Canada edition / May 27, 2020
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1 NATIONWIDE SALES SURGED IN MARCH

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Public Domain

Statistics Canada's data on March REC sales show purchases surged as the pandemic set it. Sales resulted in $181M in sales nationally, an increase of 19.2% from February (and roughly triple March 2019's $60.9M). Average prices also hit their lowest points in March before rising slightly in April.
BNN Bloomberg, MJ Biz Daily, Twitter--@itsdgc

  • The greatest increase in sales was in Northwest Territories, whose $301,000 in spending represented a 40.7% increase over February.
  • The major province next hungriest for REC in March was Quebec, where $37.7M spent was a 29.1% month-over-month increase. This number will perturb Quebec's anti-cannabis CAQ government, but it reflects growing public comfort with REC, which Quebeckers were once national outliers in opposing.
    RCI-Net, Leafly
  • Yukon (22.3%), Alberta (20.8%), and Ontario (20.6%) held the third through fifth positions in increased sales over February.
    Twitter--@itsdgc

Only PEI reported declining sales after the province closed all REC and liquor stores during the lockdown. Some believe this cost the province gains on the illicit market at a time when it was otherwise a quiet success. PEI reopened REC stores on May 22.
Twitter--@ProfMJArmstrong, Leader Post, Cannabis Retailer

Montreal represented the country's most dramatic municipal increase in March sales (up 61.4%), followed by Toronto (26.3%), Calgary (23.8%), and Edmonton (18.3%). Ottawa was the only city to post a decline, of 0.3%.
Jean Leloup, Twitter--@itsdgc

 

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2 ONTARIO RETAIL READY TO GROW

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Jeangagnon / Creative Commons

Early on in the pandemic, the Alcohol and Gaming Commission of Ontario shifted quickly from physical to virtual inspections for stores, which helps explain why the regulator has been so consistent in processing store applications.
MJ Biz Daily

3 CONSUMERS WANT CHEAP

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Michael Francis McCarthy / Creative Commons

In the US as in Canada, consumers want cheap REC, and the price of cheap is declining. (An ounce of Pure Sunfarms Indica Blend was selling for $107.24 from Friendly Stranger in Ontario, the lowest per-ounce price I've seen for legal flower.)
CNN, Twitter--@ChrisGoodwin79

  • Canopy REC retail arm Tokyo Smoke is now offering mix-and-match half-ounces composed of four 3.5 gram packages of different flower. This variety-pack approach to ounces and half-ounces is widespread on illicit mail order marijuana sites (MOMs) and seems like a wise move.
    Twitter--@WhatsMyPot

Another popular item is larger packs of pre-rolls, particularly sold at a bargain price. Again scoring points in a market they might have scared off last year, Redecan has been succeeding with its 10-packs of "Redees" 0.35g pre-rolls, sold for $20 in Ontario and $43 in Alberta.
CityNews, Twitter--@GBFarmerDeb, @StirTheMoose

  • Lake City Cannabis's Ryan Roch said the 10-packs "should be a canary in the coal mine for every LP doing Pre-Rolls. I have yet to see such a positive response from a product. 10-15 calls a day looking for them." Fair warning: Redees are designed to look and draw like cigarettes, which has turned some consumers off, and others on.
    Twitter--@LakeCityCanna, @OBCDamian, @markcavdar

 

4 COVID CHANGES CANNABIS, AND MAYBE REGS AS WELL

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MatteoBroc / Wikimedia Commons

Many Canadians have turned to cannabis to ease their anxieties during COVID-19 (as have our American cousins) though precise data about how much remains scarce. 
Calgary Herald, Bloomberg,

COVID is one thing, but some believe the industry has yet to recover from last summer's CannTrust debacle. And surviving COVID doesn't guarantee companies will come out of the crisis stronger.
Mugglehead, GrowthOp

Some companies who've survived the first three months of the pandemic have done so by employing enormous flexibility and wondering whether the regulators could also be more flexible
The Rise

5 WILL DELIVERY LAST?

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Sashafatcat / Creative Commons

As Ontario begins to lift pandemic restrictions and open stores again, industry braces for the end of the temporary emergency-order allowing private delivery in the province.

The BC attorney general's office reported the Liquor and Cannabis Regulation Branch is considering appeals from REC retailers to sell online and deliver directly to consumers.
Kamloops This Week

Quick Hits

  1. British Columbia's provincial share of federal excise tax revenue hit a record peak in December, 2019 with $2.5M for the provincial coffers, up from $1.7M in November.
    MJ Biz Daily

  2. The Department of Veterans' Affairs spent $77,794,212.57 on MED in 2019, more than the $66.2M the department spent on all 12,000 other drugs combined. Many blame Big Weed.
    Chronicle Herald

6 ZENABIS CLAIM CHALLENGED ON EU-GMP AND OTHER SECTOR NEWS

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Public Domain

Zenabis CEO Kevin Coft announced "Zenabis, in conjunction with our European Union partners Natrix Sciences Ltd. (formerly Starpharma Ltd. Malta) and ZenPharm Ltd., have received EU-GMP approval."
NewsWire

  • The demanding but desirable EU Good Manufacturing Practices certification allows companies to sell within the European Union.
  • Zenabis argued it "has obtained EU-GMP approval through its Malta-based European partner, ZenPharm Limited, "in which it owns a 43.5% stake."
  • In response, Materia Ventures CEO Deepak Anand called the company out, noting "Getting an export permit to ship products for process validation [does not equal] getting 'EU-GMP Approval' [...] Definately [sic] not EU-GMP!" Anand called upon the company to specify "who gave them this EU-GMP Approval." They did not.
    Twitter--@_deepakanand
  • I contacted Zenabis for comment and had not heard back as this issue went into production.


Across the Sector:

7 BANKRUPTCIES GRIND ON

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Wikimedia Commons / Vectortoons

Last week, Tilray CEO Brendan Kennedy predicted another dozen LPs would go bankrupt before the year was through. This week, cannabis investment firm Stoic Advisory's CEO Aaron Salz predicted "a huge chunk" of the 383 companies licensed by Health Canada will go bankrupt within the next year.
BNN Bloomberg, Mugglehead

Ohio REC retailer Green Growth Brands, which traded in Canada, announced it had filed for protection from its Canadian creditors (some of whom have filed lawsuits against the company).
Globe Newswire, MJ Biz Daily

8 AURORA FOLLOWS CBD CRAZE TO US MARKET

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Jesse Staniforth

Aurora announced it acquired U.S. hemp/CBD brand Reliva for USD$40M in an all-share transaction, finally achieving Aurora's longtime plan to return to the U.S. in order to cash in on the American CBD craze. Aurora spun off its U.S. subsidiary Australis Capital in 2018.
PR Newswire, New York Times, MJ Biz Daily

Aurora's shares jumped after the deal, which drew the scrutiny of some critics. Jeffries analyst Owen Bennett downgraded Aurora from "hold" to "underperform," predicting more difficult months would still be coming for the company.
Yahoo Finance

9 MANITOBA THROWS DOORS OPEN TO RETAILERS

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Ajbatac / Wikimedia Commons

As of Monday, June 1, any person who wants to run a REC store in Manitoba may apply. Since legalization, Manitoba has only licensed 30 REC stores, half of which are in Winnipeg, but a government representative said the move would encourage "an open and competitive cannabis market" that will generate jobs and bolster Manitoba's economy as the province recovers from COVID-19.
MJ Biz Daily, Global News

Quick Hits

  1. Lawyer Chad Finkelstein broke down the mysteries of white-label packaging, in which producers delivery raw product for another company to brand and sell.
    Twitter--@ChadFinkelstein

  2. South Korea's sovereign wealth fund bought into Cronos, Aurora, and Canopy as the three major LP stocks hit 52-week lows.
    MJ Biz Daily

10 NUNAVUT WILL FINALLY GET PHYSICAL STORES

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Fiona Paton / Creative Commons

Twenty months after REC legalization and pressure from municipalities and aspiring operators, the territory of Nunavut will begin allowing physical REC stores on June 1. Previously, Nunavummiut could only order REC online from either Canopy or AgMedica Bioscience.
Nunatsiaq News, MJ Biz Daily

  • Two classes of REC retail licenses will exist: "Remote sales licenses" will allow operators to make sales online or by phone and ship REC throughout the territory.
    Cannabis Retailer
  • Physical store licenses will allow in-person sales. These licenses are subsequently split into licenses for standalone stores as well as for stores integrated into other retailers.