How marijuana companies can profit without selling a pot


It is a new business in marijuana for recreation, and this can lead to financial finances. One of the most unusual things is that bypass companies based on a bit more than a profit on what their cannabis is the best value.

International accounting rules have been followed by the largest Canadian agents who need companies to report biological asset value – such as marijuana – at different stages of the production cycle. For pot companies, this means that seeds or clones that are valuable to & # 39; turn to a full additional growing vegetation, and the difference will be shown in the seasonal and company benefits. That rule means that a profit cannabis company can be converted without a # 39; sells grams of pot, which companies have already done.

For established businesses, International Financial Reporting Standards or IFRSs do not manage much of the case – meat companies have a good idea of ​​what their animals value once, and they know Tequila companies are the same as their agave plants. But legal cannabis is a new business with very few criteria, which could be a challenge to & # 39; establish what to expect to collect a company's company when it is; sale of marijuana. So they think they're now right now, after Canada's defaulters have been in a position to do so; breakdown in October without being satisfied with the degree of publicity when companies were valued at & # 39; pot.

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Find a place

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has shown how this is already working, when it identifies a profit that was over the last month's income. A $ 29.5 million ($ 18.8 million) salary Organigram was built on C $ 12.4 million, but it showed a loss of C $ 623,000 after the benefits of a biological system, as well as the removal of taxation.

Additionally from Tilray Inc.

TLRY, -0.94%

, the largest pot companies operating in Canada – such as Canopy Growth Corp.

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SGEUL, -3.40%

Aurora Cannabis Inc.

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ACB, -3.40%

and Aphria Inc.

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APHA, -2.68%

– they would have to offer investments to investors about how they value cannabis during their visit; grow. Tilray does not follow IFRS rules because it is selected to be & # 39; go out in the SA, which allows a report to be issued by the General Accounting Regulations adopted by the US, or GAAP. He chose a US record, in part, because of the complexity of the pot's value of IFRS, according to Zack Hutson.

Video: Conversion & Weed Girls & # 39; in California the CBD turned into a million dollar business

The assumptions used for the value of marijuana are essential for the long-term understanding of investors & While watching the cannabis department in Canada, finance director Michael Miller, White Sheep Corp. Miller and the University of Cambridge, professor Alan Jagolinzer, a curriculum for business schools that will help students to understand the accounting issues on bean companies and IFRS rules about cannabis.

Where counting for marriage can be tricky with companies that are not yet genuine revenue registration. Pot companies have found out profits before they have been allowed to sell pot, including Indiva Ltd

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NDVA, + 3.51%

and Higher Cannabis Inc.

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YOU, -16.74%

South Westerly

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Miller built Green Organic Dutchman Holdings Ltd.

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TGOD, + 0.00%

in a telephone interview, saying that the Dutch has the value of his pocket at $ 13.75 a gram, Miller's highest number from any public representative. These numbers could give big Macdonald paper benefits even though the company is still going to sell any recreational activities.

"It is an example of how a company with nil income needs to come in with key assumptions even before they sold anything," said Miller.

Dutchman's spokesman says that $ 13.75 per gram price is one of a "number of products" into her model that validates her & her value; pot. Danny Brody's deployer's Deputy Chief Executive said that his company had a " making a pot for a small group of medical marijuana patients and that it's a "precious" that is not available for a & # 39; Wholesale purchase – so the high yield for its cannabis value. When the last Dutch produces a large scale that has been promised to investors, it seems that it will change some of its assumptions, said Brody.

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There are changes that have huge potential, however. For a company that was saying that b & # 39; It was worth $ 13.75 per gram, and then sold it for $ 8 grams, and he had to give financial statements. Often, big red banner corrections are in any business, and may be common for cannabis companies as long as they learn about real value.

"[A restatement] it means that their assumptions of administration were too much of what the product would be; sold for, "said Miller." Some of the companies are historically that they have clearly expelled their financial work in previous years. You can do it for a while, but finally there will be an account. "

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