In the cannabis space this week, one Canadian province released data showing how marijuana operations in the region have fared over the last year.
Meanwhile, a well-known executive who was fired last year from one of the cannabis industry’s major companies has now lost his job at another business.
Read on for a closer look at some of the biggest cannabis news over the last five days.
OCS shares stats from first year of legalization
The Ontario Cannabis Store (OCS) published a report this week on the province’s first full year of legal cannabis operations. It lays out sales figures, consumer trends and pricing information.
In the Monday (June 8) report, the OCS states that 35.1 million grams of cannabis were sold for the reporting period, which runs from April 1, 2019, to March 30, 2020; that’s the first full fiscal year since legalization for the OCS. The total value of sales for the province came in at just over C$385 million.
A key complaint about the Ontario cannabis market from experts as well as marijuana companies has been the lack of stores — speaking to the Investing News Network recently, Rishi Malkani, cannabis practice leader at Deloitte Canada, pointed to a lack of retail operations in Ontario as well as Quebec, saying that both key provinces had under 25 stores as of January.
The OCS report indicates that number of stores in Ontario has grown substantially since that time. As of the end of March, 53 retail stores existed in the province, and that number had risen to 87 at the time the document was issued. The OCS, which supplies the province’s stores and is its only online retailer, attributes the increase to a switch to open allocation for licensing in its third fiscal quarter.
In terms of consumer trends, the OCS notes that dried flower emerged as the clear bestseller in the province, making up 79 percent of sales by volume; that said, the report does point out that dried flower was the product that was predominantly available. It also states that while Cannabis 2.0 products have so far “sold very well,” it’s too early to gauge what will happen long term.
Notably, the document indicates that Ontario’s share of the illegal market stands at only 19 percent, meaning that 81 percent of cannabis sales in the province are still illegal. The OCS describes the illegal market as “organized and persistent,” but hopes that a new pricing structure that reduces the median price for dried flower by 25 percent will improve the situation.
Bruce Linton loses job at Vireo Health
In a press release on Monday, Vireo terminated its employment agreement with Linton on a without-cause basis, saying that he would immediately be losing his position as executive chairman. On Friday (June 12), Linton also resigned from the company’s board of directors.
“I coordinated financing with the company. It closed in March, I participated in it and perhaps my demanding nature was accelerated because of those events,” he told the news outlet.
Linton had been at Vireo since last November, and was fired from Canopy Growth last July. He has said that his termination from Canopy was related to a C$5 billion investment in the company from major stakeholder Constellation Brands (NYSE:STZ) — according to Linton, Constellation “wanted a different chair and a different co-CEO.”
Though his work at Vireo has come to an end, Linton appears to have a lot going on. He was in the news recently due to the initial public offering of Collective Growth (NASDAQ:CGROU), a new “blank check” operation that plans to focus on the US cannabinoid market. BNN Bloomberg also notes that he will be behind a new Dublin-based investment fund called Oskare Capital.
Cannabis company news
As is often the case, much cannabis company news this week centered on quarterly results, but a few other firms had different announcements to share with investors.
- HEXO (TSX:HEXO,NYSE:HEXO) announced its latest quarterly results, reporting net revenue of C$22.1 million, up 30 percent quarter-on-quarter. The company also cut its adjusted EBITDA loss in half from the previous quarter — it came in at C$4.3 million, down from C$8.5 million. HEXO expects to achieve positive adjusted EBITDA in the first half of the 2021 fiscal year.
- Also releasing quarterly results was Indiva (TSXV:NDVA,OTCQX:NDVAF), which announced record revenues for the period of C$2 million. Its adjusted EBITDA loss came in at just under C$2 million. Sales of the company’s Bhang chocolate products came to C$1.6 million, net of excise taxes, and Indiva said they lead the edibles category in multiple Canadian provinces.
- Organigram Holdings (TSX:OGI,NASDAQ:OGI) signed a multi-year dried flower supply deal with Israeli medical cannabis producer Canndoc. Under the agreement, Organigram will provide 3,000 kilograms of dried flower product to Canndoc by December 31, 2021; it may provide a further 3,000 kilograms during that time period if Canndoc wants.
- News hit that Tilray (NASDAQ:TLRY) is facing a lawsuit; it alleges that company executives misled shareholders and engaged in insider stock sales both last year and this year. According to Marijuana Business Daily, the complaints relate to Tilray’s deal with Authentic Brands Group. In other Tilray news, this week a lockup of shares sold by the company in March came to an end, prompting questions about whether shareholders might cash out.
- WeedMD (TSXV:WMD,OTCQX:WDDMF) provided its results for its 2019 fiscal year, saying that net revenue came in at C$20.8 million for the 12 month period; that’s an increase of 162 percent from the previous year. The company reported an adjusted EBITDA loss of C$13.9 million for the year. Also last week, WeedMD completed planting at its 27 acre outdoor field.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.