“God was always invented to explain mystery. God is always invented to explain those things that you do not understand.” ~Richard Feynman
Sometimes, most of the time, we forget how young we are as a species. Time is relative after all, and though our time on this earth is but a flash in the pan compared to the greater universe, to us it feels like an eternity. We feel like we’ve gone so far. We’ve accomplished so much. Our technologies have us beside ourselves.
But this also causes us to get ahead of ourselves. We get a “big head” about what we’ve accomplished. We imagine we have most things figured out. When really, we are a floundering baby of a species with brains just big enough to stay alive and innovate but not big enough to see how our innovations become traps. Mostly cognitive and psychological traps, but also political and religious traps.
And the biggest trap of all? Our concept of God.
Burying God:
“One of the main functions of organized religion is to protect people against a direct experience of God.” ~Carl Jung
In our naivete and mortal desperation for an “answer to it all” we created God. We created God to alleviate our death anxiety, to square the circle of infinity, and to pinpoint the improbability of probability. We were a stubbornly vain species, and so we could not help but create a “technology of ecstasy” to help us transcend death. And so, intolerant of reality and the mortality it imposed upon us, we created God, the ultimate technology. The absolute Somethingness that we ushered in to trump the absolute Nothingness of our own impermanence.
But in our ignorance, we deified God. We anthropomorphized God. We made “Him” in our image. We vainly attempted to pigeonhole infinity into a finite ideal. And before we knew it, we were tripping over idols and getting caught in sticky webs of dogma. Our God clashed with their God. Your God collided with my God. We turned an “answer to it all” into a religion and failed spiritually. We found ourselves wanting at the invincible feet of Infinity.
But then the religious God died. We met Buddha on the path and killed him. The path is littered with murdered megalomanic egos. It’s a veritable graveyard of deicide. As Nietzsche said, “God is dead! He remains dead! And we have killed him.”
Even our personal ego’s attachment to “God” has a Question Mark Sword penetrating through its self-righteous heart. And even as this makes us balk, even as this makes us fear and tremble, we realize that it is just the tiny part of us—our false self, our placated self, our fearful self—that was hoodwinked and indoctrinated by cultural conditioning, and the bigger part of us—our authentic self—is all the more liberated because of it.
As PC Hodgell said, “That which can be destroyed by the truth should be.”
Nonetheless, this religious God is dying to this day. His reeking corpse fills temples, churches, synagogues, and mosques the world over. His bones are on display in the form of religious artifacts: most prominent of all, the splinter lodged in our mind. The cognitive dissonance we wrestle with. The sunk cost fallacy we cling to. The primordial Red Herring we are distracted by. The mortal dread we deny.
But here’s the beauty, the old caterpillar God of religion had to die for the spiritual butterfly of God to reveal its true nature: The Infinite Interconnectedness of All Things. The old blind God of religion had to die for God as Infinity Itself to see the light.
Unburying God:
“We are all mothers of God, for God is always needing to be reborn.” ~Meister Eckhart
Not every question has an answer, but every answer has a question. Let that statement sink in.
We never definitively answer any question, just like we never necessarily solve our problems. We simply outgrow them. We add capacities and experiences that eventually make us bigger than either the question, answer, or problem. So it also goes with the concept of God. We outgrew the religious God, and now we are bigger than “He” could ever be.
As James Russell Lowell said, “Time makes ancient good uncouth.”
We now understand, as Joseph Campbell did, that “God is an infinite sphere, whose center is everywhere and circumference nowhere.” How could we in good conscience go back to the uncouth ancient good of the religious God when we know damn well that there is a better way of perceiving God? A way that gets us out of our own way. A way that opens our hearts and lets our soul breathe. A way that cripples the dogma that has been crippling us for a millennium.
A religious God implies a deity bound by dogma, institutions, and historical texts, whereas a spiritual God is a more personal, internal, and perhaps universal or even mystical experience of the sacred. This simple shift in perspective is a move from external authority to internal authenticity. It paves the way for individuals to seek divinity or meaning in more personal, existential, or even poetic forms.
As Mark Twain said, “Continuous improvement is better than delayed perfection.” Indeed. The delayed perfection of the religious God must be cooked into the continuous improvement of Truth, lest we starve at the table of delusion.
We dined at the table of delusion for too long. Now it’s time to feast on the spiritual truth: that everything is connected to everything else. There’s no anthropomorphized being sitting up high judging our souls. And even if there somehow, improbably, was, it would still have to be a part of a greater Infinity. There would still have to be something that created that being, and then something that created that other being, ad infinitum.
Best to simply cut out the middleman. And that middleman is the religious God. That middleman is religion. That middleman is dogma.
The subtle art of unburying God is flexing spiritually. It’s existentially crushing out. It’s getting over our ego’s attachment to outdated “truth.” It’s swapping out petty belief for almighty faith. It’s the nuance of redefining God as Infinity itself, to include all false gods that created any other false gods.
Unburying God is transforming God into a question that we don’t need to answer. We simply allow God to be infinite. No fuss. No muss. No “Thou Shalts.” God is an Infinite Question Mark in the sky, fiery, razor sharp, and cutting through all so-called answers: a mighty symbol. A weapon against the darkness of closemindedness, rigidness, bad faith, and dogmatism. A failsafe against indoctrination, cultural conditioning, bamboozlement, and brainwashing.
A reckoning for some and a wrecking for others, sure. But no price is too high to pay for the privilege of finally becoming one with all things.
About the Author:
Gary Z McGee, a former Navy Intelligence Specialist turned philosopher, is the author of Birthday Suit of God and The Looking Glass Man. His works are inspired by the great philosophers of the ages and his wide-awake view of the modern world.
This article (The Subtle Art of Unburying God) was originally created and published by Self-inflicted Philosophy and is printed here under a Creative Commons license with attribution to Gary Z McGee and self-inflictedphilosophy.com. It may be re-posted freely with proper attribution, author bio, and this statement of copyright.
A new report from city staff in Winnipeg says there have been no public complaints or licence applications following the designated medical cannabis production zoning amendments adopted in 2022. In related news, the province’s new cannabis home grow law is expected to come into force sometime next year.
In financial news, Noya Cannabis has applied for creditor protection, Auxly reported its Q3 results, Canopy Growth released its Q2 2025 results (not actually from the future), Village Farms released its Q3 2024 report, Aurora Cannabis released its Q3 2025, and SNDL released its Q3 2024.
Shares in Canada’s major cannabis companies fell (a little) in early trading after the U.S. election, reports the Canadian Press.
Surrey, BC,ran into a few errors in their new cannabis licensing efforts. An application by “137 Brands” was first greenlit to go before council but was replaced at the last minute as it would have been located too close to a school. Now, a second application, UEM, may be too close to a preschool program.
Enforcement staff at the Ontario Securities Commissionfailed to prove allegations of an “illegal and abusive” short-selling scheme by three market participants from an anticipated spike in demand for Canopy Growth Corp. shares. The case was launched in 2022 and revolved around a complex series of transactions in 2017, including a private placement, a securities lending agreement, and short sales.
CannaPharmaRx says it has completed two shipments of its products to purchasers in Israel. A third shipment of approximately 300 kg is currently in the final stages of preparation and is expected to be dispatched soon. The average price for the third shipment is projected at CAD 2.10 per gram, with final pricing based on batch quality and THC results.
Greenstate ran a piece on Toronto-based Club Lit, which opened next to Body and Mind Cannabis and Lit Research in October.
Tether announced the release of its print edition Holiday Gift Guide with gift-giving inspiration for the holidays.
Mohawk Council of Kahnawake (MCK) chiefs voted against having a community-wide referendum on the community’s current cannabis policies after the topic was s raised at a Council meeting last week. The Kahnawake Cannabis Control Board (KCCB) recently informed the community of the updated list of seven applicants who have submitted applications for a Dispensary Licence with the KCCB.
The Ottawa Citizen ran a sponsored post for an Indigenous-owned cannabis retailer, Red Roots Trading Company. With one location in Vanier, two in Ottawa, and another Ottawa location expected later this month, the business eschews provincial licensing.
Freedom Cannabis has been granted an extension of its stay period until December 19, 2024. The company sought creditor protection in August.
Leafly reports $8.4 million in revenue (compared to $10.6 million in Q3 2023), but a net loss of $1.1 million for Q3 2024.
Finally, a medical cannabis initiative was passed in Nebraska, but it is facing legal challenges regarding the validity of many of the votes. A decision is not expected for a few weeks.
Police in Quebec have arrested six and seized a large quantity of cannabis following a series of seven searches of places and five vehicles in Shawinigan, Montreal and Saint-Armand.
In an announcement on November 8, the Sûreté du Québec’s Cannabis Smuggling Investigation Service, in collaboration with the Montreal Police Department and partner municipal police services, said the arrests and searches were in connection with illicit cannabis operations.
Police actions started with the dismantling of a hashish production laboratory operating in Saint-Armand, near the US border, followed by the arrest of six men between the ages of 34 and 71.
Police seized
390 kg of hashish
1,475 kg of cannabis (Kief and buds)
23 kg of hashish concentrate (wax, oil)
2 L of GHB
Over CAD$185,000
Over USD$10,000
1 vehicle seized as an infringing property
Police say the operation deployed 70 police officers, including dog handlers from the Sûreté du Québec.
Noya Holdings Inc. and Noya Cannabis Inc. have applied for creditor protection in an initial order posted on November 6, 2024. Noya’s monitor in the case is BDO Canada Limited.
As part of the cannabis company’s CCAA filing, the court has ordered that all relevant Health Canada and cannabis excise licences held by Noya Cannabis Inc. (NCI) and related companies shall be preserved and maintained during the pendency of the stay period. This included NCI’s ability to sell cannabis inventory, as well as any applicable licence renewals.
The balance of the relief sought by the applicants will be heard in a comeback hearing by the court on November 15, 2024. According to documents online, the applicants’ are insolvent and cannot meet their liabilities as they become due. They have determined that a CCAA proceeding is required to complete a sale process and otherwise address their current challenges by restructuring their operations.
Noya’s known list of creditors shows nearly $10.3 million owed in secured credit and $2.7 million owed to unsecured creditors. Secured creditors are Lending Stream Inc., Terrascend Corp (Gage Growth Corp), and 1955185 Ontario Inc. Unsecured creditors include the Canada Revenue Agency, Health Canada, Pure Sun Farms, High Tide, Kiaro Brands, Ignite International Brands (Canada) Ltd., HiFyre, and many others.
Noya Holdings Inc. (NHI) is the parent company of NCI and 2675383 Ontario Limited (267). First licensed in 2017, NCI holds a cannabis cultivation and processing licence, and 267 holds a micro-cultivation cannabis licence. Both are located in Ontario. The applicants currently employ 18 employees.
Lending Stream Inc. is the applicants’ senior secured creditor. As of August 31, 2024, NHI was indebted to Lending Stream pursuant to a convertible debenture in the approximate amount of nearly $1.9 million. According to records, the owner of Lending Stream is the brother of the applicant’s owner. 1955185 Ontario Inc. is another secured creditor that provided loans to NHI. As of September 30, 2024, 195 had loaned approximately $3.8 million to NHI. The numbered company is owned or controlled by the parents or relatives of the owner of the applicants.
The applicants are also facing various contingent claims in excess of $5 million, including from Pure Sunfarms Corp., Ignite International Brands (Canada) LTD, and 10805696 Canada Inc. o/a Mauve & Herbes. These claims, say documents filed online, are mostly related to contractual disputes and are unsecured.
Noya and its related companies (the applicants) are up-to-date with payments to the Canada Revenue Agency with respect to employment insurance and Canada Pension Plan deductions but owe excise tax remittances and HST remittances.
The financial race surrounding the recreational marijuana legalization initiative in South Dakota was highly competitive, with both opponents and supporters gathering nearly equal resources. This set the scene for an intense debate while voters prepared for the November 5 ballot. Both sides have collectively raised around $915,000, showcasing the deeply split opinions across the state on the matter.
Advocates for Initiated Measure 29, which aims to legalize the use and sale of cannabis for those aged 21 and over, have secured about $458,000 in funding. The main group pushing for the measure, known as the Yes on 29 Ballot Committee, has raised $436,000, with $300,000 contributed by cannabis-related businesses. The largest single donation was $100,000 from GL Partners, a Rapid City-based medical cannabis dispensary.
On the opposing front, the Protecting SD Kids Ballot Question Committee accumulated about $457,000. A large share of this funding came from individual contributions, including a notable $61,400 donation by Brad Wheeler, a local manufacturer. Additionally, businesses within South Dakota collectively contributed $71,000 to the opposition’s campaign.
The significant financial backing on both sides highlights the importance of Initiated Measure 29, one of seven ballot measures voters will decide on this November. So far, the Yes on 29 campaign has spent approximately $217,000 on its advocacy efforts, while the opposition has spent a more substantial $371,000 on initiatives to prevent the measure’s approval.
The financial records show an ongoing trend where the marijuana industry heavily invests in efforts to support legalization measures across the country. Meanwhile, those against such measures often rely on local businesses and grassroots donations to bolster their campaigns.
As election day neared, the close fundraising figures signal a tight race. Both sides stepped up their campaigns to influence voters, aware of the potential long-term effects on South Dakota’s cannabis policy.
Neighboring states also contribute to the broader conversation about cannabis reform. Montana, for instance, has already seen more than $118 million in tax revenue from its legalized marijuana market over two years. North Dakota, looking at similar economic incentives, is proposing Measure 5, which promises job creation and financial gains. In contrast, Nebraska stands apart, lacking any legalization measures and emphasizing the varied regional perspectives on cannabis policy.
Without any restrictions on donation amounts, South Dakota’s campaign on this issue represents a significant and contentious vote, making November 5 a pivotal day for the state’s future approach to cannabis regulation.
Businesses like Innovative Industrial Properties Inc. (NYSE: IIPR) with interests in the cannabis space in other markets will be hoping that the will of the people wins the day once vote counting is completed.
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A recently re-elected BC MLA is raising eyebrows with the province’s legal cannabis industry following a recent comment she made on social media platform “X” that said cannabis legalization is fuelling the illicit market.
“Great work by police confiscating drugs marketed to kids,” wrote Sturko on X. “More proof that legalization does not eradicate the illicit market, but instead fuels more drugs & crime.”
Neither Sturko nor the BC Conservatives replied to a request for comment on the issue or if the party itself is supportive of the province’s legal cannabis industry as of press time. Sturko is a former Surrey RCMP officer.
Sturko was first elected to the riding of Surrey South in September 2022. Surrey, the second largest municipality in BC after Vancouver and eleventh in Canada, has a traditionally socially conservative voting base. The city itself only recently began the process of allowing companies to apply for a handful of cannabis store licences, one of the last prohibition-era holdouts in a region that has otherwise embraced cannabis legalization.
“It’s disappointing to see that. Whether this is in BC or any other province, the intention of legalization was to create a safe and regulated product and keep it out of the hands of youth. By raiding illicit operators, really what they’re trying to do is take away that unregulated product that is shown time and again to be untested and have toxic ingredients.”
Cory Waldron, Mood Cannabis
The issue highlights one of the challenges facing the cannabis industry in BC, where a large portion of the voting public is at best uninterested in industry concerns, if not still outright hostile or dismissive to them.
Cory Waldron, the owner of Mood Cannabis, a cannabis retailer in Nanaimo, BC, and president of the Licensed Retail Cannabis Council of BC (LRCCBC), says he thinks the MLA misunderstands the issue.
“It’s disappointing to see that,” says Waldron. “Whether this is in BC or any other province, the intention of legalization was to create a safe and regulated product and keep it out of the hands of youth. By raiding illicit operators, really what they’re trying to do is take away that unregulated product that is shown time and again to be untested and have toxic ingredients.”
The comments, he says, reflect a broader issue in BC politics where neither major party seems to be listening to the concerns of the legal industry. The industry is at a “critical point,” he explains, in terms of the sustainability of legalization. Companies are facing considerable challenges and not getting support from the government, be it provincial or federal.
Screenshotvia the platform formerly known as Twitter
“I think both parties [in BC], the Conservatives and NDP for the most part, don’t really want to deal with the problems that we’re seeing in BC. Not only as retailers but at the producer level as well. The file is kind of treated like the bad kid in the corner. We’re forgotten.”
“Statements like these make me wonder if our policymakers are completely unfamiliar with how our industry works. The popularity of unregulated edibles is evidence that we need better regulations, not proof that legalization fuels more crime.”
Walker Patton, BC Cannabis Alliance
Walker Patton, from the BC Cannabis Alliance, representing cannabis producers in BC—especially craft producers—shared a similar sentiment.
“Frankly, it’s disappointing,” Patton tells StratCann. “Statements like these make me wonder if our policymakers are completely unfamiliar with how our industry works. The popularity of unregulated edibles is evidence that we need better regulations, not proof that legalization fuels more crime. Or maybe I’m being naive in taking a comment like that at face value.”
When elected in 2020, Sturko replaced BC NDP MLA Mike Starchuk, who served as MLA for Surrey Cloverdale from 2020-2022. Before that time, Starchuck was a member of Surrey City Council from 2014-2018. In 2018, he came out in support of cannabis legalization, noting his municipal party, Surrey First, had a plan for limited cannabis retail in the city rather than an outright ban.
Ridings in BC like Surrey Cloverdale are often dominated by more socially conservative politics, which highlights one of the challenges the legal industry faces in the province. The provincial government under the BC NDP have for years now been largely unresponsive to many industry concerns regarding provincial regulations and policies and their impact on the health of the legal cannabis sector in the province.
With an opposition apparently still stuck in the land of reefer madness and a voting public that appears to support this sentiment, there is little incentive for the BC NDP government to listen. MLA Sturko’s comments shouldn’t be surprising but instead should serve as another healthy reminder of how much further the industry has to go to shift this narrative among voters.
Even six years into legalization, there are still many who outright oppose the legal industry or, at the very least, don’t prioritize the industry’s concerns.
Auxly Cannabis Group Inc. reported $33.3 million in net revenue in its third quarter of 2024, a new company record and an increase of 18% year-over-year and 14% quarter-over-quarter.
The cannabis company’s net income was $3.3 million, down from $32.6 million in the same quarter in the previous year. However, its Q3 2023 net gains were mostly driven by the gains on the extension of the maturity of its Imperial Brands Debenture. Excluding the gains on that extension, net income in the most recent quarter increased by $17.5 million year over year.
About three quarters (76%) of the company’s cannabis sales originated from sales to British Columbia, Alberta and Ontario. Auxly sells under the brands Parcel, Back Forty, Foray. Doescann, and Kolab Project, and provides wholesale bulk sales of dried cannabis to various licensed producers in Canada.
Dried flower retail sales increased by over 12% compared to the previous quarter. Pre-roll retail sales increased by nearly 19% quarter-over-quarter. Auxly branded products represented approximately 50% of the top ten vape SKU’s nationally.
Hugo Alves, CEO of Auxly, commented: “Our continued focus on efficient revenue growth and enhanced profitability has delivered another record-breaking quarter of financial results, highlighted by an 18% year-over-year increase in net revenue and record adjusted EBITDA of $8.3 million.
“Our commitment to providing consumers with exceptional products that help them live happier lives enabled us to grow national market share in our core product categories of dried flower, pre-rolls and vapes; and has elevated Back Forty to the #1 brand in Ontario by dollars sold. We remain focused on creating long-term shareholder value. I am excited for the future and proud of the tremendous efforts of our talented and dedicated team in delivering these results.”
Auxly operates Auxly Charlottetown in PEI, where the company does most of its cannabis 2.0 product development and Auxley Leamington where it grows and processes dried flower. In May 2024, the company sold its Auxly Ottawa facility for $1.7 million and applied the proceeds from the sale to support its ongoing operations. The Company does not currently have any active international operations.
Featured image of Auxly’s Leamington, Ontario facility
Canopy Growth Corporation reported nearly $74 million in revenue in its second fiscal quarter of 2025, but a net loss of $128.3 million.
The second quarter of 2025, covering the three months ended September 30, 2024, saw a year-over-year decline in revenue, from $82 million in Q2 2024, but a decrease in losses, which were $324.8 million for the three months ended September 30, 2024.
Net revenue for the Canadian cannabis producer was $63 million, with $18.4 million coming from Canadian adult-use sales, $18.7 coming from Canadian medical cannabis sales, $10.1 million coming from international cannabis sales, and $15.9 million from its vaporizer company, Storz & Bickel.
Net revenue from Canadian adult-use cannabis sales was down 24% from $24.1 million in the same quarter last year, while Canadian medical cannabis revenue was up 16% from $16.2 million. International medical sales revenue was up 12% from $9 million in Q2 2024, while revenue from Storz & Bickel was up 32% from $12 million.
Canopy attributes the decline in revenue from the non-medical cannabis market in Canada to lower sales volumes, “which were partially affected by supply constraints for certain products as a result of financial difficulties with our contract manufacturers and lower sales velocity due to continued increase in price competition.”
The company attributes the year-over-year increase in revenue from domestic medical cannabis revenue to an increase in the average size of medical orders placed by its customers, which it says is primarily due to an increase in the percentage of insured customers and a more extensive assortment of cannabis product choices offered to its customers.
Canopy’s international sales increased from Q2 2024 because of the increased shipments of flower products in Europe, especially Poland and Germany, offset by a decline in Australian medical business due to greater competition in that market.
The company also incurred nearly $11 million in excise tax in the most recent quarter.
“We delivered a solid second quarter led by strong growth across our Storz & Bickel, Canadian medical, and European cannabis businesses and we are well positioned to accelerate momentum in the second half of our fiscal year,” said David Klein, Canopy’s CEO. “In addition, we remain highly optimistic about the momentum building within Canopy USA as this strategy was uniquely designed to succeed independent of the need for federal legalization.”
(CNW) Smiths Falls, Ont. – Canopy Growth Corporation today announces its financial results for the second quarter ended September 30, 2024. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.
“We delivered a solid second quarter led by strong growth across our Storz & Bickel, Canadian medical, and European cannabis businesses and we are well positioned to accelerate momentum in the second half of our fiscal year. In addition, we remain highly optimistic about the momentum building within Canopy USA as this strategy was uniquely designed to succeed independent of the need for federal legalization.” – David Klein, Chief Executive Officer
“We’ve demonstrated another quarter of progress towards profitability driven by improvement in gross margins as well as a reduction in SG&A expenses. With expected improvement in top-line growth in the second half of the fiscal year and continued cost discipline, we believe we remain on a path to achieve positive Adjusted EBITDA at the consolidated level in the coming quarters.” – Judy Hong, Chief Financial Officer
Second Quarter Fiscal Year 2025 Financial Summary
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(in millions of Canadian dollars, unaudited)
Net Revenue
Gross margin percentage
Adjusted gross margin percentage1
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Net loss from continuing operations
Adjusted EBITDA2
Free cash flow3
Reported
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$63.0
35 %
35 %
$(131.6)
$(5.5)
$(56.4)
vs. Q2 FY2024
(9 %)
100 bps
200 bps
11 %
54 %
16 %
Net revenue in Q2 FY2025 decreased 9% compared to the second quarter ended September 30, 2023 (“Q2 FY2024”). Excluding net revenue from businesses divested during the prior fiscal year, net revenue increased 3%.
Consolidated gross margin increased by 100 basis points (“bps”) to 35% in Q2 FY2025 compared to Q2 FY2024 primarily due to the realized benefit of the Company’s cost savings program as well as a shift to higher-margin medical cannabis sales.
Operating loss from continuing operations was $46MM in Q2 FY2025, compared to a loss of $7MM in Q2 FY2024, with last year’s results benefitting from the sale of a facility in Smiths Falls, Ontario.
Adjusted EBITDA loss was $6MM in Q2 FY2025, representing a 54% improvement year-over-year, driven primarily by the realized benefit of the Company’s cost savings program.
Free Cash Flow was an outflow of $56MM in Q2 FY2025, representing a 16% improvement compared to Q2 FY2024, primarily driven by a reduction in cash interest expenses.
Cash and short-term investments balance increased to $231MM at September 30, 2024, from $195MM at June 30, 2024.
1 Adjusted gross margin is a non-GAAP measure, and for Q2 FY2025 excludes $nil of restructuring costs recorded in cost of goods sold (Q2 FY2024 – excludes $0.7MM of restructuring cost reversals recorded in cost of goods sold). See “Non-GAAP Measures” and Schedule 4 for a reconciliation of net revenue to adjusted gross margin.
2 Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Measures” and Schedule 5 for a reconciliation of net loss from continuing operations to adjusted EBITDA.
3 Free cash flow is a non-GAAP measure. See “Non-GAAP Measures” and Schedule 6 for a reconciliation of net cash used in operating activities – continuing operations to free cash flow – continuing operations.
Canada Cannabis Highlights
Canada cannabis net revenue was $37MM in Q2 FY2025, representing a decrease of 8% compared to Q2 FY2024. While Canada medical cannabis net revenue increased 16% over Q2 FY2024, Canada adult-use cannabis declined 24% in part due to an interruption in the supply of Wana edibles.
Several initiatives are expected to strengthen the Company’s Canada adult-use cannabis business in the second half of fiscal year 2025 (“2H FY2025”). These initiatives include:
The re-introduction of Wana edibles which is expected to drive growth in the edibles category, supported by investments in in-market activations.
Continued efforts to elevate the quality and variety of our Tweed and 7ACRES flower and pre-roll joint product offerings, as well as increased commercial investments to expand distribution and improve velocity of our core brands. The Company is seeing this investment pay off with reinvigorated performance of Tweed Kush Mintz as well as promising in-market performance of new strains Tweed Cherry Acai Mints, which is now carried in all markets nationally, and 7ACRES Ultra Jack.
A robust new product pipeline with a particular focus on the growth categories of Vape, Pre-Roll Joints and Concentrates. Over the coming weeks, the Company expects to launch an innovative infused pre-roll joint product in both adult-use and medical channels.
International Markets Highlights
International markets net revenue was $10MM in Q2 FY2025, representing an increase of 12% over Q2 FY2024, with strong growth in Poland and Germany partially offset by a decline in Australia.
International markets cannabis gross margins increased 1,700 bps to 47% during Q2 FY2025 compared to Q2 FY2024 primarily due to a shift in sales mix to higher-margin Poland as well as a lower overall cost structure.
Agreements that the Company has signed with multiple EU-based cultivators are expected to increase the supply of cannabis flower to fuel growth in EU medical cannabis markets over the coming quarters.
Storz & Bickel Highlights
Storz & Bickel delivered net revenue in Q2 FY2025 of $16MM, representing a 32% increase over Q2 FY2024 driven primarily by strong growth in Germany following regulatory reform, significant improvement in U.S. sales and the sell through of the remaining inventory of the Mighty device that is being phased out.
Ongoing demand in Germany driven by active marketing campaigns are expected to drive continued growth in the German and the broader European market.
Additional distribution gains in the U.S., driven by new affiliate programs as well as traditional holiday season marketing and sales initiatives are expected to benefit Storz & Bickel sales in 2H FY2025.
Canopy USA Highlights
Canopy USA, LLC (“Canopy USA“) has completed the acquisition of Wana Brands (“Wana”) with the closing of Mountain High Products, LLC subsequent to the end of Q2 FY2025, paving the way for brand integration and growth.
Wana launched the ShopWanderous.com online marketplace for hemp-derived THC and CBD products, expanding their product offering to a new national consumer base.
Lemurian, Inc. (“Jetty”) is expected to launch new solventless All-In-One vapes in California and Colorado over the coming weeks, and New York early in calendar year 2025.
The acquisition of Acreage Holdings, Inc. (“Acreage”) by Canopy USA remains on track to close no later than the first half of calendar year 2025.
Second Quarter Fiscal 2025 Revenue Review4
(in thousands of Canadian dollars, unaudited)
Q2 FY2025
Q2 FY2024
Vs. Q2 FY2024
Canada cannabis
Canadian adult-use cannabis5
$18,388
$24,087
(24 %)
Canada medical cannabis6
$18,689
$16,179
16 %
$37,077
$40,266
(8 %)
International markets cannabis7
$10,060
$8,977
12 %
Storz & Bickel
$15,854
$11,991
32 %
This Works
$-
$7,074
(100 %)
Other
$-
$1,287
(100 %)
Net revenue
$62,991
$69,595
(9 %)
The Q2 FY2025 and Q2 FY2024 financial results presented in this press release have been prepared in accordance with U.S. GAAP.
Webcast and Conference Call Information
The Company will host a conference call and audio webcast with David Klein, CEO and Judy Hong, CFO at 10:00 AM Eastern Time on Friday, November 8, 2024.
Adjusted EBITDA is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Management believes Adjusted EBITDA is a useful measure for investors because it provides meaningful and useful financial information, as this measure demonstrates the operating performance of businesses. Adjusted EBITDA is calculated as the reported net income (loss), adjusted to exclude income tax recovery (expense); other income (expense), net; loss on equity method investments; share-based compensation expense; depreciation and amortization expense; asset impairment and restructuring costs; restructuring costs recorded in cost of goods sold; and charges related to the flow-through of inventory step-up on business combinations, and further adjusted to remove acquisition, divestiture, and other costs. Asset impairments related to periodic changes to the Company’s supply chain processes are not excluded from Adjusted EBITDA given their occurrence through the normal course of core operational activities. The Adjusted EBITDA reconciliation is presented within this news release and explained in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 (the “Form 10-Q”) filed with the Securities and Exchange Commission (“SEC”).
Free cash flow is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Management believes that Free Cash Flow presents meaningful information regarding the amount of cash flow required to maintain and organically expand our business, and that the Free Cash Flow measure provides meaningful information regarding the Company’s liquidity requirements. This measure is calculated as net cash provided by (used in) operating activities less purchases of and deposits on property, plant and equipment. The free cash flow reconciliation is presented within this news release and explained in the Form 10-Q filed with the SEC.
Adjusted gross margin and adjusted gross margin percentage are non-GAAP measures used by management that are not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Management believes that Adjusted Gross Margin presents meaningful and useful financial information as this measure provides insights into the gross margin performance of the business. Adjusted gross margin is calculated as gross margin excluding restructuring and other charges recorded in cost of goods sold, and charges related to the flow-through of inventory step-up on business combinations. Adjusted gross margin percentage is calculated as adjusted gross margin divided by net revenue. The adjusted gross margin and adjusted gross margin percentage reconciliation is presented within this news release and explained in the Form 10-Q filed with the SEC.
4 In Q2 FY2025, we are reporting our financial results for the following four reportable segments: (i) Canada cannabis; (ii) international markets cannabis; (iii) Storz & Bickel; and (iv) This Works. On December 18, 2023, the Company completed the sale of This Works and as of such date, the results of This Works are no longer included in the Company’s financial results.
5 For Q2 FY2025, amount is net of excise taxes of $8.9MM and other revenue adjustments of $1.3MM (Q2 FY2024 – $10.8MM and $0.5MM, respectively).
6 For Q2 FY2025, amount is net of excise taxes of $2.1MM (Q2 FY2024 – $1.7MM).
7 For Q2 FY2025, amount reflects other revenue adjustments of $nil (Q2 FY2024 – $0.1MM).
Cannabis delivery is a challenge. There are very low margins and a lot of extra steps to take. While it was initially received with fanfare in the provinces that have allowed cannabis stores to deliver cannabis, many retailers now would rather not touch it at all.
However, at least one retailer in downtown Toronto says he thinks he has found a way to not only make cannabis delivery work but also make it the main focus of his business.
Mike Dunn and his partner Brooke Silversides are the founders of 1922 Cannabis, located just off Queen Street, a half block from Moss Park in Toronto. Licensed in June 2020, Dunn says he faced many of the same challenges other cannabis stores face in the highly saturated Toronto market with high rents and tight margins.
He was able to distinguish 1922 by curating quality products, and when cannabis delivery became an option for cannabis shops in Ontario in 2022, he and his partner saw a chance to extend that curated experience through delivery. (Ontario first began temporarily allowing cannabis delivery and curb-side pick-up in early 2020 due to COVID-19 restrictions. In early 2022, the rules were made permanent).
“Our focus is on being fast and free, which we achieved by leaning into eco-friendly technology, and that’s the proof of concept we’ve brought to life,” says Dunn.
“Our journey has been a natural evolution. We began as a retail operator, then saw an opportunity to lean into delivery as this new on demand economy grew. Partnering with a world-class technology provider like Uber Eats allowed us to refine and scale our buyer experience to create a highly efficient delivery service. Now, that delivery service is evolving further into a logistics-focused company, expanding what we can offer our clients and the market.”
“Our journey has been a natural evolution. We began as a retail operator, then saw an opportunity to lean into delivery as this new on demand economy grew.”
Where many of his peers have found frustrations with delivery—namely the added costs for a potentially negligible increase in sales, if at all—Dunn says he and Silversides leaned into a streamlined, curated menu and fast delivery service that appears to be paying off—the business recently celebrated 10,000 cannabis deliveries in the Toronto area in the past year.
One of the ways 1922 has been able to become so successful with deliveries is by simplifying the menu and buying experience, Dunn thinks. Instead of layers of menus and categories and choices, he says he believes consumers—his customers at least— want fewer choices, not more.
Dunn says he can cut unnecessary expenses by consistently carrying quality products and building up a core customer base through his retail store who trust that it will always be a good product no matter what they purchase. And by moving most of his sales to delivery, he can operate with an efficient level of store staff.
“It’s become too complicated to buy weed. It’s like rocket science. So, if you’re able to establish trust through repetition, then they trust your service and product. You want to get to the point where they ask you to just bring them stuff. I have maybe 30 customers where that’s my relationship with them now.”
“We’re almost reverting back to old school dealers,” he chuckles. “‘Just get me some nice weed’. And our customers know that we do.”
“Now we’ve taken geography out of that equation, you don’t have to be in our neighbourhood to get that experience from us. We can bring it to you.”
A key to that success, he says, has also been mastering his online presence to ensure new customers can find him, especially in a sea of illegal online stores with highly sophisticated web presence and SEO.
Partnering with Uber Eats, which began offering the product listings for cannabis stores on their app in October 2022, as well as Canadian retail data program Breadstack, were also key to this.
“Buying on Uber Eats is the easiest way to buy weed in the world. Partnering with a world-class technology vendor, I’ve learned so much in terms of how to refine our buyer experience.”
Delivering almost everything himself on an E-bike (he’s done 8,000 of the 10,000 deliveries) has helped keep costs low and also helped ensure fast delivery times, even in the often highly congested downtown Toronto area.
“We’re almost reverting back to old school dealers.”
Ideally, he sees the future of 1922 Cannabis as focussing almost entirely on delivery. Retail and staffing are costly in a space like Toronto, and he sees an emerging demand economy that he sees consumers quickly moving to.
If the regulations allowed it, he would like to operate smaller low-cost retail locations in the city that he could use as delivery hubs for his growing client base. He says he’s talked to the provincial regulator, the AGLC, about the issue but hasn’t seen any movement yet.
Still, he sees it as inevitable. Retail is tough, and Dunn sees the economy is moving to a delivery economy, saying he sees it worth three-quarters of a million dollars by 2027.
“People would just rather have their cannabis delivered to them. They order everything else online; they get groceries online, and presents online. Ordering some cannabis is no different.”
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