Canopy Growth Archives - Green Market Report

Debra BorchardtDebra BorchardtNovember 14, 2019
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6min1500

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) fell over 9% on news that the company’s second-quarter earnings missed analysts’ estimates. The Canadian-based cannabis company reported (in Canadian dollars) gross revenue of $118 million, a 6% increase sequentially and a 408% increase over last year’s $23 million for the same time period ending in September. The net revenue of $76 million fell 15% sequentially and missed estimates by $29 million. It did increase by 229% over last year’s $23 million. The stock was lately trading at USD$16.68.

The net loss decreased sequentially from $1.2 billion in the first quarter to $374 million in the second quarter. It also increased by 13% from last year’s net loss of $330 million.

“The last two quarters have been challenging for the Canadian cannabis sector as provinces have reduced purchases to lower inventory levels, retail store openings have fallen short of expectations, and Cannabis 2.0 products are yet to come to market,” said Mark Zekulin, CEO, Canopy Growth. “However, we believe these conditions are a short-term headwind in what is a brand-new industry, and Canopy continues to be best positioned with cash-on-hand, a world-class infrastructure, and a portfolio of intellectual property to deliver sustained long-term market leadership.”

Restructuring Charge

Canopy Growth said it has “taken a restructuring charge of $32.7 million for returns, return provisions, and pricing allowances primarily related to its softgel & oil portfolio. Additionally, management has recorded an inventory charge of $15.9 million to align the portfolio with the new strategy.” The company said that the new strategy included new retail pricing architecture, a rationalized package assortment, and a focused marketing/educational strategy to further develop this category. The second-quarter gross margin impact of the portfolio restructuring costs is $40.4 million.

Added Zekulin: “We took the necessary steps to address inventory levels on our oils and softgels; looking beyond this, the fundamentals are strong: our retail store sales are growing on an overall and same-store basis, our Canadian medical revenues are up, and international medical sales are growing on both an organic and inorganic basis.  And, even though revenue is muted during the quarter due to the restructuring charge, actual cannabis shipments grew quarter-over-quarter, which is a great accomplishment in light of the inventory reset that’s occurring at the provinces.   We believe our fundamentals are strong and are confident we’re moving in the right direction.”

Cash Burn

The company is still sitting on a healthy war chest 0f $2.7 billion, but that is after a drop of $404.7 million from June 30, 2019.  The primary uses of cash were operations and capital spending of $228.3 million as the company finishes its build-out in Canada by constructing manufacturing and beverage production facilities. Operating expenses for the quarter were $269 million, a 48% increase year over year and a 15% increase sequentially. Consider that this is 100% over the revenue coming in.

Research and development costs increased 526% year over year, G&A increased 137% year over year and sales and marketing increased 50% over last year.

“After five years of investment in market research, product development, product marketing, production engineering, as well as production facility design, construction and qualification, we are ready to bring our Cannabis 2.0 product offerings to market,” said Zekulin.  “This marks the end of significant expansion investments in Canada and we are confident that the high quality, differentiated beverage, vape and edible products that we are bringing to market combined with a retail channel that we expect to grow significantly next fiscal year, will drive the next leg of growth for our business.”

Sales Mix

The revenue was a mixed bag between increases and decreases. Medical marijuana sales were up across the board sequentially. The only drop was a year over year decline in dry cannabis revenue. With recreational cannabis, the consumer side mostly saw sequential increases, with oil and softgels declining slightly by 1%. The B2B recreational sales saw sequential declines in each category except dry cannabis sales.

“International medical cannabis gross revenue was $18.1 million in Q2 2020, with the 72% growth driven primarily by the acquisition in May 2019 of C3, which contributed a full quarter of revenue in the amount of $14.0 million to our results in Q2 2020.”

 

 


StaffStaffOctober 15, 2019
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3min2670

Canopy Growth Corporation (NYSE: CGC) stock jumped over 7% on news that the company sold its 42,087,639 shares in Australian cannabis company AusCann Group Holdings (AusCann) via an off-market block trade at $0.15 per share for gross proceeds of $6.3 million. The trade was facilitated by Canaccord Australia. The stock was lately trading at $20.32. The sale represents Canopy Growth’s total 13.2% interest in AusCann.

“Canopy Growth remains optimistic about the future of the Australian medical cannabis market and will continue to collaborate with the team at Auscann to support greater physician understanding and patient access to high quality cannabis products throughout Australia,” said Mark Zekulin, CEO, Canopy Growth. “The decision to divest our position in AusCann, which we obtained three years ago in exchange for support provided, will allow us to sharpen our focus on our wholly-owned operations in the market, while continuing to collaborate with our partners at AusCann.”

Dr. Marcel Bonn-Miller, Canopy Growth’s Global Senior Director of Clinical Science, will continue to sit on the AusCann Board of Directors to facilitate future collaboration.

Beckley Deal Closes

Canopy also said that it closed the previously announced acquisition of the cannabinoid based research company Beckley Canopy Therapeutics, including the joint commercial venture Spectrum Biomedical UK. The company said that the teams will now be integrated into the broader Spectrum Therapeutics organization to increase the breadth of the clinical research being pursued under the Spectrum banner and to combine continental European and the United Kingdom commercial teams.

“The acquisition comes at a time when commercial opportunities across Europe are ramping up,” said Mark Zekulin, CEO, Canopy Growth. “Spectrum Biomedical has completed all necessary approvals to import cannabis into the UK market and is proud to facilitate patient access to safe cannabinoid-based medicines there. Consolidating our UK-based operations will allow Canopy to simultaneously improve its research and commercial capabilities across the continent.”

Beckley Canopy was formed as a joint venture in January 2018 between Beckley Research & Innovations and Canopy Growth to research and develop clinically validated cannabis-based medicines, with a strong focus on intellectual property protection. The research platform combined European and North American-based leaders in cannabis research from BRI and Canopy Growth to create a strong and complementary UK-based European partnership. Since its inception, Beckley Canopy has made significant progress in its core research areas, added additional indications of interest, and worked closely and in a complementary fashion with the global Canopy research team.


William SumnerWilliam SumnerOctober 10, 2019
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5min2330

It’s time for your Daily Hit of cannabis financial news for October 10, 2019.

On the Site

Nevada Marijuana Licenses Makes Appearance In Russian Campaign Violation Arrest

The two Russian nationals that were arrested on Thursday for campaign finance violations also tried to apply for marijuana licenses in Nevada according to the arrest allegations. The document said that  Lev Parnas, Igor Furman, David Correia and Andrey Kukushkin “planned to use Foreign National-1 as a source of funding for donations and contributions to State and federal candidates and politicians in Nevada, New York and other states to facilitate acquisitions of retail marijuana licenses.”

HEXO Corp.

HEXO Corp. (TSX: HEXO)(NYSE: HEXO) stock was plunging almost 20% as the company told Wall Street that its revenues would be lower than expected. The company said in a statement that it now expects net revenue for the fourth quarter to be approximately $14.5 million to $16.5 million and net revenue for the year to be approximately $46.5 million to $48.5 million.” This is a far cry from the company’s claim in June that it was on track to reach $400 million in net revenue in 2020 and said it would double net revenue in the fourth fiscal quarter.

MediPharm Labs

MediPharm Labs Inc., a wholly-owned subsidiary of MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF), has secured a $38.7 million credit facility from a top 5 Canadian Schedule 1 bank. Although the company initially sought $20 million, the credit facility was upsized and is comprised of a revolving term facility, a non-revolving term facility and a non-revolving delayed draw term facility.

In Other News

Village Farms International

Village Farms International, Inc. (TSX: VFF) (NASDAQ: VFF) announced that a group of underwriters co-led by  Beacon Securities Limited and GMP Securities L.P. have agreed to purchase, on a bought deal basis, 2,660,000 common shares of the company at a price of C$9.40 per share. The total value of the offering is approximately C$25 million. Pending regulatory approval, the offering is expected to close on or around October 22, 2019. The net proceeds of the offering will go towards working capital and general corporate purposes.

Canopy Growth

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) announced that David Klein has been appointed Chair of its Board of Directors effective immediately. Klein is currently the Executive Vice President and Chief Financial Officer of Constellation Brands, Inc. “There is no company better positioned to win in the emerging global cannabis market. I look forward to continuing to work with Canopy Growth’s very talented leadership team to position the company for long-term, industry-leading profitable growth,” Klein said in a statement.

Cannara Biotech

Cannara Biotech Inc. (CSE: LOVE) (OTCQB: LOVFF) (FRA: 8CB) has secured a first mortgage against its Farnham Facility, valued at $6 million, with the Canadian Imperial Bank of Commerce.  The mortgage will help reduce the company’s debt service costs. “Once Cannara’s cultivation and sales licenses are granted we’ll look to augment this mortgage to further reduce our debt service costs,” commented Zohar Krivorot, President and CEO of Cannara.


Video StaffVideo StaffOctober 4, 2019
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7min3870

Green Market Report thanks the ArcView Group for allowing us to tape Marijuana Money from their event this week. 

Constellation Brands (NYSE: STZ) wrote down its Canopy Brands (NYSE: CGC) investment to the tune of almost half a billion dollars. Constellation, which also owns Modelo beer and Robert Mondavi wines, said its share of equity losses from its roughly $4 billion investment came to $484.4 million. 

 Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC)  has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.

Venture capital firm Canopy Rivers Inc.  (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company.

Gotham Green Partners has invested an additional $20 million in iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) through the purchase of senior secured convertible notes. Green Gotham said it was part of a broader $100 million financing plan to support the buildout of all existing markets in which iAnthus currently operatesTerrAscend Corp. 

TILT Holdings Inc.  (CSE: TILT) (OTCQB: TLLTF) has negotiated an agreement with six of its remaining founders regarding the immediate forfeiture of all 60,217,088 stock options granted at the time of the merger. Adjusting for the subsequent forfeiture, TILT’s Q2 2019 net loss of $48.9 million would have been almost entirely reduced, bringing the Company close to break-even.

Fire & Flower Holdings Corp. (TSX: FAF) its financial results for the second fiscal quarter ending August 3, 2019, with total revenue of $11.1 million versus $9.5 million for the same time period in 2018. The net loss for the quarter was $6.4 million.

High Tide Inc. (CSE:HITI) (OTCQB:HITIF) announced financial results for the third fiscal quarter of 2019 ending July 31. Revenue in the third quarter increased by 281%, to C$8 million from C$2 million last year. 

48North Cannabis Corp. (TSXV: NRTH) delivered net revenue of $4.8 million marking 48North’s first full year of revenue, but a net loss of $8.1 million. In fiscal 2019, the company raised over $48 million and at the end of the year had $52.7 million in cash and cash equivalents on hand.

Arizona-based DNA testing technology company PathogenDx, Inc. announced $7.5 million in Series B funding. 

And finally HeavenlyRx Ltd. Acquired CBD company PureKana. 


Debra BorchardtDebra BorchardtOctober 3, 2019
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2min3910

Beverage giant  Constellation Brands, Inc. (NYSE: STZ and STZ.B) stock fell over 6% after the company reported a $484 million write-down on its $4 billion Canopy Growth investment. The cut drove its net loss to $525.2 million, or $2.52 a share, for the quarter to Aug. 31, after income of $1.149 billion, or $5.41 a share, in the year-earlier period. Excluding those charges, the company had per-share earnings of $2.72, ahead of the $2.63 FactSet consensus. Overall for Constellation. the company’s sales edged up 2% to $2.344 billion, meeting the FactSet consensus.

Canopy Growth investors didn’t seem to mind. That stock rose almost 2% and was lately trading at $22.38. This was especially comforting to the cannabis community since these stocks have been in a bear market for most of 2019.

The company had signaled this summer that it was losing its warm and fuzzy feeling towards Canopy when it terminated the CEO Bruce Linton. Linton is widely respected within the cannabis community and the termination was seen as a sign that Constellation was flexing against the smaller cannabis company. In a previous analyst call,

“While we remain happy with our investment in the cannabis space and its long-term potential, we were not pleased with Canopy’s recent reported year-end results,” Chief Executive William Newlands told analysts. “However, we continue to aggressively support Canopy on a more focused long-term strategy to win markets and form factors that matter, while paving a clear path to profitability.”

Having said that Constellation said it has been actively developing a range of CBD products and hopes to bring them to the U.S. market by the end of its fiscal year.

Constellation did note that it was planning on going further into the seltzer category by introducing four new flavors of a Corona-brand product planned for Spring 2020. It was described as being “heavily accretive,” but also as a product that could take beer sales. Wine in a can is also turning into a popular product.

 


Debra BorchardtDebra BorchardtOctober 2, 2019
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7min2710

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC)  has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.

BioSteel was founded in 2009 and focuses on premium natural ingredients with a reputation for being the hydration beverage of choice for high-performance athletes. According to the company statement, BioSteel products have been purchased by over 70% of the teams in North America’s four major sports leagues and ambassadors of the brand include: Ezekiel Elliott, of the Dallas Cowboys; Connor McDavid, of the Edmonton Oilers; WTA player, Eugenie BouchardAndrew Wiggins with the Minnesota Timberwolves; Tyler Seguin with the Dallas Stars; Jalen Ramsey, with the Jacksonville Jaguars; NHL Hall of Famer, Wayne Gretzky; Gleyber Torres, with the New York Yankees; and Smiths Falls very own, LPGA golfer Brooke Henderson. In particular, Elliott’s agreement with BioSteel allows them to activate the star running back as the leading endorser of CBD products once permitted by the NFL. To date no active player has been able to do so.

“BioSteel has a reputation for being a best-in-class provider of natural sports nutrition products and all of its products are well positioned to benefit from the increasing trend of plant-based and all-natural products, preferred not only by professional athletes, but active consumers as well,” commented Mark Zekulin, CEO, Canopy Growth. “This acquisition allows us to enter the sports nutrition space with a strong and growing brand as we continue towards a regulated market of food and beverage products that contain cannabis. We view the adoption of CBD in future BioSteel offerings as a potentially significant and disruptive growth driver for our business.”

“The use and acceptance of CBD-based products in the professional sports landscape has changed. We have witnessed the negative effects of prescription painkillers and athletes are looking for healthier alternatives,” said Michael Cammalleri, Co-Founder and Co-CEO, BioSteel Sports Nutrition. “Its presence is already commonplace amongst NHL players and as a regular CBD user myself, I couldn’t be more proud to champion BioSteel’s evolution and leadership in this space.”

In addition, BioSteel has national organizational partnerships with USA Hockey, Canada Basketball, Athletics Canada and the Professional Hockey Players Association. The company has 10,000+ points of distribution in Canada and the U.S. and continues to expand in both markets and into Europe.

Canopy Rivers

Venture capital firm Canopy Rivers Inc.  (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company TerrAscend Corp. (CSE: TER)(OTCQX: TRSSF). The investment includes the purchase of 13,243 units, with each unit consisting of: (i) one unsecured convertible debenture of TerrAscend Canada with a principal amount of CA $1,000, and (ii) 25.2 common share purchase warrants of TerrAscend exercisable until October 2, 2024.

“We think TerrAscend is uniquely positioned to meet the evolving consumer demands in the three largest cannabis markets worldwide,” said Narbe Alexandrian, President & CEO of Canopy Rivers. “We strongly believe in TerrAscend’s ability to execute on its global strategy, market a diversified brand portfolio, and build on its recent acquisitions, and this additional investment is an affirmation of that belief.”

“We are privileged to have the continued confidence and support of Canopy Rivers, one of the preeminent investment firms specializing in cannabis,” said Michael Nashat, CEO of TerrAscend. “This growth capital enables us to accelerate our organic and acquisition-driven investments in our key markets across the globe, as we execute our strategic vision of being a truly global cannabinoid company.”

Canopy Rivers, along with Canopy Growth Corporation, first invested in TerrAscend in November 2017. In October 2018, both parties restructured their investment in TerrAscend. This restructuring enabled TerrAscend to pursue strategic international transactions in the cannabis space while ensuring all parties remained compliant with industry and securities regulations.

The investment was part of a larger raise of approximately $25 million through the issuance of units of each of TerrAscend and TerrAscend Canada Inc. The first tranche of the Canadian Offering was the $10 million lead order from Canopy Rivers Inc. The company expects to close on additional tranches by mid-October 2019


William SumnerWilliam SumnerAugust 15, 2019
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7min5350

It’s time for your Daily Hit of cannabis financial news for August 15, 2019.

On the Site

Trulieve

Yesterday, Trulieve Cannabis Corp. (OTCMKTS: TCNNF) (CNSX: TRUL) announced the release of its second quarter financial results. Year-over-year, Trulieve’s increased 149% from $23.3 million to $57.9 million. Keeping pace with revenue, operating expenses also rose from $6 million to 14.8 million, representing a 146% increase. Gross profit was $37.6 million, and the gross profit margin was 65%. Adjusted EBITDA was $31.6 million.

Harvest Health & Recreation

Harvest Health & Recreation, Inc. (CSE: HARV) (OTCQX: HRVSF) has reported its financial results for the second quarter, ending on June 30, 2019. Revenue rose from $19.2 million in the previous quarter to $26.6 million, representing an increase of 39%. If one were to include Harvest Health’s completed and pending acquisitions, quarterly revenue would be $78 million.

Money Moves From Aurora Cannabis, Green Growth Brands

Aurora Cannabis Inc.  (NYSE | TSX: ACB) said that it has secured commitments from an expanded syndicate of lenders led by the Bank of Montreal to amend and upsize its existing C$200 million secured credit facility.

Green Growth Brands Inc. (CSE:GGB) (OTCQB:GGBXF) said that it has entered into backstop commitment letters with each of All Js Greenspace LLC, Park Lane Capital Limited, and Chiron Ventures Inc. in which they have committed to subscribe for and purchase up to C$102,796,241 in the aggregate or roughly $77 million of convertible debentures to support the Company’s operations and capital needs.

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) stock dropped over 10% after the company announced its financial results for the first quarter ending June 30, 2019. The worst of the news in the release was that the company’s fiscal first-quarter net losses of C$1.28 billion, or C$3.70 a share, dwarfed last year’s losses of C$91 million, or 40 cents a share. The loss was attributed to a non-cash charge of $1.2 billion in Canopy’s extinguishing warrants related to the Constellation Brands Inc. (NYSE: STZ) investment.

In Other News

Vireo Health

Vireo Health International, Inc. (CNSX: VREO) (OTCQX: VREOF) announced that its affiliate, Ohio Medical Solutions (OMS), has been granted a Certificate of Operation by the Ohio Department of Commerce. OMS, which was previously granted a provisional processing license, will begin operations immediately. The license will allow OMS to purchase plant material from cultivators and manufacture Vireo-branded medical cannabis products.  “We are delighted that Ohio Medical Solutions will begin manufacturing Vireo products for the benefit of Ohio patients,” said Vireo CEO, Kyle Kingsley, M.D. “The City of Akron has been great to us and as our business grows, we look forward to continuing to create new jobs and make a positive impact on the local economy.”

Front Range Biosciences

Front Range Biosciences (FRB) announced that it has entered a collaborative licensing agreement with Steep Hill, and that it will acquire Steep Hill’s Genomics Research & Development team. The agreement will help accelerate FRB’s marker-assisted breeding program and develop new traits and varieties of hemp and cannabis. “The Steep Hill R&D team is among the top three cannabis genomics groups in the world, and we are very excited to welcome them to FRB,” said Dr. Jonathan Vaught, CEO and Co-Founder of FRB. “This acquisition is a major value inflection point for FRB…”

Medical Marijuana Inc.

Medical Marijuana Inc. has filed its financial results for the second quarter. Revenue rose 30.8% to $20.7 million. Gross profit was $15.4 million and adjusted EBITDA was $1.5 million. General and administrative expenses decreased from 21% of sales in Q2 2018 to 16% of sales revenue. “We are excited to continue our tremendous sequential success with the second quarter of 2019 proving to be the largest sales revenue quarter in the history of our Company,” said Dr. Stuart Titus, CEO of Medical Marijuana, Inc. “As the world continues to become more receptive to learning about the benefits of hemp-derived CBD, we are enthusiastic about being at the forefront of the global cannabis industry which, according to Arcview Market Research, could be worth $57 billion by 2027.”


Debra BorchardtDebra BorchardtAugust 15, 2019
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7min4690

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) stock dropped over 10% after the company announced its financial results for the first quarter ending June 30, 2019. The worst of the news in the release was that the company’s fiscal first-quarter net losses of C$1.28 billion, or C$3.70 a share, dwarfed last year’s losses of C$91 million, or 40 cents a share. The loss was attributed to a non-cash charge of $1.2 billion in Canopy’s extinguishing warrants related to the Constellation Brands Inc. (NYSE: STZ)  investment.

“The Company has two primary objectives as we complete Q1 2020 and look to the remainder of the fiscal year,” said Mark Zekulin, CEO, Canopy Growth.  “First, the Company remains focused on laying the foundation for dominance in an emerging global opportunity. This means investments in developing intellectual property, building brands, building international reach, and ensuring scaled production capability for current and future products.  Second, we are fixated on the process of evolving from builders to operators over the remainder of this fiscal year, meaning that as our expansion program comes to a close in Canada, and as new value-add products come to market in Canada, we demonstrate a sustainable, high margin, profitable Canadian business.”

The company reported that its gross revenue in the medical market was $23.6 million, of which $16.4 million dollars or 70% of gross medical revenue was generated by oil sales. Oil sales in the medical market include sales by subsidiary C3, as well as the company’s traditional finished oils and softgels.  Dried flower sales accounted for $7.2 million dollars of gross medical revenue. When it came to adult-use sales, Canopy delivered gross revenue of $60.8 million from the sale of dry flower format products in the Canadian recreational market, representing an increase of 88% from dried flower sales in Q4 2019. Included in dried cannabis sales in Q1 2020 are sales of 1.4 million higher-margin, pre-rolled cannabis products which represented $9.7 million – or 16% – of our total recreational cannabis revenue.

Gross Margins Fall

Last year’s first-quarter gross margins were $11.1 million or 43% of net revenue. This year the gross margins were $13.2 million or 15% of net revenue. The company blamed that drop on the impact of operating costs of $16.2 million relating to facilities not yet cultivating cannabis or producing cannabis-related products, or which had an under-utilized capacity that resulted in adjustments related to the net realizable value of inventory.  “Additionally, there was a shift in product mix in Q1 2020 away from higher-margin, advanced manufactured products due to inventories evening out.”

Expenses Mushroom

The adjusted EBITDA in Q1 2020 accounted for a loss of $92.0 million, as the company said it reflected continuing losses in core operations in Canada and Europe. The company had a laundry list of reasons why the expenses had risen:

  • Increase in sales and marketing expense in Q1 2020 primarily due to increased staffing as it builds-out the network of Tweed and Tokyo Smoke-branded retail stores in Canada
  • Increased number of employees in our marketing and sales functions supporting domestic and international markets
  • Investing ahead of revenue to prepare for marketing campaigns for the launch of the second phase of recreational cannabis consumer products in Canada, as well as CBD products in the United States, both expected later this year.
  • Increase in research and development expense in Q1 2020 over Q1 2019 was due to Canopy Growth’s investment in new research and development efforts. Costs associated with hiring advanced degree researchers and engineers, in areas of vape R&D, plant genetics, applied technology and cannabis-based medical therapy clinical research.
  • Increase in costs associated with enhancing our finance and information technology capabilities, higher public company compliance and regulatory requirements, and administrative costs associated with expanding our operations.
  • Acquisition-related costs in Q1 2020 increased significantly over Q1 2019 due to higher merger and acquisition activity during the current period, most notably entering into and implementing the plan of arrangement with Acreage and closing the acquisitions of C3 and This Works
  • Increase in share-based compensation expense is primarily attributable to the continued increase in the number of stock options granted to employees, which is primarily related to the increase in the number of employees of the Company from approximately 1,400 at June 30, 2018, to approximately 3,850 at June 30, 2019.

Life After Linton

Mark Zekulin was appointed as the company’s sole Chief Executive Officer and Rade Kovacevic was appointed President of the Company upon the termination of Bruce Linton as Co-Chief Executive Officer of the Company. A search has begun to find Mr. Zekulin’s replacement as the company’s Chief Executive Officer. The stock went into a tailspin after Linton’s public dismissal and had only just begun to recover when the earnings were announced following the close of trading on Wednesday.


William SumnerWilliam SumnerJuly 23, 2019
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3min5800

Amplify Investments is getting into the cannabis industry. Today, Amplify ETF’s announced the launch of Amplify Seymour Cannabis ETF (NYSE Arca: CNBS), an actively managed ETF covering the cannabis industry. Tim Seymour, CIO of Seymour Asset Management and CNBC Fast Money co-host, will act as the fund’s portfolio manager.

As one of the world’s most premier financial journalists, Seymour recently served as the headline speaker for the Green Market Summit in Chicago, Illinois. You can watch his fireside chat with Peter Miller, CEO of Slang Worldwide Inc. (SLGWF), about the explosive growth of the cannabis industry here.

“The global legal cannabis industry is still very much in its infancy and presents an attractive growth opportunity for investors looking to capitalize on this emerging frontier,” Seymour said. “Amplify has a track record of offering investors access to disruptive areas of the market via the ETF structure, and the cannabis industry certainly fits this mold.”

As portfolio manager, Seymour will base his decisions off of publicly available data, regulatory filings, third party research, and his evaluations of companies’ financial fundamentals.

The CNBS portfolio will include cannabis companies that are federally legal in the countries in which they operate. Specifically, the portfolio will cover companies that fall into one of three categories: cannabis/hemp plant, support cultivation and retail, and ancillary companies that provide goods and services to the cannabis industry.

Another qualification is that at least 80% of the companies in the ETF must receive 50% or more of their revenue from the hemp or cannabis industry. The fund portfolio currently covers 25 of the cannabis industry’s leading companies; such as Aurora Cannabis (NYSE: ACB), Canopy Growth (NYSE: CGC), Hexo Corp. (NYSE: HEXO), Tilray (NASDAQ: TLRY), and WeedMD (OTCMKTS: WDDMF)

“Cannabis and hemp are seeing a new wave of potential use cases across multiple industries, and investors are eager to gain access to this emerging sector,” said Christian Magoon, founder and CEO of Amplify ETFs. “Tim is a recognized voice and active investor in the cannabis space, and we’re excited to harness his investment expertise and specialized insights to navigate and capture the expanding opportunity in the rapidly evolving industry.”


Debra BorchardtDebra BorchardtJuly 3, 2019
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4min9160

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) Co-CEO Bruce Linton said he was stepping down leaving Mark Zekulin as the sole CEO while the company begins a search for a new top executive. The company said it would consider both internal and external options. Rade Kovacevic, who currently heads up all Canadian operations and recreational strategy will assume the role of President. These changes are effective immediately.

“Creating Canopy Growth began with an abandoned chocolate factory and a vision,” said Linton. “The Board decided today, and I agreed, my turn is over. Mark has been my partner since this Company began and has played an integral role in Canopy’s success. While change is never easy, I have full confidence in the team at Canopy – from Mark and Rade’s leadership to the full suite of leadership – as we progress through this transition and into the future.”

The move comes as a surprise as Linton has been the face of Canopy for years. That Linton stated that the board decided suggests it wasn’t his decision. His biography was also immediately removed from the company’s homepage.

“We thank Bruce and Mark for establishing the foundation for a company that is very well-positioned to lead in the emerging global cannabis market,” said Canopy Growth board director, David Klein. “We are also excited to embark upon our next phase of growth as global leader in the cannabis industry.”

Canopy Growth said in its statement that it has experienced rapid growth since being founded in 2013, establishing leading positions in Canada’s medical and recreational cannabis markets and building an emerging presence in a number of additional markets around the world. The company recently received a C$5 billion investment from Constellation Brands (STZ), a leading beverage alcohol company, which provides a significant benefit as Canopy continues to establish a first-mover advantage in the quickly evolving global cannabis market.

“While Canopy will never be the same without Bruce, the team and I look forward to continuing to do what we have done for the past 6 years: investing in world-class people, infrastructure and brands, and always seeking to lead through credibility and vision,” said Zekulin. “I personally remain committed to a successful transition over the coming year as we begin a process to identify new leadership that will drive our collective vision forward. I know the company will continue to thrive as the Canopy story continues on for years to come.”

The Board has also appointed John Bell as its Board Chair, to be reviewed at the Board’s annual meeting in September when new board members are elected. Bell has served on the board as lead director for 5 years. Bell is the Chairman of Onbelay Capital Inc., a Canadian based private equity company.  Mr. Bell is also director of Strongco Corporation (TSX: SQP) and the Royal Canadian Mint (TSX: MNT). He was also on the board at Canopy Rivers (RIV).



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