A Heady but Wobbly Takeoff for Canadian Cannabis

After a big media buildup and much anticipation, recreational cannabis finally became legal in Canada.

The results out of the gate were mixed, with sales surging in some places, lagging in others, and supply shortages making it difficult for many Canadians to purchase legal cannabis.

One thing became clear: Canadians love cannabis.

Big Bang

The Ontario Cannabis Store (OCS), which sells online, reported making 100,000 sales within the first 24 hours, with sales rising to 150,000 orders within the first week. Shopify, whose e-commerce software powers a number of Canadian government cannabis retail sites, said the sites collectively were receiving more than 100 orders per minute.

The Canadian economy was the happy beneficiary of this frenzied activity. As Vice.com reported, “Canada made some serious cash on day one of legalization.”

The problem was that the outlets could not keep up with the demand.  As 420Intel reported, “many stores and provinces are completely out of product” and “some experts think it might take a year or longer before the country can supply enough weed to meet demand.”

Blame Game

With so many of the major cannabis growers being Canadian companies, people are finding it difficult to understand why there are shortages, and fingers are pointing in many directions to assign blame.

Provinces are the sole wholesalers of cannabis and cannabis products in Canada. According to reports, provinces say they cannot supply retailers because they are not receiving the supply they were promised from the licensed growers.

While some observers believe the cannabis growers are to blame for not producing enough cannabis, others believe it is the slow pace of Canadian government agencies to grant the licenses that permit growers to sell cannabis.

Carousel of Excuses

The government-run Ontario Cannabis Store (OCS) is the largest retailer in Canada and the only sales channel for legal marijuana sales in Ontario. The OCS initially blamed the delays in fulfilling orders on demand “beyond what we anticipated” and a postal labor dispute that disrupted its exclusive shipper, Canada Post.

However, OCS president Patrick Ford later sent customers a note saying that some of the items from licensed cannabis producers were “mislabeled” and “this delayed our ability to ship your order to you.”

Amateur Growers

In a report on Vice.com, Dan Sutton, founder of Tantalus Labs, said the production capability of many Canadian cannabis companies was overblown because the managers were business people who lacked the agricultural experience needed to grow cannabis on a large scale.

The institutional knowledge needed to reliably grow massive amounts of cannabis simply doesn’t exist, he said, and the industry won’t figure it out for a while.

Sutton said he did not believe there would be enough supply to meet demand for 18 months, which would “result in the collapse of some of these big companies on the stock market.”

Harvest Coming Soon

Jordan Sinclair, vice-president of communications for Canopy Growth Corp., disagreed with Sutton’s assessment.

Sinclair said the shortages were the result of larger than anticipated demand, logistical issues in getting product onto store shelves, and yields that are still a few months away from being harvested.

Canopy has been expanding its production capability over the past year, but it will be a few more months before the facilities are in full production mode, he said.

Robbing Peter to Pay Paul

Rosalie Wyonch, an analyst with C.D. Howe Institute, said she believed there was plenty of blame to go around and that “no one is completely guilty, and no one is completely innocent.” Licensed producers failed to deliver enough cannabis, provinces failed to procure enough cannabis, and the Canadian government via Health Canada may not have approved enough LP licenses in time for legalization.

Wyoch also said legal producers were short on medical cannabis because they were routing deliveries to meet their obligation for recreational cannabis.

“The truth is, there’s a huge incentive for licensed providers to supply distributors before they supply medical patients, and as a result these medical patients are getting the short end of the stick,” she said.

A Little Perspective

Taking a step back, we can see that even with the shortages, Canada is doing a lot better than other places in which recreational cannabis became legal. In California, for example, there was no cannabis available for an entire year after legalization became official, and cannabis dispensaries are still spotty throughout the state.

In Massachusetts, recreational marijuana was legalized in November 2016, but sales are not expected to begin until this month, a full two years after legalization and four months after the July 1 target date this past summer.

Future Looks Bright

Despite the shortages, the strong demand for cannabis signals a bright future for the cannabis market in Canada. With so many major Canadian cannabis companies focused on producing large quantities of premium cannabis, consumers will be well served in the near future.

Cam Battley, Chief Corporate Officer at Aurora Cannabis, is among the bullish believers, noting that even though some cannabis companies might have stumbled getting their products to the provinces, the fact that there was such high demand was a good thing. Customers will be pleased with the high-quality cannabis that will be available to them, he said.

As we noted in a previous post, major Canadian cannabis companies like Aurora, Canopy Growth Corp., The Green Organic Dutchman, and Tilray are looking beyond Canada and making moves to become leading providers worldwide.

As the Financial Post reports, a new report from the Bank of Montreal projects a worldwide cannabis market of $194 billion in 2025. The report pegs the total Canadian cannabis market at $5.9 billion. Based on these projections, says the Financial Post, “the potential of the global cannabis industry is so vast that it could eventually make the sky-high valuations of some Canadian licensed producers look like bargains.”

As the maker of the most modern, integrated, and scalable cannabis manufacturing solution, MaxQ has deep cannabis industry expertise. Contact us to learn more about the latest trends and management solutions in the cannabis manufacturing industry. 


For APTMetrics, Power BI Is a Gift That Keeps on Giving

To say that Power BI has been a game-changer for HR consulting firm APTMetrics may be an understatement, according to CFO Marty Kelly.

Kelly credits Power BI with not only improving his company’s performance, but with making his job and those of his co-workers an order of magnitude easier and more efficient.

APTMetrics’ primary business is assessment-centered talent management solutions. Kelly says Power BI has yielded benefits across all areas of the business, including finance, marketing, sales, and operations, allowing for the consolidation of information across multiple disciplines. The scope of Power BI’s potential uses is limitless, he said.

Kelly took advantage of MaxQ’s Power BI expertise to implement a solution that matched his business needs and made it easy for his team to access data from multiple sources, view and manipulate the data, generate reports, and perform an unlimited range of analyses.

Changing Outcomes

Although Power BI was deployed initially for managing accounting in the financial department, Kelly said the solution’s flexibility has provided a host of unexpected benefits.

For instance, Kelly said he now can take snapshots of the consulting business via Power BI and know much earlier in the month how well the company is doing. By monitoring and managing the project allocation of the company’s 40 consultants, he can make adjustments that improve business outcomes, something he could not do in the past.

Using Power BI, Kelly said, he can view up-to-the-minute information as the consultants input their time and project data into the shared system. “If I know a week-and-a-half into a four-week month that I am falling short,” he explained, “I can call the consulting officer and get people more billable hours.

More Effective Financial Management

Power BI also has enabled Kelly to manage the company’s financials in new and more effective ways. “I use Power BI for in-depth financial analysis, database management and querying, and to create graphical presentations in support of the company’s business model,” he explained.

Power BI is extremely fast and flexible, said Kelly, enabling him to access and analyze data and respond to business issues faster than in the past. It also enables him to delve into financial data to pull up sophisticated financial extracts and generate reports from multiple databases with relative ease.

“I can slice the data in unlimited ways to meet the needs and requests for analytics,” he said, “and I don’t have to distribute reports because people can access shared Power BI reports.”

Power BI also has made forecasting more accurate and reliable, Kelly said, as well as easier to perform. “With ten days of information, I’ll nail the forecast for the month,” he explained. “What used to take four hours, I can now do in ten minutes.”

A Wealth of BI Benefits

Besides better financial management and forecasting, Kelly said Power BI makes it easy to create and monitor key performance indicators (KPIs) for marketing, sales, and the company’s financials. Power BI also enables him to analyze detailed project lines of business and to better understand the company’s customers in terms of revenues and profitability.

In addition, Kelly said he uses Power BI to generate “Flash” reports covering key aspects of the company’s revenue stream—consulting hours, assessments delivered, and how many tests were administered on the IT platform side.

Power BI enables him to nest multiple layers of data, which consultants and other teams can then expand, collapse, button, unbutton, and drill down into.

Everyone in the Power BI Pool

Initially used only by Kelly and his financial staff, the use of Power BI is quickly expanding to support the entire company, including three businesses (consulting, assessment practice, and IT platform for high-volume testing), business partners, the APTMetrics sales staff, and the executive team.

Power BI plays a huge role in the annual financial plan, Kelly said, enabling him to manage the yearly results of the business more effectively. After budgeting and forecasting for the full year, he can refine the plan in real time as the year progresses. “I can see how sales activity is turning into business,” he explained, “and I can more easily compare actual financial data with the full-year plan.”

Kelly also uses Power BI to calculate sales incentives, prepare supplemental financial information for the company’s CPA, and support pipeline activities. “With Power BI I can see whether we are back on a sales cycle and if there is too much quiet time. If we haven’t heard from a customer in a while, it’s time to contact them.”

Accessing data to generate reports has become easier with Power BI, Kelly said, eliminating the need to compile data in Excel and run reports from Microsoft Dynamics. “I used to have to drag a Crystal report into a database or do a direct query from the Dynamics tables and mine those. Power BI is much faster and more efficient.”

Installation a Breeze

Kelly also had praise for the ease with which he and his team could begin using Power BI, and for the MaxQ team who installed and configured the Power BI solution. Once the MaxQ team understood APTMetric’s requirements, he said, they were able to write the formulas, connect the data sources, and have Kelly and his team up and running in two days.

“For setup, we needed help from the folks at MaxQ,” said Kelly. “But once it was set up, we haven’t needed much help afterwards, just an hour of consulting support from time to time.”

Only the Beginning

After one year of using Power BI, Kelly says his company is just getting started. “We addressed key business needs first, but we haven’t come anywhere close to tapping Power BI’s capabilities.”

A big benefit has come from requiring less people to do the work, said Kelly. “If I didn’t’ have these tools, I’d have a million people doing all these tasks. With Power BI, I need less professionals to get the work done, and the work is more efficient and accurate.”

Has Power BI exceeded his expectations? “Absolutely,” said Kelly. “The cost is low and the value for the money is amazing. Every day we see new ways to use the tool. It keeps giving more value.”

Has it made the business more profitable? “Yes. More forward looking, efficient, and profitable.”

“I’m a big fan,” said Kelly. “I have yet to see a downside to it.”

MaxQ Technologies provides state-of-the-art Power BI solutions and incorporates Power BI within advanced business solution suites. Contact us to learn more about Power BI and how your business could benefit from a Power BI solution.


How to Fix Incorrect Purchase Receipt Accruals

                                    In this series, we answer real-life questions from Acumatica users

QUESTION:  I have a variance in my PO accrual report. How do I correct it?

ANSWER:  If you have a report in which there is an accrual account difference, the cause may be multiple Reversals of AP Bills. If this is the case, here is how to resolve it:

First, if you perform a Reverse Action in an AP Bill created from a PO Receipt, as shown below:

Please note that the system provides a warning:

If you continue, all links to the PO Receipt are carried over to the Debit Adjustment (highlighted below):

Unfortunately, there is no restriction to the number of times the AP Bill Reversal Action can be performed, allowing, in this example, creation of a second Debit Adjustment tied to the same PO Receipt:

When the Debit Adjustments are released, the result is double Unbilled Quantities and Unbilled Amounts in the Purchase Receipt Accrual Details report:

RESOLUTION

It is not apparent how to correct this error. You can do so by creating a new AP Bill against the PO Receipt:

The system will take all documents associated with the Receipt into account and create a net Bill, i.e., double the Quantities and Amounts, as shown in this example:

Once the Bill has been released, the PO Receipt has been cleared from the report:

MaxQ is a provider of advanced Acumatica business solutions across a wide range of applications and industriesContact us to learn more about how MaxQ for Acumatica solutions can help your business.