Alphabet stock tanking as Department of Justice eyes Google for an antitrust probe. Facebook stock also weighed by Wall Street Journal's report that the FTC is looking into probing how its practices impact digital competition. Yahoo Finance's Dan Roberts joins Seana Smith.
OAKVILLE, Ont. -- Algonquin Power & Utilities Corp. (AQN.TO) has signed a deal to buy Ascendant Group Ltd., the parent company of Bermuda Electric Light Co., for US$365 million.
Algonquin chief executive Ian Robertson says the deal will be immediately accretive to the company's earnings.
"The acquisition of Bermuda Electric Light Company builds materially on our international growth program through the addition of this high-quality utility, Robertson said in a statement.
"In addition to Ascendant customer and employee benefits coming from the scale of our existing utility operations, we are confident that our demonstrated capability in renewable energy development can help Bermuda realize on its carbon reduction aspirations."
Bermuda Electric Light, which has roughly 370 employees, serves 63,000 residents and businesses in Bermuda.
Under the deal, Ascendant will maintain its headquarters in Bermuda.
Algonquin also says it is committed to retaining and developing the existing management and operations team at the company.
The deal, which is subject to shareholder and regulator approvals, is expected to close late this year.
Algonquin provides rate-regulated natural gas, water, and electricity generation, transmission and distribution utility services in the United States and Canada.
The company also has an international portfolio of long-term contracted wind, solar and hydroelectric generating facilities.
The Canadian market for next-generation cannabis products is worth an estimated $2.7 billion annually, with edibles contributing more than half, according to a new report from Deloitte.
This spending once the final edible pot regulations roll out in the coming months is expected to be on top of the roughly $6-billion estimated domestic market for recreational and medical cannabis, the consultancy said Monday.
Consumers are looking to snap up these new pot products in addition to the dried flower, oils, plants and seeds they have been buying from legal retailers since legalization last fall, a recent survey of 2,000 Canadians conducted by Deloitte suggests.
The first wave of legalization last October was quite limited in terms of product range and the type of consumer, said Jennifer Lee, Deloitte Canada's cannabis national leader.
"When we legalize in October again for edibles, we are in a world where the formats and the assortment is much broader," she said. "The use cases are much broader."
Canada is gearing up to legalize cannabis-infused foods, beverages, topicals and other next-generation products in the coming months, once Ottawa rolls out the final regulations.
Pot companies, as well as food and beverage makers, have been preparing to roll out their own pot-infused products which they anticipate will appeal to a broader audience — particularly those who aren't interested in smoking weed.
The federal government wrapped up its consultation on the draft edible rules in February, and has said the regulations must be brought into force no later than Oct. 17, 2019.
Deloitte estimates that roughly $1.6 billion will be spent on edibles in Canada, followed by cannabis-infused beverages at $529 million and topicals at $174 million. Spending on concentrates is expected to hit $140 million, followed by tinctures at $116 million and capsules at $114 million.
Roughly half of likely edible users surveyed by Deloitte say they plan to consume gummy bears, cookies, brownies or chocolate at least every three months.
The global market for alternative cannabis products is expected to nearly double over the next five years, the consultancy added.
Lee doesn't expect these new products to eat into revenues from existing categories in Canada, at least in the early days.
"Over time, in the long term, you may," she said. "But right now, there's too much demand in the market and there's not enough product."
Legal pot retailers, both government and privately owned, have been contending with a shortage of cannabis since legalization last October, but have said the situation has improved in recent months.
For example, the Alberta government lifted its moratorium on new cannabis retail licences, citing an increase in the pot supply.
Deloitte's market estimates for cannabis 2.0 products reflect overall Canadian consumer demand, but realizing the market's full potential too may take some time. Many of the new pot products may not be available, or available in sufficient quality, come October, Deloitte said.
Companies should take a three- to five-year view on the market, said Lee.
"The regulations will need time to settle, even after legalization in October," she said.
While this presents a growth opportunity for companies readying themselves for the next wave of the green rush, it may come at the expense of sales in more established industries.
"Our research is showing that the occasions that consumers use the product, i.e. mostly edibles, overlap a lot with alcohol ... On a limited wallet, there are going to be tradeoffs," Lee said.
As well, consumers view topical cannabis products such as lotions used for ailments such as pain as a potential replacement for other medicinal products, Deloitte's survey showed.
"This could be cause for concern for the traditional pharmaceutical sector, as 45 per cent of current consumers and 48 per cent of likely consumers say they see cannabis topicals as an alternative to prescription medications, not a complement," Deloitte said in the report.
Deloitte surveyed 2,000 adult Canadians online between Feb. 26 and March 11.
Apple CEO Tim Cook
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Apple shares ticked lower Monday after a Reuters report saying the Justice Department is considering a probe of the iPhone maker.
The agency has been given jurisdiction to probe the company's practices as part of a broad review into potential anti-competitive behavior among big tech companies, Reuters reported, citing two sources.
The stock fell nearly 2% following the report, after trading higher earlier in the day. Apple and CEO Tim Cook are presenting updates to the company's central software at the annual Worldwide Developers Conference.
The tech-heavy Nasdaq Composite index fell Monday after similar regulatory headlines dinged tech giants Google, Amazon and Facebook.
Earlier Monday, the Wall Street Journal reported that the Federal Trade Commission will examine how Facebook's practices affect digital competition. The Washington Post reported over the weekend that Amazon has come under heightened scrutiny by U.S. regulators. And on Friday, the Journal reported that the Justice Department is preparing a probe of Google, sending shares of parent company Alphabet down more than 7% Monday.
The possible Apple probe is linked to the Google probe, Reuters reported, and stems from meetings between the DOJ and the FTC.
The headlines together paint a daunting picture for Silicon Valley and the stock market's most valuable companies. Big tech has long faced scrutiny from European regulators, but has so far shrugged off calls for government regulation in the U.S.
Apple has drawn increased criticism in recent months for what some — including streaming giant Spotify — see as anti-competitive behavior in the App Store. Apple owns and operates the online marketplace, collecting subscription fees from developers.
The so-called "Apple tax" accounts for a sizable percentage of Apple's burgeoning services revenue segment, but draws the ire of developers who, in some cases, compete with Apple's own apps in the store.
Spotify's EU complaint against Apple, filed in March, is pending investigation by European authorities.
Facebook shares tumbled more than 8% Monday following a The Wall Street Journal reported that said the FTC will be able to examine the effect of Facebook's practices on digital competition.
Shares of other tech giants took a hit over similar concerns. Amazon's stock was down more than 4% Monday following a Washington Post report that the top U.S. antitrust enforcement agencies have a new agreement over tech oversight. The drop shaved about $35 billion from its market cap, bringing it to $839 billion.
And shares of Google parent company Alphabet were down more than 6% after The Wall Street Journal reported Friday the Justice Department is readying an antitrust investigation. The stock lost about $47 billion from its market cap, bringing it to around $721 billion.
Facebook's drop shaved more than $33 billion from its market cap, bringing it to about $472 billion. Facebook is already under investigation by the FTC over its handling of user data and has said it is expecting a fine of up to $5 billion.
Antitrust regulation has remained a distant threat in recent years as scandals like Cambridge Analytica brought the scale of tech power into focus for the public. In the lead up to the 2020 presidential election, "break up big tech" has become a rallying cry for some, Democratic presidential candidate Sen. Elizabeth Warren, D-Mass.
But a new reported agreement between the Federal Trade Commission and the Department of Justice brings that threat a bit closer to reality. The FTC will take the lead on oversight of Amazon, which the DOJ will have greater jurisdiction over Google, according to the Post. The FTC previously closed an investigation of Google without taking action, but now the DOJ will take another look into Google's practices in search and other areas, according to the Journal.
Watch: DOJ's Google antitrust probe will hit other tech players, analyst says
