Week in Review: Marijuana firms cut costs amid COVID-19, L.A. cannabis licensing audit, NYSE aims to delist CannTrust & more

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

Week in Review coronavirus layoffs, Week in Review: Marijuana firms cut costs amid COVID-19, L.A. cannabis licensing audit, NYSE aims to delist CannTrust & more

Three multistate marijuana operators – 4Front Ventures, MedMen Enterprises and Acreage Holdings – announced cutbacks in bids to accelerate their paths toward profitability, even as some experts questioned the overall financial strength of the industry amid the coronavirus crisis and a contracting economic climate.

MJBizDaily takeaway: There have been plenty of shakeups recently at the C-suite level among cannabis companies, and the coronavirus pandemic has added uncertainty to an already challenging business landscape.

Craig Behnke, equity analyst at Marijuana Business Daily’s Investor Intelligence noted that economic conditions resulting from the COVID-19 outbreak are pushing cannabis companies to take even more aggressive steps than they had previously – including significantly lowering expenses, reducing head count and selling noncore assets.

But he added the “transformation” of the industry is a “natural” step as it matures.

For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.

Audit reveals L.A. cannabis licensing flaws

An independent audit of last September’s marijuana business licensing round in Los Angeles found the process “confusing and prone to human error,” but there were no signs of corruption.

MJBizDaily takeaway: Los Angeles is not much closer to finishing its marijuana store permitting process than it was a year ago.

Additional delays mean more costs for would-be marijuana store owners, since one of the requirements for retail permits is that applicants must have a location under lease or owned before applying for a permit.

For some companies, that means burning through tens of thousands of dollars in rent a month while they await the green light to begin selling products.

NYSE likely to drop Canada’s CannTrust

The New York Stock Exchange moved to delist financially struggling CannTrust.

It would be the first publicly traded Canadian cannabis cultivator to lose its listing on a major stock exchange. The company admitted it “has been unable to generate any meaningful revenue since June 2019.”

MJBizDaily takeaway: CannTrust’s delisting would represent a grim milestone for the cannabis industry. The move by big cannabis companies onto the NYSE and Nasdaq originally was heralded as another sign of marijuana’s entry into the mainstream.

For analysis and in-depth looks at the investment trends and deals driving the cannabis industry forward, sign up for our premium subscription service, Investor Intelligence.

Colorado adult-use retailers restart in-store sales

Regulators in Colorado delivered good news to the state’s recreational cannabis retailers, saying they can resume selling products inside their stores – versus having first been told adult-use retailers must offer only curbside pickup.

MJBizDaily takeaway: The new order could give adult-use marijuana stores a financial shot in the arm, because it provides them another option for serving customers.

At the same time, retailers can continue curbside pickups – or choose to restrict customers to lobbies or waiting areas to reduce the spread of the coronavirus.

John Rebchook can be reached at johnr@mjbizdaily.com