MJBizMag September 2020 - 53

5. LAYOFFS PROLIFERATE
AT HOME AND OVERSEAS
Corporate transformation plans at those
two major producers have resulted
in hundreds of layoffs in Canada and
abroad in recent months. But job
cutbacks haven't been limited to Canopy
and Aurora.
In the past year, layoffs also have taken
place at CannTrust, The Green Organic
Dutchman, Hexo, Organigram, Tilray
and Zenabis.
Some of those job cuts have been
related to the COVID-19 pandemic,
while others reflect cultivation-facility
closures and corporate restructurings at
struggling producers.
At the very least, Canadian cannabis
job losses translate into a large pool
of workers available for companies in
search of talent.
6. LEGAL CANNABIS SALES
ENJOY STRONG GROWTH
Canadian retail sales of legal cannabis
have increased more or less sequentially
in the months since legalization, from
$31 million (CA$42 million) in the first
month to nearly $139 million this past
May. (See chart " Adult-Use Cannabis
Sales by Month in Canada. " )
That figure suggests a roughly
$1.6 billion annual market for legal
cannabis in Canada, despite lagging retail
stores in key provinces.
The overall growth trend in sales
continued during the COVID-19
pandemic, notwithstanding some
regional variation related to temporary
store closures in certain provinces,
including Ontario.
Despite trouble at individual producers,
continued month-over-month growth
bodes well for Canada's cannabis industry.
7. STORE OPENINGS
INCREASE UNEVENLY
The number of regulated adult-use
cannabis stores in Canada passed 1,000
this summer.
Alberta, the fourth-largest market,
leads the way with roughly 500 cannabis
Shoppers visit Four20 Premium Market in Calgary on the first day of legal recreational cannabis sales
in 2018. Photo by Lindsey Bartlett
stores for a population of 4.4 million.
Sales from that province comprised
25% of the national total in May.
But Ontario, the largest province
by population with 14.7 million
people-nearly 40% of Canada's
population-still had fewer than
150 cannabis stores as of August.
Store growth is even more sluggish in
provinces that allow only governmentoperated
stores. Quebec, Canada's
second-most populous province
with 8.5 million people, had only
43 government-operated marijuana
stores as of August.
Continued store growth in the
months ahead likely will only improve
legal marijuana's market share
in Canada.
8. MORE COMPANIES SEEK
CREDITOR PROTECTION
Amid a dearth of outside funding in the
past year, several cannabis companies
have received creditor protection from
Canadian courts-in effect, Canada's
form of bankruptcy protection.
Some of those creditor-protection
orders come alongside debtor-inpossession
loan deals from lenders who
eventually acquire the distressed firms.
The list of companies turning to
creditor protection includes AgMedica
Bioscience, Beleave, James E. Wagner
Cultivation Corp. and Wayland Group,
all in Ontario, as well as Ascent
Industries and Invictus Group in
British Columbia.
CannTrust in Vaughn, Ontario, is the
biggest Canadian name to seek creditor
protection in the past year after a 2019
scandal in which the license holder
was sanctioned for growing plants in
unlicensed areas.
9. PRODUCERS REDUCE
THEIR GLOBAL FOOTPRINT
After years of acquiring and building
infrastructure abroad from Lesotho to
Luxembourg, a number of Canadian
producers have scaled back their
international ambitions in favor of
financial discipline. (See " Global
Retreat " on page 58.)
September 2020 | mjbizdaily.com 53

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