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Revenue up, but so is loss

Cannabis producer Tilray Inc. reported its fourth-quarter revenue surged by more than 200 per cent year-over year to US$15.5 million, but its net loss for the period also deepened.

The Nanaimo-based company said its net loss for the quarter ended Dec. 31, 2018 amounted to US$31 million or 33 US cents per share, compared to a net loss of US$3 million or four US cents per share a year earlier.

Analysts had estimated quarterly revenues of US$14.15 million and a net loss of US$10.43 million or 12 US cents per share, according to those surveyed by Thomson Reuters Eikon.

Tilray said that the increased net loss for the quarter was primarily due to the increase in operating expenses due to growth initiatives, expansion of international teams and costs related to financings and merger and acquisition activities.

The company's average net selling price per gram rose to US$7.52, up from US$7.13 during the same quarter one year earlier.

For the full 2018 financial year, Tilray reported revenue of US$43 million, up 110 per cent from the previous year, and net loss of US$67.7 million compared to US$7.8 million in 2017.

"2018 was a very successful year for Tilray with many corporate milestones," said Tilray's chief executive officer Brendan Kennedy in a statement. "Our team made significant progress on our long-term initiatives including increasing production capacity, expanding and strengthening strategic partnerships, and acquiring complementary businesses to accelerate our future growth and leadership position in medical and adult-use cannabis.”



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Apple refreshes iPad lineup

Apple has unveiled a new iPad that's thinner and slightly larger than its current entry-level tablet.

The new iPad Air will cost $499 and sport a screen that measures 10.5 inches diagonally. That compares with the standard, 9.7-inch iPad, which Apple will still sell for $329.

Apple has higher-end Pro models starting at $999. The new iPad Air has several features found in older Pro models, but not the latest. For instance, the iPad Air has a home button with a fingerprint sensor, while the latest Pro ditches that to make more room for the screen.

Apple is also refreshing its 7.9-inch iPad Mini for the first time in more than three years.

In the past, Apple has sometimes used older chips in the Mini, saving the latest technology for the larger models instead. This time, the Mini will have the same chip as the Air, along with support for the Apple Pencil stylus. But the Mini won't have an optional keyboard attachment, unlike the new Air and Pro models.

The Mini will cost $399, more expensive than the larger, but older 9.7-inch iPad.



WestJet suspends guidance

WestJet Airlines is suspending its 2019 financial guidance following the grounding of its 13 Boeing 737 Max 8 aircraft by regulators in Canada and the United States due to safety concerns.

The Calgary-based airline says its financial outlook provided as late as a month ago are being put on hold except for earnings per share, return on invested capital and cumulative free cash flow between 2020 and 2022 until more information is known.

The move follows a similar decision last week by Air Canada, which operates 24 of the narrowbody aircraft.

WestJet says it grounded all Max aircraft within 55 minutes of Transport Canada's order last Friday, with only three planes outside of Canada. The action was taken after aviation authorities across the globe grounded the aircraft in the wake of the Ethiopian Airlines crash March 10 that killed 157 aboard the plane, including 18 Canadians.

The airline says through its contingency plan it expects to preserve about 86 per cent of passengers bookings on Max flights and find alternative planes for about 75 per cent of Max flights.

Walter Spracklin of RBC Capital Markets described the challenge as a temporary issue for both airlines.

"Overall, we see the impact as limited and short-term," he wrote in a research note.



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Energy lifts TSX

The energy sector helped lift Canada's main stock index higher as the price of oil climbed higher in late-morning trading.

The S&P/TSX composite index was up 52.96 points at 16,193.31.

In New York, the Dow Jones industrial average was up 15.33 points at 25,864.20. The S&P 500 index was up 9.02 points at 2,831.50, while the Nasdaq composite was up 33.08 points at 7,721.61.

The Canadian dollar traded for 74.99 cents US compared with an average of 74.95 cents US on Friday.

The May crude contract was up 71 cents at US$59.53 per barrel and the April natural gas contract was up 4.1 cents at US$2.84 per mmBTU.

The April gold contract was up US$2.70 at US$1,305.60 an ounce and the May copper contract was up 0.95 of a cent at US$2.92 a pound.



TransAlta stock rises

Shares in power utility TransAlta Corp. rose by more than five per cent Monday after a U.S. investment partnership revealed it has acquired a 10-per-cent stake and will be demanding board representation.

Dallas-based Cove Key Bluescape Holdings announced late Friday it had bought 50,000 TransAlta shares to take its total ownership to 8.1 million, about 2.86 per cent of the outstanding stock.

It says it has an agreement with Bluescape Energy Partners, and Mangrove Partners, a New York-based investment manager, to use their combined 10 per cent stake to press for changes that will increase the value of the Calgary utility's shares.

It says Bluescape executive chairman Charles John Wilder, Jr., and his team have the experience needed to improve execution and focus at TransAlta, which owns power generation assets in Canada, the United States and Australia.

It says shareholder value can be improved through operational and cost efficiency, asset optimization, capital allocation and broader strategic initiatives.

In a news release later Friday night, TransAlta chairman Gordon Giffin said the company has spoken with the U.S. investors and will "carefully consider their views."

"TransAlta values constructive input from all of our shareholders, including Mangrove and Bluescape," he said.

The company's shares gained 44 cents or 5.32 per cent at $8.71 in late-morning trading on the Toronto Stock Exchange.



Manulife wins ruling

Manulife Financial Corp. says a Saskatchewan court has ruled in its favour in its legal fight with hedge fund Mosten Investment LP over insurance contracts.

Mosten had argued that under the terms of the universal life insurance policy, it could deposit an unlimited amount of money and receive an annualized guaranteed return of at least four per cent with one-month liquidity.

However, Manulife says the ruling by the Saskatchewan Court of Queen's Bench found the policy in question "does not provide for unlimited stand-alone investment opportunities within the carrier fund."

The insurer says the ruling is consistent with its position that the case was legally unfounded and commercially absurd.

Prominent short-seller Muddy Waters had warned that if the court had sided with Mosten, the hedge fund could sell an unlimited amount of partnership interests backed by Manulife and "financially cripple" the insurer.

Manulife had argued that issuers of universal life policies never intended to have them function as deposit or securities contracts, and disagreed with the short-seller's conclusions.



'Captain Marvel' soars

"Captain Marvel" has continued to dominate the global box office in its second weekend in theatres, leaving newcomers in the dust.

Walt Disney Studios estimated Sunday that the intergalactic superhero fell only 55 per cent from its record-breaking opening. This weekend, "Captain Marvel" earned an additional $69.3 million from North American theatres and $119.7 million internationally, bringing its global grosses to $760 million.

With Brie Larson in the title role, "Captain Marvel" has already surpassed the lifetime grosses of a slew of superhero films including "Justice League," ''Captain America: The Winter Soldier" and "The Amazing Spider-Man."

In a very distant second, Paramount's animated family film "Wonder Park" struggled with $16 million against a reported $100 million budget. Paul Dergarabedian, a senior media analyst for Comscore, said that it's hard to compete with "Captain Marvel," which is playing to all ages and audiences. But the PG-rated pic about a girl who dreams up an amusement park did not score well with critics either — it's currently sitting at a 30 per cent on Rotten Tomatoes.

But it wasn't all bad news for the films in "Captain Marvel's" shadow. The Cole Sprouse and Haley Lu Richardson film "Five Feet Apart" opened in third place with $13.2 million in ticket sales, which is nearly double its production budget. The film from Lionsgate and CBS Films is centred on two teens with cystic fibrosis.

Audiences were overwhelmingly female (82 per cent) and young (65 per cent under age 25 and 45 per cent under 18). That the stars involved, like Sprouse who is in the popular TV show "Riverdale," have a strong fan base and social following motivated young women to turn out to the theatres.

"You don't always have to be No. 1 to have a success," Dergarabedian said. "And 'Five Feet Apart' proves that."

It was a good weekend overall for Lionsgate, which had three films in the top 10, including "Five Feet Apart," Tyler Perry's "A Madea Family Funeral," which landed in fifth place with $8.1 million (behind "How To Train Your Dragon: The Hidden World") and the Spanish-language newcomer "No Manches Frida 2," which opened on only 472 screens and grossed $3.9 million to take sixth place.

Estimated ticket sales for Friday through Sunday at U.S. and Canadian theatres, according to Comscore. Where available, the latest international numbers for Friday through Sunday are also included. Final domestic figures will be released Monday.

1."Captain Marvel," $69.3 million ($119.7 million international).

2."Wonder Park," $16 million ($4.3 million international).

3."Five Feet Apart," $13.2 million ($189,000 international).

4."How to Train Your Dragon: The Hidden World," $9.3 million ($9.4 million international).

5.Tyler Perry's "A Madea Family Funeral," $8.1 million ($65,600 international).

6."No Manches Frida 2," $3.9 million.

7."Captive State," $3.2 million ($64,400 international).

8."The LEGO Movie 2: The Second Part," $2.1 million ($2.1 million international).

9."Alita: Battle Angel," $1.9 million ($4 million international).

10."Green Book," $1.3 million ($17.1 million international).

___

Estimated ticket sales for Friday through Sunday at international theatres (excluding the U.S. and Canada), according to Comscore:

1. "Captain Marvel," $119.7 million.

2. "More Than Blue," $41.3 million.

3. "Green Book," $17.1 million.

4. "How To Train Your Dragon: The Hidden World," $9.4 million.

5. "Escape Room," $7.7 million.

6. "My Hero Academia: Two Heroes," $5.3 million.

7. "Wonder Park," $4.3 million.

8. "Alita: Battle Angel," $4 million.

9. "The Mule," $3.3 million.

10. "What Men Want," $2.9 million.



Biz week look ahead

Five things to watch for in the Canadian business world in the coming week:

Tilray results

Tilray Inc. will hold a conference call to discuss its financial fourth-quarter and full year 2018 results on Monday. The Nanaimo, B.C.-based pot grower signed a deal in February to acquire Hemp Hearts-maker Manitoba Harvest for up to $419 million in cash and stock as the two companies look to launch CBD-infused products where permissible in the U.S.

Budget day

Finance Minister Bill Morneau tables the 2019 federal budget and delivers his budget speech on Tuesday. Morneau has hinted that the budget will include measures to help Canadians cover their bills if they choose to head back to school to boost their skills or change careers.

Couche-Tard checkup

Alimentation Couche-Tard will release third-quarter earnings on Tuesday. The Quebec retail giant recently announced it is teaming up with cannabis company Canopy Growth Corp. to support a privately run pot shop in London, Ont.

BRP results

BRP Inc. reports fourth-quarter results on Friday. The Quebec-based maker of sporty recreational vehicles is targeting a growing market of baby boomers who are turning in their motorcycles for safer, more stable three-wheeled bikes.

Inflation update

Statistics Canada will release its consumer price index for February on Friday. The federal agency said the country's annual inflation rate decelerated in January to 1.4 per cent in large part because of lower prices at the pump.



Edibles legalization fuzzy

From the classic pot brownie to cannabis-infused cotton candy, there is no shortage of options for edibles at an illicit dispensary in downtown Toronto.

Among the people lining up to browse and buy, one 34-year-old IT worker chooses gummy bears for what he says is his first-ever edibles purchase. The Toronto man, who did not want to be named, said he preferred edibles over smoking cannabis because he can avoid the pungent smell and partake indoors.

"These are more convenient," he said, adding that among his friends who are cannabis users, half of them say edibles are their form of choice even though they aren't legal in Canada yet.

Cannabis companies, as well as food and beverage makers, are looking to tap this expected demand as they gear up to roll out their own pot-infused edibles when the next wave of the green rush is legalized later this year.

Canadians can legally purchase cannabis-infused goods and vapes once the government rolls out the final edible pot regulations, which Ottawa has said must be brought into force no later than Oct. 17, 2019.

However, like the rush towards the initial wave of legalization on Oct. 17 of last year, the process is fraught with obstacles and the parameters are unclear.

From obtaining specialized research licenses to potentially building new and separate manufacturing facilities and developing new products to comply with yet-to-be-finalized rules — there are numerous hoops to jump through before edibles can grace store shelves.

"It's a challenge," said Jeffrey Zietlow, vice-president of innovation at licensed producer CannTrust Holdings Inc. "Everyone is running for the October deadline, and we're trying to develop multiple products at the same time…. The more certainty you have, the easier it is to innovate products."

Health Canada published its proposed edible pot regulations in December and wrapped up its public consultation period on Feb. 20. The federal health agency is now reviewing the responses before finalizing the regulations.

Meanwhile, a flurry of companies from various sectors including cannabis, alcohol and consumer-packaged goods sectors have announced imminent plans for edibles.

Edibles spending was estimated at US$1 billion in the U.S. and Canada in 2017 and is forecast to grow to more than US$4.1 billion by 2022, according to a recent report from BDS Analytics.

Cannabinoid-infused products that will be legalized under the new regulations include inhalable extracts as well as solids, beverages and topicals, like lotions.

The latter forms are appealing to those who are not interested in inhaling products into their lungs, Zietlow said.

"Cannabis 2.0, the edibles category, you're now providing consumers products in form factors that they're used to consuming all the time and that they enjoy," he said. "And that makes it a lot easier for people to try a cannabis-based product."

While companies are full-steam ahead on development, many do not have the ability to have people try the products they are creating to see if they taste, and perhaps more importantly, feel good.

Under the previous licensing system enforced prior to Canada legalizing recreational cannabis on Oct. 17, companies conducted various forms of cannabis research under what was called a "dealers' licence."

With the new cannabis regulations, holders of a processor licence can engage in many of those same research and development activities, except administering cannabis to a test subject, Health Canada says. That requires a specific research licence for each specific project, said Health Canada spokeswoman Tammy Jarbeau.

As of March 11, 36 research licences have been issued under the Cannabis regulations and another 122 applications are at various stages of the review process, though not all of them are specific to palatability testing.

While Health Canada aims to process research licences within two to four months, application processing times vary and depend on a number of factors such as the complexity and completeness of the application.

Another complicating factor is manufacturing, as the proposed regulations require companies who are already making non-cannabis infused goods to establish a separate manufacturing facility for edibles.



French protesters set fires

French yellow vest protesters set life-threatening fires, smashed up luxury stores and clashed with police Saturday in the 18th straight weekend of demonstrations against President Emmanuel Macron. Large plumes of smoke rose above the rioting on Paris' landmark Champs-Elysees avenue, and a mother and her child were just barely saved from a building blaze.

The resurgent violence came as protesters are seeking to breathe new life into a movement that seemed to be fizzling, and get attention from French leaders and media whom they see as underplaying their economic justice cause and favouring the elite.

Paris police appeared to be caught off guard by the speed and severity of the unrest. French police tried to contain the demonstrators with repeated volleys of tear gas and water cannon, with limited success.

Cobblestones flew in the air and smoke from fires set by protesters mingled with clouds of tear gas sprayed by police, as tensions continued for hours along the Champs-Elysees.

One perilous fire targeted a bank on the ground floor of a seven-story residential building. As firetrucks rushed over, a mother and her child were rescued as the fire threatened to engulf their floor, Paris' fire service told The Associated Press. Eleven people in the building, including two firefighters, sustained light injuries, as other residents were evacuated.

Protest organizers had hoped to make a splash Saturday, which marks the 4-month anniversary of yellow vest movement that started Nov. 17. It also marks the end of a two-month national debate that Macron organized to respond to protesters' concerns about sinking living standards, stagnant wages and high unemployment.

The violence started minutes after the protesters gathered Saturday, when they threw smoke bombs and other objects at officers along the famed Champs-Elysees — scene of repeated past rioting — and started pounding on the windows of a police van, prompting riot police to retreat.

Simultaneous fires were also put out from two burning newspaper kiosks, which sent black smoke high into the sky. Several protesters posed for a photo in front of one charred kiosk.

Demonstrators also targeted symbols of the luxury industry, as shops including brands Hugo Boss and Lacoste were smashed up and pillaged, and mannequins thrown out of the broken windows. A posh eatery called Fouquet's, which is associated with politicians and celebrities, was vandalized and set on fire. A vehicle burned outside the luxury boutique Kenzo, one of many blazes on and around the Champs-Elysees.

Interior Minister Christophe Castaner said on French television that an estimated 10,000 yellow vest protesters were in Paris and another 4,500 protesters were demonstrating around France. He also said the crowd included 1,500 "ultraviolent ones who are there to smash things up."

Still, the numbers paled beside the 30,000 people estimated to be taking part in a separate climate march that was weaving through Paris at the same time, according to Castaner.

And the number of yellow vest protesters remains smaller than early in the movement, when it drew masses to the streets nationwide and polls showed a majority of French people supporting their cause. Since then, repeated rioting by the protesters and economic concessions by Macron have diminished public support for the yellow vest cause.

Paris police told The Associated Press that 109 people were arrested in Paris on Saturday.

Yellow vest groups representing teachers, unemployed people and labour unions were among those that organized dozens of rallies and marches.

Protesters dismiss Macron's national debate on the economy as empty words and a campaign ploy to gain support for the European Parliament elections in May. Protesters are angry over high taxes and Macron policies seen as coddling business.

Many protesters, particularly those on the political extremes, see the national debate as a failure.

"As long as we don't get any results, we will continue (to protest) for all we asked for: pay rises, pensions, purchasing power, food waste. Everything," said Martine Sous, a protester from the Eure region west of Paris.

While the rioters drew most attention Saturday, most of the protesters remain peaceful.

"We are pacifists," Sous insisted.



More pipelines needed

The National Energy Board says Canada's existing export pipelines are running at maximum efficiency and the only way to realistically get more oil to market through pipelines is to build more of them.

The board responded Friday to questions posed last fall by Natural Resources Minister Amarjeet Sohi, who wanted to know if there was any way to improve the efficiency of pipelines while Canada struggles to expand existing lines or get new ones built.

"In a nutshell, pipelines are full," said Jean-Denis Charlebois, the chief economist for the National Energy Board.

In a statement Friday, Sohi said the report confirms that Canada needs to build new pipelines.

The report says the amount of oil Canada is producing has increased while the capacity of pipelines to carry it has not. There are five pipeline projects, the report notes, that have been proposed and then cancelled or delayed in recent years. That includes the Trans Mountain pipeline expansion, which is in limbo pending a new round of reviews after a Federal Court of Appeal ripped up cabinet approval for it last year.

The NEB recently recommended cabinet proceed with the Trans Mountain expansion after completing a new review of the impact it will have on marine life. A new round of Indigenous consultations is underway and could be completed this spring.

The others are the Energy East pipeline from Alberta to the east coast (which Trans Canada abandoned), the Northern Gateway pipeline between Alberta and northern British Columbia (which the Liberals rejected in 2016), and the Keystone XL pipeline and the Enbridge Line 3 replacement (both of which face uncertainty due to regulatory challenges in the United States).

Altogether, those five projects could have added 3.4 million barrels of oil per day to Canada's shipments. According to the NEB, the capacity in pipelines out of western Canada was just under four million barrels a day as of last September.

The report says moving more oil by rail is also not a "perfect substitute" because doing so is more expensive and complex.

It also tells Sohi that while there is room to streamline the system used by oil producers to get access to pipeline space, doing so would only reallocate existing capacity, not create more.

The improvements largely surround how the pipelines verify the ability of producers to supply the amounts of oil they want to ship in pipelines. The way the system works now, sometimes companies overestimate how much they can send, expecting that when the limited space is allocated on a percentage basis they will end up getting what they actually need.

Sohi's request to the board came last fall as Canadian oil prices plunged thanks to temporary refinery closures in the Midwest, creating a price differential between Canadian oil and U.S. oil of $50 per barrel.

That price gap has since closed to less than $10 a barrel after refineries came back online and the Alberta government imposed a mandatory cut in production.

Charlebois said the report does say the system would benefit from better transparency of market data, to help shippers understand the pipeline operations.

Sohi Friday asked his officials to establish a team with Alberta and Saskatchewan to work on the availability of data, as well as make the suggested to improvements to how producers apply for pipeline space.

He is also working with Transport Minister Marc Garneau on improving rail access for smaller oil producers.



Grounding hurts bottom line

Canada's largest airline is suspending its financial guidance for this year following the decision by regulators in Canada and the United States to ground the Boeing 737 Max aircraft until further notice.

Air Canada said Friday that, "in light of the current uncertainty," it is suspending the forecast it provided last month for its 2019 financial year.

The Montreal-based company said its guidance for the years 2020 and 2021 for return on invested capital and margin on earnings before interest, taxes, depreciation and amortization (EBITDA), as well as the cumulative free cash flow over the 2019-2021 period, remains in place.

Analyst Walter Spracklin of RBC Dominion Securities advised investors not to be alarmed.

"We believe the company has avenues to work around the grounding, including the longer in-service use of older aircraft, possible access to third-party aircraft, the temporary use of different gauge aircraft and if necessary the temporary suspension of some routes," he wrote in a research note.

Spracklin said the carrier's suspension "does not come as unexpected and more importantly, we do not consider it to be impacting our longer-term view on the shares."

Regulators around the world grounded the Boeing 737 Max 8 and Max 9 aircraft over safety concerns arising from the crash of an Ethiopian Airlines flight that killed everyone on board, including 18 Canadians.

Concerns have been raised regarding apparent similarities with a Lion Air flight involving the same aircraft that crashed off the Indonesian coast in October.

Air Canada has 24 Boeing 737 Max 8 aircraft out of 184 narrow-body planes in its fleet.



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