Alberta
Canopy Growth reports $648 million net loss in Q4 as it parts way with BioSteel staff
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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
New children’s book demonstrates how the everyday world is connected to natural resources
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From the Canadian Energy Centre
‘Today’s youth have the opportunity to lead us into the future with innovative solutions for environmental challenges’
After a 24-year career in oil sands land reclamation, author Tanya Richens is sharing her knowledge with young minds.
Her new book, From the Earth to Us: Discovering the Origins of Everyday Things, explores the relationship between natural resources and the things we use in everyday life, from computers and water bottles to batteries and solar panels.
“There is a gap in society’s understanding of where things come from. We are a society driven by consumerism and immediate gratification. We order something online, and it arrives on our doorstep the next day. We don’t stop to think about where it really came from or how it was made,” Richens says.
“There’s an ever-increasing societal position that mining is bad, and oil is even worse… But there’s a simple hypocrisy in those beliefs, since so many things in our lives are made from the raw materials that come from mining and oil and natural gas,” she says.
The book, illustrated by reclamation artist Shannon Carla King, follows young Hennessy Rose and her Cavalier King Charles Spaniel Riley on a trip to a children’s summer camp.
Hennessy’s mom is a guest speaker on the origin of everyday items and the relationship between humans and the earth. Through detailed explanations of items surrounding her, Hennessy’s mom teaches the kids how rocks, minerals, oil and gas from the earth are used to power and aid our lives, creating items such as building supplies, food and hair products, camping and sports equipment, and cell phones.
Author Tanya Richens poses with her two books for children about natural resources. Photo for Canadian Energy Centre
“I thought a simple and fun book explaining the raw materials needed to make everyday items would be valuable for all ages,” Richens says.
“When people feel personally connected to natural resources, they are more likely to promote sustainable practices. Today’s youth will have the opportunity to lead us into the future with innovative solutions for environmental challenges.”
Richens‘ career began with Alberta Environment, where she was a coordinator of reclamation approvals in the oil sands. She oversaw technical reviews of oil sands reclamation applications, communicated with statement of concern filers, coordinated public hearings and provided support for legislative changes.
She moved from government to Suncor Energy, ensuring the company’s compliance on reclamation projects and led initiatives to obtain reclamation certificates. She now works as an independent consultant.
Drawing on her wealth of experience in the field, Richens’ first book, Adventures in Land Reclamation: Exploring Jobs for a Greener Future, seeks to excite kids aged 9-12 years about jobs related to the environment and land reclamation.
Hoping to get From the Earth to Us into the hands of teachers, Richens is heading to the Edmonton Teachers Convention in late February. She says the book supports multiple learning outcomes in Alberta’s new science curriculum for grades 3, 4, 5 and 6.
“Ultimately, I’d like people to understand and acknowledge their individual part in the need for mining and oil and natural gas development. Until the naivety and hypocrisy in the world is addressed, I’m not sure that real environmental change is possible.”
Richens’ books can be purchased on her website at tcrenvironmental.com.
Alberta
Open letter to Ottawa from Alberta strongly urging National Economic Corridor
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Canada’s wealth is based on its success as a trading nation. Canada is blessed with immense resources spread across a vast country. It has succeeded as a small, open economy with an enviable standard of living that has been able to provide what the world needs.
Canada has been stuck in a situation where it cannot complete nation‑building projects like the Canadian Pacific Railway that was completed in 1885, or the Trans Canada Highway that was completed in the 1960s. With the uncertainty of U.S. tariffs looming over our country and province, Canada needs to take bold action to revitalize the productivity and competitiveness of its economy – going east to west and not always relying on north-south trade. There’s no better time than right now to politically de-risk these projects.
A lack of leadership from the federal government has led to the following:
- Inadequate federal funding for trade infrastructure.
- A lack of investment is stifling the infrastructure capacity we need to diversify our exports. This is despite federally commissioned reports like the 2022 report by the National Supply Chain Task Force indicating the investment need will be trillions over the next 50 years.
- Federal red tape, like the Impact Assessment Act.
- Burdensome regulation has added major costs and significant delays to projects, like the Roberts Bank Terminal 2 project, a proposed container facility at Vancouver, which spent more than a decade under federal review.
- Opaque funding programs, like the National Trade Corridors Fund (NTCF).
- Which offers a pattern of unclear criteria for decisions and lack of response. This program has not funded any provincial highway projects in Alberta, despite the many applications put forward by the Government of Alberta. In fact, we’ve gone nearly 3 years without decisions on some project applications.
- Ineffective policies that limit economic activity.
- Measures that pit environmental and economic objectives in stark opposition to one another instead of seeking innovative win-win solutions hinder Canada’s overall productivity and investment climate. One example is the moratorium on shipping crude through northern B.C. waters, which effectively ended Enbridge’s Northern Gateway proposal and has limited Alberta’s ability to ship its oil to Asian markets.
In a federal leadership vacuum, Alberta has worked to advance economic corridors across Canada. In April 2023, Alberta, Saskatchewan and Manitoba signed an agreement to collaborate on joint infrastructure networks meant to boost trade and economic growth across the Prairies. Alberta also signed a similar economic corridor agreement with the Northwest Territories in July 2024. Additionally, Alberta would like to see an agreement among all 7 western provinces and territories, and eventually the entire country, to collaborate on economic corridors.
Through our collaboration with neighbouring jurisdictions, we will spur the development of economic corridors by reducing regulatory delays and attracting investment. We recognize the importance of working with Indigenous communities on the development of major infrastructure projects, which will be key to our success in these endeavours.
However, provinces and territories cannot do this alone. The federal government must play its part to advance our country’s economic corridors that we need from coast to coast to coast to support our economic future. It is time for immediate action.
Alberta recommends the federal government take the following steps to strengthen Canada’s economic corridors and supply chains by:
- Creating an Economic Corridor Agency to identify and maintain economic corridors across provincial boundaries, with meaningful consultation with both Indigenous groups and industry.
- Increasing federal funding for trade-enabling infrastructure, such as roads, rail, ports, in-land ports, airports and more.
- Streamlining regulations regarding trade-related infrastructure and interprovincial trade, especially within economic corridors. This would include repealing or amending the Impact Assessment Act and other legislation to remove the uncertainty and ensure regulatory provisions are proportionate to the specific risk of the project.
- Adjusting the policy levers that that support productivity and competitiveness. This would include revisiting how the federal government supports airports, especially in the less-populated regions of Canada.
To move forward expeditiously on the items above, I propose the establishment of a federal/provincial/territorial working group. This working group would be tasked with creating a common position on addressing the economic threats facing Canada, and the need for mitigating trade and trade-enabling infrastructure. The group should identify appropriate governance to ensure these items are presented in a timely fashion by relative priority and urgency.
Alberta will continue to be proactive and tackle trade issues within its own jurisdiction. From collaborative memorandums of understanding with the Prairies and the North, to reducing interprovincial trade barriers, to fostering innovative partnerships with Indigenous groups, Alberta is working within its jurisdiction, much like its provincial and territorial colleagues.
We ask the federal government to join us in a new approach to infrastructure development that ensures Canada is productive and competitive for generations to come and generates the wealth that ensures our quality of life is second to none.
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Devin Dreeshen
Devin Dreeshen was sworn in as Minister of Transportation and Economic Corridors on October 24, 2022.
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