TOUGH COMPETITION
Why investors are giving up on Canopy Growth
The impressive vision painted by the executives at Smiths Falls, Ont.-based Canopy Growth was enough to attract a ton of investment, according to the Globe and Mail. But after reporting poor earnings this past spring, breaking its promise to turn a profit by then, Canopy’s shares have fallen 42%—and more than double that over the past 12 months.
Three reasons for the downfall were cited:
- Investors didn’t examine the tough competition and the likelihood of a vastly oversupplied market
- An “over-regulated” cannabis market, such as tough restrictions on marketing and packaging
- Poor management, exemplified by Canopy’s unreadiness for “Cannabis 2.0” and over-spending on acquisitions
At this point, growth looks unlikely, according to Canaccord’s Matt Bottomley. “They’re the furthest of all the large LPs from becoming profitable.”
Enjoy Cannabis Daily each morning at 7 a.m.
COMPASSION FOR CLINIC
Victoria, B.C. mayor asks feds for high-THC exemption for longtime compassion clinic
Lisa Helps, the mayor of Victoria, B.C., has written a letter to Health Canada on behalf of the Victoria Cannabis Buyers Club (VCBC) asking for a legal exemption that would allow the longtime compassion clinic to continue serving its patients with high-THC products, reports CTV.
Currently, edibles products are limited to 10 mg of THC per package. But the club, which has operated since 1996, has sold clients, who suffer from ailments such as chronic pain or symptoms associated with cancer and/or treatments, much higher doses.
“Over more than two decades of operations in Victoria, the management, staff and board of directors of the VCBC have proven their commitment to patients and to our community,” she wrote. “The City of Victoria is prepared to do its part to ensure that the club can successfully transition into the legalized cannabis system as soon as possible.”
MAFIA SCAM
Juicy Fields scam is ‘100%’ tied to Russian mafia, says lawyer building class action suit
More than €700 million may have been lost in the Juicy Fields scandal—“by far the largest scam in Europe for many, many years,” according to Lars Olofsson, CEO of PRIO Startup, per BusinessCann.
Oloffson has contacted more than 1500 investors as part of his work building a class action lawsuit against the company. In total, he believes 120,000 investors have been affected, each with an average investment of about €40,000.
He also said he believes the scam is “100%” tied to the Russian mafia:
- The company and most points of contact disappeared suddenly—a commonality among Russian mafia scams
- Some communication occurred on various social media platforms to placate investors, again a frequent strategy used in previous scams
- A recent communication from Juicy Fields denying that it’s a Ponzi scheme and blaming the fallout on a single individual, Friederich Graf von Luxburg, is nearly a “copy and paste of announcements done in two other cases we have managed,” according to Olofsson
- According Spanish newspaper elDiario.es, the company had a bank account in Cyprus, which the BBC says is a popular offshore country for Russian mafia banking
- Juicy Fields network controllers Paul Bergolts, Alex Vaimer and Vasily Kandinski all reportedly held Russian passports
“That money is gone. It’s more or less impossible to find out where it ended up and how it’s been divided,” Mr Olofsson said. “I want to describe the environment this kind of scam and this kind of set-up can work in,” he added. “There are individuals and companies that should have reacted, that should have said that this is not good.”
