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Canopy reissues MD&A after accounting error

Canopy Growth Corp. had to reissue the Management Discussion and Analysis that accompanied its quarterly earnings report last week, after an accounting error that understated the company’s nine-month “Adjusted EBITDA” loss. (EBITDA means earnings before interest, taxes, depreciation, and amortization). The original MD&A had listed an Adjusted EBITDA loss of $69-million for the nine months leading up to Dec. 31. The actual nine-month loss was $155-million. The mistake resulted from “a formula error in the spreadsheet supporting the year to date Adjusted EBITDA loss calculation,” the company said. There were no other mistakes, the company said, and its original three-month Adjusted EBITDA calculations leading up to Dec. 31 were correct.

EBITDA is typically a key number to watch when assessing a company’s performance. However, cannabis companies use non-standardized accounting methods, drawn from the agriculture industry, which make it difficult to determine the actual Cost of Goods Sold and to compare earnings from company to company. Canopy defines Adjusted EBITDA as “the Income (loss) from operations, as reported, before interest, tax, and adjusted for removing the share-based compensation expense, depreciation, and the fair value effects of accounting for biological assets and inventories, and further adjusted to remove acquisition related costs.”

Mark Rendell

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Aurora announces senior appointments

Aurora Cannabis Inc. said yesterday that Darren Karasiuk has been promoted to chief commercial offier, and Jill Swainson will become chief legal officer and corporate secretary. Mr. Karasiuk was formerly executive vice-president of adult usage, global, while Ms. Swainson was previously senior vice-president of legal affairs. “These appointments reflect the commitment we’ve made to continuously strengthen our leadership team as we scale up our organization while recognizing the tremendous achievements of Jill and Darren since joining our company,” said Terry Booth, CEO of Aurora.

Aleafia named top performer on TSX Venture 50

Aleafia Health Inc. has been named the top-performing company on the TMX Group’s 2019 TSX Venture 50. The TSX 2019 Venture 50 winners were selected from the 2,000 companies listed on the TSX Venture Exchange and were judged on three equally weighted market performance criteria: market capitalization growth; share price appreciation; and trading volume, for the year ended Dec. 31, 2018. The TSX Venture 50 is an annual showcase of top performing companies from five industry sectors: clean technology and life sciences, diversified industries, energy, mining, and technology.

This and that ...

  • Lift & Co. Corp. said yesterday it is establishing a foothold in Europe by selecting Berlin as location of a newly announced Lift & Co. Cannabis Business Conference Europe (“LCBC Europe”). The event will take place September 5-6, 2019, at the Berlin Congress Centre.
  • Alberta-based High Tide Inc. said yesterday that it has been licensed to open its ninth Canna Cabana retail store, which is located at #105, 330 10th Street NW in Calgary. The store has been converted from a Smoker’s Corner location and is now the first franchised Canna Cabana outlet in the High Tide network, the company said. 
  • Delta 9 Cannabis Inc., which has one retail store in Winnipeg, said yesterday it is currently building three more retail outlets, in Winnipeg, Thompson and Brandon, Manitoba, and has partnered with a Manitoba First Nation to open a fifth store. Additionally, the company says it has prequalified for the Manitoba government’s request for proposals to build additional stores in smaller, rural communities.
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