Cannabis Professional’s daily roundup of industry news. View archive here.
Alcanna swung to a net loss in its second quarter while privately-held Tantalus Labs made money. Ontario, meanwhile, is ready to issue its first eight cannabis retail store licences for First Nations and Canopy Growth is getting into the long-term care cannabis “education” business.
– Jameson Berkow
Canopy signs “education” agreement with senior’s home pharmaceutical distributor
Canopy Growth Corp. has doubled down on medical cannabis for seniors, signing a five-year “education” agreement with Medical Pharmacies Group Ltd., a pharmaceutical distribution service for long-term care homes.
The partnership will see Spectrum Therapeutics, Canopy’s medical arm, become “the preferred medical cannabis education partner to Medical Pharmacies and the seniors it serves in over 500 residences and care facilities,” Canopy announced Thursday.
Because LPs are not allowed to advertise medical cannabis directly, education is a key marketing tool to create brand awareness among patients and physicians. The financial arrangement between Medical Pharmacies and Canopy was not disclosed.
Spectrum is already working with the Ontario Long Term Care Association on a pilot study measuring ”how medical cannabis use can potentially displace other, less-desirable therapeutics for both pain and cognitive function for residents in a select group of homes.”
Canopy isn’t the only LP looking to tap the senior’s market. WeedMD Inc. has supply contracts with several long-term care providers, including peopleCare Communities, Arbour Heights, and Kensington Health Centre.
As WeedMD explained in its most recent MD&A: “Seniors carry a large pharmaceutical burden and a sizeable portion of the population is living in, or seeking, assisted living facilities. WeedMD forecasts that patients in this segment can generate upwards of three times the lifetime value (LTV) of a typical patient under the Cannabis Act, generated by higher, more consistent consumption and a more operationally efficient patient acquisition and distribution model.”
In December, Tilray Inc. launched an “observational study” study in several medical clinics looking at the effects of medical cannabis on pain, sleep and quality of life among seniors.
The agreement between Canopy and Medical Pharmacies also includes Toronto-based Apollo Cannabis Clinics, which will provide “comprehensive medical support to all pharmacists, nursing staff and medical directors.”
– Mark Rendell
“Profitability first and then scale” private Tantalus Labs reports Q2 profit
Tantalus Labs, a small licensed cannabis producer in British Columbia, said it made a profit in the second quarter due to strong production and sales as more retail stores open across the country.
The statement came as most Canadian licensed producers (LPs) have, so far, reported improved revenue but net losses as they build facilities and ramp up capacities within the country’s youngest industry.
Tantalus’s net revenue in the three-month period ended June 30 reached $2.65 million, up 360 per cent from the first quarter of 2019. Its net income for the second quarter was $2.45 million, the company stated.
Unlike publicly traded companies, privately held Tantalus Labs is not legally required to report its financial status and it is rare for a private company to do so.
“We don’t have any material plans to sell the company or go IPO at this time,” said Dan Sutton, chief executive of Tantalus Labs.
The LP does, however, continue to explore strategic partnerships and has received buyout proposals. The topics of private financing and initial public offerings have come up “more often,” but the company does not have any “definitive plans” at the moment, Mr. Sutton said.
“We can keep our options open as we continue to grow and scale this company,” he said.
“We’re taking the approach of profitability first and then scale.”
- Marcy Nicholson
Ontario announces winners of eight First Nations cannabis retail licences
Ontario announced late Thursday who will be allowed to apply for the first eight provincially-authorized cannabis retail licences to be located on First Nations territory.
Dozens of locally-sanctioned cannabis stores have already been operating on First Nations land across Ontario, some for several years. In July, the province allocated the opportunity to apply for eight licences - with no more than one allowed per reserve - on a first-come-first-serve basis.
Representatives from the following communities have been invited to apply for one of the eight licences: Shawanaga, Wikwemikong, Chapleau Cree, Wahgoshig, Couchiching, Nipissing, Mississauga and Serpent River.
No official data exists on the total number of cannabis stores already operating on First Nations land within the province. However, some estimates say the number is well over 100.
In Tyendinaga alone, a single territory north of Kingston, more than 50 cannabis stores have been establish. More than a dozen cannabis stores dot what has since been dubbed the “green mile” in Alderville, a First Nations community near Peterborough that, despite its substantial marijuana economy, covers just a single square mile.
One store in Fort William First Nation, near Thunder Bay, even filed a lawsuit against the local governing council in an attempt to legitimize the business.
Cannabis-infused foods, drinks and vape pens are also widely already available at the dozens existing stores on First Nations territory in Ontario. The eight stores formally authorized by the province, however, will not be allowed to carry those products until late 2019 at the earliest.
- Jameson Berkow
Alcanna swings to loss in Q2
Alcohol and cannabis retailer Alcanna lost money in the second quarter of its 2019 fiscal year, the company disclosed early Friday, as costs associated with opening new pot stores rose.
The Edmonton-based company reported a Q2F19 net loss of nearly $6-million or $0.15 per share, compared to a profit of nearly $2-million or $0.05 per share during the same time last year.
In a statement, Alcanna attributed the loss to “increased operating expenses related to the new Cannabis division, an increased number of liquor stores, an increase in labour costs in the Liquor division as a result of increases in minimum wage in Alberta and British Columbia in 2018, and investments in the shared services team to support the growing and transitioning company.”
The company opened four Nova Cannabis retail stores during the quarter, bringing the total in Alberta to eight. Alcanna said Friday it is hoping to have between 15 and 20 additional cannabis retail stores ready to open in Alberta before the end of this year, subject to regulatory approval.
In addition to its Alberta presence, Alcanna also operates a Nova Cannabis location in downtown Toronto as part of an agreement with an Ontario retail lottery winner Heather Conlon.
“Sales started strongly and have continued to grow steadily from there - now averaging $450,000 per week, which makes Nova Queen Street the highest volume store of all our two hundred sixty-one (261) locations at this time,” the company said.
CEO James Burns and other members of the senior management team will provide further details and take questions on a conference call set for noon ET. Anyone interested can dial (416) 340-2216 or toll-free (800) 273-9672 to participate.
- Jameson Berkow