Fire & Flower (FFLWF) reports 2Q Earnings.
Fire & Flower is a cannabis consumer retail and technology platform with more than 90 corporate-owned stores in its network. They reported revenue of $40.7 million, representing a decrease of 6% from $43.3 million in the prior year comparative period, primarily due to increasing competition from new licences issued and pricing pressures in the cannabis retail market. Gross profit in the quarter came in at $9.7 million (24% of revenue) compared to $16.2 million (37% of revenue) in the prior year comparative period. The decline in gross profit dollars and margin reflects investment in the Spark Perks Member Pricing program, Firebird Delivery and Hifyre digital platform during the current fiscal quarter. Adjusted EBITDA of negative $6.0 million and net loss was $21.6 million, compared to a net profit of $19.5 million in the prior year comparative period. Fire and flower has a cash/cash equivalents balance of $18.6 million as at July 30, 2022, a decrease of $1.3 million from the fiscal year ended January 29, 2022.
Second circuit courts commentary.
The United States Court of Appeals for the Second Circuit said the federal government’s decision to classify cannabis as a Schedule I controlled substance without accepted medical utility is arguably “irrational,” but it is not unconstitutional. The lawsuit argued that cannabis being a schedule 1 drug under the US Controlled Substances Act has no rational basis because cannabis does not meet the statutory criteria for inclusion. “As we have explained,” judges concluded, the defendants in this case “must do more than show that the legislature’s stated assumptions are irrational; [they] must discredit any conceivable basis which could be advanced to support the challenged provision, regardless of whether that basis has a foundation in the record, or actually motivated the legislature.” This decision was not unexpected by industry experts due to the fact that it is the federal lawmaker's duty, and not that of the courts, to repeal cannabis prohibition. We all know that complete federal reform for ending the days of cannabis prohibition won't happen any time soon, but at least we can still dream that SAFE+ might happen (if you close your right eye and squint with your left eye). norml.org
U.S. Wants Banking data w/o reform?
The U.S. Treasury Department formally sent the Biden Administration a proposal to start collecting cannabis banking data, similar to how it gets data from liquor stores, casinos, and car dealerships. These measures have been put in place in other industries to fight the war on money laundering. This comes to no ones surprise as the Treasury Department initially announced that they were looking into this earlier this summer. “Challenges resulting from the lack of banking are not limited to cannabis businesses, but also impact entities that choose to engage with and service them; including financial institutions themselves. Consequently, the MLR risk assessment is an important tool for the OCC’s Bank Secrecy Act/Anti-Money Laundering and OFAC supervision activities because it allows the agency to better identify those institutions, and areas within institutions, that may pose heightened risk and allocate examination resources accordingly.” said the Nation Cannabis Industry Association. We find it funny that the Treasury Department finds needs for banking information of cannabis companies at the same exact moment in time that Congress is struggling to even get SAFE across the finish line. marijuanamoment.net
