Organigram Holdings Inc. is anticipating that consumers seeking non-smokable cannabis will help to further boost its revenues that more than doubled to $25.2 million in the first quarter.
The company based in Moncton, N.B., says revenues were up from $12.4 million a year earlier.
Chief executive Greg Engel foresees tremendous opportunities ahead as demand for vapes, chocolates and powdered products accelerates in the coming months.
“The feedback we’re hearing from the retailers is that the consumer that’s coming in today, many of them are consumers who have not come into retail stores because they don’t want to look for a dried flower product in the past,” he said in an interview.
That should translate into new revenues as between 40 to 45 per cent of sales should come from these Rec 2.0 products, according to results in U.S. states.
The first vape pens were shipped as planned in December while premium cannabis-infused chocolates are to begin sales later in the quarter.
Sales of powdered products, to be added to a consumer’s beverage of choice, are expected in the second quarter.
Engel declined to provide specific dates for the launch of these products but said one large unnamed province has already tripled its order for cannabis-infused chocolates.
“There’s a tremendous amount of opportunities with 2.0 products. It’s going to expand the market dramatically.”
Revenues during the first quarter included $16.7 million of sales to the adult-use recreational market and about $9.5 million to medical markets, partly offset by a $1.1 million provision for product returns and price adjustments.
The provision related to two slow-selling products sold to the Ontario Cannabis Store – a lower THC dried flower and THC oils.
Organigram’s net loss was $863,000 or less than a cent per share, compared with a loss of $29.5 million or 19.5 cents per share in the prior year. That large loss was largely due to non-cash fair value changes to biological assets and inventories.
The cannabis producer was expected to lose $3.9 million or three cents per share on $19.6 million in revenues, according to financial markets data firm Refinitiv.
Engel said he’s pleased with the solid quarterly results and positive adjusted EBITDA, but wouldn’t say when it will become profitable.
“We’re at the point where it’s a marginal loss but it is in part because the market really has not grown and we expect that to shift.”
Organigram said last November that its net revenue in the quarter would be higher than the $16.3 million in the fourth quarter due to increased sales to provinces and higher wholesale revenue.
The company said the Canadian cannabis market is poised for growth with more retail store openings planned in Ontario and Quebec, two provinces that together account for more than 60 per cent of the country’s population.
In particular, Ontario is moving to open more retail stores with approvals to be issued in April at an initial rate of about 20 per month.
Quebec also plans to double the number of stores and Alberta’s network of 375 stores will continue to grow to meet consumer demand.
Legalization of edible and derivative products is also expected to significantly expand the legal market although Newfoundland & Labrador, Quebec and Alberta have announced delays or restrictions on the launch of vaporizable products.
That increased demand should allow the company to move fairly quickly to “reinvigorate” its expansion plans, Engel added.
Afterpay delays vote on $29 billion buyout as Square awaits Spain’s nod
Afterpay Ltd will delay a shareholder meet to approve Square Inc’s $29-billion buyout of the Australian buy now, pay later leader, as the Jack Dorsey-led payment company awaits regulatory nod in Spain.
The investor meet was set for Dec. 6, but Afterpay said it would likely take place next year as Square, which has rebranded itself to Block Inc, is likely to get an approval from the Bank of Spain only in mid-January.
The delay is unlikely to impact the completion of Australia‘s biggest deal, which is set for the first quarter of 2022, Afterpay said.
“We continue to believe the risks of the transaction closing are minimal,” RBC Capital Markets analyst Chami Ratnapala said in a brief client note.
Meanwhile, Twitter Inc co-founder Dorsey is expected to focus on Square after stepping down as chief executive of the social media platform as it looks to expand beyond its payment business and into new technologies like blockchain.
Afterpay shares fell more than 6%, far underperforming the broader Australian market, tracking Square’s 6.6% drop overnight in U.S. market on worries over the Omicron variant.
(Reporting by Nikhil Kurian, Sameer Manekar and Indranil Sarkar in Bengaluru; Editing by Anil D’Silva, Rashmi Aich and Arun Koyyur)
Canada Goose under fresh fire in China over no-return policies
China’s top consumer protection organisation has warned Canada Goose Holdings Inc against “bullying” customers in China with its return policies, just three months after the winterwear brand was fined for false advertising.
The premium down jacket manufacturer has been a hot topic on Chinese social media in recent days over its handling of a case involving a customer who wanted a refund of her purchases amounting to 11,400 yuan ($1,790.17) after finding quality issues.
She said she was told by Canada Goose that all products sold at its retail stores in mainland China were strictly non-refundable, according to her account which went viral online.
State-backed media such as the Global Times newspaper later cited Canada Goose as denying that it had a no-refund policy and that all products sold at its retail stores in mainland China were refundable in line with Chinese laws. The company did not respond to Reuters’ request for comment.
That has not failed to quell criticism of the brand.
“No brand has any privileges in front of consumers,” the government-backed China Consumer Association (CCA) said in an opinion piece posted on its website on Thursday morning.
“If you don’t do what you say, regard yourself as a big brand, behave arrogantly and in a superior way, adopt discriminatory policies, be condescending and bully customers, you will for sure lose the trust of consumers and be abandoned by the market,” the CCA said.
Representatives of the brand were summoned for talks on Wednesday by the Shanghai Consumer Council to explain its refund policy in China.
The dressing down of Canada Goose comes as tension between China and Western countries has fuelled patriotism and driven some shoppers to turn to home-grown labels.
Canada Goose was also fined 450,000 yuan in September in China for “misleading” consumers in its ads.
($1 = 6.3681 Chinese yuan renminbi)
(Reporting by Sophie Yu, Brenda Goh; Editing by Kim Coghill)
Apple tells suppliers demand for iPhone 13 lineup has weakened – Bloomberg News
Apple Inc has told its component suppliers that demand for the iPhone 13 lineup has slowed, Bloomberg News reported on Wednesday, citing people familiar with the matter, signaling that some consumers have decided against trying to get the hard-to-find item.
(Reporting by Maria Ponnezhath in Bengaluru; Editing by Arun Koyyur)
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