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CULTIVATED: Why investors love Flowhub, cannabis industry layoffs, and more – Business Insider – Business Insider

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Welcome to Cultivated, our weekly newsletter where we’re bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom.

Sign up here to get it in your inbox every week.

If you want a discount to BI Prime to read our stories, sign up here!

Happy Valentine’s Day Cultivated readers,

We’ve been very aware that V-Day was around the corner for a while now because of all the themed press releases that have been sent our way. From pre-rolls in the shape of actual flowers to cannabis-based massage oil, there seems to be a lot out there for all the romantics.

Anyhow, let’s get down to it.

We’ve updated our list of ongoing layoffs in the cannabis industry again this week with the addition of Supreme Cannabis, which cut around 15% of its workforce on Tuesday. And with Aurora’s 500 cuts last week, our tally for cannabis layoffs stands at around 2,000.

Read about all the layoffs here.

Canopy Growth and Aurora Cannabis also reported earnings this week. Aurora’s earnings, analysts say, were no surprise after the guidance they released last week.

Both Canopy Growth and its venture capital division Canopy Rivers posted quarterly earnings this morning, which we covered in our article here.

Canopy Growth surprised investors with a 49% jump in net revenue to C$123.8 million in the last three months of 2019. Canopy’s stock soared about 12% in trading and other companies, like Tilray and Aurora, rode the wave as well.

Jeremy’s off skiing in Utah this weekend, so Yeji is on point for earnings coverage. More to come!

-Jeremy and Yeji

Here’s what we wrote about this week:

The buzziest startup in cannabis doesn’t even sell marijuana.

Flowhub, a cannabis-tech company that helps retailers track inventory and process sales, topped Business Insider’s recent list of the hottest startups in the industry. Founded in 2015, Flowhub has raised $27 million from investors and now works with more than 900 dispensaries in the US.

The US cannabis industry is projected to reach $85 billion by 2030, up from $51 billion now, and Flowhub – which already operates across 12 states – is set to benefit as more states legalize cannabis.

Legal cannabis is strenuously tracked, according to Flowhub founder and CEO Kyle Sherman. He said he likes to tell lawmakers on Capitol Hill that the US tracks legal cannabis better than it does uranium.

The once red-hot cannabis industry is coming back down to earth.

In the past few months, cannabis companies – including venture-backed startups like Pax and giants like MedMen – have announced a series of job cuts, amounting to over 2,000 workers in the sector as a whole.

Supreme Cannabis, a Canadian cannabis grower, on Tuesday said it was eliminating 15% of its workforce, including one-third of corporate positions, in an effort to cut costs.

We’re continuing to keep track of layoffs in the industry here. Please get in touch if you have a tip.

Canopy Growth’s latest earnings may just be signaling the end of the long downturn in the cannabis industry.

In its financial results on Friday, the company reported an unexpected 49% jump in net revenue to C$123.8 million in the last three months of 2019. The company also reported a narrower loss than analysts expected, according to estimates collected by Bloomberg News. That sent the stock soaring about 12% in trading on Friday.

The results come as a sign of good news for the industry. Other cannabis firms that have faced a difficult few months also saw their stocks rise.

Capital raises, M&A activity, partnerships, and launches

  • European medical cannabis cultivator Sanity Group closed a $22 million Series A funding round led by Calyx and HV Holtzbrinck Ventures. Other investors include Scooter Braun’s TQ Ventures.
  • Acreage Holdings secured a $100 million credit facility from undisclosed investors, a $50 million private loan partially from CEO Kevin Murphy, and a $30 million private placement.
  • KushCo, a publicly-traded maker of cannabis accessories, raised $16 million through a direct offering.
  • Disruption Labs, the parent company to CBD company Reset Biosciences closed a $3.8 million seed round led by Andrew Garnock/AJR Consulting, a family office that has previously invested in the medical cannabis space.

Executive moves

  • Flowhub hired Craig Gomulka as CFO and Scott Schell as CTO. You can read more about Flowhub in Yeji’s story here.
  • Former Molson Coors marketing executive Greg Butler has joined Cresco Labs as the company’s chief commercial officer.
  • Aaron Keefer, the culinary gardener for the renowned restaurant The French Laundry, has joined Sonoma Hills Farm as VP of Cultivation.

Chart of the week

The legal cannabis industry supports 243,700 full-time jobs in the US. Nearly 40,000 of those are in California, accounting for about 16% of all legal cannabis jobs in the country.

Check out the data from Leafly’s jobs report here:

Foto: sourceRuobing Su/Business Insider

What we’re reading

Instead of releasing this greenhouse gas, beer brewers are selling it to pot growers (Washington Post)

Governors Across U.S. Step Up Push To Legalize Marijuana In Their States (Forbes)

Q&A: The Food Giants Push For „Smart Regulation“ of CBD (Cannabis Wire)

Nepal lawmakers seek to legalize growing, using marijuana (Associated Press)

Did we miss anything? Have a tip? Just want to chat? Send us a note at [email protected] or find Business Insider’s cannabis team on twitter: @jfberke & @jesse_yeji. You can also reach Jeremy on encrypted messaging app Signal on at (646) 376 6002.

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Cineplex reports $24.7M Q3 loss on Competition Tribunal penalty

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TORONTO – Cineplex Inc. reported a loss in its latest quarter compared with a profit a year ago as it was hit by a fine for deceptive marketing practices imposed by the Competition Tribunal.

The movie theatre company says it lost $24.7 million or 39 cents per diluted share for the quarter ended Sept. 30 compared with a profit of $29.7 million or 40 cents per diluted share a year earlier.

The results in the most recent quarter included a $39.2-million provision related to the Competition Tribunal decision, which Cineplex is appealing.

The Competition Bureau accused the company of misleading theatregoers by not immediately presenting them with the full price of a movie ticket when they purchased seats online, a view the company has rejected.

Revenue for the quarter totalled $395.6 million, down from $414.5 million in the same quarter last year, while theatre attendance totalled 13.3 million for the quarter compared with nearly 15.7 million a year earlier.

Box office revenue per patron in the quarter climbed to $13.19 compared with $12 in the same quarter last year, while concession revenue per patron amounted to $9.85, up from $8.44 a year ago.

This report by The Canadian Press was first published Nov. 6, 2024.

Companies in this story: (TSX:CGX)

The Canadian Press. All rights reserved.

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Restaurant Brands reports US$357M Q3 net income, down from US$364M a year ago

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TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.

The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.

Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.

Consolidated comparable sales were up 0.3 per cent.

On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.

The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 5, 2024.

Companies in this story: (TSX:QSR)

The Canadian Press. All rights reserved.

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Electric and gas utility Fortis reports $420M Q3 profit, up from $394M a year ago

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ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.

The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.

Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.

Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.

On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.

The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 5, 2024.

Companies in this story: (TSX:FTS)

The Canadian Press. All rights reserved.

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