Canopy Growth Announces Changes To Global Operations To Drive Strategic Focus

 

The Company continues to expect to incur approximately $700-800MM pre-tax charge in Q4 Fiscal 2020.

CANADA: Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX:WEED, NYSE:CGC) today announced a series of global operational changes designed to further optimize production, better align supply and demand, and improve efficiencies in its global operations. As part of its ongoing strategic review of the business, the Company announced today the following changes to its operations:

  • Africa: Canopy Growth has exited its operations in South Africa and Lesotho, transferring ownership of all of its African operations.
  • Canada: The Company will shut down its indoor facility in Yorkton, Saskatchewan, to further align production in Canada with market conditions.
  • Latin America: Canopy Growth will cease operations at its cultivation facility in Colombia, moving to an asset-light model that leverages local suppliers for raw materials and Procaps for formulation and encapsulation activities as outlined in the previously announced agreement between the two companies. These activities will support the position of Colombia as the Company’s LATAM production hub and the ongoing development of its cannabis industry.
  • United States: Canopy Growth will cease its farming operations in Springfield, New York, due to current market demand for hemp.

“When I arrived at Canopy Growth in January, I committed to conducting a strategic review in order to optimize our cost structure and reduce our cash burn,” said David Klein, CEO, Canopy Growth. “I believe the changes outlined today are an important step in our continuing efforts to focus the Company’s priorities, and will result in a healthier, stronger organization that will continue to be an innovator and leader in this industry. I want to sincerely thank the members of the teams affected by these decisions for their contributions in helping build Canopy Growth.”

The Company continues to expect, based upon information currently available to management, to record estimated pre-tax charges of approximately $700-800MM in the quarter ending March 31, 2020. This relates to this announcement and previous announcements, as well as any additional changes made during the organizational and strategic review. The organizational changes announced today include a headcount reduction of approximately 85 full-time positions.

All figures reported above with respect to the quarter ending March 31, 2020 are preliminary and are unaudited and subject to change and adjustment as the Company prepares its consolidated financial statements for the year ending March 31, 2020. Accordingly, investors are cautioned not to place undue reliance on the foregoing information. The Company does not intend to provide preliminary results in the future. The preliminary results provided in this news release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation, are based on several assumptions and are subject to a number of risks and uncertainties. Actual results may differ materially. See “Notice Regarding Forward Looking Statements”.

Tilray Announces New Subsidiary Tilray Latin America

Recently acquired subsidiary Alef Biotechnology officially renamed Tilray Latin America

CANADA:  – Tilray, a global leader in cannabis research and production, today announced that after completing an acquisition of its existing import and distribution partner Alef Biotechnology SpA, the company has officially relaunched as Tilray Latin America SpA, a wholly-owned subsidiary of Tilray.

Tilray Latin America will further strengthen Tilray’s position as a global leader in the medical cannabis market. Tilray currently has medical cannabis products available in twelve countries and operates globally through its wholly-owned subsidiaries in Australia & New Zealand, Canada, Germany, and Portugal.

Screenshot 2018-12-03 16.19.07Tilray Latin America will import, produce and distribute Tilray branded medical cannabis products in Chile and create a hub to distribute Tilray products throughout Latin America, subject to local laws.

Tilray previously announced a partnership with Alef Biotechnology in February 2017 to import and distribute Tilray products in Chile and Brazil. Alef, now Tilray Latin America, is currently licensed by the Chilean government to commercially produce medical cannabis and is planning a state-of-the-art facility to domestically produce and process medical cannabis products. Chilean law permits patients to access medical cannabis products under the supervision of a recommending physician.

Alan Nudman, as General Manager, and Ariel Nudman, as VP of Sales, will oversee the strategic growth of Tilray Latin America under the global leadership of Tilray Inc.

Tilray Strengthens Presence in Latin America With Acquisition Of Alef Biotechnology

CANADA: Tilray, Inc., a global leader in cannabis research and production, today announced that it has completed an acquisition of its existing import and distribution partner Alef Biotechnology SpA. The acquisition will allow Tilray to import, produce and distribute Tilray branded medical cannabis products in Chile and to create a hub to distribute Tilray products throughout Latin America.

Tilray purchased all the outstanding equity of Alef for approximately C$5,000,000. The purchase was comprised of approximately C$250,000 in cash paid at closing, and C$4,750,000 in Tilray Class 2 common stock, subject to a standard working capital adjustment and Alef achieving certain business milestones within a twelve-month period after closing.

Tilray to import, produce and distribute Tilray branded medical cannabis products in Chile

Tilray to import, produce and distribute Tilray branded medical cannabis products in Chile

“Today’s announcement marks another milestone for Tilray as we expand our global footprint and solidify our presence in Latin America by officially welcoming Alef to the Tilray team,” said Brendan Kennedy, President and Chief Executive Officer of Tilray. “The Chilean government has been a pioneer legitimizing and regulating medical cannabis in Latin America, and we are thrilled to be investing in one of the region’s most exciting markets for biopharmaceutical development.”

Tilray previously announced a partnership with Alef in February 2017 to import and distribute Tilray products in Chile and Brazil. Alef is currently licensed by the Chilean government to commercially produce medical cannabis and is developing a state-of-the-art facility to domestically produce and process medical cannabis products. Chilean law permits patients to access medical cannabis products under the supervision of a recommending physician.

As a part of the acquisition, Tilray will retain current Alef employees Alan Nudman as Chief Executive Officer, and Ariel Nudman, as Chief Sales Officer. Alan and Ariel will oversee the strategic growth of Alef Biotechnology under the global leadership of Tilray.

“The agreement with Tilray is an incredibly exciting moment for Alef and the entire medical cannabis community in Latin America,” says Alan Nudman, Chief Executive Officer of Alef. “In partnership with Tilray, Alef was the first company to offer medical cannabis products through pharmacies anywhere in the Americas and we are looking forward to increasing access for patients throughout Latin America through this acquisition.”

 

Uruguay Unveils Marijuana Regulation Details

URUGUAY: The Uruguayan government has unveiled long-awaited regulations for its recreational marijuana market — a move that steers the tiny nation of 3.3 million people away from the prohibitionist war on drugs, with its disastrous consequences in Latin America, and toward a drug policy based on improving public health and security. Although Uruguay’s Congress approved the measure in December — becoming the first country in the world to legalize recreational pot use — it was just this week that the government of President José Mujica announced all the details.

The regulations allow three forms of access to marijuana. Uruguayans can purchase up to 40 grams per month – with a limit of 10 grams per week – from registered pharmacies. They can also choose to cultivate up to 6 homegrown plants, with a cap on annual production at 480 grams. Finally, as members of cannabis clubs, Uruguayans will be able to cultivate up to 99 plants per group, with a production cap of 480 grams per member. But smokers must choose one form of acquiring pot, and will be denied access to the drug by the other two means. The law officially takes effect on May 6, the government announced Friday.

The “experiment,” as Mujica has labeled the law, will be closely monitored throughout the hemisphere – from Mexico to Guatemala to Argentina – as a growing list of countries increasingly mull alternatives to a militarized drug policy that has seen governments outgunned by trafficking syndicates, who rake in billions of dollars annually through illicit sales.

 

Peru Calls For Debate On The Legalization Of Marijuana

PERU:  Peru should consider legalizing marijuana, the former head of the country’s National Drug Control Commission has said. Uruguay recently became Latin America’s first nation to legalize the marijuana industry, encouraging its neighbors to follow suit.

Former director of the Peruvian National Drug Control Commission (DEVIDA) Ricardo Soberon appealed to the government to consider the legalization of marijuana in an interview.

“We must open the debate with Carmen Masias, the President of DEVIDA, and the Peruvian Medical School. Let’s open a forum that deals, first and foremost, with the health issues and secondly with safety and the implications of its [marijuana] use,” Ricard Soberon told news website Terra. He said that the legalization of the marijuana market could be a solution to the illegal drugs trade in Peru.

“The possibility of removing the criminal element from the cannabis trade – a drug that is a lot less dangerous than others – is the answer to 50 years of repeating the same strategies with no results,” said Soberon.

In December, Soberon applauded the Uruguayan decision to legalize both the sale and production of the drug, calling it “a good experience.” Later that month, Uruguayan President Jose Mujica signed into law the legislation that will bring the production and sale of marijuana under state control.

 

 

Uruguay's Neighbors Now Considering Legalization Of Pot

ARGENTINA:  Argentina has given the first sign that Uruguay’s groundbreaking cannabis reform just may have started a domino effect across Latin America.

Following the momentous vote by its smaller neighbor’s senate this month — making it the first nation in the world to completely legalize the soft drug — Argentina’s anti-drug czar Juan Carlos Molina has called for a public discussion in his country about emulating the measure.

“Argentina deserves a good debate about this,” Molina told local radio. “We have the capacity to do it. We should not underestimate ourselves.”

Crucially, Molina, a Catholic priest appointed earlier this month by President Cristina Fernandez de Kirchner as head of her government’s counternarcotics agency, said his boss also wanted a new approach.

Uruguay President Mujica Signs Marijuana Law

URUGUAY:  A spokesman for President Jose Mujica of Uruguay says the leader has quietly signed into law the government’s plan to create a regulated, legal market for marijuana.

Presidential secretary Diego Canepa told The Associated Press on Tuesday that Mujica signed the legislation Monday night. That was the last formal step for the law to take effect.

Bureaucrats now have until April 9 to write the fine print for regulating every aspect of the marijuana market, from growing to selling in a network of pharmacies.

They hope to have the whole system in place by the middle of next year. But as of Tuesday, growing pot at home is legal in Uruguay, up to six plants per family and an annual harvest of 480 grams.

In Costa Rica, Candidates Tell Pot Smokers Not To Hold Their Breath On Marijuana Legalization

COSTA RICA: It looks like there will be little momentum in Costa Rica from Uruguay’s historic legalization of marijuana last week.

Costa Rica’s two leading presidential candidates have said they do not support the full legalization of marijuana in Costa Rica. Proponents of medical marijuana, however, might glean some hope from the candidates’ responses.

Soon after Uruguay became the first country in the world to legalize marijuana, and Guatemalan President Otto Pérez Molina celebrated the move as a beacon for future drug policy in the region, The Tico Times reached out to the three top-polling candidates for their take on the debate. [Read more…]

In 'Brave Break With Failed Model,' Uruguay Passes Historic Marijuana Legalization

URUGUAY: Uruguay has chosen to “bravely break with the failed prohibitionist model” in becoming the first country to legalize and regulate the production, distribution, sale and use of marijuana in a landmark bill passed by the country’s parliament Tuesday.

The bill, which will be signed by leftist President José Mujica, was designed as an “experiment aimed at finding an alternative to the deadly and unsuccessful war on drugs,” as the Guardian reports. While other countries have legalized possession of marijuana, Uruguay’s new law is the first in the world to legalize and regulate all aspects of the trade.

Mujica said that the controversial bill is a deliberate move away from the “war on drugs,” which has only helped fill the pockets of criminals in the illegal drug trade and has failed to discourage drug use. [Read more…]

Finally, A Nation Legalizes Pot

URUGUAY: Editor’s note: Hannah Hetzer, who is based in Montevideo, Uruguay, is the policy manager of the Americas for the Drug Policy Alliance.

(CNN) — Today, Uruguay became the first nation to make recreational marijuana legal for adults and to regulate its production, distribution and sale.

In the year and a half since President Jose Mujica announced the proposal in June 2012 as part of a comprehensive package aimed at fighting crime and public insecurity, a strong coalition of LGBT, women’s rights, health, student, environmental and human rights organizations joined forces with trade unions, doctors, musicians, lawyers, athletes, writers, actors and academics under the banner of Regulacion Responsable (Responsible Regulation) to support the initiative and created a lively public campaign in favor of the proposal. [Read more…]