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Organigram net revenues more than double to $25.2 million in first quarter – Article – BNN – BNNBloomberg.ca

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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.

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Canadian coronavirus patient who returned from Iran took Air Canada flight | News – Daily Hive

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A woman who is BC’s sixth presumptive case of COVID-19 was aboard a domestic air Canada flight on Valentine’s Day during her journey home from Iran.

Air Canada spokesperson Pascale Dery told Daily Hive that officials from the BC Centre for Disease Control informed Air Canada Saturday that a passenger on one of its February 14 flights from Montreal to Vancouver later tested positive for the novel coronavirus.

BC CDC spokesperson Caeli Murray told Daily Hive this person is the same woman that health officials announced as BC’s sixth presumptive case of the novel coronavirus on Thursday.

The woman is in her 30s and lives in the Fraser Health region, just east of Vancouver. She returned from a trip to Iran, where there has been a spike in COVID-19 cases.

“Air Canada is working with public health authorities and has taken all recommended measures,” Dery said, adding BC CDC staff are following up with other passengers aboard the plane.

With previous Canadian cases of the novel coronavirus, BC’s Provincial Health Officer Dr. Bonnie Henry has declined to say what flight patients have returned on because she doesn’t want to cause panic.

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Don Braid: Cancelled Teck Frontier means even First Nations' support can't get projects built – National Post

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For the Kenney government and almost anybody interested in oil and gas investment, it was the Sunday night slaughter — sudden news that Teck Resources has cancelled its $20-billion Frontier oilsands mine.

Federal cabinet was expected to rule on the mine this week. Teck’s sudden decision to withdraw its application has many consequences, but one is to get Ottawa off the hook for a ruling that deeply divided the Trudeau cabinet.

Premier Jason Kenney had made Teck the big test of whether the Trudeau government will allow further oilsands projects. Now the Liberals won’t even face the test.

When the word came out Sunday evening, the province still hadn’t been officially informed by the company or by Ottawa.

But soon enough, Premier Jason Kenney blasted Ottawa for creating such chaotic security risks, including the refusal to clear rail blockades, that the company felt it couldn’t go ahead at this time.

“Teck’s decision is disappointing,” he said in a news release, “but in light of the events of the past few weeks it is not surprising.

“It is what happens when governments lack the courage to defend the interests of Canadians in the face of a militant minority.

“The timing of the decision is not a coincidence. This was an economically viable project, as the company confirmed this week, for which the company was advocating earlier this week, so something clearly changed very recently.”

Earlier Sunday, Environment Minister Jason Nixon was proudly announcing crucial new agreements with Mikisew Cree First Nation and Athabasca Chipewyan First Nation.

Technically, they related to dealings between the province and the First Nations, but they had a bearing on Teck and thus made the agreement of 14 Indigenous groups complete.

“My only reaction is that I’m disappointed . . . why would I put a press release out today (announcing support for the project) to hear this kind of news?” Athabasca Chipewyan Chief Allan Adam told Postmedia on Sunday evening.


Protesters on both sides of the Frontier mine issue gather in Calgary on Wednesday, Jan. 22, 2020.

Jim Wells/Postmedia

Teck did not specifically cite the rail blockades but said “there is no constructive path forward for the project,” given that the company is now “squarely at the nexus of much broader issues that need to be resolved.”

Teck makes no mention of resubmitting the application in the future.

This seems to be the end of a project that’s been a decade in the making, passed both federal and provincial regulatory hurdles, and would have created thousands of jobs with potential investment of $20 billion.

“The factors that led to today’s decision further weaken national unity,” Kenney said.

“The Government of Alberta agreed to every request and condition raised by the federal government for approving the Frontier project, including protecting bison and caribou habitat, regulation of oilsands emissions and securing full Indigenous support.

“The Government of Alberta repeatedly asked what more we could do to smooth the approval process. We did our part, but the federal government’s inability to convey a clear or unified position let us, and Teck, down.”

The company pointed out that it had done all the required work and secured unprecedented Indigenous agreement, but still had to cancel because “global capital markets are changing rapidly, and investors and customers are increasingly looking for jurisdictions to have a framework in place that reconciles resource development and climate change, in order to produce the cleanest possible products. This does not yet exist here today.”


Members of Beaver Hills Warriors and Extinction Rebellion Edmonton protest further expansion of the oil sands, specifically the Teck Frontier Mine, inside Canada Place, in Edmonton Wednesday Jan. 22, 2020.

David Bloom

Teck expressed hope that withdrawing from the fray will allow Canada to finally settle the issues. True optimists, these people.

There’s an immediate suspicion that Ottawa somehow strong-armed Teck into this decision. But for the directors of this company, just following the daily news was probably enough.

Rail blockades continue to spring up, paralyzing vital economic links. In B.C., the Horgan government has moved the goalposts on the Coastal GasLink pipeline, sending it back to Wet’suwet’en for further consultation.

Premier John Horgan is now fully immersed in the very mess he created for the Trans Mountain pipeline expansion, whose own future is still very much in doubt.

We’ve now had Energy East cancelled because of endless hurdles thrown up by governments. Kinder Morgan abandoned Trans Mountain because it saw no way to get the project done.

Teck is just the latest abandoned project — and maybe the last, because it’s unlikely that anything of this size will even be proposed again.

There will be a mighty uproar for days and weeks to come. But one early message is this — First Nations approval, once touted as the route to approval and Indigenous prosperity, no longer means a thing.

dbraid@postmedia.com

Twitter: @DonBraid

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Millions of Chinese Firms Face Collapse If Banks Don’t Act – Yahoo Canada Finance

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Millions of Chinese Firms Face Collapse If Banks Don’t Act

(Bloomberg) — Brigita, a director at one of China’s largest car dealers, is running out of options. Her firm’s 100 outlets have been closed for about a month because of the coronavirus, cash reserves are dwindling and banks are reluctant to extend deadlines on billions of yuan in debt coming due over the next few months. There are also other creditors to think about.

“If we can’t pay back the bonds, it will be very, very bad,” said Brigita, whose company has 10,000 employees and sells mid- to high-end car brands such as BMWs. She asked that only her first name be used and that her firm not be identified because she isn’t authorized to speak to the press.

With much of China’s economy still idled as authorities try to contain an epidemic that has infected more than 75,000 people, millions of companies across the country are in a race against the clock to stay afloat.

A survey of small- and medium-sized Chinese companies conducted this month showed that a third of respondents only had enough cash to cover fixed expenses for a month, with another third running out within two months.

While China’s government has cut interest rates, ordered banks to boost lending and loosened criteria for companies to restart operations, many of the nation’s private businesses say they’ve been unable to access the funding they need to meet upcoming deadlines for debt and salary payments. Without more financial support or a sudden rebound in China’s economy, some may have to shut for good.

“If China fails to contain the virus in the first quarter, I expect a vast number of small businesses would go under,” said Lv Changshun, an analyst at Beijing Zhonghe Yingtai Management Consultant Co.

Despite accounting for 60% of the economy and 80% of jobs in China, private businesses have long struggled to tap funding to help them expand during booms and survive crises.

President Xi Jinping over the weekend pledged a greater focus on reviving the economy, with a more proactive fiscal policy, accelerated construction projects and freer reserves for commercial lenders to unleash more funding.

Support from China’s banking giants in response to the outbreak has so far been piecemeal, mostly earmarked for directly combating the virus. Industrial & Commercial Bank of China Ltd., the nation’s largest lender, has offered relief to about 5% of its small business clients.

In an emailed response to questions from Bloomberg News, ICBC said it has allocated 5.4 billion yuan ($770 million) to help companies fight the virus. “We approve qualified small businesses’ loan applications as soon as they arrive,” the bank said.

As a group, Chinese banks had offered about 794 billion yuan in loans related to the containment effort as of Feb. 20, according to the banking industry association, with foreign lenders such as Citigroup Inc. also lowering rates. To put that into perspective, China’s small businesses typically face interest payments on about 36.9 trillion yuan of loans every quarter.

Stringent requirements and shortlists restrict who can access special loans earmarked by the central bank for virus-related businesses, while local governments and banks have imposed caps on the amounts, according to people familiar with the matter. A debt banker at one of China’s largest brokerages said his firm opened a fast lane to ease debt sales by businesses involved in the containment effort, with borrowers required to prove they will use at least 10% of the proceeds to fight the disease.

That’s of little help to a car dealership. Brigita, whose firm owes money to dozens of banks, said she has so far only reached an agreement with a handful to extend payment deadlines by two months. For now, the company is still paying salaries.

Many of China’s businesses were already grasping for lifelines before the virus hit, pummeled by a trade war and lending crackdown that sent economic growth to a three-decade low last year.

At most risk are the labor-intensive catering and restaurant industries, travel agencies, airlines, hotels and shopping malls, according to Lianhe Rating.

Yang, a property manager of a seven-story mall in Shanghai, says a tenant who runs a 150-room hotel that’s usually busy has called asking for a month’s rent waiver after business dried up. She expects the massage parlor that rents space in the mall is also struggling and is open to extending some help.

A deputy financing director at a small developer in central Anhui province said his firm is even being denied loans under existing credit lines. A drop in sales has hurt the company’s credit profile and a dearth of new projects means there’s no collateral to put up. Without access to credit, the business can survive for about four months, or maybe longer if some payments can be delayed, he said.

Banks are hardly any better off themselves. Many are under-capitalized and on the ropes after two years of record debt defaults. Rating firm S&P Global has estimated that a prolonged emergency could cause the banking system’s bad loan ratio to more than triple to about 6.3%, amounting to an increase of 5.6 trillion yuan.

Wu Hai, owner of Mei KTV, a chain of 100 Karaoke bars across China, took to the nation’s premier outlet of discontent, social media platform WeChat, to voice his despair.

KTV’s bars have been closed by the government because of the virus, choking off its cash flow. The special loans from the authorities will be of little help and no bank will provide a loan without enough collateral and cash flow, he said on his official WeChat account earlier this month.

Wu couldn’t be reached for a direct comment, but on WeChat he gave himself two months before he has to shutter his business.

(Adds details on economic measures in eighth paragraph, updates lending in 10th.)

–With assistance from Jun Luo, Emma Dong and Yinan Zhao.

To contact Bloomberg News staff for this story: Evelyn Yu in Shanghai at yyu263@bloomberg.net;Ken Wang in Beijing at ywang1690@bloomberg.net;Zheng Li in Shanghai at zli698@bloomberg.net;Xize Kang in Beijing at xkang7@bloomberg.net

To contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Jonas Bergman, Michael Patterson

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