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Cannabis Summary for May 6, 2020

2020-05-06 19:43 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index slipped 0.5 point to 129.23 Wednesday, while the Canadian Securities Exchange Composite Index lost 2.3 points to 310.86. Dale McClanaghan's Okanagan-based cannabis producer Lotus Ventures Inc. (J) gained 1.5 cents to 12.5 cents on 387,800 shares after releasing its results for its fiscal second quarter ended Feb. 29, 2020. The company recorded $1-million of revenue in fiscal Q2 (its first quarter with any revenue). Lotus lost $335,000 in the quarter, but that was because of a $675,000 downward accounting adjustment relating to inventory. Without the accounting adjustment, Lotus would have had pretax earnings of $340,000.

With costs of goods sold at just $329,000, Lotus had a sturdy gross margin of 69 per cent. Additionally, most of the company's sales are on the wholesale market, which typically has lower margins. The healthy gross profit is made possible by Lotus's low production cost of $1.16 per gram.

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