The Canadian Giant ⬇️

Canadian giant Aurora Cannabis is struggling to maintain its market share...

In Today’s Issue:

  • → Is Aurora Slowing Down? ⬇️

  • → LA’s 60K Cannabis Dismissals. ✅

  • → A $50M Cannabis Compound. 💸

The Rise & Fall Of Aurora’s Revenue

Why Aurora’s adult-use revenues is declining…

Having destroyed over 400 million grams of cannabis between 2018 - 2020, Canadian cannabis producers are still sitting on over 1 billion grams of dried cannabis flower.

With such a large surplus of cannabis products on the Canadian market, prices are falling and larger producers such as Aurora are feeling this pain.

Declining revenues…

Aurora is not alone in producing too much cannabis.

Whereas initially larger producers such as Aurora choose to blame the slow rollout of cannabis retail stores in Canada, during the same period where adult-use cannabis sales in Canada nearly doubled — Aurora’s adult-use cannabis sales are declining.

What’s causing this decline?

Aurora is pointing the finger at Covid for these declining revenues, however, Canada has seen record cannabis sales throughout this period.

It’s more than likely this decline has much more to do with the increased competition in the Canadian market, as opposed to any alternatives.

This problem is not limited to Aurora with the top 5 producers of cannabis in Canada commanding over 50% of the share of total cannabis sales last year.

In the time since this market share has declined 20% in August 2021 with the top five producers now commanding less than 40% market share.

Looking forward… 🔭

Aurora Cannabis lost $550 million USD from June 2020 — June 2021 an improvement from the $2.59 billion USD they lost the year prior.

While this is undoubtedly an improvement, the level of competition Aurora will face in Canada is only increasing as more craft producers join the legal industry, in addition to big brands such as Cookies coming to Canada.

Additionally, larger producers such as Aurora are not only facing an ever-increasing level of competition from smaller producers — they are also competing against much more specialized operators.

While Aurora has chosen to produce every form factor of cannabis from dried flower, to gummies, beverages, vapes — many of its competitors are focusing on one single form factor of cannabis.

Our Take

Given how early we are in the development of the cannabis industry, it would be foolish to assume that the most successful companies of today will be the most successful companies in 5 years time.

Throughout this period we will very likely see many cannabis giants rise & fall as consumers determine which cannabis products succeed, and which fail.

Dismissing 125,000 Cannabis Convictions…

LA county once again leads the way in dismissing cannabis convictions…

Having dismissed 66,000 cannabis convictions in 2020, LA is once again moving to dismiss an additional 60,000 cannabis convictions.

Under previous district attorney Jackie Lacey, LA county dismissed 66,00 cannabis convictions that took place before California legalized cannabis for adult-use purposes.

New information…

The previous dismissals were based on information collected by the California Department of Justice.

The new district attorney George Gascón said his office was able to identify tens of thousands more eligible cases by combing L.A. County court records.

“Dismissing these convictions means the possibility of a better future to thousands of disenfranchised people who are receiving this long-needed relief.

It clears the path for them to find jobs, housing and other services that previously were denied to them because of unjust cannabis laws.”

Gascón has been a very public proponent of ending the war on drugs due to the outsized impact it has on minority communities & people of color.

In his previous role as the district attorney of San Francisco, he dismissed close to 9,000 cannabis convictions that were processed before the legalization of cannabis.

Leveraging technology, Gascón led the charge on a partnership with Code for America — a nonprofit organization that developed an algorithm to analyze county data and identify cases eligible to be cleared.

Who this helps…

An estimated 20,000 of the 60,000 of the cannabis convictions dismissed under Gascón’s new orders were felony possession or cultivation of cannabis.

It remains unclear how far back this new case review went, however, when working as the district attorney of San Francisco, Gascón overturned cannabis convictions dating to the mid-1970s.

Our Take

Any day whereby we are discussing the actions being taken to rectify the wrongs of the prohibition of cannabis is a day worthy of celebration.

Looking forward, this number could seem small in comparison to the number of cannabis convictions that could be dismissed if the MORE act were to receive the required support.

NBA Star Chris Webber Goes All In On Cannabis

The 5-time NBA All-Star is opening a $50 Million USD cannabis compound…

Having won every possible award on the court, basketball star Chris Webber is now turning his attention to cannabis.

Earlier this year, Webber partnered with Jason Wild of JW Asset Management & Chairman of TerrAscend when they launched a $100 million cannabis fund to invest in business and brands in the Black community.

Webber Wellness…

Next on his list is Webber Wellness — a cannabis compound in his home city of Detroit, Michigan.

The compound, which is currently an old factory, is owned by Players Only Holdings, a business co-founded by Webber and entrepreneur Lavetta Willis.

To transform the 9-acre industrial site into Webber’s vision they are investing $50 million to build this cannabis compound.

"This is my biggest priority in life," Webber said.

"I've seen who (Willis) and I have helped across the country and the lives that have been disrupted by cannabis. 

Hopefully, we can do a little bit of repairing. Hopefully, we can help the city."

The compound will be home to an array of different activities, including:

  • → Cookies University which is a job training program run by Cookies.

  • → A 60,000 square foot cultivation facility run by Gage Growth.

  • → An 8,000 square foot Players Only cannabis retail store.

  • → An on-site cannabis consumption lounge.

Additionally, Weber said that record expungement offices will also be included in the facility for those who are in need of services.

Timelines…

Webber started Webber Wellness, the parent company in 2015 after teaming up with his longtime business partner Levetta Willis.

Looking forward, they aim to open the cannabis retail store by March 2022 with the 60,000 square foot cultivation facility open within 18 months

They anticipate opening the lounge within 8 months in what is only the first phase of what will total a $175 million investment in his home city of Detroit.

“I want to be the shining jewel of cannabis, I want us to be the example of diversity, the example of a village of people that have stayed and made a decision to help a city.” — Webber said.

Beyond Detroit, they plan on opening 10 Players Only cannabis retail stores across the U.S. over the next two years.

Our Take

I commend the action Chris Webber, Jason Wild &  Lavetta Willis are taking to establish this cannabis compound such that more people will have the opportunity to participate in the growth of the cannabis industry.

Whereas many people have spoken about creating a more “equitable cannabis industry” this trio are actively investing their capital to ensure this.

For more like this, subscribe to Four PM today to receive the next edition:

If you gained value from this edition of Four PM, share it with your favorite cannabis professionals. 🌎

Share