DOLLARs in the sofa have dried up.
Through 6-months of 2022, 41 cannabis companies have raised seed/venture funding which accounts for a total of $294 million. At this time last year, cannabis companies had received 3x times more funding, and at this pace, 2022 will be the lowest funding year since 2017.
Oh, CANOPY, STOP TRYING TO GIVE MY GOOD FRIEND STZ Hope.
We mentioned earlier in the week that Fitch downgraded Canopy Growth to CCC, citing market share loss. Garth Hankinson, CFO of Constellation Brands, said this about Canopy yesterday during the STZ earnings call, "there's no doubt that over the past couple of years, Canopy has faced a number of headwinds. That being said, we remained very, very positive on the category and very optimistic for Canopy. The reason we feel that way, right, is that number one, in Canada, we believe that the Canopy team, through its recently announced restructuring programs, has a renewed focus on driving the premium end of that business which is profitable and that the team up there is on a path to profitability in the near-term. In the US, we continue to see very good green shoots for that category in general in terms of consumer consumption, whether you look at retail sales or you look at state-by-state tax income associated with cannabis sales. Both are growing very, very, quite nicely, showing that the consumer is adopting the category. We also really like the approach that the Canopy team is taking in the US. If you look at some of the options that Bill outlined in his prepared remarks, Canopy's positioned with Acreage and TerrAscend and Jetty and Wana, have them very well positioned to take advantage of the US market once it does open up and once legalization occurs. So that's why we remain – that's why we continue to have conviction on the category." It sounds like a lot of words and not much data to back it up. We will be hosting our Monthly QA and Industry Sales Tracker in a couple of weeks, and we will be able to dig into these consumption patterns in more detail.
Is safe coming?
Yesterday, House Representative Ed Perlmutter from Colorado filed an amendment to the FY23 National Defense Authorization Act by including SAFE Banking. This is the second year in a row that the House has tried to pair the NDAA with SAFE, but last year they could not come to an agreement with the Senate and ended up cutting it out. "As I've repeatedly said, I will pursue any and all legislative avenues to get SAFE Banking across the finish line this year," Perlmutter said in a press release on Thursday. "We have a critical window of opportunity between now and the end of the year to enact common-sense cannabis reforms starting with access to the banking system. Continued inaction on this issue is dangerous and neglectful and puts communities, businesses, employees, and patients at risk across this country."
