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Cannabis Summary for April 22, 2020

2020-04-22 20:03 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index fell 0.44 point to 126.92 Wednesday, while the Canadian Securities Exchange Composite Index gained 6.28 points to 294.21. Jon Sandelman's United States-based AYR Strategies Inc. (AYR) lost five cents to $6.96 on 67,900 shares after the company provided the first peek at its earnings since COVID-19 became a factor. AYR operates in Massachusetts and Nevada, both states where recreational marijuana is legal. The company acquired five companies spread across those two states just before AYR listed its shares publicly in May, 2019. It has been in no hurry to expand to other states.

Cannabis producers in Nevada are only allowed to continue making sales by delivery; companies cannot keep their dispensaries operating. In today's update, AYR says it is still generating positive adjusted EBITDA in Nevada despite the restrictions. The company now has over 50 delivery vehicles, which AYR says have delivered up to 1,200 orders per day. Part of what is presumably keeping the business stable is that customers are making much bigger orders, stocking up so they can order less frequently. AYR's average order is up to $139 (U.S.) with the delivery model in place, up from $61 (U.S.) it saw before COVID-19. The company says its gross margins are up 20 per cent since COVID-19 began to effect business.

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