Cannabis Watch: How a freshly grown cannabis company managed to lose $500 million in less than a month

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Tilt Holdings valued assets at about half a billion dollars when raising funds, then decided value was actually more like $7 million less than four weeks later

As Tilt Holdings Inc. completed a four-way reverse merger and began trading on the Canadian Securities Exchange late last year, the U.S.-based cannabis producer claimed the value of its disparate parts was roughly $500 million.

A month later, the pot company had a slightly different valuation for those same businesses: About $7 million.

Tilt SVVTF, -0.11% took a goodwill impairment charge of roughly $500 million late Wednesday in its first quarterly earnings report since going public, leading to a massive loss of $554.5 million on sales of just $5.7 million. Chief Executive Alex Coleman told MarketWatch that the charge was because the company used one methodology on Dec. 6, 2018, to value the companies that merged to form Tilt Holdings, and a different set of standards on Dec. 31.

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