Cannabis ‘edibles’ crackdown takes bite out of Indiva’s sales

Did you miss the webinar “Women Leaders in Cannabis: Shattering the Grass Ceiling?” Head to MJBiz YouTube to watch it now!


Canadian cannabis producer Indiva’s net revenue took a hit in the second quarter because of the loss of sales from its Life Lozenges brand stemming from Health Canada’s crackdown on “erroneously” classified edibles products.

Indiva’s second-quarter net revenue of 7.5 million Canadian dollars ($55.4 million) was 20% lower than the previous quarter and a 7.6% decrease year-over-year.

The Ottawa, Ontario-based company attributed the decline primarily to the lozenges issue as well as a decrease in sales of its Wana Brands cannabis gummies.

“This was a transitional and busy quarter for Indiva, with several cross currents impacting our results, including the negative impact from the loss of revenue from our Indiva Life Lozenges, and partial revenue loss in the quarter from the transition to contract manufacturing of Wana gummies, offset by continued growth and excellent market share gains from Pearls by Grön gummies,” CEO Niel Marotta in a statement.

Indiva was one of several producers of some lozenges and chewable extracts for which Health Canada had issued a “stop sale” request because their packages had been classified as extracts and contained more than 100 milligrams of THC.

Health Canada said some of those products should be classified as “edibles” and thus should not exceed 10 milligrams of THC per package.

“While we maintain that the Lozenge products were compliant with the Cannabis Act and had the positive effect of migrating dollars from the illicit market to the legal market, we complied with regulatory orders and discontinued production and packaging of these products in March 2023, and completed all sales of finished goods to provincial wholesalers in May 2023,” Marotta said.

In March, Indiva paused production of the products over the dispute and eventually stopped their sales altogether.

In the quarter, Indiva reported a comprehensive net loss of CA$1 million.

The company took an inventory impairment hit worth CA$700,000 in the quarter – and CA$1.5 million cumulatively year-to-date – related to bulk lozenges and packaging that could not be sold because of the Health Canada crackdown.

Indiva said it will work to monetize any impaired inventory that remains saleable.

Net revenue in the April-June quarter from edible cannabis products declined to CA$6.9 million, down 5.5% from CA$7.3 million in the previous year’s quarter.

Edibles represented 91.3% of Indiva’s net sales.

Indiva said it continues to be No. 1 in market share in the edibles category, with 21.8% share of sales across the key markets of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

Citing data from Hifyre, an analytics company, Indiva said it had a 25.7% edibles market share in Ontario and 15.9% in British Columbia – enough for No. 1 in both markets.

Indiva said it expects the third quarter’s net revenue to improve, driven by new products.

Shares of Indiva are traded on the TSX Venture Exchange as NDVA.