Case 6

1. Some of the key success factors to succeed in the Cannabis Industry are:
· Legalisation: Cannabis is an illegal commodity in most countries therefore one of the key success factors to succeed in the Cannabis industry is legalisation which will mean that the government allows the use of Cannabis for adults, this is important because the market is very big, and it is predicted that the market will reach $55.8 billion by 2025
· Medical Use: Another key success factor for succeeding in this industry is to make products from Cannabis that is used medically, this will open the market under the Cannabis industry which is very big and will continue getting bigger as we go forward
· Keeping Costs Down: Another very important success factor is the costs because the cannabis market is very elastic therefore the cost plays a very crucial role in the success, which means that to succeed in the industry one need to keep the costs down
· Acquisition: Not one of the crucial success factors, but still companies grow this way by undertaking acquisitions, which was done by “Canopy Growth Corporation” to expand and access the huge market which ‘Brdrocan’ had
· Expanding to international markets: Cannabis is a popular commodity that has growing across regions and is still growing because of the benefits which it has, like the market in South America is very big, Europe is another market
To assess the company’s performance to date we can see the total amount sold by the company over the years from 2015-to 2017, this will give us a very clear picture of the company’s performance, and from the table, we can see that the company’s total sales have been growing across each of the products where the Dried Cannabis touched a total sales of 5,836 kg during the period January 1 – March 31, 2017, from a mere 2,481 kg on October 1 – December 31, 2015. The same is for Cannabis oil which had a total sale of 5,673 kg.
The company’s cost of shipment is decreasing too which gives us confidence that the company is optimizing and therefore is performing well.
2. Financial Health of the company is not good as can be seen from the Income Statement for the year ended March 31, 2016, and 2017. This is said because the company is making losses which were 3,496 million for the year ended March 31, 2016, and not only these the company’s losses increased by 4 fold to reach a high of 16,658 million for the year ended March 31, 2017, which is just massive. The main reasons for the company’s health to be poor are:
· Rising Cost of Sales: The cost of sales for the company is rising which is visible in the...