It’s time for your Daily Hit of cannabis financial news for March 17, 2020.
On The Site
It seems cannabis isn’t as recession-proof as originally thought. While the world hasn’t officially gone into a recession, the cannabis industry has consistently stated it would thrive in downtimes because consumers would continue to make purchases. However, no one ever thought a pandemic would close the doors entirely.
That has changed with the news that Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) has made the decision to temporarily close all corporate-owned Tokyo Smoke and Tweed retail locations across Canada, effective at 5:00 p.m. local time today, March 17.
“We have a responsibility to our employees, their families, and our communities to do our part to “flatten the curve” by limiting social interactions. For us, that means shifting our focus from retail to e-commerce,” said David Klein, CEO, Canopy Growth. “This is a big decision but it was also an easy one to make – our retail teams are public-facing and have been serving an above-average volume of transactions in recent days. Given the current situation, it is in the best interest of our teams and our communities to close these busy hubs until we are confident we can operate our stores in the best interest of public health.”
Medical Marijuana Card
Though the numbers increase every year, not all states have legalized recreational marijuana — most merely permit the medicinal use of marijuana to treat various physical and mental ailments. Yet, even in states where recreational weed is legal, plenty of residents pursue medical marijuana permits, despite the fact that they can obtain recreational weed without the hassle of doctors’ appointments and prescriptions.
There are noteworthy differences in medical marijuana and recreational marijuana — both in how the drug is sold and what varieties of the drug are available. If you live in a state where recreational marijuana has been legalized, you might still consider seeking a medical marijuana card.
In Other News
Hexo Corp. said Tuesday it missed the March 16 deadline to file its interim financial statements for the 3-month and 6-month periods ended Jan. 31. The Canada-based cannabis company said the delay in filing was a result “exceptional circumstances,” such as “complex” calculations in determining the total of the “significant impairment loss” it will be recording in second-quarter filings. The expected range of the impairment is $265 million to $285 million. In the meantime, the company said it recorded fiscal second-quarter gross revenue growth of 23% to C$23.8 million ($16.9 million), while net revenue rose 17% to C$17.0 million.
Cronos Group Inc. (NASDAQ: CRON) said that its previously issued unaudited interim financial statements for first, second and third quarters of 2019 prepared in accordance with International Financial Reporting Standards as filed on SEDAR, and with the U.S. Securities and Exchange Commission on Form 6-K, will be restated and reissued and should no longer be relied upon.
As previously announced, the Audit Committee of the Company’s Board of Directors has been conducting a review of certain bulk resin purchases and sales of products through the wholesale channel, and the restatement is being made to eliminate certain of these transactions through the wholesale channel. The Company will reduce revenue for the three months ended March 31, 2019 by C$2.5 million and the three months ended September 30, 2019 by C$5.1 million. Cronos director and chair of its compensation committee Bruce Gates, resigned in order to focus on his increased professional responsibilities.