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According to Kriendler’s calculations, the five largest licensed producers are carrying a whopping $6.3 billion in goodwill on their balance sheets. Aurora leads the pack, with over 50 per cent in goodwill as a percentage of total assets.

“Throughout earnings season, we started to see that these foreign holdings became a negative drag on earnings. Many of these assets were purchased at prices that cannot be defended anymore and companies booked major goodwill,” said Rosen.

One of the lesser-known investments that some Canadian LPs made abroad was a rush to buy up swaths of land in Swaziland and Lesotho.

The Supreme Cannabis Co. led that charge in early 2018, investing $10 million in a company called Medigrow Lesotho, which had obtained the country’s first licence to legally cultivate cannabis.

Almost two years later, the company says it is still “helping develop” Medigrow, which it intends to use as a supply hub for cannabis to the EU, Australia and even Canada. To date, however, Medigrow has not begun exporting any cannabis from its facility, Supreme confirmed to the Post. “Unfortunately it’s a slow process but we’re working on it. As far as I know, no one else has gotten it out of Lesotho yet either,” said Supreme’s head of investor relations, Scott Davidson.

Rosen says there was a time when the market was heavily rewarding “perverse investments.”

“Look, there is nothing inherently flawed about owning an asset in Lesotho, if, and only if, you can afford to finance it and run it, and have the management expertise to develop these assets. But right now … you’re not even able to turn your Canadian assets into positive earnings,” he added, referring to the industry in general.



He does believe, however, that there are certain international investments that will pay off.

“Tilray (which has a massive high tech greenhouse in Portugal) will hold on to that asset, because that’s a key part of their overall strategy. Cronos’ R&D investments in Israel are meaningful because it is an intellectual capital base for the development of novel medications,” he said.

“Not every foreign adventure is a misadventure.”