Read on Twitter
Harvested area of greenhouse crops in Canada (square metres)
1. Tomatoes 6.6 million (2018)
2. Peppers 5.6 million ('18)
3. Cucumbers 4.6 million ('18)
4. #Cannabis* 1.4 million (Nov '19)
5. Lettuce 200,000 ('18)
*Licensed site where cultivation occurred, includes indoor
1. Tomatoes 6.6 million (2018)
2. Peppers 5.6 million ('18)
3. Cucumbers 4.6 million ('18)
4. #Cannabis* 1.4 million (Nov '19)
5. Lettuce 200,000 ('18)
*Licensed site where cultivation occurred, includes indoor
Growth slowing in cannabis greenhouse canopy, rising for outdoor. Cannabis will not catch cucumbers, even after Canada eventually reaches full retail rollout.
Story from July 2018: Licensed marijuana cultivation in Canada exceeds 10 million square feet https://mjbizdaily.com/licensed-cannabis-cultivation-canada-exceeds-10-million-square-feet/
Story from July 2018: Licensed marijuana cultivation in Canada exceeds 10 million square feet https://mjbizdaily.com/licensed-cannabis-cultivation-canada-exceeds-10-million-square-feet/
Completed and licensed cannabis greenhouse sitting empty, for various reasons, is becoming normal. Example: https://mjbizdaily.com/cannabis-producer-hexos-loss-surges-cultivation-suspended-in-niagara/
Standard LPs probably have months, not years, to get cultivation issues straightened out at their hundred-million-$-plus greenhouses before facing serous competition from outdoor + micros/craft. Will we see some standard LPs shift some production away from greenhouse to outdoor?
Did #cannabis executives know they were bankrolling too many greenhouses? Surely they did.
Our story *from 2017/2018*: Canada's largest marijuana producers have bankrolled more than enough capacity to meet rec demand https://mjbizdaily.com/canadian-marijuana-producers-bankrolled-enough-capacity-meet-demand/
Our story *from 2017/2018*: Canada's largest marijuana producers have bankrolled more than enough capacity to meet rec demand https://mjbizdaily.com/canadian-marijuana-producers-bankrolled-enough-capacity-meet-demand/
The inevitable outcome for some producers: https://mjbizdaily.com/cannabis-greenhouse-retreat-continues-with-canopy-closing-two-facilities/
Another million-square-foot #cannabis cultivation facility bites the dust — this one by $TGOD.
In this case, the first three of four planned construction phases were "largely completed" — at considerable expense to the company and shareholders. https://mjbizdaily.com/green-organic-dutchman-shelves-large-quebec-facility-lays-off-staff/
In this case, the first three of four planned construction phases were "largely completed" — at considerable expense to the company and shareholders. https://mjbizdaily.com/green-organic-dutchman-shelves-large-quebec-facility-lays-off-staff/
This should also be in this thread — from last November: #AuroraCannabis ceased construction at its large second-phase facility in #Denmark and shelved most of the final construction at its Aurora Sun facility in #Alberta https://mjbizdaily.com/aurora-cannabis-loss-balloons-to-ca39-7-million-ceases-construction-on-denmark-expansion/
Remember, even if Canada converted 100% of the underground market to the regulated market on day 1 of legalization (which obviously was impossible and not expected) there was never enough demand to justify financing and building these cultivation facilities.
Latest: Canopy Growth exits cannabis cultivation on three continents in major international pullback.
Most of these assets were never needed & were acquired at the height of a cannabis stock craze in 2017/18 that rewarded M&A in lieu of DD. https://mjbizdaily.com/canopy-growth-exits-cannabis-cultivation-on-3-continents-in-major-international-pullback/
Most of these assets were never needed & were acquired at the height of a cannabis stock craze in 2017/18 that rewarded M&A in lieu of DD. https://mjbizdaily.com/canopy-growth-exits-cannabis-cultivation-on-3-continents-in-major-international-pullback/
After the dust has settled & the winners/losers are clear, most cannabis facilities financed, built & licensed in 2017/18 will not be used for cannabis.
Remember the moaning about how slowly Health Canada was licensing these behemoths back then?
Remember the moaning about how slowly Health Canada was licensing these behemoths back then?
Time to update this thread, which is dedicated to the insane amount of money poured into cannabis greenhouses by large companies the months before and after Canada legalized cannabis, the vast majority of which were never needed.
Tweeting hiatus to recommence after this update.
Tweeting hiatus to recommence after this update.
From May: Tilray closing High Park Gardens cannabis greenhouse — acquired as part of Natura Naturals deal for $70 million.
One of the industry's worst deals ever. https://mjbizdaily.com/tilray-closing-high-park-gardens-cannabis-greenhouse/
One of the industry's worst deals ever. https://mjbizdaily.com/tilray-closing-high-park-gardens-cannabis-greenhouse/
Also May: Aurora Cannabis selling Ontario greenhouse for one-third of the original purchase price. This 1-million sq ft beast (and adjacent property) was acquired in the MedReleaf deal. https://mjbizdaily.com/aurora-cannabis-sells-massive-ontario-greenhouse-for-half-of-asking-price/
April: After raking up collective net losses exceeding $6 billion in 2019, some CEOs found themselves on the outside looking in — though they departed as very wealthy men or retained a seat on the board https://mjbizdaily.com/missed-earnings-misdirection-put-canadian-cannabis-executives-in-hot-seat/
Here's the latest on cannabis facility closures in Canada. A real tragedy for all those soon to be out of work.
By colleague @sol_israel: Aurora Cannabis to close 5 facilities, lay off 700 staff https://mjbizdaily.com/aurora-cannabis-to-close-five-facilities-lay-off-700-staff/
By colleague @sol_israel: Aurora Cannabis to close 5 facilities, lay off 700 staff https://mjbizdaily.com/aurora-cannabis-to-close-five-facilities-lay-off-700-staff/
An Aurora spokesperson wouldn't say whether any of Aurora's executive team would take pay cuts to share the burden with their employees.
Or will Aurora follow Canopy Growth's lead & give their executives massive retroactive raises?
When we know, you'll know.
Or will Aurora follow Canopy Growth's lead & give their executives massive retroactive raises?
When we know, you'll know.
Directly related to years of over investment in greenhouses and ill-advised M&A by Big Cannabis ➜Inventory soars to new high, indicating more pain ahead for large producers
Bye again Twitter! https://mjbizdaily.com/canadian-cannabis-inventory-soars-to-new-high-indicating-more-pain-ahead-for-producers/
Story: How Canadian cannabis firms lost hundreds of millions on bad greenhouse deals
Adding story to this thread
Some deals led to real estate losses worth millions & “balance sheet adjustments” worth billions of dollars
Thanks @MaryKDurocher1 @dansax https://mjbizdaily.com/how-canadian-cannabis-firms-lost-millions-on-bad-greenhouse-deals/
Adding story to this thread
Some deals led to real estate losses worth millions & “balance sheet adjustments” worth billions of dollars
Thanks @MaryKDurocher1 @dansax https://mjbizdaily.com/how-canadian-cannabis-firms-lost-millions-on-bad-greenhouse-deals/
Story: Aurora Cannabis shuts CA$250 million greenhouse "indefinitely"
As previously reported, Aurora's executives were effectively incentivized with bonuses to build greenhouses that were never needed. https://mjbizdaily.com/aurora-cannabis-shuts-massive-ca250-million-greenhouse-indefinitely/
As previously reported, Aurora's executives were effectively incentivized with bonuses to build greenhouses that were never needed. https://mjbizdaily.com/aurora-cannabis-shuts-massive-ca250-million-greenhouse-indefinitely/
New: Zenabis selling cannabis facility for HALF of original asking price
The conditional deal is for $6.65 million
A property matching the same description was being marketed for $12.75 million earlier this year. https://mjbizdaily.com/zenabis-selling-cannabis-facility-for-half-of-original-asking-price/
The conditional deal is for $6.65 million
A property matching the same description was being marketed for $12.75 million earlier this year. https://mjbizdaily.com/zenabis-selling-cannabis-facility-for-half-of-original-asking-price/
Zenabis previously pegged the building's value at over $12 million, per this regulatory filing. It sold for $6.6 million.
So it was way off.
Which 3rd-party was responsible for the appraisal? Zanabis hadn't responded to the question by deadline.
So it was way off.
Which 3rd-party was responsible for the appraisal? Zanabis hadn't responded to the question by deadline.
NEW: After a years-long buildout, has total licensed cannabis greenhouse area finally peaked in Canada?
Though licensed outdoor area doubled in 2020 to August.
Where's all the production going to go?
@qnp @GoBlueCdn & @Michaelconunaa shared insight:
https://mjbizdaily.com/canadian-cannabis-greenhouse-space-in-retreat-as-outdoor-capacity-doubles/
Though licensed outdoor area doubled in 2020 to August.
Where's all the production going to go?
@qnp @GoBlueCdn & @Michaelconunaa shared insight:
https://mjbizdaily.com/canadian-cannabis-greenhouse-space-in-retreat-as-outdoor-capacity-doubles/
Month after month of record cannabis sales in Canada have barely dented weed inventory amassed by Canadian producers.
That differs from wholesalers & retailers, which largely manage inventory like normal businesses, drawing it down when they can and adding to it when necessary.
That differs from wholesalers & retailers, which largely manage inventory like normal businesses, drawing it down when they can and adding to it when necessary.
Demand has never been the issue.
And to be clear, we're talking about the country's largest producers who built airport-sized greenhouses before knowing what they'd make or who their customers were. It was great for their stock prices—until the strategy spectacularly backfired.
And to be clear, we're talking about the country's largest producers who built airport-sized greenhouses before knowing what they'd make or who their customers were. It was great for their stock prices—until the strategy spectacularly backfired.
NEW: Canopy shuts facilities across 
, abandons outdoor cultivation, lays off another 220 ppl
Cuts come amid a broad supply glut & a consequence of overexpansion — the theme of this thread.
Former CEO BL did not immediately respond to a media query https://mjbizdaily.com/canopy-growth-shuttering-facilities-across-canada-abandons-outdoor-cannabis-cultivation/
, abandons outdoor cultivation, lays off another 220 pplCuts come amid a broad supply glut & a consequence of overexpansion — the theme of this thread.
Former CEO BL did not immediately respond to a media query https://mjbizdaily.com/canopy-growth-shuttering-facilities-across-canada-abandons-outdoor-cannabis-cultivation/
Truth
from @Michaelconunaa: “I think Canopy is finally accepting the repercussions of their terrible business model, and I think they probably should have closed down some of these facilities and rolled back some of their foreign engagement a lot sooner.”
from @Michaelconunaa: “I think Canopy is finally accepting the repercussions of their terrible business model, and I think they probably should have closed down some of these facilities and rolled back some of their foreign engagement a lot sooner.”
Updated: With tough truths from @Michaelconunaa
“Internationally they were buying up and building facilities from scratch, not really understanding the market—of course, because there wasnt one”
Other business will learn from the mistakes, she said. https://mjbizdaily.com/canopy-growth-shuttering-facilities-across-canada-abandons-outdoor-cannabis-cultivation/
“Internationally they were buying up and building facilities from scratch, not really understanding the market—of course, because there wasnt one”
Other business will learn from the mistakes, she said. https://mjbizdaily.com/canopy-growth-shuttering-facilities-across-canada-abandons-outdoor-cannabis-cultivation/
Updating thread with yesterday @Mjbizdaily scoop: Aurora flagship greenhouse 75% idled, >200 jobs lost, and CSO Jonathan Page is departing
In 2018, Aurora's then-mgmt expected “a full payback on this project in a very short number of months” ¯\\_(ツ)_/¯ https://mjbizdaily.com/aurora-cannabis-lays-off-200-reduces-production-at-sky-facility/
In 2018, Aurora's then-mgmt expected “a full payback on this project in a very short number of months” ¯\\_(ツ)_/¯ https://mjbizdaily.com/aurora-cannabis-lays-off-200-reduces-production-at-sky-facility/
New: This is dire for Canada's standard cannabis producers with (no meaningful differentiation)
Canada has to much inventory, resulting from too much growing area
Licensed area & inventory at all-time high. Dried cannabis stock near 1 million kgs—almost mirroring licensed area
Canada has to much inventory, resulting from too much growing area
Licensed area & inventory at all-time high. Dried cannabis stock near 1 million kgs—almost mirroring licensed area
Adding last week's @MJBizDaily scoop to thread: Aurora Cannabis strikes deal to sell cultivation facilities, document suggests
The two facilities were among the closures Aurora announced in June https://mjbizdaily.com/aurora-cannabis-strikes-conditional-deal-to-sell-cultivation-facilities/
The two facilities were among the closures Aurora announced in June https://mjbizdaily.com/aurora-cannabis-strikes-conditional-deal-to-sell-cultivation-facilities/
NEW: cannabis inventory reaches a staggering 1 million kilograms
The "croptober" boost adds to an already alarming inventory level for dried cannabis for large-scale LPs.
See the beginning of this thread for how we got to this point. https://mjbizdaily.com/canadas-croptober-surge-pushes-cannabis-inventory-over-1-million-kilograms/
cannabis inventory reaches a staggering 1 million kilograms The "croptober" boost adds to an already alarming inventory level for dried cannabis for large-scale LPs.
See the beginning of this thread for how we got to this point. https://mjbizdaily.com/canadas-croptober-surge-pushes-cannabis-inventory-over-1-million-kilograms/
Not a problem isolated to dried cannabis of a certain variety (generally lower quality, with lower THC levels).
In October
- edibles inventory (incl. bevs) 7 x over sales
- extracts inventory 6 x over sales
There is only so much warehouse space in to store all this stuff.
In October
- edibles inventory (incl. bevs) 7 x over sales
- extracts inventory 6 x over sales
There is only so much warehouse space in
to store all this stuff.
Adding to previous: Historical Health Canada data suggests October's surge may continue into November, but to a lesser degree, as LPs finished up their fall outdoor harvests.
Expect a lot more cannabis to be added to inventories in Nov. beyond the 350,000 kgs from Sept. & Oct.
Expect a lot more cannabis to be added to inventories in Nov. beyond the 350,000 kgs from Sept. & Oct.
