Vancouver, Delta, Kelowna, BC – February 13, 2023 (Investorideas.com Newswire) www.Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site release today’s podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.
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Investor Ideas Potcasts #645, Cannabis News and Stocks on the Move – (TSX: WEED) (NASDAQ: CGC) (TSXV: MUSH)
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Today’s podcast overview/transcript:
In today’s podcast we look at a few public company announcements as well as recent news regarding the edibles market in Canada and the issues being raised from the industry, cannabis hangovers and Raw papers.
Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) announced its financial results for the third quarter ended December 31, 2022. Canopy Growth is also announcing significant changes to the Company’s Canadian cannabis business. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.
Canopy Growth announced today that it is transitioning to an asset-light model in Canada by exiting cannabis flower cultivation in the Company’s Smiths Falls, Ontario facility, ceasing the sourcing of cannabis flower from the Mirabel, Quebec facility, and moving to a third-party sourcing model for cannabis beverages, edibles, vapes, and extracts.
Today’s changes come in addition to multiple cost reduction activities within FY2023, including the divestiture of Canopy Growth’s Canadian retail operations, the organisational restructuring of certain corporate functions, and the closure of the Scarborough, Ontario research facility.
As a result of the cost reduction initiatives undertaken in fiscal 2023, the Company intends to close its 1 Hershey Drive facility in Smiths Falls, Ontario, in addition to reducing headcount across the business by approximately 60%, including 800 positions impacted by the changes announced today, of which 40% are impacted immediately.
Management expects these cost reduction initiatives will reduce annual Cost of Goods Sold (“COGS”) and Selling, General & Administrative (“SG&A”) expenses by a combined $140-$160 million over the next 12 months, bringing the total cost reduction target to $240-$310 million inclusive of the reductions announced in April 2022.
Canopy Growth continues to progress its U.S. strategy through Canopy USA, LLC (“CUSA”) and is committed to remaining dual-listed on the TSX and the Nasdaq.
Based on our current revenue run rate and these cost reduction initiatives, management reaffirms its expectation to achieve positive Adjusted EBITDA in FY2024, with the exception of investment in BioSteel.
“Canopy must reach profitability to achieve our ambition of long-term North American cannabis market leadership. We are transforming our Canadian business to an asset-light model and significantly reducing the overall size of our organization. These changes are difficult but necessary to drive our business to profitability and growth.” said David Klein, Chief Executive Officer.
The Good Shroom Co Inc. (TSXV:MUSH) through its subsidiary Teonan Biomedical Inc., announced that it is breaking into a new category with a THC infused beef jerky named OG Jerk.
OG Jerk launched in all Quebec cannabis stores last week. The Company received its first purchase order for this product of $23,685.12 and is expected to receive replenishment orders every 1 to 2 weeks in addition to its other hash, hash infused joints and cannabis flower SKU’s. The total Quebec purchase order value for this week, all products combined, was of $ 94,523.52. Orders are received weekly in the province of Quebec.
OG Jerk contains 60 grams of beef jerky (2 x 30 gram vacuum sealed sachets) infused with a total of 9 mg of THC (2 x 4.5 mg of THC vacuum sealed sachets) which permits the consumer to consume in doses accordingly and enjoy beef jerky in the process.
The company’s CEO Mr. Eric Ronsse stated “In Quebec the government limits the choice of edibles to products which they judge would not appeal to children such as cookies and candies which has drastically limited the choices. This limitation also presents an opportunity as there are no well performing edibles at present, by our standards. As the only beef jerky in Quebec, we expect that such a commonly consumed savoury snack, now infused with THC, will appeal to many consumers. Concurrent with Superbowl weekend, we also feel it’s an appropriate launch week.”
In recent news, smoking marijuana on the streets of Amsterdam‘s Red Light District will soon be illegal.
The ban comes as part of a string of new legislation that aims to make life in the city more bearable for permanent residents who have long complained about the rowdiness of tourists in the area.
Amsterdam’s city council announced the cannabis ban on Thursday. The city’s statement said Amsterdam’s busiest neighbourhoods, including De Wallen (also known as the Red Light District), have become “unliveable.”
“Residents of the old town suffer a lot from mass tourism and alcohol and drug abuse on the streets,” wrote the Municipality of Amsterdam. “Especially at night, the atmosphere can get grim. People who are under the influence linger for a long time. Residents cannot sleep well and the neighbourhood becomes unsafe and unliveable.”
In addition to the soon-to-be smoking ban, the city is also discouraging the sale of alcohol. Stores in the inner city will be banned from selling alcohol after 4 p.m. Thursday to Sunday. Drinking in public will be forbidden.
In mid-May, bars, restaurants and cafes will close at 2 a.m., rather than the currently mandated 3 a.m. weekday and 4 a.m. weekend times.
Sex work establishments will also see their hours change as a result of the new legislation, and will now be required to close up shop at 3 a.m., rather than 6 a.m.
A recent news article from the Toronto Star, discussed how “Aurora Cannabis Inc. (NASDAQ: ACB) and other cannabis producers appear to be finding some creative ways around dose limits for legal THC gummies – and Health Canada apparently isn’t amused.”
Some of the products, which hit legal pot stores and the Ontario Cannabis Store website late last year, have been labelled as “Glitches.” This has come as a natural result, say industry officials, of competition from the grey market, where vastly stronger edibles are readily available.
Industry sources say several licensed producers, including Aurora, have received letters from Health Canada recently about edibles which the regulator said didn’t conform to the rules.
The Drift brand, Glitches, produced by Aurora, each contain 10 mg of THC per unit, the maximum for edibles and extract products. But they come in packages of 5 or 10, meaning there are either 50 or 100 mg of THC per package. Edibles can have a maximum of 10 mg per package, while “extract” products can contain up to 1000 mg of THC per package.
“Health Canada has identified edible cannabis products erroneously being classified and marketed as cannabis extract products,” said spokesperson Tammy Jarbeau. “These non-compliant products do not meet the controls in the Cannabis Act and Cannabis Regulations which serve to mitigate against public health and public safety risks associated with edible cannabis.”
Extract products, whether they’re in gel form or liquid, are also supposed to contain no added sugar or sweeteners. The Glitches ingredient list includes oligofructose, which is listed by Health Canada as a dietary fibre, but is sometimes used as an alternative, low-calorie sweetener.Jarbeau said Health Canada typically gives companies who run afoul of regulations a chance to allow them to remedy the situation.
“Health Canada is in the process of working with implicated licence holders to return them into compliance with the Act and its regulations,” said Jarbeau.
Aurora spokesperson Michelle Lefler said the company was following the rules when it developed and launched Glitches.
“We take compliance seriously and developed our Aurora Drift Glitches in accordance with the regulations and fulfilled all requirements by Health Canada prior to market launch,” said Lefler in an email. “We respect Health Canada’s oversight and continue to have regular, open dialogue about moving forward.”
Producers wouldn’t have to do an end-run around rules if THC limits weren’t so low, argued former Ontario cabinet minister George Smitherman, the head of the industry association for legal cannabis producers. The low amount of THC allowed in legal edibles is pushing consumers into the grey market, he added.
“That limit means we concede that category to the illicit market,” said Smitherman, president and CEO of the Cannabis Council of Canada.
On a recent visit to one grey market store, shoppers could buy 10-packs of “Stellar” gummies, with each candy containing 100 mg of THC, bags of Pineapple Express gummies containing 50 mg of THC, or a small package of strawberry-flavoured cotton candy containing 150 mg of THC.
Competing with that kind of variety, colourful packaging and dosages, Smitherman said, simply isn’t a fair fight for mainstream companies.
In other recent news, a new scientific review is challenging the idea that there’s a marijuana “hangover” effect the day after use, raising questions about policies that punish drivers and people in safety-sensitive positions for cannabis consumption that occurs weeks prior to drug tests being administered.
Researchers at the University of Sydney reviewed 20 studies that looked at the effects of marijuana eight hours after use, focusing on performance assessments. Their findings are set to be published in the journal Cannabis and Cannabinoid Research.
“Most studies didn’t detect ‘next day’ effects of cannabis use, and the few that did had significant limitations,” study author Danielle McCartney said in a press release. “Overall, it appears that there is limited scientific evidence to support the assertion that cannabis use impairs ‘next day’ performance. Though, further research is still required to fully address this issue.”
“Policy makers should bear in mind that the implementation of very conservative workplace regulations can have serious consequences, such as termination of employment with a positive drug test,” the study states. “They can also impact the quality of life of individuals who are required to abstain from medicinal cannabis used to treat conditions such as insomnia or chronic pain for fear of a positive workplace or roadside drug test.”
This issue has become a focus of policymaking as the legalisation movement continues to spread. Certain sectors like the trucking industry have identified THC screening as a major contributing factor for labour shortages, for example.
The head of the American Trucking Association (ATA) recently discussed the problem with a congressional committee, arguing that lawmakers need to “step up” to address the federal and state cannabis policy conflict as the industry faces these shortages.
Lastly, Raw, the company making the most well known rolling papers has found itself in hot water after a federal court ordered HBI International, maker of Raw Organic Hemp rolling papers, to stop selling and distributing certain products after a jury found the company engaged in unfair competition and violated the Illinois Uniform Deceptive Trade Practices Act.
The permanent injunction, filed Jan. 31 in the U.S. District Court for the Northern District of Illinois, stems from a 2016 lawsuit from Republic Brands, a Glenview, Illinois-based distributor of rolling papers and premium smoking accessories.
Republic Brands claimed HBI “deceptively and unfairly marketed” its Raw Organic Hemp rolling papers and that conduct largely fell within nine topics or categories. Those include HBI marketing its papers as having been made in Alcoy, Spain, and referring to Alcoy as the “birthplace of rolling papers.” HBI affixed an Alcoy stamp to some of its products.
Evidence at trial found, however, that HBI “makes no rolling paper in Alcoy, Spain whatsoever,” a Jan. 19 opinion and order from district judge Thomas Durkin said.
Other claims HBI made regarded the existence of a Raw Foundation, that Raw organic hemp rolling papers are made in eco-friendly and 100% wind powered facilities, that HBI’s CEO and founder Joshua Kesselman invented rolling paper cones and more, court documents show.
According to the court order, by March 2, HBI must stop promoting, selling, distributing, shipping or delivering all Raw Organic Hemp products sold in packaging displaying the nine statements, including the Alcoy stamp. By May 31, it must stop selling the products under its other brands sold in packaging including an Alcoy stamp.
This follows other reporting in which blunt and joint smokers around the world may want to consider spending a bit extra to get higher-quality papers from now on. New research shows a significant amount of papers and blunt wraps are likely tainted with heavy metals and pesticides which can harm your health.
Nearly one in ten rolling papers failed California’s stringent standards for legal cannabis product purity…
Leading California lab SC Labs spent two months this summer testing 118 rolling papers, cones, wraps, and cellulose rolling papers purchased from Amazon and several smoke shops around Santa Cruz.
Nearly one in ten rolling papers (13) failed California’s stringent standards for legal cannabis product purity: including 8 of 20 types of blunt wraps SC Labs tested, and all 3 cellulose-based rolling papers tested. Almost all other rolling papers and cones passed.
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