Alberta
Canopy Growth reports $648 million net loss in Q4 as it parts way with BioSteel staff
Canopy Growth Corp.’s chief executive said the company has made management changes and parted ways with some staff as it continues to review its BioSteel business after uncovering “material misstatements” in the sports drink unit’s previous financial filings.
“Based on the results of the review, we’ll be implementing several remedial actions to strengthen our controls for the BioSteel business,” David Klein, chief executive of the Smiths Falls, Ont.-based cannabis company, said on a Thursday call with analysts.
“We felt it was important to act swiftly to provide stability to the business at this pivotal time, so to this effect, we have exited several members of the BioSteel leadership team and are considering all legal remedies available to us including litigation to recover damages and costs associated with and resulting from the findings of the BioSteel review.”
His remarks came after Canopy promised in May to refile three of its past quarterly financial statements because of misstatements linked to BioSteel, a brand of dietary supplement products targeting athletes.
The misstatements were in its first-, second- and third-quarter filings from 2022 and included sales information from that period which Canopy said in regulatory filings “should no longer be relied upon.”
It discovered the misstatements when it was preparing its financial results for the financial year ended March 31, and determined on May 4 that there were errors in its filings after a review of BioSteel results with independent external counsel and forensic accountants.
Canopy now says the sales misstatements found are linked to BioSteel’s “timing and amount of revenue recognition.”
The company revealed new details about the misstatements as it released its fourth-quarter and full-year results Thursday. Canopy’s fourth-quarter net loss amounted to $648 million, $59 million more than the loss it incurred a year earlier.
It attributed much of the loss to $164 million in asset impairment and restructuring costs, but says those costs were partially offset by improved gross margins.
The corrected numbers for BioSteel resulted in a decrease of roughly $10 million in net revenue for the company’s 2022 financial year, or about two per cent of its total net revenue.
For the nine months ended December 31, 2022, Canopy said the correction resulted in a decrease of about $14 million in net revenue or four per cent of total consolidated revenue.
“Despite this, we have great confidence in the BioSteel brand, which saw a 101 per cent revenue increase in fiscal (2023),” Klein said.
Canopy also noted that BioSteel is continuing to gain market share in Canada, especially through NHL partnerships.
Meanwhile, Canopy is continuing with a transformation plan for its overall business that included the departure of 800 workers — roughly 35 per cent of its workforce — in February.
At the time, it also planned to wind down 1 Hershey Dr. in Smiths Falls, Ont., its flagship facility where chocolate company Hershey once had a factory, and move post-production flower activity to a building across the street.
Canopy said it would cease to source flower from its Mirabel, Que., facility, which is owned and operated through Les Serres Vert Cannabis Inc., a joint venture partnership between the company and Les Serres Stephane Bertrand Inc., a tomato greenhouse operator.
Canopy previously purchased pot from the joint venture, but will cease that activity and now move to a more flexible sourcing strategy to ensure Quebec-grown products are brought to consumers in the province.
Consolidation was also planned for its Kincardine, Ont. and Kelowna, B.C. sites.
Canopy’s net revenue for the period ended March 31 totalled $88 million, 14 per cent lower than the revenue reported a year prior.
Canopy’s adjusted loss for the quarter was $96 million, a $36 million improvement from its negative adjusted earnings before interest, taxes, depreciation, and amortization a year earlier.
This report by The Canadian Press was first published June 22, 2023.
Companies in this story: (TSX:WEED)
Tara Deschamps, The Canadian Press
Alberta
Free Alberta Strategy petition demanding PM Trudeau fire Steven Guilbeault passes 13,000 signatures
News release from Free Alberta Strategy
Are you tired of watching elected officials flout the law and disregard public concerns with impunity?
Are you frustrated by a federal government that prioritizes arrogance over accountability?
If so, you’re not alone.
Over 13,000 people have signed our petition calling on Justin Trudeau to fire Steven Guilbeault.
Once one of Greenpeace’s most disruptive forces, Guilbeault has spent enough time in an orange jumpsuit to build up a reputation for deliberately ignoring both law enforcement and the courts.
Since then, his career has been marked by a troubling disregard for both legal boundaries and public sentiment.
In 2001, Guilbeault was found guilty of mischief for scaling the CN Tower in Toronto and displaying a banner.
He received a sentence of one year’s probation, was mandated to complete 100 hours of community service in Montreal, and was ordered to pay $1,000 in restitution.
The incident incurred approximately $50,000 in costs for the tower operators.
Shortly thereafter, Guilbeault orchestrated another audacious act, leading a Greenpeace team in a demonstration at the Calgary residence of then Alberta Premier Ralph Klein and his wife, Colleen.
They erected a banner, positioned ladders against the house, and ascended to the roof to install a solar panel.
The intrusion deeply unsettled Colleen Klein, who was alone at the time and feared a home invasion – she resorted to grabbing a broom for defense.
Despite his controversial background, Justin Trudeau’s decision to appoint Guilbeault as Minister of Environment and Climate Change raised eyebrows and elicited criticism.
Jason Kenney, then premier of Alberta, accurately predicted the consequences of Guilbeault assuming a significant role in Justin Trudeau’s cabinet.
“His own personal background and track record on these issues suggests someone who is more an absolutist than a pragmatist when it comes to finding solutions,” Kenney said.
It’s perhaps no surprise then that Guilbeault’s response to legal setbacks in his political career, such as the Supreme Court’s ruling on the unconstitutionality of his Impact Assessment Act, has been dismissive, indicating a stubborn adherence to his own agenda rather than a willingness to heed judicial guidance.
Instead of accepting that he was wrong and repealing the law, Guilbeault wants to pass minor amendments and pretend like the Supreme Court ruling never happened.
Worse, the amendments – buried 552 pages into a 686-page budget implementation bill – don’t fix the problem.
Guilbeault still has the power to control projects that fall under provincial jurisdiction.
Consequently, tensions between the federal and provincial governments have escalated, with Alberta poised to immediately challenge the amended legislation in court once again.
This charade is getting old.
This pattern of defiance and disregard for legal constraints has become wearisome, eroding public trust in the integrity of federal institutions.
The rotation of headlines proclaiming federal overreach and constitutional breaches underscores a troubling trend within the governing party, where arrogance appears to have supplanted prudent governance.
Guilbeault, with his checkered past and continued ignorance of the law since becoming Minister, are crippling public confidence.
A few months ago, we launched a petition calling on Justin Trudeau to see the light, and fire his most controversial Minister.
Since then, things have only gotten worse.
If you agree, and think Guilbeault should be fired, please sign our petition today:
Then, send this petition to your friends, family, and every Albertan so that they can sign too!
Regards,
The Free Alberta Strategy Team
Alberta
Fortis et Liber: Alberta’s Future in the Canadian Federation
From the C2C Journal
By Barry Cooper, professor of political science, University of Calgary
Canada’s western lands, wrote one prominent academic, became provinces “in the Roman sense” – acquired possessions that, once vanquished, were there to be exploited. Laurentian Canada regarded the hinterlands as existing primarily to serve the interests of the heartland. And the current holders of office in Ottawa often behave as if the Constitution’s federal-provincial distribution of powers is at best advisory, if it needs to be acknowledged at all. Reviewing this history, Barry Cooper places Alberta’s widely criticized Sovereignty Act in the context of the Prairie provinces’ long struggle for due constitutional recognition and the political equality of their citizens. Canada is a federation, notes Cooper. Provinces do have rights. Constitutions do mean something. And when they are no longer working, they can be changed.
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