TERRY BOOTH IS OUT AT AURORA, AMID LAYOFFS, WRITE-DOWNS
Aurora founder and CEO Terry Booth announced he was stepping down from his position, which he's occupied since 2013. He'll remain in an advisory role. Executive chairman Michael Singer will replace him as interim CEO.
BNN Bloomberg, Barron's
The company is cutting 500 staff—15% of its 3,400 employees. One quarter of positions cut are executive.
BNN Bloomberg
The combined goodwill writedowns (one alone is for between $740M and $775M) and impairment charges related to "certain intangible and property, plant and equipment" added up to roughly $1B.
Financial Post, Twitter—Vanmala Subramaniam
Multiple analysts downgraded the company on news of Booth's departure. Over the last year, Aurora's share price has declined by 80%.
Twitter—David George-Cosh
In one piece of good news, Aurora announced it had got the permits it needed to begin selling MED again in Germany, the EU's largest market.
MJ Biz Daily
Two members joined Aurora's board: Michael Detlefsen, a governor of the Royal Ontario Museum, and Lance Friedmann, ex-senior VP at Kraft.
Twitter—Matt Lamers
Booth's departure follows the company asking high-profile Chief Corporate Officer Cam Battley to resign in December. (Battley had kind words for Booth on his departure.) Since that time, C-suites across the floundering sector have begun to shuffle their membership, with five companies changing CEOs and executive teams in January alone.
Times Colonist, Twitter—Cam Battley, Financial Post
Two days prior to Booth's announcement, Keith Merker stepped down as CEO of WeedMD. He had been in that position since 2018.
Wildfire Collective CEO Mark Spear said, "The bittersweet thing about what is happening now in the cannabis industry is that a handful of people were sounding the alarm 4 years ago about what would happen if quality wasn't dramatically improved. They were fired. Now the people that fired them are fired."
Twitter—Mark Spear
CEO Brendan Kennedy said "reducing headcount and cost" will make Tilray "better positioned to achieve profitability."
Financial Post
Kennedy said Tilray would focus on international MED, domestic REC, science and research, and the hemp foods company Manitoba Harvest, which it acquired for $420M last year.
Cowen analyst Vivien Azer called Tilray's cuts a "logical response given the current state of the industry," noting, "Both Canadian and international LPs have built up infrastructure levels that exceed current market demand."
Ernst Young strategic growth and risk leader and industry expert Ashley Chiu said, "A lot of cannabis companies should never have gone public to begin with. Reckless disregard and no respect for capital. We are going through a corrective period which hopefully brings the industry to a better place."
Twitter—Ashley Chiu
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In order to cool simmering tensions on the island, Canada Post asked LPs to cease shipping to Campobello in order "to provide timely and reliable service to the [island] residents."
Boston Globe
Materia Ventures CEO and MED advocate Deepak Anand noted such a ban would prevent MED patients from receiving medication.
Twitter—Deepak Anand
REC is legal in Maine, but US Customs and Border Protection enforces federal laws, including federal cannabis prohibition.
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The suit is related to Canntrust's equity offering in May of last year (underwritten by major investment banks, among them RBC Dominion Securities, Canaccord Genuity, and Jefferies Securities. ).
The suit is related to Canntrust's equity offering in May of last year (underwritten by major investment banks).
The four investors who lodged the suit argue former Canntrust CEO Peter Aceto and other executives misrepresented the company by claiming it had all licensing necessary to grow product, at a time when CannTrust was growing product in unlicensed rooms).
Investment Executive
Quick Hits
Norfolk, Ontario will buy a drone in order to fly over properties and determine whether illicit cannabis is being grown on site.
Simcoe Reformer
If you get pulled over in Ontario with cannabis secured in a fastened, closed bag "not otherwise readily available to any person in the vehicle or boat," the police can't ticket you. But that hasn't stopped them, in some places.
Twitter—Harrison Jordan
Ottawa has adjusted its excise-tax revenue expectations for this year from $100M down to $66M.
Nonetheless, it projects $135M in excise tax revenues next year, reaching $220M in 2023.
More data:
For the first time, licensed cultivation space is now predominantly outdoors rather than indoors. Health Canada has licensed 19M square feet of outdoor grow space, compared with 13M square feet indoors (including greenhouses).
MJ Biz Daily
In recent market data reporting, Health Canada has ceased to specify units of measure for cannabis sold, and has begun to use the unspecified "units" and "packaged units."
Twitter—Mollytime, Cannalysts
BNN Bloomberg's David George-Cosh reported Health Canada told him the change "aligns with how many regulated parties track their product internally."
Cannalyst Craig "GoBlueCDN" Wiggins said, "Anyone underperforming against metrics and targets - like LPs, public retailers, and governments - will applaud and support Health Canada moving from widely understood measures such as KGs and litres to the amorphous 'Units.'" Twitter—GoBlueCDN
Edmonton police reported there has been a slight rise in drug-impaired driving arrests, but admitted the impact of legalization on drug-impaired driving was lower than it expected.
CBC Edmonton
Massachusetts sold $677M worth of legal cannabis in its first legal year—more than half of the $1B sold in Canada's first legal year, but in a state with a 6.9M population. Illinois (population 12.7M), meanwhile, sold $40M worth of legal REC in its first month.
420 Intel, Nasdaq
ACROSS THE SECTOR
HTTPS://WWW.FLICKR.COM/PEOPLE/41000732@N04
The Bank of Montreal is now charging cannabis licensees $7,000 to their documents to decide whether to provide them services. They charge an additional $1,000 annually for "maintenance." Insiders were unimpressed.
Twitter—PipeDreemz, Matt Maurer, Trina Fraser
CANNABIS HEALTH PRODUCTS INSPIRE 1,100 SUBMISSIONS
PUBLIC DOMAIN
Last June, Health Canada proposed introducing a new "Cannabis Health Product" (CHP) designation for non-intoxicating cannabis products, in order to allow the products to be sold outside REC retail. This week, Health Canada revealed it had received 1,100 responses to its public consultation on the CHP designation and discussed its next moves.
MJ Biz Daily
After publishing a summary of the feedback in coming weeks, Health Canada will strike an external scientific advisory committee (within months) to decide on the necessary amount of evidence to demand to prove CHP safety and efficacy.
New regs will have to create a framework to bring to market legally cannabis products that make health claims and can be sold without physician permission.
Under current law, cannabis is not allowed in Natural Health Products (NHPs, such as vitamins, and probiotics).
Provinces would determined where CHPs could be legally sold.
Quick Hits
According to new data derived from cannabis consumption tracker Cannatrack, Canadian women consumed roughly as much cannabis as men in the first 50 weeks of legalization.
Cannabis Retailer
Del Riley helped write sections 25 and 35 of the Constitution Act, 1982. Last week, the former Chief of the National Indian Brotherhood (which became the Assembly of First nations) from the Chippewas of the Thames First Nation told a cannabis discussion at Aundeck Omni Kaning First Nation on Ontario's Manitoulin Island, "Your treaty rights [often containing guarantees of protecting businesses] are constitutionally protected. We’ve always run our own businesses, we’ve always traded all sorts of goods. We’ve never had to have licences for our businesses before."
Manitoulin Expositor
A year after Akewsasne Mohawk Police Services raided dispensaries in Akwesasne Mohawk Territory licensed by the traditional Longhouse (a rival government that disputes the jurisdiction of the elected and federally recognized Mohawk Council of Akwesasne), the parties have arrived in court.
Cornwall Standard-Freeholder
Jared Jock, whose dispensary was raided, will argue the constitution allows Longhouses to approve their own dispensaries without approval from the MCA.
At Eskatoni First Nation, a Mi'kmaq community in Nova Scotia, there were two instances of children being accidentally served THC-infused edibles. First, students, teachers, and parents attending a winter feast were accidentally served molasses cake believed to contain THC, sending some to hospital.
Global News, Daily Hive
"I think we look pretty amateur, man," resident Christopher Bernard told CTV News, "when it comes to the cannabis, man."
Quick Hits
Industry may not like Health Canada's slow rollout, conservative packaging, and draconian advertising rules, but some American analysts watching figure this isn't the worst way to legalize REC.
Food Processor
Security clearances are necessary for many people employed in licensed businesses, including most executives (directors, officers, partners) as well as key figures like master growers, security heads, and quality-assurance managers.
I spoke with Fraser this week as part of an upcoming WeedWeek Report on the Ontario sector. She told me that those who grew illicit cannabis before legalization, in a best-case situation, clearances can take a matter of "a few months, but you have to budget a much longer timeframe for that."
Twitter—Travis Lane
One piece of good news Fraser shared: in a month of open applications for REC retail in Ontario, "they've received over 600—but I can tell you that every single one of our clients who's applied has gotten some type of feedback essentially on their applications and some are done. I have been pleasantly surprised with how fast the AGCO has been processing these operator applications."
She noted at the rate the authorizations are taking place, "we could get a lot more than 20 store authorizations a month coming out come May, June, July, into the summer. It's going to take a couple of months, but they will start to flow pretty quickly I think."
Quick Hits
The Nova Scotia Human Rights commission, in a potentially precedent-setting case, determined MED was a medical necessity in the case of an employee denied it by his insurer.
Financial Post
Edmonton REC store owners and employees are uneasy following a series of robberies stretching back into December.
CTV News
Edmonton REC store CannaMart owner Christopher Wilson said witnesses were unable to see the robbery taking place at his store due to window coverings. A representative of Alberta Gaming, Liquor and Cannabis said window coverings were a federal mandate, but stressed fully covering windows was not required by law.
Health Canada only "prohibits the display of cannabis or cannabis accessories where they can be seen by a young person." An AGLC rep said, "In order to better display products for sale openly within the store and for customer experience purposes, most licensees have decided to cover their windows – but this is not an AGLC requirement."
Here's an interview with a representative of the United Food and Commercial Workers International Union about unionizing workers at Aurora subsidiary MedReleaf.
Cannabis Wire
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