Canada edition / October 19, 2019

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Table Service & Tokes at Lowell Cafe



With 9,200 people employed (and numbers increasing) in an industry that contributes $8.26B to the Canadian economy and plenty of taxes, aspects of legalization can be celebrated as successes. Other smaller-ticket achievements include a faster (though more restrictive) Health Canada licensing process, and provincial and municipal governments softening on retail and processing. Those good things help offset the parts of the last year that stank:
Botaniq, Bloomberg, Twitter—CannaTom

The industry remains frustrated and confused with Health Canada's strict-yet-vague advertising regulations. Among the unclear regulations that came into effect on Thursday are new rules limiting REC retail logos and brand elements to no larger than 300 square centimetres, or about the size of a shoebox lid--but without clear guidance on the places that rule was to be applied.
CTV News

The illicit market remains "vibrant" according to virtually all estimations, helped by minimal REC retail rollouts and prices nearly half that of the legal market.
CBC Politics

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Quebec always has to do things its own way, which is why my home province will be banning all extracts with more than 30% THC—effectively banning all extracts and vape pens.

  • The CAQ government's regulations will also cap edibles and beverages at 5mg per serving with maximum 10mg per package, and ban all sweetened edibles. They will allow "granola bars" and "bran muffins," however.
    La Presse—In French
  • Since the SCDC won't be allowed to sell vape pens and many other products that will shape legalization 2.0 for the rest of the country, the crown corporation will begin by stocking mostly cannabis beverages, as well as hashish no stronger than 30% THC.
    Journal de Montréal—In French
  • The CEO of the Société Québécoise du Cannabis, Jean-François Bergeron, hopes to cut long lineups at SQDC outlets, hence their recent plan to nearly double the number of stores (from 22 to 43) by April.
    Montreal Gazette

Despite la belle province's confused feelings about legalization, Quebec's REC users prefer the illicit market for the usual reasons: Montreal's delivery services are fast, friendly and cheap, while visits to SQDC outlets (all of which close at 9:00 pm) require waits in long lines. Those who shop at the SQDC are generally happy with the crown corporation, however. (Meanwhile, at least you can smoke cannabis outside in Montreal. Quebec City has given 97 tickets and $150 fines to people smoking cannabis in public places.) Leafly, Montreal Gazette, Ici Radio-Canada—French

  • Quebec police used blood tests to detect the presence of cannabis in 113 drivers believed to be impaired—up from 73 the previous year. (Tests cannot confirm impairment.) Montreal Gazette

In the midst of its own troubles, SQDC principal supplier Hexo announced the launch of Original Stash, a budget brand boasting the lowest-cost legal REC in Canada with 28-gram bulk bags selling for $125.70 with sales taxes included, or $4.49 per gram (less than half the national average of more than $10 per gram). These are the first one-ounce (28 gram) REC packages available in Quebec.
Globe NewsWire

Quick Hits

  1. Inexhaustible Globe reporter Jameson Berkow crossed Quebec and into the maritimesprofiling LPs as he went.
    Globe and Mail
  2. Canadian legalization has been a catalyst for interest in legalizing from a variety of other governments, including Mexico, Luxembourg, Australia, New Zealand, and the US.
    GrowthOp, Associated Press



The Ontario Cannabis Store announced it was consulting with LPs and REC retailers about "increasing private sector participation in the delivery of [REC] to stores across Ontario." This will likely eventually end the OCS's central warehouse and role in wholesaling, and allow LPs to sell directly to retailers. It would also make the brick-and-mortar REC retail sector fully private.

Everyone agrees Ontario needs more REC stores, though analysts aren't sure precisely how many. Is it twice as manyTen times?
CanTech Letter, Globe and Mail

Quick Hits

  1. Lawyer Jodi Butts—wife of Justin Trudeau's close friend and former principal secretary Gerry Butts—was nominated to Aphria's board, and will likely be confirmed on November 14. She'll be compensated with $150,000 cash and another $150,000 worth of deferred share units.
    National Post
  2. Darryl Dexter, former NDP premier of Nova Scotia who now advises on cannabis issues, called on Ottawa to get involved with complaints from the sector that banks are refusing access to and closing accounts of cannabis businesses.
    MJ Biz Daily



With cannabis stocks at their lowest point since 2017, industry investors are desperate for good news. They found it in Aphria's report of their second profitable quarter, despite analyst predictions of a coming loss.
Bloomberg, PR NewsWire, Bloomberg

Quick Hits

  1. Canopy became the first LP to be allowed to bulk-import MED directly to its UK distribution hub.
    Financial Times
  2. Cronos share prices spiked as much as 40% overnight on Wednesday following a series of block purchases, prompting a Stifel analyst to upgrade the stock and dub it "the new king of the north."
    Market Realist, Yahoo Finance, Bloomberg, Barron's, Investor's Business Daily



Real-estate company RE/MAX released its 2019 Cannabis Survey, concluding the cannabis industry is resulting in localized housing-market "micro-booms" in communities surrounding major cannabis production sites like Smith's Falls and Leamington. The result has been spiking prices and some housing shortages.
NewsWire, Re/Max Huffington Post

Quick Hits

  1. The Alberta Cannabis Micro License Association, an upstart micro-cultivators association, hopes to turn their affiliation into a canna-tourism attraction, like the Niagara wine region.
  2. Pharmacy corporation Rexall entered the sector as its online wellness subsidiary received a sales license from Health Canada. Rexall's parent is multinational health care behemoth McKesson, whose 2018 revenue was $208B.
    Twitter—Deepak Anand, David George-Cosh