Marijuana sector’s books more like ‘audited hallucinations’ than financial statements, accountants say | January 26th, 2018

By Bloomberg News
Kristine Owram

Financial statements from marijuana producers can look strikingly rosy, with a quirk of accounting regularly leading to gross margins of more than 100 per cent. But a closer look reveals a mishmash of management assumptions that could deflate those margins if the bud sells for less than estimated — or gets attacked by mold.

In Canada, where 84 listed marijuana stocks have surged to a value of about $36.9 billion ahead of recreational legalization in July, companies abide by International Financial Reporting Standards. The guidelines favour a fair-value model used by the agricultural industry, which requires companies to place a value on plants while they’re still in the ground.

That’s akin to counting your chickens before they’re hatched, leaving companies open to big write-offs and investors groping for financial clarity. It’s all crying out for more guidance and standardization from the country’s regulators, industry observers say.

read more>>

Upcoming Events & Seminars

More Events »

Whipp Tips & News

Meet Triodos, the ethical investment firm trying to fund a better world

Investors are tired of questionable practices where executives at underperforming businesses are paid huge bonuses, and of companies making staggering amounts of money at a huge cost to the planet.

Details »

Renewables Investment Nudges Out Fossil Fuel And Nuclear

In 2017, global investment exceeded US$ 333 billion, compared to only US$ 144 billion invested in conventional fossil fuels and nuclear.

Details »

How socially responsible investing can help you avoid catastrophic drops within your portfolio

According to research from MSCI, companies in the bottom ESG quintile have been twice as likely to suffer a catastrophic loss (over 95% cumulative loss) within three years.

Details »

More News »

The information in this website was obtained from sources believed to be reliable, however, we cannot guarantee that the information is accurate or complete. The information provided is a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities.

Leede Jones Gable Inc. is a
Member of IIROC and the Canadian Investor Protection Fund
Stephen Whipp is a member of the Responsible Investment Association