile, Statistics Canada’s consumer price index shows that the price of cannabis increased by one tenth of a point from May to June and from June 2023-June 2024 (71.6).

This small increase was after a seven month decline, which itself was preceded by a brief spike in prices in October 2023. The CPI baseline was set at 100 in December 2018, following legalization.

Price of cannabis in Canada continues to decline, except for medical cannabis

April 18, 2023

$11 billion in cannabis sales has created 151,000 new jobs and added $43.5 billion to Canada’s GDP

February 1, 2022

Retail cannabis sales year-over-year growth continues to slow, retail stores decrease

June 21, 2024

Avant posts increase in net revenue, driven by exports and rec sales

Written by Sarah Clark on July 15, 2024. Posted in Financials.

Avant Brands (formerly GTEC Holdings) reported net revenue of $16.4 million for the first half of 2024, producing 6,417 kg of cannabis and selling 5,493 kg.

Despite these gains, a 9% increase from the same period in 2023, the company posted a $6.7 million loss for H1 2024 (first six months/half of 2024). The company posted nearly $2 million in federal excise taxes from its $18.4 million in gross revenue, nearly $9 million in cost of sales, and $13.9 million in losses from the change in fair value of biological assets realized through inventory sold.

Recreational cannabis sales accounted for nearly half (41%) of net revenues during the six-month period ended May 31, 2024. Domestic wholesale sales were 14% of net revenue, while export wholesale was 43%.

The overall weighted average selling price of cannabis decreased by 15% in the first six months of 2024 to $3.48 per gram, with the average for recreational cannabis at $4.98. The average recreational gross pricing per gram, calculated by determining the total flower sales divided by the total number of flower grams sold, was down from $7 a gram in the first six months of 2023.

Avant says the decrease in average selling price was primarily due to an increase in bulk domestic and export sales and a combination of general price compression in the industry.

The company’s cost of sales decreased to $8.6 million in the six-month period ended May 31, 2024, compared to $9.4 million in the first half of 2023. Avant says this decrease in costs was due to reductions in costs associated with its cannabis operations, incremental improvements in operational processes, and reductions in facility costs.

Avant has facilities in BC, Alberta, and Ontario. In BC: Vernon (3PL Ventures), Kelowna (Flowr Group) Greentec Bio-Pharmacueitcals (Construction in Progress), and Chase (Tumbleweed Farms). Alberta: Edmonton (Avant Craft). Ontario: Tiverton, (Grey Bruce Farms).

Avant Brands brings in $30 million in revenue with a $5 million loss

February 29, 2024

GTEC Holdings

March 25, 2020

Cannabis companies have numerous ways to market their products

December 10, 2020

CanadaBis continues trend of profitability with focus on pre-rolls and extracts

Written by Sarah Clark on June 26, 2024. Posted in Financials.

CanadaBis Capital Inc, the parent company of cannabis brands like Stigma Grow, reported its third quarter fiscal 2024 results, with $2.2 million in gross profits and 109,824 in net and comprehensive income.

The majority of the Calgary-based cannabis company’s profits was from the sale of extracts, with $170,946 in gross profits from dried flower sales and just under $2 million in extract sales for the three months ended April 30, 2024. This is an increase in gross profits from cannabis flower sales from the same quarter in 2023 ($59,579) and a decrease in gross profits from extracts sales ($2.6 million).

The Company reported a 44% decrease in its sales of extract products in the provinces of Alberta, Ontario, Saskatchewan, and British Columbia. However, it has seen continued growth in the sale of its flavoured, infused pre-rolls and its Electric Dartz pre-rolls. CanadaBis also lists its butane hydrocarbon (BHO) extraction process as a competitive advantage in the industry.

The company lists $763,447 in excise duty from its sales of flower (~48% of $1.6 million gross sales) and almost $2.4 million in excise duty for extracts sales (from $5.5 million gross sales), both representing around 40-50% excise rates, for Q3 2024.

The Company currently owns a 66,000-square-foot facility in Alberta, with around 44,000 square feet of the building developed and equipped to grow 225 kg of cannabis per year. In the most recent quarter, they released 17 new SKUs into the Canadian market and have been attempting to position themselves as the leader in infused pre-rolls and “super slim” pre-rolls, as well as expand the Dab Bods brand across Canada.

The company’s overall gross revenues were up in Q3 2024 compared to Q2 2024, but higher excise taxes meant lower net revenue. This was somewhat offset by a lower cost of sales, which led to net income remaining relatively stable from Q2 to Q3.

“CanadaBis Capital’s performance in Q3 2024 was robust, driven by our strategic investments and continuous efforts to optimize our operational efficiencies,” said Travis Mcintyre, Chief Executive Officer of CanadaBis Capital. “We are focused on enhancing shareholder value through prudent financial management and forward-thinking strategies in the evolving cannabis market.”

Nova Scotia sold $121 million worth of cannabis in 2023

Written by David Brown on June 26, 2024. Posted in Cannabis News, Financials, Government.

The Nova Scotia Liquor Corporation (NSLC) released their most recent year-end financial report on June 25 covering April 1, 2023-March 31, 2024.

The Crown corporation, which operates 49 retail cannabis locations, sold $121 million worth of cannabis, an 8.9% increase from the previous year. Sales of local Nova Scotia cannabis products accounted for $39.5 million, or 32.7% of all cannabis sales, a 17.9% increase from the previous year.

Cannabis transactions increased by 12.2%, but the average basket size decreased by 3% to $37.27, along with a 4% reduction in the average price per gram of $5.96.

“We continue to see strong growth in cannabis sales demonstrating our continued progress in competing with the illicit cannabis market,” said Greg Hughes, NSLC president and CEO. “In addition to the expansion of our cannabis retail network, our strong vendor partnerships, including our valued local cannabis producers, have played an important role.”

NSLC also reports that 79% of Nova Scotians now live within 10 kilometres of a licensed cannabis store.

The agency, which also manages the sale of alcohol in the province, reported total annual sales of $874.5 million, with alcohol sales accounting for $753.4 million. Total earnings were $283.8 million.

Nova Scotia forecast $17.4 million in their share of federal cannabis excise for 2023-24, and $18.3 million for 2024-25. In 2022-2023 they reported $14.8 million in cannabis tax.

Atlas Global Brands granted CCAA protection

Written by David Brown on June 21, 2024. Posted in Business, Cannabis News, Financials, Producers.

Atlas Global Brands, the company behind cannabis brands like D*gg Lbs, GreenSeal, and Electric Lettuce along with its subsidiaries, has been granted an initial order under the Companies’ Creditors Arrangement Act (CCAA).

Atlas Global includes GreenSeal Cannabis Company Ltd., GreenSeal Nursery Ltd., AgMedica BioScience Inc., Wellworth Health Corp., 5047346 Ontario Inc., 8050678 Canada Inc., and Tavivat Naturals Inc. as its subsidiaries. The company says the CCAA order will provide an opportunity to restructure its business and financial affairs.

Atlas Biotechnologies Inc. and Atlas Growers Ltd had previously gone into receivership in 2023.

Headquartered in Chatham, Ontario, Atlas Global operates its business of cultivation, extraction, manufacturing, marketing, and distribution through its wholly-owned Canadian subsidiaries, GreenSeal and AgMedica. Atlas Global operates two licensed cannabis facilities in Canada, one of which has European Union GMP certification, as well as three medical pharmacies in Israel. Atlas Global distributes its products within Canada and to seven other countries: Australia, Denmark, Germany, Israel, Norway, Spain and the United Kingdom.

At the end of 2023, Atlas Global employed 185 full-time employees in Canada and two full-time employees in Israel. In early 2023, Atlas announced it was moving its operations from Alberta to Ontario and laying off 50 workers in the process. In August 2023, the company listed a notice of sale for many of its assets. In January 2024, the Agriculture Financial Services Corporation filed a bankruptcy order against Atlas Growers.

A bankruptcy creditor package filed in February of this year lists $3.5 million in total realized assets. It lists the Agriculture Financial Service Corporation as a secured creditor with the company for a total of $8.6 million.

The Atlas Group is scheduled to return to Court for a comeback hearing on June 27, 2024, at which time it plans to seek, among other relief, an Amended and Restated Initial Order, an extension of the stay of proceedings, and interim financing to allow the Atlas Group to stabilize its operations, consider possible transactions, and emerge from the CCAA Proceedings as a going concern.

One of the Company’s creditors, Stoke Canada Finance Corp., has applied to have a receiver appointed over the Company’s receivables and related assets. Unless resolved, that application will be heard at the Comeback Hearing.

The Company says it continues to believe that the protection afforded by the CCAA will allow it to stabilize operations in order to consider potential restructuring transactions that would benefit all stakeholders, including the sale of all or substantially all of the business or assets of the Atlas Group through a court-supervised sales process.

Aurora quarterly report shows increase in net revenue, decrease in losses

Written by Sarah Clark on June 20, 2024. Posted in Financials.

Aurora Cannabis reported $67.4 million in net revenue for the three months ending March 31, 2024, but a $20.8 million net loss.

The net revenue represented a 5% year-over-year increase, while the net loss represents a $66 million increase in net revenue from the $86.8 million loss for the same three months in 2023.

Aurora’s loss from operations ($2.7 million) also declined significantly in the three months ending March 31, 2024, compared to the previous three months ending December 31, 2023, with a loss from operations of $18 million and $31.1 million in the three months ending March 31, 2023.

Of Aurora’s $67.4 million in net revenue, $45.6 million was from sales of cannabis for medical purposes, while $10.2 was from sales of cannabis for non-medical (“consumer”) purposes. Another $10.4 million in net revenue was from plant propagation (from its non-cannabis “Bevo” operation).

Net revenue from medical sales was up 20% from the three months ending March 31, 2023, while net revenue from “consumer” cannabis was down 29% compared to the three months ending March 31, 2023. Plant propagation revenue was down 3% from the first three months 2023.

Aurora’s average net selling price of dried cannabis, excluding bulk sales, was $5.37, with 15,179 kg sold in the first three months of 2024. The average selling price increased from $4.74 in the first three months of 2023 when the company sold 16,578 kg of cannabis.

Of the $45.6 million in medical cannabis sales, $26.5 million was from sales in Canada, while $19.2 million was in international sales. Aurora also reported $1.1 million in net revenue for wholesale bulk cannabis. While Canadian medical cannabis sales declined slightly (by $652,000) compared to the first three months of 2023, international sales increased slightly (by $86,000).

Aurora attributes the increase in international sales partly to the current year, consisting of four quarters compared to three quarters in the prior year, as well as “significantly” higher sales to Australia and “improved” sales to Poland and the United Kingdom. Aurora’s main medical markets are Canada, Germany, the UK, Poland, and Australia.

On February 7, 2024, Aurora Cannabis acquired Indica Industries Pty Ltd. (Australia), giving them full control of the Indica operations for a purchase price of $44.7 million.

In March, Aurora became one of the first Canadian cannabis companies to receive European Union Good Manufacturing Practice (“EU GMP”) certification from Australia’s Therapeutic Goods Administration (TGA) for its Canadian production facilities, River and Ridge.

“We are incredibly pleased to be reporting our strongest fiscal year ever at Aurora,” said CEO Miguel Martin. “Total fiscal year 2024 net revenue increased 21% compared to the trailing four quarters, while adjusted EBITDA was positive on an annualized basis for the first time in our history, reaching $12.8 million. We also strengthened our balance sheet, ending with a strong net cash position of approximately $180 million as of March 31^st, and fully repaid our convertible debt.”

Christina Lake Cannabis files year-end report for 2023

Written by Sarah Clark on June 19, 2024. Posted in Financials.

After some delays, BC’s Christina Lake Cannabis (CLC) recently released its financial statements for the year ending November 30, 2023.

The indoor and outdoor cannabis producer and processor posted a total revenue of $11.8 million in 2023, up from $10 million in 2022 and $3.6 million in 2021. The company posted a net loss of $4.1 million for 2023, compared to a net loss of $2 million in 2022 and $2.1 million in 2021. The company also reported more than $227,548 in regulatory fees for the year ending November 30, 2023.

Revenue was primarily from distillate sales, with CLC attributing a year-over-year decline in gross margin percentage to price compression in the wholesale distillate market.

CLC operates two outdoor production sites in BC, one on a 32-acre property and the other on a 100-acre property. It also processes its own biomass into distilled and winterized oils, kief, and other extracts for sale to other producers.

After the end of this most recent reporting period, the company also secured a third outdoor production site in BC, BZAM’s former Midway site, along with related harvesting and manufacturing equipment and approximately 19,000 kg. of biomass.

The Midway property is 342 acres, with just over 100 acres of licensed cultivation space. With this acquisition, CLC will expand its licensed outdoor cultivation footprint to over 120 acres. Further expansion of additional acreage is available and could be licensed by the company should the demand arise.

The company plans to grow the first 80-acre crop of their proprietary CLC cultivars in 2024 at the new site, with expansion to 100 acres planned for 2025.

In January, Christina Lake Cannabis also repaid its Canada Emergency Business Account loan in full. Because the loan was repaid before the January 18, 2024 deadline, $10,000 of the original $40,000 interest-free loan was forgiven.

High Tide reports increase in retail footprint, revenue

Written by Sarah Clark on June 13, 2024. Posted in Financials.

High Tide Inc. reports a 5% year-over-year increase in revenue and a 175% year-over-year increase in income in its most recent quarterly report.

The company behind Canada’s largest non-franchised retail cannabis chain brought in $124.3 million in revenue in the three months ending April 30, 2024, up from $118.1 million in the same period in 2023, but down slightly from the $128.1 million in revenue from the first three months of 2024.

High Tide’s net income for the second quarter of 2024 was $171,000, an improvement from a $5,000 loss in the previous quarter and a $1.6 million loss in Q2 2023. The Company is free cash flow positive for the fourth consecutive quarter, ending with a free cash flow of $9.4 million.

High Tide attributes its 5% year-over-year growth in revenue largely to the continued increase in cannabis stores under its control, as well as growth in same-store sales. This growth is partially offset by the increase/decrease in data analytics and e-commerce revenues. The company operated 168 cannabis stores in the second quarter of 2024, primarily under its Canna Cabana brand.

Revenue from sales of cannabis products in Q2 2024 was $108 million, another $7.3 million was from consumption accessories, and just under $9 million was from its data analytics service “Cabanalytics,” as well as advertising and “other revenue.”

The Cabanalytics Business Data and Insights Platform is billed as giving subscribers access to High Tide’s monthly report of anonymized consumer purchase data with a stated goal of helping retailers with “forecasting and planning their future product decisions and implementing appropriate marketing initiatives.”

High Tide’s CEO, Raj Grover, says the company still holds its position as the highest revenue-generating cannabis company reporting in Canadian dollars.

“I am thrilled to report that in an environment where many cannabis companies, including some of our retail competitors, have been forced to seek bankruptcy protection, our team has been able to deliver positive net income in Q2, while also generating record-breaking free cash flow. In fact, over the past four quarters, we have generated $22.7 million in free cash flow, fueling our strong organic growth. We accomplished this despite Q2 being a seasonally slower quarter with two fewer days, as we tightly managed our G&A while also rapidly growing our store count and increasing our Canadian retail market share to 10.9%.”

High Tide to acquire Queen of Bud

March 15, 2024

Alberta now allowing private label cannabis products

June 3, 2024

High Tide Inc. reports increased revenue, declining losses, in newest quarterly report

March 15, 2024

Retail chain Four20 files NOI under Bankruptcy and Insolvency Act

Written by Sarah Clark on June 3, 2024. Posted in Business, Cannabis News, Financials, Retail.

The parent companies of cannabis retail chain Four20 Premium Markets filed a notice of intent to make a proposal under the Bankruptcy and Insolvency Act on May 29.

The parent companies, 420 Premium Markets Ltd., 420 Investments Ltd., and Green Rock Cannabis (EC1) Ltd., filed the notices of intent following a $9.8 million judgment against 420 for repayment of a bridge loan and related interest and costs to Tilray subsidiary High Park Shops Inc. High Park was created for the purpose of the acquisition of Four20.

Tilray had initiated litigation against 420 after a failed attempt by Tilray to purchase 420 for approximately $110 million in 2019.

At the time, Four20 had six licensed cannabis retail locations and another 16 locations secured in Alberta. The retailer currently lists 35 locations in Alberta and Ontario.

According to court documents, High Park then filed a Counterclaim on March 20, 2020, in relation to a loan advanced in connection with the Arrangement. High Park had advanced $5 million to Four20 under the Loan on August 29, 2019, and a further $2 million on November 29, 2019.

On April 14, 2020, Four20 defended the Counterclaim, arguing that the money advanced to it under the loan agreement was not due because High Park’s and Tilray’s alleged notices of termination of the agreement were invalid.

High Park filed an application for summary judgment in relation to the loan on March 2, 2023. On February 7, 2024, a court granted High Park summary judgment against Four20 on its counterclaim for $7 million plus interest.

The Applications Judge then dismissed Four20s application for an interim stay of the Judgment on March 22, 2024, pending the determination of an appeal on the merits, with Four20 arguing that Tilray had “buyer’s remorse” and felt they had overpaid for the retail chain.

That appeal was dismissed in April 2024, with the judge finding that Four20 had not demonstrated that it would suffer irreparable harm. In that case, the judge wrote, “There is no dispute that Four20 received the Loan proceeds of $7,000,000 and has used those funds to build out its retail store network. Four20 asserts that paying back the funds it borrowed, pending appeal of the Judgment, would be a greater harm than High Park going without the funds that it lent Four20 under the Loan. I disagree.”

AgriCann continues to struggle

Written by Sarah Clark on May 30, 2024. Posted in Financials.

AgriCann Solutions Corp. provided an update to shareholders, noting that its wholly owned subsidiary, Newline Ventures Inc., a micro cultivator and processor located in Vernon, BC, continues as a “bare-bones operation” as existing inventory is being sold off.

AgriCann remains under a “Cease Trade Order” (“CTO”) issued by the BC Securities Commission. The company also operates Craft Nurseries Canada Ltd., a cannabis nursery located in Lake Country, British Columbia.

In April, AgriCann said it would be shutting down new cultivation for a three-month period, “given the buildup of inventory and disruptions at the leadership level,” to allow for “a re-assignment and rationalization of core personnel and to facilitate the processing of harvested flower and related packaging and refocus on developing sales and retail store relations.”

A consultant hired in April at Newline left early without providing recommendations to the board. In February, the company’s CFO resigned, and the accountant brought in at the Newline facility to assume their duties is said to have failed to complete the company’s expected December 31, 2023 Q3 consolidated reporting obligations. The CFO did update Newline’s bookkeeping.

The Company anticipates that it will not have the necessary resources to engage an auditor for its March 31, 2024, fiscal year annual audit, typically a $50,000 engagement demanding upfront payment under the circumstances.

In December 2023, AgriCann’s CEO also stepped down. They had been acting as an RPIC. Founding director and former COO Tim Tombe immediately assumed an interim CEO position.

AgriCann also says that its sales in the Ontario market have entirely shut down since Newline fell behind on excise payments.

In April, the company wrote: “In hindsight, the Company’s long-term growth aspirations as executed over 2023 sacrificed the achievement of steady-state production, revenue and expense coverage. The resulting cash burn became increasingly unfinanceable, given projections regularly missed and goalposts extended. The lengthy Newline acquisition closing delay encountered was a complicating factor. Last-minute cash calls were used to compensate. Simply put, operations required a substantially greater financial commitment than envisioned, which the Company could not effectively raise without key shareholder support. Meanwhile, the cannabis sector was experiencing its own challenges and dislocation, with significant investor distress and aversion.”

For the six months ended September 30, 2023, AgriCann reported a net loss from operations of $837,520 and revenue of $3,118.

Shiny Bud files notice of intention to make a proposal under Bankruptcy and Insolvency Act

Written by Sarah Clark on May 28, 2024. Posted in Cannabis News, Ontario, Retail.

The parent company of Shiny Bud, a cannabis retail chain in Ontario, announced it has filed a Notice of Intention to make a proposal pursuant to the provisions of the Bankruptcy and Insolvency Act.

The parent company, Shiny Health & Wellness Corp., emphasizes that it is not bankrupt. Instead, it says the primary purpose of the Notice of Intention (NOI) filing is to “create a stabilized environment for the Company and its financial advisors to run an orderly and flexible sale, investment and solicitation process (“SISP”) with the goal of identifying one or more interested parties that wish to acquire or make an investment in the Company’s business or all or some of its assets.”

Shiny Bud says it currently operates 20 locations in Ontario. On May 16th, the company announced it had temporarily closed five of its retail cannabis stores effective immediately. It had previously closed another three locations and opened one since October 31, 2023. Its website currently lists 36 locations. The AGCO lists 37 locations as authorized to open.

If the agreement is approved, Shiny Health believes it has enough resources to fund its operations during the SISP, and its stores will remain open for business during that time. This would be subject to any restructuring steps the company may take during this process.

It expects that its 20 licensee stores will not be impacted by the NOI and will be able to continue to use the Shiny Bud brand in accordance with the licence agreements.

Due to the NOI filings and other “financial resource constraints,” Shiny Health says it does not expect to file its annual financial statements and accompanying management’s discussion and analysis for the fiscal year ended January 31, 2024, by the prescribed deadline of May 30, 2024.

In addition to its retail cannabis stores, Shiny Health also owns one pharmacy in Ontario, initially intending to create a chain of pharmacies that would provide access to cannabis, as well. A recent report proposed allowing sales of medical cannabis through pharmacies in Canada.

As of October 31, 2023, Shiny Health had cash of $239,817, liabilities that exceeded current assets by $7.4 million, an accumulated deficit of $26.7 million, and a shareholders’ deficit of $5.1 million.

“The current negative working capital deficit indicates the existence of material uncertainties that may cast significant doubt on the company’s ability to continue as a going concern,” says its most recent report for 2023. “Management’s view is that the success of the Company is dependent upon its ability to generate sufficient positive cash flow from its total operations to cover all its costs, including overhead and public company costs and obtaining financing through a combination of equity and additional debt where possible for working capital, debt service and to sustain its operations until positive overall cash flow is achieved.”

For the three months ended October 31, 2023, Shiny Health had $4.3 million in revenue, with a loss of $752,594 and a net comprehensive loss of $5.9 million.

In the same period, it brought in $3.6 million in revenue from its retail cannabis operations, $220,849 from its “data program,” and $346,828 from its pharmacy. This represented about a 45% decline in revenue for its retail cannabis operations and data program from the same period in 2022.

For the nine months ended October 31, 2023, retail cannabis operations brought in $14.8 million, a 30% decline from the same period in 2022 and $852,450 from its data program, down 33% from the same period in 2022.

The company blames the decrease in cannabis sales and data program revenue on the market conditions in Ontario and the closure of some of its stores.

Simply Solventless reports seventh consecutive quarter of positive EBITDA

Written by Sarah Clark on May 27, 2024. Posted in Financials.

Simply Solventless Concentrates (SSC) brought in $502,536 in net revenue in the first three months of 2024 from gross revenue of $3.1 million and net revenue after taxes of $2.3 million.

The Alberta-based company is behind cannabis brands Astrolab, Frootyhooty and the recently acquired Lamplighter, all available in Alberta, Ontario, and Saskatchewan with infused pre-rolls and vapes. Simply Solventless acquired Lamplighter on January 17, 2024. The company is looking to enter Manitoba and hopes to enter BC soon.

SSC says it has been experiencing rapid revenue growth, with average gross revenue of approximately $233,281 per month in 2022, around $581,117 per month in 2023, and $1,033,334 per month in the first three months (Q1) of 2024.

Excise tax on the $3.1 million in gross revenue for the first three months of 2024 was $823,959. The cost of goods sold in the net revenue of $2.3 million was nearly $1.2 million for a gross profit of $1.1 million. Adjusted EBITDA for Q1 2024 was $611,571. The company has reported positive adjusted EBITDA for the past seven quarters.

This represents an increase in gross and net revenue for the company compared to Q1 2023. However, the company reported lower gross profit and net income than in the same period, as excise taxes were not listed as remitted in Q1 2023.

Net and comprehensive income was $502,536 in Q1 2024, compared to $758,828 in Q1 2023 and a loss of $1 million in Q3 2023.

Salaries and wages also increased significantly in the most recent quarter (246%) compared to the similar period of 2023 due to a higher number of employees in sales and management roles.

SSC lists $9.5 million in raw material and processed intermediates in its inventory as of March 31, 2024, compared to $7.7 million as of December 31, 2023. The company says this increase is due to its acquisition of Lamplighter and in preparation for increased sales volumes.

As of March 31, 2024, SSC had a working capital surplus of $4.3 million, up from $3.7 million as of December 31, 2023.

“What we want to do is we want to bring solventless products to larger markets. And the largest markets in cannabis right now are infused pre rolls, vapes, and its predominantly flavoured distillate.”

Indiva reports strong edibles sales, net loss of $1.8 million in Q1 2024

Written by Sarah Clark on May 23, 2024. Posted in Financials.

Indiva reported a net loss of $1.8 million from $9.3 million in net revenue in the first three months of 2024 as the Ontario producer maintained its market position as top edibles sales in several major provinces.

The company’s gross and net revenue increased from the same reporting period in 2023, while its net loss decreased by 27% year-over-year.

Indiva holds the top market share in the edibles category in BC, Alberta, and Ontario with the sales of its Pearls by Grön gummies, No Future gummies, Bhang Chocolate, 1432 Chocolate, and Doppio Sandwich Cookies.

The company’s net revenue in Q1 2024 of $9.3 million was a 14.1% sequential decrease from Q4 2023 and a 0.9% decrease year-over-year from Q1 2023.

While edibles sales were driven by its Pearls brand, which saw net revenue grow by more than 160% year-over-year, revenues were tempered by an 85% decline in year-over-year sales of its Wana Sour Gummies line of products, as well as the loss of revenue from its lozenges, which Health Canada determined were not compliant in the edibles category.

Indiva says the loss of revenue from this latter product category being removed from shelves reduced net revenue in Q1 2024 by more than $1.3 million compared to the same quarter in 2023.

Net revenue from edible products was the majority (89.7%) of Indiva’s revenue at $8.4 million in Q1 2024, up 14.5% from $7.3 million in the same period in 2023.

Gross profit increased by 18% to $2.8 million, 29.7% of net revenue, compared to $2.3 million or 24.8% of net revenue in Q1 2023.

The company sold products containing 186 million milligrams of cannabinoids in the first three months of 2024, a 14.7% decrease when compared to the 218 million milligrams in product sold in Q4 2023, but a 66.3% increase from the 112 million milligrams sold in Q1 2023.

EBITDA was a loss of $0.2 million in the quarter. In comparison, adjusted EBITDA decreased to a profit of $0.1 million in Q1 2024, compared to a profit of $1.5 million in Q4 2023, and a profit of $0.4 million in Q1 2023.

Indiva’s Blips products, which come in 25 and 55 pack options, have somewhat replaced sales of the company’s lozenges line, offering consumers tablets of 10 mg THC per serving. The company launched its 55-pack to its existing 25-pack of these tablets in Alberta and British Columbia, and expects them to hit Ontario in June 2024.

Indiva also expanded its offering of Indiva Blips Tablets with two additional new 20-count SKUs, one with a cannabinoid ratio of 1:2 THC:CBG that will ship to British Columbia and Alberta in May, and the other with 1:1 THC:CBD, which will also ship to Alberta in May.

In April 2024, Indiva repaid $2 million of the principal amount outstanding from a strategic investment of $22 million provided by cannabis company SNDL.

The Company expects that it will need to raise additional financing in the form of debt and/or equity to continue funding its operations, as well as its convertible debenture repayments and capital expenditures.

The Company also expects its Q2 2024 net revenue to be higher on a sequential basis and year-over-year, exceeding $10 million. This is partly based on record net revenue in April 2024, driven by sales of its Pearls gummies, as well as its No Future gummies and Indiva Blips tablets. It also expects margins to improve sequentially in Q2 2024 due to higher sales, improved product mix, and improved overhead absorption. The company also expects record net revenue for fiscal year 2024.

“We are very pleased with our performance in the first quarter of 2024, our seasonally weakest quarter,” said Niel Marotta, President and Chief Executive Officer of Indiva. “Indiva’s business has transformed in the last year, as greater than 50% of our net revenue, specifically the revenue from Wana which has declined due to the transition to contract manufacturing, and the elimination of revenue from lozenges, has been replaced in the last 12 months.

“Now that these difficult cross currents have subsided, Indiva is positioned to demonstrate sustainable organic growth in its core brands without fighting against the loss of revenue from Wana and lozenges. Growth in our core brands, namely Pearls gummies, where depletions in the big three provinces have more than doubled year-over-year, and the continued growth of the No Future and Blips brands, more than offset the loss of net revenue caused by the movement to contract manufacturing of Wana and the discontinuation of lozenges caused by regulatory requirements. Greater than 30% of our net revenue in Q1 2024 was derived from brands created and owned by Indiva, including Indiva 1432 Chocolate, Indiva Blips tablets, Indiva Doppio Sandwich Cookies, and No Future Gummies and Vapes, up from 20% of net revenue in Q1 2023. Indiva remains committed to product innovation that will support both industry and edible category growth and we have a robust pipeline of new products across No Future, Pearls and Indiva Blips brands which will hit market between June and September of 2024.”

Tag: Financials

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