Sponsored by Cytophage Technologies

Another cannabis co bites the dust.

In what some might call an inevitable conclusion, Tokyo Smoke, once a darling of Canada’s cannabis retail industry, has filed for protection under the Companies’ Creditors Arrangement Act (CCAA). This move paints a picture of a company that overplayed its hand in a market it clearly misunderstood.

Once touted as a premium cannabis retailer, the firm is now struggling to keep its head above water in a market it hoped would stay restricted and lucrative—but didn’t.

You can read more on the matter here.

What’s going on?

• Brazilian Court Threatens to Pull Plug on X Over Legal Dispute (theDeepDive)

• Russia’s Military Fears for Its Secrets After Telegram Founder’s Arrest (WSJ)

• Why Interest Rate Cuts Won’t Fix a Global Housing Affordability Crisis (NYT)

• China Tightens Grain Imports Following Canada’s EV Trade Tariffs (theDeepDive)

• Collapse of Official Opposition BC United leaves candidates scrambling (Globe)

• Italy weighs sharp tourist tax rise in furore over impact of visitors (FT)

• IRCC Terminates Temporary Resident Work Permit Program (theDeepDive)

• UK workers could get right to four-day week (BBC)

• Trump says IVF costs would be covered if he is elected (Reuters)

• Plurilock Taps Clear Street: How A Modern Investment Approach Will Shape The Cybersecurity Space (theDeepDive)

• Putin is visiting Mongolia — a country that's supposed to arrest him when he lands (BI)

• National child-care plan has cut costs, created tens of thousands of new spaces, report says (Globe)

• U.S. Home Prices Soar to Record Highs, Sparking Housing Bubble Fears (theDeepDive)

What’s the latest?

• Canada GDP: In the second quarter, Canada's economy grew at an annualized rate of 2.1%, surpassing the Bank of Canada's forecast but continuing to shrink on a per-person basis. Growth was driven by government spending, business investment, and household spending on services, while exports, residential construction, and household spending on goods declined.

• Teamsters Dispute: The Teamsters union has filed appeals against the federal directives that ended last week's rail shutdown, arguing that the move threatens workers' rights to collective bargaining. The appeals challenge the orders for binding arbitration issued by Labour Minister Steven MacKinnon and subsequent decisions by the Canada Industrial Relations Board.

• CWB Earnings: CWB Financial Group reported a significant decline in third-quarter profit, with net income for common shareholders dropping to $41.4 million, or 43 cents per diluted share, compared to $83.1 million, or 86 cents per diluted share, a year ago. The decrease was largely due to a sharp rise in provisions for credit losses, which increased to $55 million from $15 million in the same quarter last year.

• Euro Inflation: Euro-area inflation dropped to 2.2% in August, its lowest level since mid-2021, fueling expectations for the European Central Bank to cut interest rates in September. Core inflation also eased to 2.8%, matching economists' predictions.

• US Consumer Spending: U.S. consumer spending increased by 0.5% in July, maintaining momentum from the second quarter and suggesting that the economy remains on solid ground. This robust spending growth, alongside moderate inflation, weakens the case for a half-percentage-point interest rate cut from the Federal Reserve in September, despite recent concerns over a rising unemployment rate.

Electra secures game-changing Department of Defense contract

The stock market and stuff

• CrowdStrike Beats Expectations But Lowers Outlook After July Outage Disruptions (theDeepDive)

• Norfolk Southern reaches tentative agreements with five more labor unions (Reuters)

• Intel working with bankers to present board with strategic options, sending shares up 8% (CNBC)

• Shell to Slash 20% of Workforce in Major Restructuring Drive (theDeepDive)

• Fed Favored Inflation Gauge’s Mild Gain Sets Stage for Rate Cut (Bloomberg)

• Laurentian Bank Faces Sharp Profit Decline as Revenue Falls and Credit Losses Rise (theDeepDive)

In the juniors

• SNDL Expected To Close On Assets Of Indiva Following Stalking Horse Bid (theDeepDive)

• Heritage Cannabis Sees Assets Sold Off Under CCAA Process (theDeepDive)

• Plurilock Sees Topline Revenue, Margin Improvements In Q2 (theDeepDive)

• Trulieve Drops Over $70 Million Supporting Smart & Safe Florida In Push for Amendment 3 (theDeepDive)

FULL DISCLOSURE: Cytophage Technologies is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Cytophage Technologies. The author has been compensated to cover Cytophage Technologies on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.