Nov 16, 2018
Cannabis Canada Daily: Are pot firms getting bang for their marketing bucks?
Cannabis marketing spending overshadows revenues in last quarter
After several of Canada’s major cannabis producers reported quarterly results this past week, one metric stood out for the pack. BNN Bloomberg’s David George-Cosh reports that sales and marketing costs soared for all five major publicly-traded pot producers in the last quarter, collectively tripling the amount of money spent informing Canadians about recreational marijuana ahead of legalization. The top five spent a cumulative $74 million on marketing in the last quarter, compared to about $23 million last year. But the million dollar question remains: Did it work?
Black market still thriving a month after legal pot
One of the Canadian government’s goals in legalizing cannabis was to stamp out the black market. But one month after recreational pot was legalized in the country, the illicit market is not only surviving, but it’s thriving as well, according to The Canadian Press’s Armina Ligaya. Product shortages, delivery delays and other problems plaguing the roll-out have not helped, according to one analyst who closely watches the space.
Cannabis producers eye franchise model for Ontario retail rollout
As cannabis producers digest new regulations governing the rollout of privately-owned pot stores in Ontario, some producers are exploring a franchise model or moving to a more independent role to avoid running afoul of the rules. Bloomberg’s Kristine Owram reports that cannabis producers are looking to find ways to abide by Ontario’s rules that a corporation isn’t eligible for a retail license in Canada’s most populous province if it’s more than 9.9 per cent owned or controlled by one or more pot companies. That’s forcing some companies like Canopy Growth and Alcanna to come up with some creative ways to open up pot stores while abiding by the rules.
U.S. pot producers raise more money than Canadian peers on CSE
Here’s another clue that the U.S. pot companies may be close to overshadowing their peers north of the border: U.S. cannabis companies raised more money on the Canadian Securities Exchange during the first 10 months of this year than their Canadian counterparts for the first time. The Canadian Press analyzed statistics provided by the pot-friendly CSE market to conclude that U.S.-based pot companies raised roughly $1.5-billion between January and October this year, usurping the $1-billion raised by Canadian-based cannabis issuers during that period.
Acreage, Harvest go public on Canadian markets
Another day, another cannabis company trading on public markets. New York-based Acreage Holdings and Arizona-based Harvest Health went public in Canada on Thursday sporting billion-dollar valuations on the aforementioned CSE, The Globe and Mail reported. Both companies listed on the exchange through a reverse takeover but are emblematic of the rising trend of U.S. pot companies turning to Canadian markets for fresh sources of capital.
DAILY BUZZ
$1 billion
– The amount that Canopy Growth Corp. CEO Bruce Linton believes the company will spend on future acquisitions.
Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new – and controversial – Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.