Altria to Make Growth Investment in Cronos Group

Altria to Invest USD $1.8 Billion (CAD $2.4 Billion) for 45% Ownership Interest in Leading Global Cannabinoid Company with Warrant to Increase Ownership to 55% Over Next 4 Years

VIRGINIA: Altria Group, Inc. announced that it has entered into an agreement to acquire newly issued shares in Cronos Group Inc., a leading global cannabinoid company, headquartered in Toronto, Canada. The transaction represents a 45% equity stake in Cronos Group, at a price of CAD $16.25 per share, for an aggregate investment by Altria of approximately USD $1.8 billion.1

As part of the agreement, at closing, Altria will have the right to nominate four directors, including one independent director, to serve on Cronos Group’s Board of Directors, which will be expanded from five to seven directors. The agreement includes a warrant to acquire an additional ownership interest in Cronos Group at a price of CAD $19.00 per share exercisable over four years from the closing date. If exercised in full, the warrant would increase Altria’s ownership in Cronos Group by 10% to approximately 55%.

“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” said Howard Willard, Altria’s Chairman and Chief Executive Officer. “We believe that Cronos Group’s excellent management team has built capabilities necessary to compete globally, and we look forward to helping Cronos Group realize its significant growth potential.”

“Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth,” said Mike Gorenstein, Cronos Group’s Chairman, President and Chief Executive Officer. “The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers. Importantly, Altria shares our vision of driving long-term value through innovation, and we look forward to continuing to differentiate Cronos Group in this area.”

This investment positions Altria to participate in the emerging global cannabis sector, which it believes is poised for rapid growth over the next decade. It also creates a new growth opportunity in an adjacent category that is complementary to Altria’s core tobacco businesses.

Altria expects its investment to help Cronos Group accelerate its growth strategies and its R&D and intellectual property development. Additionally, Altria will provide expertise to help Cronos Group thrive in the growing global cannabis market. These services may include regulatory affairs, regulatory science, compliance, government affairs and brand management.

About Cronos Group

Cronos Group is a globally diversified and vertically integrated cannabis company with a presence across five continents. Cronos Group operates two wholly-owned Canadian licensed producers: Peace Naturals Project Inc., which received the first non-incumbent medical cannabis license granted by Health Canada, and Original BC Ltd., which is based in the Okanagan Valley, British Columbia. Cronos Group operates a portfolio of brands which includes Peace Naturals, a global medicinal brand and two Canadian adult-use recreational brands, COVEand Spinach. Cronos Group has multiple international production and distribution platforms across five continents.

Cronos Group is establishing infrastructure to create an efficient global production footprint and a diversified global sales and distribution network. Cronos Group is focused on creating and monetizing disruptive intellectual property and growing a portfolio of iconic brands that resonate with consumers. Cronos Group is committed to building an industry-leading business that transforms the perception of cannabis and responsibly elevates the consumer experience.

Cronos Group has no U.S. operations, and cannabis remains illegal at the federal level. Through Cronos Group, Altria is better positioned should cannabis become federally permitted.

Transaction Structure

Under the terms of the agreement, at closing Altria will pay CAD $16.25 per share of Cronos Group stock issued in the transaction, or a 41.5% premium to the 10-day volume weighted average price of CAD $11.48 on the TSX as of November 30, the last unaffected trading day prior to when Cronos Group announced it was in preliminary discussions with Altria regarding a possible investment in Cronos Group. The transaction will result in an aggregate investment by Altria at closing equal to approximately USD $1.8 billion in cash (approximately CAD $2.4 billion).1Altria will receive shares representing a 45% interest in Cronos Group.

The agreement also includes a warrant to acquire additional ownership interest in Cronos Group at a price of CAD $19.00 per share exercisable over the next four years. If exercised in full, the warrant would increase Altria’s ownership in Cronos Group by 10% to 55%. The aggregate exercise price for the warrant is equal to approximately USD $1.0 billion (approximately CAD $1.4 billion),1 subject to customary adjustments.

The transaction is subject to customary closing conditions, including Cronos Group shareholder approval and receipt of regulatory approvals, which will be pursued promptly. The transaction is expected to close in the first half of 2019. At closing, Cronos Group will remain a Canadian publicly-traded company headquartered in Toronto, Canada and continue to be led by its existing management team.

A copy of the agreement containing the terms of the transaction will be filed with the Securities and Exchange Commission (SEC) and Canadian regulatory authorities.

Financing & Advisors

Altria has received committed financing totaling approximately CAD $2.4 billion from JPMorgan Chase Bank, N.A. Altria may consider seeking permanent financing in the future.

Perella Weinberg Partners LP is the financial advisor to Altria. Wachtell, Lipton, Rosen & Katz and Goodmans LLP are providing legal counsel to Altria for the deal. Hunton Andrews Kurth LLP is providing legal counsel to Altria regarding the financing.

Lazard Ltd. is the financial advisor to Cronos Group. Sullivan & Cromwell LLP and Blake, Cassels & Graydon, LLP are providing legal counsel to Cronos Group for the deal.

WeedMD Makes Changes To Leadership, Names George Scorsis Interim CEO

CANADA:  WeedMD, a medical cannabis licensed company operating in Strathroy, Ontario, has a new leader at its helm.

WeedMD announced that George Scorsis will take over as the organization’s Interim CEO. Since 2019, Scorsis has served as WeedMD’s Executive Chairman.  Currently, the company owns and operates a 158-acre state-of-the-art greenhouse and processing facility.

“As we continue on the path of executing our new product strategy and building an expanded distribution network, we are initiating a leadership transition that will position us strongly for this next phase. Additionally, the organization will focus on optimizing all aspects of the business,” Scorsis commented.

During his time at WeedMD, Scorsis has served in a variety of roles and has led initiatives and managed relationships with members and key stakeholders. He has over 25 years of business experience and was instrumental in restructuring Red Bull Canada, growing the company to $150 MM in revenue and also acted as President of Mettrum, a licenced producer.

In addition to this news, most recently, WeedMD announced the expansion of its Cannabis 2.0 product portfolio, with the introduction of terpene-infused vapes to be sold under its Saturday Cannabis branded line-up.  The flavored strains, which come in lemon haze and sour pineapple, are available to consumers through the Ontario Cannabis Store.

The launch of flavored vapes is another way the company is executing on its commercial growth plans.

“We are kicking off 2021 with a focused approach on increasing market share and commercial growth of our Color Cannabis and Saturday brands, while expanding our medical footprint through our Starseed portfolio. This includes an aggressive plan to transition WeedMD into a consumer-facing model of excellence. Ultimately becoming hyper-focused on driving meaningful results, while optimizing the organization for future success to deliver shareholder value,” George Scorsis commented.

The Saturday-branded vapes are produced at WeedMD’s extraction hub in Aylmer, Ontario and  join its line of Color Cannabis.

The debut comes after WeedMD began selling Black Sugar Rose to the Ontario Cannabis Store for adult-use earlier in December. WeedMD is the first cultivar to carry a terpene profile listing.  Black Sugar Rose is an indica-dominant hybrid whose whole flower product is currently available with a terpene profile of 3.6 per cent and THC level of 20 per cent.

Scorsis: “With Black Sugar Rose, we wanted to respond to the call for new cultivars, flower integrity, greater product diversity while responding to consumers’ request for less packaging.  Selling the product is just another way WeedMD is enhancing its appeal and accommodating an ever-evolving, national consumer base.”

Curtis Wallace, Head of Cultivation at WeedMD, added, “Cultivating and releasing Black Sugar Rose in Ontario is a proud achievement and pays homage to WeedMD’s cultivation pedigree and tradition for excellence.”

Terpenes are natural organic compounds that exist in all plants found in nature, including cannabis. They play a key role in aroma and flavour of individual cultivars and can be consumed in combination with cannabinoids.

WeedMD also made the decision to display total terpenes on its packaging at a time when cannabis users, and those who are new to cannabis, are looking for more information.

In an interview, Curtis Wallace said: “We now share full visibility on total terpenes, just like cannabinoids. Consumers and patients that are purchasing Color and Starseed flowers will value this new data point. From our perspective, a flower’s total terpene percentage is another number that matters, and knowledge is power.”

As WeedMD progresses into its next stages, George Scorsis will continue to work closely with the team to enhance customer experience, broaden distribution and work to increase sales on a national level.

 

Health Canada Releases New Data On Cannabis Use In Canada

CANADA:  Health Canada published the results of its 2020 Canadian Cannabis Survey. Results of the survey provide a snapshot of Canadians’ knowledge, attitudes and behaviours towards cannabis and its use. Data were collected from April 30 to June 22, 2020.

The survey results will help to evaluate the impact of the Cannabis Act and inform policy and program development, and public education and awareness activities. This important research complements data collected through Health Canada’s national drug surveillance surveys—the Canadian Tobacco, Alcohol and Drugs Survey and the Canadian Student Tobacco, Alcohol and Drugs Survey.

Key findings show that:

  • More than half of those who use cannabis, report using it three days a month or less. 54% reported using cannabis three days per month or less, while 18% reported daily cannabis use. Responses were unchanged from 2019.
  • More than half of those who use cannabis choose to obtain it through a legal source. 41% reported legal storefront as their usual source, an increase from 24% in 2019, whereas 13% reported obtaining cannabis from a legal online source.
  • The COVID-19 pandemic has had some impacts on cannabis use. People who used cannabis in the past 12 months were asked if their cannabis use had changed due the pandemic—56% reported using the same amount, while 22% reported using more and 22% reported using less.
  • Smoking remains the most common method of consuming cannabis, but it has declined while eating cannabis products has increased since 2019.
  • Almost 8 in 10 Canadians feel they have access to trustworthy information to make informed decisions about their cannabis use. An increase from 71% in 2019 to 77% in 2020. Information about the health risks associated with cannabis use is widely available and reaching Canadians.
  • Driving after cannabis use has decreased among those who reported past 12-month cannabis use, as compared to 2019 results. 22% of those who use cannabis drove within two hours of smoking or vapourizing cannabis in their lifetime and 13% reported driving within four hours of orally ingesting cannabis in their lifetime.
  • The federal government will continue to conduct research and share the results with Canadians, public health officials, provinces and territories, and other stakeholders.

Aphria And Tilray Combine To Create Largest Global Cannabis Company With Pro Forma Revenue Of C$874 Million (US$685 Million)

Complementary, Scalable Medical and Adult-Use Cannabis Businesses Strengthen Leadership Position in Canada; Expands U.S. and International Reach through World-Class Cultivation, Manufacturing, Diversified Product Portfolio and Distribution Footprint

CANADA: Aphria Inc., a leading global cannabis company inspiring and empowering the worldwide community to live their very best life, and Tilray, Inc. , a global pioneer in cannabis research, cultivation, production and distribution, today announced that they have entered into a definitive agreement to combine their businesses and create the world’s largest global cannabis company based on pro forma revenue1. The deal is pursuant to a plan of arrangement under the Business Corporations Act (Ontario), and the implied pro forma equity value of the Combined Company is approximately C$5.0 billion (US$3.9 billion), based on the share price of Aphria and Tilray at the close of market on December 15, 2020. Following the completion of the Arrangement, the Combined Company will have principal offices in the United States (New York and Seattle), Canada (Toronto, Leamington and Vancouver Island), Portugal and Germany, and it will operate under the Tilray corporate name with shares trading on NASDAQ under ticker symbol “TLRY”.

The Combined Company, supported by low-cost, state-of-the-art cultivation, processing, and manufacturing facilities, will have a complete portfolio of branded Cannabis 2.0 products in Canada. Internationally, the Combined Company will be well-positioned to pursue growth opportunities with Aphria’s medical cannabis and distribution footprint in Germany, and Tilray’s European Union Good Manufacturing Practices low-cost cannabis production facility in Portugal, which has export capabilities and tariff-free access to the European Union to meet increasing global demand for medical cannabis. In the United States, the Combined Company will have a strong consumer packaged goods presence and infrastructure with two strategic pillars, including SweetWater Brewing Company, a cannabis lifestyle branded craft brewer, and Manitoba Harvest, a leading hemp food manufacturer and a pioneer in branded CBD and wellness products. The Combined Company is expected to have a strong, flexible balance sheet, cash balance and access to capital giving it the ability to accelerate growth and deliver attractive returns for stockholders.

Under the terms of the Arrangement, the shareholders of Aphria will receive 0.8381 shares of Tilray for each Aphria common share, while holders of Tilray shares will continue to hold their Tilray shares with no adjustment to their holdings. Upon the completion of the Arrangement, Aphria Shareholders will own approximately 62 percent of the outstanding Tilray Shares on a fully diluted basis, resulting in a reverse acquisition of Tilray, representing a premium of 23 percent based on the share price at market close on December 15, 2020 to Tilray shareholders. On a pro forma basis for the last twelve months reported by each company, the Combined Company would have had revenue of C$874 million (US$685 million).

Proven Leadership Team

The Combined Company will be led by a best-in-class management team and board of directors, with strong track records in consumer-packaged goods and cannabis experience internationally. Upon completion of the Arrangement, Aphria’s current Chairman and Chief Executive Officer, Irwin D. Simon, will lead the Combined Company as Chairman and Chief Executive Officer. The board of directors will consist of nine members, seven of which, including Mr. Simon, are current Aphria directors and two of which will be from Tilray, including Brendan Kennedy, and one of which is to be designated. Aphria and Tilray are confident that the leadership team and proposed board of directors of the Combined Company provides a strong foundation for the Combined Company to accelerate growth. Additional senior leadership positions at the Combined Company will be named at a later date.

“This is an exciting day for both companies including our 2,500 employees, for the cannabis industry, and for patients and consumers around the world. We are bringing together two world-class companies that share a culture of innovation, brand development and cultivation to enhance our Canadian, U.S., and international scale as we pursue opportunities for accelerated growth with the strength and flexibility of our balance sheet and access to capital,” said Mr. Simon. “Our highly complementary businesses create a combined company with a leading branded product portfolio, including the most comprehensive Cannabis 2.0 product offerings for patients and consumers, along with significant synergies across our operations in Canada, Europe and the United States. Our business combination with Tilray aligns with our strategic focus and emphasis on our highest return priorities as we strive to generate value for all stakeholders.”

“I am honored to work with Brendan Kennedy, a pioneer in the cannabis industry, and the Tilray team as they join forces with our talented employees at Aphria,” continued Mr. Simon. “I look forward to leading the talented teams of both Aphria and Tilray as we seek to create a leading global cannabis and consumer packaged goods company with a portfolio of medical, wellness and adult-use brands consumers love.”

Mr. Kennedy, Tilray’s Chief Executive Officer, commented, “We are thrilled to bring together two cannabis industry leaders. At this nascent stage of development and expansion of the global cannabis market, we believe companies with leading geographic scale, product range and brand expertise are most likely to benefit long-term. By leveraging our combined strengths and capabilities, we expect to be able to meet the needs of consumers more effectively all over the world and advance patient care. With a strong financial profile, low-cost production, leading brands, distribution network and unique partnerships, we believe the Combined Company will be well-positioned to deliver sustainable, attractive returns for stockholders. I look forward to working with Irwin and the Combined Company’s management team to make our consumer products more accessible around the world.”

Strategic and Financial Benefits

The Combined Company will be the largest global cannabis company based on pro forma revenue for the last twelve months reported by each company with scale and breadth across major geographies and a complete portfolio of market leading brands in the major Cannabis 2.0 product categories. Aphria and Tilray each believe the business combination pursuant to the Arrangement will provide the following financial and strategic benefits, among others:

Financial Strength and Flexibility: The Combined Company will enjoy an attractive financial profile with pro forma revenue of C$874 million (US$685 million) for the last twelve months reported by each company, the highest in the global cannabis industry. In Canada, the combination of Aphria and Tilray will create the leading adult-use cannabis company with gross revenue of C$296 million (US$232 million) in the adult-use market for the twelve months reported by each company. Aphria has generated positive adjusted EBITDA over the last six quarters2, which in combination with the synergies to be realized, provides a robust platform for future profitability and cash flow generation for the Combined Company. This, collectively with the strength of the Combined Company’s balance sheet and access to capital, is expected to help accelerate global growth and value for the Combined Company’s stakeholders.

Creates the Leading Canadian Adult-Use Cannabis Licensed Producer: Together, Aphria and Tilray will be the leading adult-use cannabis Canadian Licensed Producer based on revenue for the last twelve months by combining their respective brands, distribution networks and world-class facilities. In Canada’s C$3.1 billion adult-use, retail market3, the Combined Company will have one of the lowest cost production operations with its state-of-the-art facilities. In addition, the Combined Company will have a portfolio of carefully curated brands across all consumer segments that are sold through its distribution partners. On a pro forma basis, for the period August to October 2020, the Combined Company would have held a 17.3% retail market share4, the largest share held by any single Licensed Producer in Canada and 700 basis points higher than the next closest competitor.

Increases Product Breadth and Commitment to Innovation: Leveraging both Aphria and Tilray’s commitment and culture of innovation and brand building, the Combined Company will serve clients with a complete portfolio of Cannabis 2.0 products and sales and service infrastructure supported by leading distribution partners. Aphria and Tilray’s complementary brands will be available across economy, value, core, premium and premium plus product offerings. In addition, the Combined Company will have a complete breadth of products in every major cannabis category, including flower, pre-roll, oils, capsules, vapes, edibles and beverages.

Establishes an Unrivaled European Platform: The Combined Company will be well-positioned to pursue growth opportunities with its end-to-end EU-GMP supply chain and distribution, which includes Aphria’s German medical cannabis distribution footprint and Tilray’s 2.7 million square foot European EU-GMP low-cost cannabis cultivation and production facility in Portugal. In Germany, Aphria’s wholly-owned subsidiary, CC Pharma GmbH, will provide the Combined Company with distribution capabilities for the Aphria and Tilray medical cannabis brands to more than 13,000 pharmacies. In Portugal, Tilray’s EU-GMP cultivation and production facility will provide the Combined Company with the capacity to cultivate and produce medical cannabis products in order to meet international demand and has export capabilities, which provides tariff-free access to the EU.

Enhances Consumer Packaged Goods Presence and Infrastructure in the U.S.: In the United States, the Combined Company will have a strong consumer packaged goods presence and infrastructure with two strategic pillars, including SweetWater, a cannabis lifestyle branded craft brewer, and Manitoba Harvest, a pioneer in branded hemp, CBD and wellness products with access to 17,000 stores in North America. The Combined Company is expected to leverage SweetWater’s craft beer manufacturing and distribution network to build brand awareness for the Combined Company’s leading brands via craft beers, hard seltzers, and other beverages as it seeks to take advantage of opportunities for both the adult-use and health and wellbeing beverage trends. The Combined Company also expects to pursue the opportunity to expand with new or existing CBD or other cannabinoid brands leveraging Manitoba Harvest’s strong hemp and wellness product platform. When U.S. regulations allow, the Combined Company expects to be well-positioned to compete in the U.S. cannabis market given its existing strong brands and distribution system in addition to its track record of growth in consumer-packaged goods and cannabis.

Positions Combined Company to Continue to Grow in the Beverage Segment: The Combined Company believes it will be well-positioned to pursue an accelerated rate of growth in the Canadian and the U.S. beverage industries by leveraging SweetWater’s innovation, knowledge, and expertise to introduce adult-use cannabis brands via craft beers and other beverages. This includes leveraging Aphria and Tilray’s proven distribution networks in Canada to sell SweetWater’s 420 cannabis lifestyle brand in Canada.

Substantial Synergies: The combination of Aphria and Tilray is expected to deliver approximately C$100 million of annual pre-tax cost synergies within 24 months of the completion of the transaction. The Combined Company expects to achieve cost synergies in the key areas of cultivation and production, cannabis and product purchasing, sales and marketing and corporate expenses. This is expected to include the opportunity for Aphria’s Leamington, Ontario operations to provide additional volume for Tilray’s brands and to replace the need for Tilray to use wholesale cannabis purchases from other licensed producers. Tilray’s London, Ontario facility will also provide Aphria with excess capacity to increase production of additional form factors including their branded edibles and beverages. The Combined Company is considering utilizing Tilray’s existing Nanaimo, British Columbia facility for Aphria’s premium Broken Coast brand to increasingly meet consumer demand for its products. The Combined Company plans to capitalize on opportunities for growth through a broadened product offering and additional form factors, with the aim of increasing adult-use cannabis brand availability across certain Canadian provinces to an expanded customer base with the Combined Company’s scalable infrastructure. Internationally, the Combined Company will have the opportunity to reach additional pharmacies and patients via distribution relationships. The combination is expected to unlock significant shareholder value.

Agreement Details

Under the terms of the Agreement, the Arrangement will be carried out by way of a court approved plan of arrangement under the Business Corporations Act (Ontario) and will require the approval of at least two-thirds of the votes cast by the Aphria Shareholders at a special meeting. Approval of a majority of the votes cast by Tilray stockholders will be required to, among other things contemplated by the Agreement, authorize the issuance of Tilray shares to Aphria shareholders pursuant to the Arrangement. Following completion of the Arrangement, Aphria will become a wholly-owned subsidiary of Tilray, with Aphria shareholders owning approximately 62 percent of Tilray.

Completion of the Arrangement is subject to regulatory and court approvals and other customary closing conditions. Regulatory approvals expected to be required include Competition Bureau (Canada), U.S. HSR and Germany FDI. The Agreement includes certain reciprocal customary provisions, including covenants in respect of the non-solicitation of alternative transactions, a right to match superior proposals and C$65 million (US$50 million) reciprocal termination fee payable under certain circumstances. The Arrangement is expected to close in the second quarter of calendar year 2021 following the receipt of such regulatory approvals, as well as court approval of the Arrangement.

Each of Aphria’s and Tilray’s respective directors and officers and certain principal Tilray Stockholders have entered into voting support agreements agreeing to vote their Aphria Shares or Tilray Shares, as applicable, in favor of the resolutions put before them pursuant to the Agreement.

For further information on the terms and conditions of the Arrangement, please refer to the Agreement in its entirety, which will be available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Full details of the Arrangement will be included in a management information circular of Aphria and in a proxy statement of Tilray to be delivered to Aphria Shareholders and the Tilray Stockholders, respectively, in the coming weeks.

Board of Directors’ Approval

Each of Aphria’s and Tilray’s respective board of directors has unanimously approved the Agreement and the Arrangement. Jefferies LLC provided a fairness opinion to the Board of Directors of Aphria on December 15, 2020, stating that, as of the date of such opinion and based upon the scope of review and subject to the assumptions, limitations and qualifications stated in such opinion, the Exchange Ratio is fair, from a financial point of view, to the Aphria Shareholders. Cowen provided a fairness opinion dated December 15, 2020 to the board of directors of Tilray stating that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the Exchange Ratio is fair, from a financial point of view, to Tilray.

Advisors

Jefferies LLC is serving as financial advisor and DLA Piper LLP (US), DLA Piper (Canada) LLP and Fasken Martineau Dumoulin LLP are acting as legal counsel to Aphria. Cowen is serving as financial advisor and Cooley LLP and Blake, Cassels and Graydon LLP are acting as legal counsel to Tilray.

Conference Call & Webcast Presentation

Aphria and Tilray executives will host a conference call and webcast with a supplemental presentation to discuss the strategic business combination today, December 16, 2020 at 8:30 a.m. Eastern Time.

To listen to the live call, dial (647) 427-7450 from Canada and the U.S. or (888) 231-8191 from international locations and use the passcode 4334816. A telephone replay will be available approximately two hours after the call concludes through January 13, 2021. To access the recording dial (855) 859-2056 and use the passcode 4334816.

There will also be a simultaneous, live webcast and supplemental presentation available on the Investors section of Aphria’s and Tilray’s website at aphriainc.com and Tilray.com. The webcast will be archived for 30 days.

We Have A Good Thing Growing

Canopy Growth Announces Changes To Canadian Operations

CANADA:  Canopy Growth Corporation announced a series of Canadian operational changes designed to streamline its operations and further improve margins.

Canopy Growth will cease operations at the following sites: St. John’s, Newfoundland and Labrador; Fredericton, New Brunswick; Edmonton, Alberta; Bowmanville, Ontario; as well as its outdoor cannabis grow operations in Saskatchewan. Approximately 220 employees have been impacted as a result of these closures.

“As part of the end-to-end review of our operations that we outlined during our second-quarter earnings call, we have made the decision to close a number of our production facilities. These actions will be an important step towards achieving our targeted $150-$200MM of cost savings and accelerating our path to profitability. We are confident that our remaining sites will be able to produce the quantity and quality of cannabis required to meet current and future demand,” said David Klein, CEO, Canopy Growth. “This was a difficult decision but I believe it is the right one. I want to thank all of the employees impacted by this decision for their efforts in helping build Canopy Growth.”

These decisions are the partial outcome of an ongoing end-to-end review designed to improve the Company’s margins. The end-to-end review was announced during the Company’s Q2 earnings call and looks at people, process, technology, and infrastructure. The Company expects to record estimated total pre-tax charges of approximately $350-400MM in the third and fourth quarters of Fiscal 2021.

The production sites impacted represent approximately 17% of the Company’s enclosed Canadian footprint and 100% of its Canadian outdoor production footprint.

All figures reported above with respect to the third and fourth quarters of Fiscal 2021 are preliminary and are unaudited and subject to change and adjustment as the Company prepares its quarterly and annual financial statements.

 

The People’s Alliance Of Cannabis In Canada Brings Support, Services & Standards To The Growing Industry

CANADA: “We are concerned with setting standards for the cannabis industry in Canada that will not only demonstrate our united strength, but also give countries across the world something to emulate as they pursue federal legalization as well,” said Anne-Marie Fischer, M.Ed., the President of the newly launched People’s Alliance of Cannabis in Canada (PACC).

The People’s Alliance of Cannabis in Canada, known as PACC, launched today on the second anniversary of cannabis legalization in Canada. PACC represents the interests of professionals and consumers within the growing cannabis space across the nation. They provide support through crucial programming, develop professional standards for the industry to emulate, encourage the unification of all cannabis markets, and create a standard for education across cannabis in our country.

PACC operates and advocates for legislative change so that we create a cannabis industry where cannabis is always safely accessed, and provided by cultivators and producers who meet a set of defined professional standards.

“We came together in spring of this year because we were all frustrated about some of the things that were happening in the cannabis industry,” says Fischer, Founder and CEO of CannaWrite, “We saw that people were losing their jobs, that harassment and discrimination was a big problem, and that there were certain divides between markets that were preventing a united front for the progression of the plant.”

The People’s Alliance of Cannabis in Canada has 6 focus areas that are led by one of the founding members, and supported by an Advisory Team of cannabis professionals, advocates, and consumers that have been carefully chosen to represent their part of cannabis. These focus areas are:

Medical Cannabis

Recreational/Retail

Black, Indigenous, and People of Colour (BIPOC) in Cannabis

Hemp and Agriculture

Legacy Market

Cannabis Advocacy

Each Focus Area will work to develop professional standards, educational resources, and a path towards advocacy in their area of passion.

In addition to the Focus Areas, PACC will have several service areas that aim to provide support, benefits, and methods of recourse for disputes:

Group Medical Benefits

Legal Support

Alternative Dispute Resolution (ADR)

Human Resources Standards/Best Practices

Harassment & Discrimination Reporting & Support

“The Founding Members of PACC all have professional backgrounds, and experiences, that we would like to see brought into this industry,” says Fischer, “By putting our skills, background, and knowledge of business, human resources, group benefits, and legal standards together, we hope that the people of cannabis feel they have somewhere to go, where they feel taken care of in all aspects of their lives”. The People’s Alliance of Cannabis in Canada will unveil its membership program, that gives professionals in cannabis access to the above services, in mid-2021.

At present, PACC is working on establishing its Advisory Team and Working Groups, at which time the organization will move forward with establishing bylaws, terms and conditions, and objectives of PACC for the remainder of this year, and the year ahead.

Joining Fischer within the Founding Board is Vice President Kelly Addison, of Kelly’s Green Lounge, Michelle Parrotta of Mimi Cannabis, Khadisha Thornhill of Afro Cannada Bud Sistas, and Stacy Bobak of Cannadent.ca. “It’s been a passionate project for us all,” says Fischer, “We’ve been working every week together to move this forward. We genuinely hope this organization is a success that is supported by many.”

To learn more about The People’s Alliance of Cannabis in Canada, visit www.peoplescannabis.ca, or follow the organization on Instagram at @peoplescannabiscanada or Facebook at www.facebook.com/peoplescannacanada

How To Pick A Cannabis Consultant Or Lawyer For Your AGCO Retail Dispensary In The Greater Toronto Area Or Ontario

CANADA:  The regulation of cannabis in Canada has come a long way to where it is today. Since the federal legalization took place, it has proven to be an area that is performing relatively well. However, it’s still a sector that’s highly regulated; in essence, a prospective business owner has to go through stringent processes before being granted a license to operate.

To increase your chances of being granted a license, it’s always recommended that a person seeks legal and consultancy assistance. There are several cannabis consultants in the Greater Toronto and Ontario. Choosing one can be the difference between success and failure.

The purpose of a cannabis consultant is to provide their clients with vital information especially in the areas that they are lacking in knowledge. Besides the horticultural aspect of consultancy, a good adviser should also educate potential business owners about the facility design.

The following is a detailed guide that’ll help you with finding the right cannabis lawyer or consultant:

Things to Consider When Choosing a Cannabis Consultant or Lawyer

Given the popularity of the cannabis industry, it’s quite unfortunate to learn that multiple unscrupulous firms have cropped up claiming to be cannabis consultants. To make matters worse, many naive business owners have fallen prey to them. Here’s how you can avoid such pitfalls and pick the right adviser.

Probing the Advisers

When you’ll be looking for the right adviser, it’s very important to thoroughly vet the person. If you notice that a prospective consultant is quite reserved or hesitant in giving you answers, that may be an indication that he or she isn’t worth hiring. Consultants are vastly knowledgeable and are very quick to offer advice. Some of the questions you shouldn’t fail to ask include the number of years they’ve been in the field, relevant credentials and certification, their current and past clients, and the amount of time he or she will dedicate to you.\

Watch out for the red flags

As you search for the most qualified adviser who’d help you, it’s also good to be on the lookout to avoid anything that can potentially ruin your chances of getting a license. Some examples of red flags you should watch out for include; being asked for equity, a consultant who’s reluctant to track time, not being treated as a partner, and avoiding to answer your questions adequately.

Identify your Needs

Before you seek consultancy services, you should first and foremost understand the specific needs of your business venture. This will help you in determining the particular type of consulting you require as well as providing you with a clear picture of the amount you’ll be willing to pay for that service. Due to the complexity of this industry, this area tends to be a field that has many consulting firms. Thus, you should only go for a person who specializes in a particular niche.

On many occasions, business owners find themselves requiring more than one consultancy service. Even though it may appear costly, the person seeking the services will end up gaining a lot in the long run.

Understanding the Consultancy Process

When it comes to cannabis consultancy, different business owners usually have varying needs. The consultancy process tends to follow three fundamental stages.

Problem definition

This stage usually seeks to identify the particular need of the client and how he or she can work along with the consultant to facilitate a successful outcome.

Business Licensing

Apart from facing other startup challenges, acquiring a cannabis license is usually a difficult hurdle on its own. This step involves acquiring the right license for the client’s business.

Compliance 

For your business to remain operational, it should always comply with the set guidelines in the industry. The Consultant’s work at this stage would be to ensure that your business remains compliant and attains profitability

Conclusion

Getting the help of a cannabis adviser or lawyer is a crucial step before anyone begins operating a cannabis retail dispensary. For any consultancy services to work perfectly, there has to be a positive relationship between both parties. Honesty and timely communication can help in cementing a solid relationship. If you’re searching for the appropriate adviser in Greater Toronto or Ontario, be sure the following the guidelines provided above.

Speakeasy Cannabis Club Releases Short Film On Canadian Farming Legacy

CANADA: SpeakEasy Cannabis Club has released a powerful new short film documenting the storied history of the Geen family, the generational farmers who founded the Okanagan based cannabis company. From cherries, apples, ginseng to peaches, and now cannabis, SpeakEasy Founder, Marc Geen, and his family are pioneers of agriculture with more than a century of farming experience in the region.

Directed and shot by documentary filmmaker, Simon Schneider (from CBC’s The Nature of Things), the six minute short film highlights over one hundred years of hard-earned farming principles passed down through five generations of the Geen family. From the humble beginnings of Marc’s great grandfather, Charles Howard Geen, who came to Kelowna, B.C. in 1903 and started growing fruit trees, to the purchase of 2200 acres of land in Rock Creek, B.C.’s fertile “Golden Mile”, in 1995, where the family has successfully farmed for four generations, to Merv Geen’s critical participation in SunRype’s success as a former Chairman-of-the-board, and to founding SpeakEasy in 2013, the film illustrates the foundation in which a true agricultural legacy is built and what has set SpeakEasy apart from other licensed cannabis producers.

As the film shows, it’s not only hard work and agricultural experience that have laid the foundation for SpeakEasy to cultivate what is set to be the best product on the market. It’s also the farmer’s keen sense of selecting the perfect site and land to grow on.

“The Golden Mile is one of the most fertile areas in Canada as it’s a perfect climate with tons of sunshine, lots of heat, cool at the right times, not too extreme and very little rain. The land is beautiful for growing cannabis.” says Marc Geen, Founder of SpeakEasy. Licensed producers made a massive assumption that simply getting on the shelf would lead to success. Cherries are one of the hardest crops to harvest, cannabis is no different. Agriculture at this level is an art and these consumers are no different than wine connoisseurs, you simply can’t cut corners.”

After a long journey to build the necessary infrastructure and getting the licensing approval through Health Canada, the Geen name is about to put its stamp on a new crop. SpeakEasy will make history cultivating one of the largest outdoor cannabis harvests in Canada this September. SpeakEasy expects to harvest 70,000 kg of sun-grown cannabis at a projected $0.04 a gram this fall, with the same methods and climate Canada is world-renowned for.

The SpeakEasy Family Legacy short film is available to stream now through YouTube:
https://youtu.be/jjoCGYM5024

Aphria Announces Strategic Supply Agreement With Canndoc

Aphria now positioned within two of the largest cannabis markets outside of Canada
Agreement with Israeli leader Canndoc provides access to Israel’s largest drugstore chain
Finished product will be co-branded under Aphria and Canndoc brands

CANADA: Aphria Inc., a leading global cannabis company, today announced it has entered into a Strategic Supply Agreement with Canndoc Ltd., a subsidiary of InterCure Ltd., one of Israel’s largest and most established medical cannabis producers.

Under the terms of the Agreement, Aphria will supply Canndoc with dried bulk flower over a two-year period, with the option to extend for two additional terms of two years each, and an option for an additional year after that if the parties agree to terms.  During the first two-year term and each additional term, if applicable, the Company will provide Canndoc with 3,000 kgs. of bulk dried flower, which will be processed into finished product, co-branded under the Aphria and Canndoc brand names, and sold exclusively within the Israeli market.

“We are excited about our strategic partnership with Canndoc, a well-established Israeli leader, and the opportunity to continue to expand our medical cannabis brand internationally,” said Irwin D. Simon, Chairman and Chief Executive Officer, Aphria Inc. “Today’s announcement is about more than a supply agreement. It’s about the strength and quality of our medical brand, Aphria, being continuously validated by the world’s medical cannabis markets, including countries in which we have no distribution today. The Agreement represents a significant step for Aphria, and we look forward to bringing our high-quality medical cannabis products to patients in Israel.”

“We are proud to partner with Aphria, a global leader who shares with us the same quality values and commitments of meeting patients’ needs and improving their quality of life. This is another vote of confidence in Canndoc’s leadership and the Israeli market,” said Ehud Barak, former Israeli Prime Minister and Chairman of the Canndoc Board of Directors.

The strategic partnership will also include the possibility of Aphria and Canndoc collaborating on research initiatives such as clinical trials focused on the use of medical cannabis with leading hospitals and research institutions in Israel and exploring potential collaboration in the EU market.

Now strategically positioned in two of the largest cannabis markets outside of Canada, Germany, one of the most highly sought-after developed medical cannabis markets in the world, and Israel, one of the largest importers of medical cannabis in the world, the Company will continue to leverage its market leadership as it develops its medical cannabis markets internationally.

Canndoc has been pioneering Pharma-Grade cannabis for more than 13 years and has established itself as a well-respected company in the global cannabis industry. In March 2020, Canndoc entered a strategic partnership with Super-Pharm, Israel’s largest drugstore chain, allowing for Canndoc’s products to be distributed across 95 medical cannabis authorized pharmacies and sold to Israel’s growing medical cannabis patient community.

CANADA: Cannalogue Introduces COVID-19 Compassionate Care Program For Medical Cannabis

Physician-led online marketplace offers discount of 20-50% on select products for frontline workers, seniors and financially strained

CANADA: In response to the closure of storefront retailers due to COVID-19, online marketplace Cannalogue announced today a new Compassionate Care Program that seeks to provide better access to medical cannabis for all Canadians. 

Qualified candidates including first responders, seniors, nurses, teachers, and those facing financial strain due to work shortage/layoffs can enroll in the program to receive selected products at a discount of 20-50%.  The doctor-recommended, Health Canada approved products include oils, capsules, and dried flowers from as low as $3.50/gram.  As the most inclusive program in Canada, Cannalogue’s Compassionate Care Program is also available to veterans, individuals currently enrolled in a disability, federal or provincial assistance program and Indigenous peoples.

“COVID-19 has had a devastating effect on all Canadians” says President and CEO, Dr. Mohan Cooray. “As a result, we’ve seen an upsurge in cannabis use among patients managing symptoms such as pain, anxiety, difficulty sleeping, and stress – especially from symptoms related to COVID-19 isolation.  Cannabis is a natural plant medicine that can be used safely to manage mental health issues without the dependency effects we see from alcohol, opioids or narcotics.  During this unprecedented time and without access to storefront retailers, we want to help Canadians receive the products they need,” he says.

Additionally, with limited access to doctors or pharmacists during self-isolation, Cannalogue’s medical staff can assess and provide dosage recommendations over the phone.  “Cannalogue is an essential national medical service that Health Canada has confirmed will be fully available to patients during the pandemic. No matter how long we face the challenges of COVID-19, Cannalogue will be here to help,” says Dr. Cooray.