Hello and welcome back to Top Five Friday Finds – the weekly series in which we share five of the business news stories that dominated the papers (and our conversations) this week.
On Tuesday, cannabis company Aphria Inc. announced it’s decision to rebrand recently acquired Nuuvera Inc. as ‘Aphria International Inc.’. Aphria acquired the smaller Nuuvera back in January for $826 million in cash and stock, paying a premium of 21% per share. The acquisition was part of the larger change in control trend that has defined Canada’s marijuana industry recently, with companies battling to gain market share before marijuana sales become legal later this year. Aphria’s acquisition of Nuuvera represents the company’s attempt to look beyond Canada’s boarders to the broader international market. Nuuvera has an Italian import license, a GMP-certified facility in Malta, and is one of a handful of companies competing for a German cultivation license. This grants Aphria with desirable access to the European market.
Here’s the latest update in the ongoing Kinder Morgan Trans Mountain pipeline saga. To recap, over the past few months Alberta and British Columbia have been locked in a trade war over a proposed $7.4 billion pipeline expansion project. In February Alberta imposed – then withdrew – a ban on British Columbia wine.Alberta then followed up this threat with a second attack, one that saw Alberta threaten to cut off oil shipments to the West Coast – a move that would send gasoline prices sky-high in Vancouver.While Alberta has yet to stop oil shipments to B.C., but it’s threat gained a bit more clout this week. On Thursday, fellow prairie province Saskatchewan entered into the war, announcing it will consider limits on its out-of-province oil shipments if B.C. continues its efforts to delay the pipeline expansion project.While Saskatchewan likely would not be shipping oil on the proposed pipeline, the province has been negatively impacted by the projects continued delays. Canadian oil is trading at a steep discount to it’s American crude counterpart – costing the Saskatchewan government upwards of $150 million per year. Building new pipelines and increasing exports is expected to substantially decrease the size of that discount, meaning more profit for Canada’s resource rich provinces.
Tech companies have seen a difficult few weeks. Last week we commented on Facebook’s recent legal woes, which centre around a think-tank’s use of Facebook user data to manipulate political campaigns. This week, Amazon takes the hot seat, with the company loosing US$53 billion in market value on Wednesday.The catalyst? An articlepublished by American news and information website Axios indicating U.S. President Trump is ‘obsessed’ with regulating the e-commerce giant. Trump’s deeply routed dislike of Amazon stems from a variety of sources. According to sources, the President sees online retailers as a threat to traditional businesses – namely shopping malls and brick-and-morter retailers. Additionally, the President has expressed his belief that Amazon fails to pay taxes to state and local governments, and takes advantage of preferential rates offered by the Post Office. In support of this second point, the President has pointed to overall declines in total Post Office revenue (an argument analysts are quick to counter – revenue in the Post Office’s shipping and packages segment continues to grow).What does this mean for Amazon? As previously mentioned, when Axios’s report broke the market jumped into action and Amazon’s share value tanked. With that being said, there doesn’t appear to be any legal or regulatory action on the horizon – and experts indicate that any action would likely lack any ‘teeth’.Analysts predict the company’s share value should gradually recover from Wednesday’s dramatic drop, with most still listing the tech-giant as a good ‘buy’.
Baseball season is officially back! While most fans are singing ‘take me out to the ball game’ and eating peanuts, some fans in Toronto are less than happy at changes to the Blue Jay’s relationship with ticket-reseller StubHub. This week news broke that the ticket giant had entered into an arrangement with the Jays that gives the team a cut of every ticket resold on the site.According to a joint investigation by the CBC and Toronto Star, an estimated 44.7% of all Rogers Centre seats are posted on StubHub for resale at an average markup of 205%. This shed’s some new light on StubHub’s unique business model, and the changing face of the ticketed event industry. The global online scalping industry is worth an estimated $8 billion a year, driven largely by professional scalpers who use software to harvest and resell massive quantities of tickets to popular events (remember the Tragically Hip’s sold-out farewell tour? A CBC investigation concluded that 2/3 of tickets were snapped up, and resold, by brokers). Partnerships between Major League Baseball teams and StubHub aren’t new to Toronto (the Jays and the retailer have had a strategic partnership since last year), but what is new is the introduction of a revenue sharing partnership. With over half of the team’s season tickets sold by brokers the team stands to make a large profit off of the booming business of resale., signalling the beginning of a new era of Canadian baseball business.
And finally, it was a difficult week for the Canadian business community – Peter Munk, founder of Barrick Gold, passed away at the age of 90. Munk, a Hungarian immigrant who arrived in Canada at the age of 20, founded numerous businesses in Canada before becoming a legend in the mining industry. When Barrick Gold was founded in 1983 the company’s portfolio consisted of a single mine that produced 3,000 ounces of gold in its first year of operations. The company gradually expanded, eventually earning the status of ‘world’s largest gold producer’ in 2006. While Barrick’s success can partially be attributed to the company’s diverse asset portfolio, the company differentiated itself by implementing a gold hedging strategy that countered the impact of price fluctuations. Munk’s reach extended beyond the business world – a statement evidenced by the Cardiac Centre at the Toronto General Hospital and the University of Toronto’s School of Global Affairs, both of which bear the Munk name.