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Biological Assets | 12 Months Ended
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Jun. 30, 2020
Agriculture [Abstract] |
Biological Assets | Biological Assets
| Accounting Policy The Company defines biological assets as cannabis plants up to the point of harvest. Biological assets are measured at fair value less costs to sell at the end of each reporting period in accordance with IAS 41 - Agriculture using the income approach. The Company utilizes an income approach to determine the fair value less cost to sell at a specific measurement date, based on the existing cannabis plants’ stage of completion up to the point of harvest. The stage of completion is determined based on the specific date of clipping the mother plant, the period-end reporting date, the average growth rate for the strain and facility environment and is calculated on a weighted average basis for the number of plants in the specific lot. The following inputs and assumptions are all categorized within Level 3 on the fair value hierarchy and were used in determining the fair value of biological assets: |
| Inputs and assumptions | Description | Correlation between inputs and fair value |
| Average selling price per gram | Represents the average selling price per gram of dried cannabis net of excise taxes, where applicable, for the period for all strains of cannabis sold, which is expected to approximate future selling prices. | If the average selling price per gram were higher (lower), estimated fair value would increase (decrease). |
| Average attrition rate | Represents the weighted average number of plants culled at each stage of production. | If the average attrition rate was lower (higher), estimated fair value would increase (decrease). |
| Weighted average yield per plant | Represents the weighted average number of grams of dried cannabis inventory expected to be harvested from each cannabis plant. | If the weighted average yield per plant was higher (lower), estimated fair value would increase (decrease). |
| Standard cost per gram to complete production | Based on actual production costs incurred divided by the grams produced in the period. | If the standard cost per gram to complete production was lower (higher), estimated fair value would increase (decrease). |
| Stage of completion in the production process | Calculated by taking the weighted average number of days in production over a total average grow cycle of approximately twelve weeks. | If the number of days in production was higher (lower), estimated fair value would increase (decrease). |
| Production costs are capitalized to biological assets and include all direct and indirect costs relating to biological transformation. Costs include direct costs of production, such as labor, growing materials, as well as indirect costs such as indirect labor and benefits, quality control costs, depreciation on production equipment, and overhead expenses including rent and utilities. |
The following table highlights the sensitivities and impact of changes in significant assumptions on the fair value of biological assets:
Significant inputs & assumptions | Inputs |  | Impact on fair value |
June 30, 2020 |  | June 30, 2019 |  | Sensitivity | June 30, 2020 |  | June 30, 2019 |
Average selling price per gram |  | $4.78 |  |  | $5.86 |  | Increase or decrease of $1.00 per gram |  | $14,070 |  |  | $14,868 |
Weighted average yield (grams per plant) | 52.73 |  | 44.31 |  | Increase or decrease by 5 grams per plant |  | $3,756 |  |  | $6,295 |
Standard cost per gram to complete production |  | $1.73 |  |  | $2.04 |  | Increase or decrease of $1.00 per gram |  | $19,318 |  |  | $17,735 |
The Company’s estimates are, by their nature, subject to change and differences from the anticipated yield will be reflected in the gain or loss on biological assets in future periods. The changes in the carrying value of biological assets during the period are as follows:
| Year ended June 30, 2020 |  | Year ended June 30, 2019 Restated (Note 2(h)) |
| $ |  | $ |
Opening balance | 50,567 |  | 13,620 |
Production costs capitalized | 62,177 |  | 41,857 |
Biological assets acquired through business combinations (Note 12) | — |  | 8,888 |
Changes in fair value less cost to sell due to biological transformation | 56,614 |  | 92,503 |
Transferred to inventory upon harvest | (133,923 | ) | (106,301 | )
Ending balance | 35,435 |  | 50,567 |
As of June 30, 2020, the weighted average fair value less cost to complete and cost to sell a gram of dried cannabis was $1.88 per gram (June 30, 2019 – $2.93 per gram). During the year ended June 30, 2020, the Company’s biological assets produced 152,740 kilograms of dried cannabis (year ended June 30, 2019 – 57,442 kilograms). As at June 30, 2020, it is expected that the Company’s biological assets will yield approximately 41,653 kilograms (June 30, 2019 – 36,010 kilograms) of cannabis when harvested. As of June 30, 2020, the weighted average stage of growth for the biological assets in was 48% (June 30, 2019 – 49%).

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- Definition The entire disclosure for biological assets, agricultural produce at point of harvest and government grants related to biological assets. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 41 -IssueDate 2019-01-01 -Section Disclosure -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=41&code=ifrs-tx-2019-en-r&doctype=Standard&dita_xref=IAS41_g39-57_TI -URIDate 2019-03-27 + Details
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