Connect with us

Aurora Stock Price

Canadian Cannabis Sales for April 2022 – Cannabis News, Lifestyle



Statistics Canada has released cannabis sales figures for April 2022. Canadian cannabis sales increased by 3.7% from the previous month to C$372.4 million.

Compared to April 2021, sales are up 25.8%.

Canadian Cannabis Sales: Details

Canadian Cannabis Sales

Statistics Canada cites an increasing number of retail stores and falling flower prices for the boost. We can break down Canadian cannabis sales data province-by-province.

Ontario, the largest province in population, increased sales by 4% from the previous month and up 53% from April 2021.

Alberta, the second-largest province, was up 2% from March and 10% from the previous year.

Despite its restrictive retail model (and striking workers), Quebec was up 18% from March. But, true to form, it only increased 3% of sales from 2021.

Interestingly, British Columbia was down 6% from March and up only 21% from April 2021. Reasons for this may include the proliferation of grey-market shops on Indian Reserves. As well as the popularity and consumer loyalty to BC Bud, of which only a handful hold federal licences. The rest of them remain underground four years after legalization.

Comparing Alberta and Ontario

Canadian Cannabis Sales

Examining Ontario and Alberta offers insights into Canadian cannabis sales.

Ontario began legalization with higher sales than Alberta, with the two provinces equally matched in late 2019. However, since the summer of 2020, Ontario‘s cannabis sales have increased almost exponentially.

This increase in sales corresponds to the drop in cannabis prices. Over the past year, the average unit price has decreased by 13.2%, while the number of units sold continues to trend upward. Since April 2022, the market has amassed $165 million in total sales. And as total sales increase, the prices of cannabis products decrease.

Potential Problems with Canadian Cannabis Sales

Canadian Cannabis Sales

Canadian cannabis sales may be trending upward, but competition impacts each store’s revenue. As Ontario has demonstrated, in 2020, the average revenue per store declined from C$100k in average weekly sales to C$20k in 2022. So while Canadian cannabis sales remain strong in Ontario, average revenues have declined for individual retailers.

The average retailer saw negative growth in April 2021, down -3.7% compared to April 2020. Examining April 2022 Canadian cannabis sales, the average Ontario store is now down -14% in revenue.

Toronto Cannabis Stores Consolidate

In response, cannabis retail stores are now consolidating. Consolidation is apparent in Toronto, where, since 2021, cannabis stores have doubled, with roughly 300 in operation in April 2022.

Superette has bought Canoe for $5 million and has acquired Dimes Cannabis.

Dutch Love has closed its doors. Owned by the Donnelly Group, a spokesperson said the company no longer sees the Toronto market as viable due to the saturation of cannabis stores.

It’s a buyer’s market for Canadian cannabis sales.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

All about Cannabis

Amending the Cannabis Act – Cannabis News, Lifestyle




Amending the Cannabis Act? The Canadian government says they will review and amend it as soon as possible. But the deadline to begin the review is eight months passed. Scheduled for October 2021, Health Canada won’t comment on when the review will occur, only that any amending will come from a “credible, evidence-driven process.”

Health Canada also said the review could take up to 18 months. The latest federal budget promised a cannabis industry roundtable, but no details have been released. However, some remain skeptical that meetings between government bureaucrats and industry insiders will do anything except help out the larger producers at the expense of the smaller craft companies.

Forward Regulatory Plan

Amending the Cannabis Act

But will a review and amendment of the Cannabis Act work out in everyone’s favour? So far, the federal government plans to update the Cannabis Act through some regulatory changes that Health Canada will be taking the lead on.

These regulatory changes include:

  • Cutting back on regulatory paperwork “to simplify and reduce requirements related to record keeping, reporting and notifications, and to provide more flexibility in meeting certain requirements related to matters such as antimicrobial treatment.”
  • Amending the regulations to “facilitate cannabis research for non-therapeutic purposes.”
  • Increasing the possession limit for cannabis beverages (no indication of raising the THC limit or abandoning it altogether).
  • Allowing the sale of certain health products containing cannabis without a prescription
  • Amending Cannabis Act regulations to “restrict the production, sale, promotion, packaging, or labelling of inhaled cannabis extracts with certain flavors, other than the flavor of cannabis.”

Health Canada says these changes are unlikely to be ready until the end of the year.

Buying cannabis health products without a prescription is a step in the right direction. But the typical attitude of Health Canada bureaucrats is that public health and safety trump your personal autonomy. So the agency will now be targeting cannabis producers promoting terpene profiles that they’ve decided are not “flavors of cannabis.”

Why Bother Amending the Cannabis Act?

Why bother amending the Cannabis Act when the government should scrap it altogether? The entire Liberal Legalization scheme has insulted the Western legal tradition of free markets and the rule of law. 

All they needed to do was remove cannabis from the Criminal Code. We already have laws on the books that facilitate peaceful associations. Tort and criminal law provide security, while contract, property, and commercial law facilitate cooperation and exchange. Politics doesn’t need to enter the picture. Politicians certainly don’t need to draft new legislation and create roles for their already inflated taxpayer-funded bureaucracy.

The three major hurdles for small craft producers are:

  1. Barriers to entry because of the high costs of bureaucracy
  2. Arbitrary rules on some products, such as THC limits on edibles and capsules
  3. How the LPs can tap equity markets and starve out their competition who are malnourished because,
  4. Excise taxes ensure Canada won’t ever have a middle-class of cannabis producers.

Will an industry roundtable consisting of large producers and government bureaucrats solve these issues? Or will they only address the excise tax since even the larger producers send half their revenue to Ottawa?

Time will tell, but LPs and bureaucrats seem to think the roundtable will be a cure-all.

I have my doubts. If you want some insight into what this “cannabis industry table” is going to be about, look at who supports it. If you want some insight into what amending the Cannabis Act will look like, take a gander at everything else this government has (or hasn’t) done.

A true, small L, classical liberal cannabis market won’t occur until Justin’s Liberals are out of power.

Source link

Continue Reading

Aurora Stock Price

Aurora Cannabis laying off 12% of its workforce – Cannabis News, Lifestyle




Aurora Cannabis announced it is laying off 12% of its workforce as the company reorganizes.

A spokesperson said, “Today we delivered against that commitment as we announce a corporate reorganization that will allow Aurora to operate as a leaner, more agile, and future-focused company, fit for success in the evolving global cannabis industry.”

Aurora is embarking on a $90 million cost savings project.

Aurora Cannabis is laying off 12% of its workforce

Aurora Cannabis is laying off 12% of its workforce

The Edmonton-based company confirmed the layoffs to The Canadian Press. They did not provide details.

The cuts are part of an effort to streamline Aurora into a profitable company.

Spokesperson Kate Hillyar said the company identified cost savings in their third-quarter earnings as the key to profitability. Aurora Cannabis announced net losses of $1 billion in its third quarter.

Like many of Canada’s large licensed producers, Aurora has never made a profit.

The company’s third-quarter financial and operational results saw a 17% sequential decrease in revenue to $50.4 million.

“If you take a look at the top players in Canada, take a look at where their stock prices are compared to where their all-time highs were, and we’re taking a look at losses 99 cents on the dollar,” says Nawan Butt, Portfolio Manager at Purpose Investments. “It’s all to the determent of the equity holder for the LPs. And I’m surprised more equity holders aren’t appalled at some of the decisions management have taken.”

Bad Year for Aurora

Aurora Cannabis laying off 12% of its workforce isn’t the only bad news. Earlier this year, they announced the closure of three greenhouses. One of these places is Aurora Sky in Edmonton, employing 13 percent of the workforce.

Initially hyped as a pioneer in cannabis growing technology, Aurora Sky is now closing. If this doesn’t demonstrate the bursting Canadian cannabis bubble, then what does?

Still, some might say Aurora is reaping what they sowed when they speculated. When they gleefully watched the Canadian cannabis stock prices climb to nonsensical proportions. They once claimed they’d supply a third of the country with its cannabis. They bought up every small niche company in sight. Built more greenhouses while the legacy market was in a supply glut.

All to the determent of the equity holders. The company was never selling cannabis, according to one anonymous insider. “They were always just selling equity.”

Now Aurora Cannabis is finding that it must start selling cannabis people are willing to buy.

Source link

Continue Reading

Aurora Stock Price

Is the Canadian Cannabis Experiment A Failure?  – Cannabis News, Lifestyle




Is the Canadian cannabis experiment a failure? Things may look rosy on the surface, but underneath, Canada’s legal cannabis regime is struggling. Whether it’s smaller craft producers sending half their profits to the federal government in excise taxes or larger producers racking up a record amount of losses. For many, the Canadian cannabis experiment is a failure.

Excise Taxes

Canadian cannabis experiment

The Canadian cannabis experiment’s biggest failure comes from excise taxes. Since the government claims activities like smoking or drinking are morally degrading, they are subject to “sin” or excise taxes. This tax takes $1 per gram off wholesale flower regardless of production costs or retail price. So if you’re producing wholesale cannabis at $8 per gram, and your competitors are producing cannabis at $10 per gram, you’re paying a higher tax for being more productive and efficient. 

Furthermore, large licensed producers can absorb excise taxes more than smaller producers. All they have to do is sell cannabis at a loss and wait for their smaller competitors to starve. 

“I think it probably speaks to how unhealthy the funding side of the industry is,” says Nawan Butt, Portfolio Manager at Purpose Investments.

“If you take a look at the largest players, the amount of losses they’ve racked up, even just this year, the numbers are absolutely massive. And the reason is, they can tap equity markets at any point that they want, helping them absorb these losses and try to maintain market share until the point where it’s survival of the fittest or survival of the fattest, in this case.”

Smaller niche players are finding their market share. But without the volume to increase their margins, they’re left alive only due to tax breaks and flexibility offered by the Canada Revenue Agency. 

“The healthy players are unfortunate to be in such a position because the larger LPs just won’t allow them to realize the value that they’re creating in this environment. Because they have an almost unlimited bank account they can tap on. Which is to the frustration of the smaller LPs,” says Nawan.

Unprofitable LPs

The large licensed producers (LPs) represent the biggest failure of the Canadian cannabis experiment. They originate from the unconstitutional medical cannabis regime former PM Stephen Harper tried to set up. These large-scale pharmaceutical companies now sell to recreational and medical customers.  

They’ve never been cash flow positive. Before legalization, large LPs inflated the potential of the cannabis market. They forecasted record numbers based on nothing at all. Canada’s top LPs, like Canopy and Aurora, indicated sales more than triple what the government predicted. Aurora claimed it would grow a third of Canadian cannabis. And despite a supply gut in the legacy market, Aurora kept building greenhouses.

“If you take a look at the top players in Canada, take a look at where their stock prices are compared to where their all-time highs were, and we’re taking a look at losses 99 cents on the dollar,” says Nawan. “It’s all to the determent of the equity holder for the LPs. And I’m surprised more equity holders aren’t appalled at some of the decisions management have taken.”

Government Bureaucracy Ruined the Canadian Cannabis Experiment

Canadian cannabis experiment

It’s clear the federal government’s bureaucracy ruined the Canadian cannabis experiment. It was a failure before the first retail store even opened. “My experience working in government is people who work in government know what they’re doing. This is a program that’s designed to fail. No one in the government wanted legalization of cannabis,” says David Hurford, Volunteer Secretary at the BC Craft Farmers Co-Op.

As early as 2016, Justin Trudeau said the Canadian cannabis experiment was not about “creating a boutique industry.”

And that’s clear with plain-packaging rules, inaccurate warning labels, and the big red “THC” label on all cannabis products (including CBD-only strains). Or by having a producer application process requiring tens of thousands of dollars in start-up capital, having provincial monopolies as distributors, and, in some provinces, crown corporations handling all retail.

“I think the world is watching the Canadian experiment and we are not giving them positive signs on how to conduct this business,” says Nawan.

Future of the Canadian Cannabis Experiment 

“I think the Canadian market is still a very long way from its ultimate stage. There’s a lot of work that still needs to be done,” says Nawan.

What kind of work? For starters, excise taxes are crippling the industry. Unlike other “sinful” industries, the government levies the tax on manufacturers, not retail. If the government wants to call cannabis consumption immoral and tax people for it, it should impose no more than 10% of the retail price.

Second, politicians can scale back government bureaucracy. Give provinces more power and eliminate Health Canada‘s involvement with recreational cannabis. Giving each province more responsibilities can ensure a Canadian cannabis experiment that works for everyone. Places like British Columbia can have their boutique industry while Quebec can continue its strict anti-business, public health approach.

Third, reform the licensed producer system. Again, production licenses are something that the federal government can hand to the provinces. Something has gone wrong at the federal level. Or it’s been designed to fail. Either way, this is not how you legalize cannabis.

“If we look at some of these US players, they’re the ones doing it right,” says Nawan. “They’re the ones that have tight belts and can execute, as well as scale in this environment where they don’t really have equity markets to tap. They’re making the most of what they have, and I think Canadian LPs have a lot to learn from them.”

“I’m just very disappointed that it’s been almost four years of legalization now and our top five LPs have yet to turn a profit.”

If that doesn’t indicate the Canadian cannabis experiment is a failure, then what does?

Source link

Continue Reading


Copyright © 2021 The Art of MaryJane Media