Wall Street’s exuberance over legal weed has quickly curdled into sober reality.
In a matter of months, white-hot cannabis companies have flamed out in spectacular fashion. Many have lost two-thirds or more of their value.
Widespread legalization has been thwarted. Bank financing has dried up. Deep-pocketed institutional investors remain on the sidelines and old-fashioned black-market dealers still provide stiff competition.
The pain deepened on Thursday, when Ontario-based Canopy Growth Corp. announced revenue that fell short of the lowest Wall Street estimate and a loss that one analyst called “astounding.” That sent shares to the lowest since December 2017. It’s still the largest pot company in the world, but at C$7.1 billion its market value is just a sliver of the C$24 billion it reached in April.
One day later, MedMen Enterprises Inc., one of the first U.S. cannabis companies to sell shares to the public, said it would dismiss 190 employees, including about 20% of its corporate workforce, as it struggles to preserve a dwindling cash pile.
“The last industry chapter was defined by growth at all costs,” MedMen Chief Executive Officer Adam Bierman said in an interview. “Now we’re transitioning out of that chapter, and that transition is harsh and quick.” [Read More @ Bloomberg]
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Notify me of follow-up comments by email.
Notify me of new posts by email.
Entrepreneurs need to keep an eye on start-up costs to ensure that the money they’ve raised stretches as far as possible. But focusing solely on price can blind entrepreneurs to potential losses in the future by pursuing the cheapest option. Keep the following three tips in mind as you balance price, quality, and return on…
During a Q&A session, at the II Federal Congress of Law,Alberto Fernandez, President of Argentina, referred to the legalization of marijuana for recreational purposes. According to Infobae, a student from the Faculty of Legal Sciences of the National University of Patagonia asked the president what his views were on recreational cannabis and whether it was…
As people begin to filter back into the office after a year-and-a-half in Zoom exile, the growing ranks of recreational cannabis users might want to take a peek at their employee handbook before lighting up. Marijuana, which went from a controlled substance to a booming industry in Illinois during the pandemic, may still get you…
When Philip Morris International (PMI) CEO Jacek Olczak told The Mail on Sunday that the UK government should treat cigarettes like petrol cars and ban them in 10 years, many wondered why the world’s biggest tobacco company would self-sabotage itself with such a draconian statement. However, a few days later, the British American Tobacco (BAT) executive Kingsley…