In a flood of earnings reports that pot companies released just ahead of the mandated deadline for quarterly updates, companies proved that they have not been very good at figuring out how to grow, package, distribute and sell the long-illegal plant. Investors punished pot stocks in response: In the past week, the ETFMG Alternative Harvest ETF MJ, -2.27% declined 14.5%, the Horizons Marijuana Life Sciences Index ETF HMMJ, -3.04% fell 17.2% and the Cannabis ETF THCX, -1.73% fell 15.8%.
• “[T]he market opportunity today is simply not living up to expectations and at the risk of oversimplifying, the inability of the Ontario government to license retail stores right off the bat has resulted in half of the expected market in Canada simply not existing,” Canopy Growth Corp. CGC, -3.22% WEED, -3.20% Chief Executive Mark Zekulin said. “Ontario represents 40% of the country’s population yet has one retail cannabis store per 600,000 people.
• “In terms of profitability, and as Cam mentioned earlier, I don’t think there’s any of us on this call that we’re expecting Ontario a year after legalization to be sitting on 24 stores,” Aurora Chief Financial Officer Glen Ibbott said in the earnings call.• “The infrastructure for the adult-use cannabis market is still in its infancy and is slowly being developed,” Cronos Group Inc. CRON, -7.92% CRON, -7.42% CEO Mike Gorenstein said.
• “Although we’re optimistic that we will start seeing a more steady supply of organic biomass come online, the overall industry supply of dried cannabis inventory has hit record highs,” MediPharm Labs Corp. LABS, +1.50% CEO Patrick McCutcheon said. • “Supply-demand is a little bit tricky because there’s so many sub-categories of the products. So I would say we’re getting close to supply-demand balance on low-quality byproduct and for low-potency product. But for high-potency product and products that consumers want, there is just not enough supply,” Tilray CFO Mark Castaneda said. “I think we’ll see the same thing in the 2.0 products, especially as we start out of the box.
• “There is sufficient supply for an orderly store rollout to happen now as it did in Alberta over the past year and until this happens the cannabis sector cannot reach its full sales potential and cannot convert consumers from the illicit market into the legal market,” Canopy CEO Zekulin said. “Having said that, the stores will open, Cannabis 2.