Canadian Cannabis News: March 2021 Edition
The year 2020 may have been difficult for many of the big players in the cannabis industry, but things do seem to be getting back on track in the first quarter of 2021.
Here’s our March edition of the latest cannabis news in Canada.
Cannabis News in Canada – Hexo Acquires Zenabis
Cannabis producer Hexo Corp announced in late February that it has agreed to buy struggling competitor Zenabis Global for $235 million in stock.
The acquisition of Vancouver-based Zenabis would give Hexo a foothold in the European medicinal market, thanks to Zenabis existing partners who have established facilities in the European Union to supply pharmaceutical products to the European market.
After reporting significant losses in recent years, both Hexo and Zenabis had sold off cultivation assets to weather the storm. The purchase of Zenabis allows Hexo to put in place a firm growth strategy toward expanding its global presence, and the acquisition means that Hexo will almost certainly become one of the top three producers in Canada’s recreational market.
Canopy Growth Files $2 Billion Shelf Prospectus
Canadian cannabis producer Canopy Growth has filed a short-form base shelf prospectus to enable them to raise $2.5 billion in the issue of securities over a 25-month period.
This is the largest shelf prospectus ever by a cannabis company, and the move serves to aid the company in replenishing its cash reserves. This move clears the way for Canopy Growth to issue common shares, subscription receipts, warrants, and units for a 25-month period up to an aggregate total offering price of US$2 billion.
Canopy claimed to have had a negative cash flow for both the fiscal year that ended on March 31, 2020, and also for the remaining nine months of the year.
Booming Recreational Sales in 2020
Sales of legal recreational cannabis in Canada totalling $2.6 billion were recorded in 2020. The data released by the national data agency Statistics Canada in late February shows a 120 percent increase over sales in 2019, which were valued at $1.2 billion.
According to the statistics, 2020 was a year of largely sequential monthly growth in the recreational sector. Although monthly sales did dip in February, April, and November, total sales across Canada throughout the year trended upward as new stores opened across the provinces.
Interestingly, four of Canada’s provinces — Ontario, Alberta, Quebec, and British Columbia — accounted for 84 percent of sales across the country.
According to Statistics Canada, the new sales records set in 2020 represent the first time that legal sales of recreational cannabis surpassed black market sales.
Ontario Increases Cannabis Store Licensing to 120 Per Month
The cannabis store regulator in Ontario has increased the pace at which it issues store licenses. After initially issuing 20 per week, that figure has now increased to 30.
Ontario currently has 430 licenced cannabis stores in operation. There are
over 940 applications still in process, and while the new licensing rules will come as a welcome development to many, the existing backlog will likely take seven months to clear.
This is the third time that regulators have increased the rate of cannabis store approvals since Sept 1st when it increased the licensing rate to roughly 40 stores per month at one point.
Stay tuned for the latest cannabis news in Canada.