Business
Share consolidation sweeps marijuana industry as stock prices flop
In the face of slumping marijuana stock prices, publicly traded Canadian cannabis producers and U.S. ancillary companies are increasingly turning to share consolidations to maintain their listings on the Nasdaq exchange.
Canadian grower Canopy Growth Corp. is the latest to announce plans for a share consolidation after the company ran afoul of the Nasdaq’s minimum bid-price requirement.
Nasdaq-listed cannabis companies that have completed share consolidations include Canadian producer Hexo Corp. – now part of Tilray Brands – which consolidated shares in December 2022, and fellow Canadian grower Organigram Holdings, which consolidated shares in early July.
Massachusetts-based marijuana ancillary company Agrify Corp. also consolidated shares in July.
Although negative sentiment surrounding cannabis stocks could potentially change because of external factors, all signs suggest more share consolidations to come: Several cannabis producers and ancillary firms are under Nasdaq warnings regarding their low share prices, and share consolidations are a possible solution.
High-profile examples include Canadian producer Aurora Cannabis and Village Farms International, the British Columbia-headquartered parent company of cultivator Pure Sunfarms.
Equity analyst Nadine Sarwat, the London-based director of North American cannabis with Bernstein Research, said she wouldn’t be surprised to see the share-consolidation trend continue.
“Because we aren’t seeing any indication that the problems that are causing these issues are being solved,” she said.
For example, the Canadian government’s review of its cannabis legalization law is running late, Sarwat observed.
“And unless you believe that there is going to be a meaningful change there, that then becomes really difficult to say (that) a lot of these companies are going to see a far rosier future,” she said.
“And then in the U.S., we’re still seeing meaningful price compression in cannabis – there’s a lot of excess supply, depending on the state, federal (reform) isn’t very clear yet,” Sarwat continued.
“That’s not to say that the industry cannot be successful in 10 years, but there is more to suggest that the pain is going to continue before it gets better.”
Equity analyst Jesse Redmond, head of cannabis at Florida-based Water Tower Research, explained that in bullish times, when certain equities have gained significant value, companies have chosen to split their shares in order to lower the price of each share.
Such share splits make the stock “more accessible to investors. … You’d wake up the next day with four times as many shares at a quarter of the price,” he said.
“Traders figured out that once companies announce stock splits – and especially the day after they happen – typically the shares rally, because people like getting more shares, and the lower stock price sometimes opens up a name to more retail investors.”
Share consolidations, also called reverse share splits, are the opposite: Outstanding shares are combined, increasing the value of each share.
“Mathematically, they’re both a zero-sum game,” Redmond said.
A company’s market capitalization is not affected by either a share split or a share consolidation.
However, share consolidations can help a company keep their listing on a major exchange such as the Nasdaq.
Such listings are particularly important at a time when funding remains in short supply for cannabis operators.
Nasdaq share-price warnings
The latest wave of high-profile cannabis share consolidations has been driven by the listing requirements of the Nasdaq stock exchange, which requires stocks to maintain a $1 minimum closing bid price.
If a stock trades below that $1 minimum for 30 consecutive business days, the Nasdaq issues a warning and grants a 180-day period for the company to regain compliance.
A second 180-day period might be granted to companies trading on the Nasdaq Capital Market, one of the exchange’s three tiers.
Cannabis companies are listed on all three tiers, which also include the Nasdaq Global Select Market and the Nasdaq Global Market.
Staying above that $1 minimum is clearly presenting a challenge for several Nasdaq-traded cannabis producers – a distinctly Canadian and international group, since U.S. plant-touching companies can’t list on the Nasdaq because marijuana remains illegal under federal law.
“On one hand, what you’re seeing is continued challenges in the fundamentals of these companies,” Bernstein analyst Sarwat said.
Those challenges aren’t all the companies’ fault, she added: Canada’s cannabis excise tax structure presents an obstacle to profitability, and restrictions on cannabis marketing make it “difficult to bring up brand equity, which is how you justify charging the higher price.”
But Sarwat said some companies do bear responsibility for their own woes, such as overbuilt production capacity.
“And now you’re seeing those companies having to significantly pare back capacity, and it has impacted their financial performance, and that’s now being reflected in lower share prices,” she said.
Until recently, Sarwat added, higher marijuana equity valuations were maintained somewhat on hopes for U.S. federal legalization and an accompanying inflow of capital from major institutional investors.
“And now you’re having a realization that that federal change is probably not going to happen anytime soon, and that’s also depressing the stock prices.”
In addition to Aurora and Village Farms, international cannabis companies Akanda Corp. and Clever Leaves Holdings have been given share-price warnings, Nasdaq’s noncompliance list shows.
Several U.S. ancillary cannabis companies have made the Nasdaq’s naughty list for the same reason:
- Marketing and loyalty platform Springbig Holdings.
- E-commerce platform Leafly Holdings.
- Technology company Akerna Corp., which has moved to exit the cannabis industry.
- Advertising and technology firm WM Technology, parent company of Weedmaps.
‘Uncertain time for cannabis’
Consolidating shares doesn’t guarantee a permanent solution to the Nasdaq’s minimum bid-price requirement, since equity valuations are at the whim of market forces.
Even after Organigram consolidated its stock, for example, its Nasdaq-traded shares declined to less than $1.50 after the company reported third-quarter earnings.
Cannabis equity analyst Redmond believes marijuana investors are increasingly focused on profitable companies, moving away from metrics including adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and toward metrics such as operational cash flow and free cash flow.
“During this uncertain time for cannabis, I think people are starting to gravitate toward the less speculative businesses that are less reliant on the debt markets,” he said.
Redmond anticipates that cannabis businesses with trouble generating cash flow will see their share prices continue to drop.
“And, in some cases, those will drop below $1 and then we’ll find ourselves needing to do more of these reverse (share) splits,” he said.
However, Redmond added that positive U.S. political progress, including cannabis banking reform and the potential for rescheduling or even descheduling marijuana, could improve the MJ sector’s fortunes.
If such political progress causes U.S. cannabis stocks to rally, he expects that would affect American ancillary MJ companies and Canadian cannabis producers as well.
“When people get bullish on cannabis, or they see positive headlines about cannabis, a lot of the big players still can’t invest in the (over-the-counter-traded) and the (Canadian Securities Exchange-traded) names,” Redmon said.
“… I think you’ll see money come into those Nasdaq-listed names because they tend to have better liquidity, and they’re more accessible to the bigger, institutional-type investors, especially the ones with the quantitative programs that might be trading off of the headlines.”
Source: https://mjbizdaily.com/share-consolidation-sweeps-cannabis-industry-as-stock-prices-flop/
Business
Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light
Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.
India’s Indigenous LEO Satellite Vision
Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.
The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.
According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.
The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.
Regulatory Process Moves Forward
Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.
The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.
Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.
Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.
Broadband, Mobile Connectivity, and Strategic Applications
Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.
The company also intends to establish 20 to 22 ground stations across India to support network operations.
Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.
Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.
Major Step for India’s Space and Telecom Sectors
Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.
The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.
Business
Alleged Crores Pharma Scam Mastermind Arrested from Surat
After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.
Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.
Fake Business Deals and Dishonoured Cheques Used in Fraud
Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.
In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”
Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.
Multiple Identities and Repeated Fraud Pattern
Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.
Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.
Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.
Multi-State Surveillance Leads to Arrest in Surat
A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.
Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.
Growing Threat of Corporate Identity Fraud
The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.
Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.
Experts Urge Stronger Due Diligence in High-Value Transactions
Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.
Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
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