Delta 9 Cannabis: Picking a Path to Growth during Turbulent Times

內容大綱
Delta 9 Cannabis Inc. produced and sold recreational cannabis in Canada—a market that after legalization was characterized by volatility in supply, demand, and regulations. Nonetheless, Delta 9 grew rapidly, and March 31, 2020, marked Delta 9’s best-ever fiscal quarter. However, Delta 9’s share prices had deflated over the previous year and the economy had recently been upended by the COVID-19 pandemic. Thus, there was considerable uncertainty regarding the outlook of Delta 9’s three main business segments, each facing unique challenges and opportunities. The chief executive officer must decide how to allocate existing capital to keep Delta 9 on the path to growth.
學習目標
This case can be used for undergraduate- and graduate-level courses in managerial accounting, finance, or strategy. It profiles a company undertaking a vertical integration strategy in the new and growing Canadian cannabis industry. After working through the case and assignment questions, students will be able to<ul><li>gain institutional knowledge and become familiar with the business challenges of operating in a unique environment;</li><li>use provided data to practice capital budgeting techniques (projecting cash flows, calculating internal rate of return, and analyzing net present value) to value different business expansion options; and</li><li>evaluate the expansion options by considering competitive forces, changes in consumer behaviour, and regulatory risk.</li></ul>
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