Canada edition / February 22, 2020
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2 BC CANNABIS SQUAD RELENTS (SOMEWHAT) ON $1.5M FINE CASE

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PUBLIC DOMAIN
BC's Community Security Unit has not retracted its fine of $1.5M for Alex Robb, former manager of Trees, a defunct BC dispensary chain. But public pressure forced the CSU to drop some kangaroo-court aspects of its case, including its refusal to tell Robb what the grounds for his case were until he decided whether or not to take a plea deal. CTV News, Vancouver Sun
  • The CSU will now give Robb relevant evidence before he decides whether to accept the fine and pay half of it, or challenge it in a contestation process overseen by the director of the CSU that fined him.
  • Robb believes the CSU made an example out of him because he refused to close Trees while getting licensed, as he believed to do so would harm patient access. Inside the Jar
  • Industry members in Victoria planned to meet last night to discuss supporting Robb. BC Independent Cannabis Association

Quick Hit

  1. Last week LPs were trying to figure out how to process returns. This week, customers are wondering why it isn't easier to return unsealed cannabis. Inside the Jar
This week on the podcast
Who Hurt Kristen Yoder?
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3 ONE STEP FORWARD, 2.0 STEPS BACK

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PUBLIC DOMAIN
Following on last week's news that the liners of aluminium cans may leach cannabinoids from REC beverages, new Canopy CEO David Klein said the problem was among the reasons for the company's decision to postpone the release of its infused beverage line.
Gummies still seem like the most popular new edible, selling out much more quickly than infused chocolate products. (This may be partly because producers shipped more chocolates than gummies). Twitter—Colin Bambury, Rob Cherry
Vape products are holding strong, with none yet sold out in Ontario. The coronavirus may delay China-manufactured vape hardware in reaching Canada. Twitter—David George-Cosh, Calgary Herald Vaginal and rectal suppositories can provide enormous relief for sufferers of endometriosis, ovarian cysts, and prostate diseases. However they're not available through MED producers and aren't being released by REC LPs. Leafly
  • Pharmacist and MED advocate Rahim Dhalla said, "4 months post 2.0 and no topicals, suppositories, patches or anything else that patients need." Twitter—Rahim Dhalla
One third of consumers are still not aware which brands they're buying, or what dosages they prefer. Toronto Sun
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4 UPS, DOWNS, ALL AROUNDS

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Canadians bought a total $1.3B legal REC in the first full year of legalization, purchasing more as the year went on. Financial PostTwitter—David George-Cosh New Statistics Canada numbers found legal cannabis consumption continues to rise slowly, while fewer Canadians are buying on the illicit market. But who seems to be consuming significantly less cannabis since legalization? That's right, it's the children! Statistics Canada, Twitter—Michael J Armstrong, The Simpsons
CBC News found massive differences in the prices of the same legal oil- and gelcap products between provinces. CBC Toronto, Youtube—CBC
  • In the case of one format of Aurora CBD (9mg to 12mg) capsules, a package sold for $44.99 in BC sold for $52.20 in Ontario, $86.99 in Alberta, and $92.30 in Quebec.
  • The Ontario Cannabis Store said they had lowered prices on more than 200 productsFinancial Post
If you're looking for a job managing a REC store in Toronto, expect to be paid $80,000 to $100,000 per year plus extended benefits (get those massages, you're worth it). Indeed.com Nova Scotia police reported "maybe a 30 to 40% increase in terms of the numbers of [drug impaired driving] arrests"—though the number of people charged with drug-impaired driving actually declined from 21 in 2018 to 13 last year. CBC Nova Scotia, Twitter—Ashley Keenan
  • Critics pointed out Nova Scotia police using saliva-testing devices can only determine whether someone has consumed cannabis in the recent past, not whether they are impaired. Twitter—Jenna Valleriani
Beer sales continued to decline, which many (including some brewers) believe is the result of canna-competition. MJ Biz Daily

5 CORPORATE NEWS

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Saying "There are no sacred cows," Canopy Growth CEO David Klein said he hadn't ruled out the layoffs some insiders have been predicting for weeks. BNN Bloomberg
Controversy resurfaced around Green Relief, after the Financial Post viewed video of a shareholder meeting the Midas Letter mentioned a few weeks back. During that meeting, shareholders heard allegations from company executives that almost a quarter of the $60M the company raised could not be accounted for and that the founders had been "linked" to those missing funds. WeedWeek Canada, Financial Post
  • Lyn and Warren Bravo, a married couple who are two of the company's three founders, "vehemently deny" the allegations.
Capital is beginning to return to the sector, though the amount of debt-based financing has increased from 19% of last year's capital raises to 40% of this year's. Bloomberg Will Canada quickly be overwhelmed as a legal producer as hot Latin American and Caribbean countries legalize? Will LPs increasing focus on exports force Canada to accept REC imports from countries like Jamaica? Canopy's ex-CEO Bruce Linton, on the WeedWeek Podcast last summer, predicted it would be a long time before cannabinoids were allowed to travel easily over international borders. Financial Post, Twitter—Trina Fraser, WeedWeek Longtime testing lab Anandia, widely used in pre-REC-legalization MED growing circles, announced it would no longer provide testing across the entire industry and will instead provide services to Aurora alone. Aurora bought Anandia in June, 2018 in a $115M all-stock deal. Twitter—John Fowler, David Brown, Jonathan Page, CBC Business BC-based premium LP Westleaf rebranded as Decibel Cannabis Company—while also laying off 11 positions and cutting its REC store count from 22 to 11. NewsWire

6 INDOOR OR OUT?

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LPs are beginning to move from greenhouses and indoor production facilities to outdoor growing, where being at the mercy of weather dramatically lowers the cost-per-gram. MJ Biz Daily
  • Since debuting outdoor growing last May, Health Canada has licensed 33 outdoor grows, with another 135 in waiting.
  • MJ Biz Daily's Matt Lamers noted, "10 of the 33 outdoor cannabis cultivation approvals so far [have involved] outdoor. Among the 135 applications [in the Health Canada queue] with an outdoor area, 41 involve micros. Lots of micros/craft [producers see] outdoor as [an] important part of their [business] plans. Expect high quality from these producers." Twitter—Matt Lamers
  • NextLeaf CEO Paul Pedersen noted outdoor has changed the face of cultivation. "Companies who spent millions building greenhouses/large indoor AND struggling with quality are up against a flood of cheap outdoor biomass this fall. Many indoor cultivation assets are liabilities not assets." Twitter—Paul Pedersen
Lamers added, "Expect $200 million cannabis greenhouses to be in the news a lot in the months ahead, with headlines like ["Aurora Cannabis cease construction at Alberta, Denmark facilities as losses widen"]." Twitter—Matt Lamers
  • EY's Ashley Chiu noted, "Very few buyers for cultivation facilities in Canada. I see mostly international funds (primarily out of Europe), PE, alternative financing (albeit much less than before), specialized funds, those with licensing challenges, and a few operators looking to get into the space." Twitter—Ashley Chiu

Quick Hits

  1. Alberta joins other provinces in extending agricultural grants to cannabis cultivators. MJ Biz Daily

7 PROVINCIAL BUSINESS

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The Ontario Cannabis Store drew criticism for publicly congratulating Canopy on opening their newest licensed Tokyo Smoke REC store. Lawyer Harrison Jordan noted OCS CEO Cal Bricker also performed as a musician during a Canopy-related concert event. Twitter—Canopy, Harrison Jordan
This year's BC budget earmarked $12M "for resources to ensure compliance and enforcement against the illegal sale of cannabis and related activities" and set aside $154 for the BC Liquor Distribution Branch, but offered no new money to bring legacy growers and sellers into the legal market. So far the BC government has only invested $676,000 in helping illicit operators transition into the mainstream. Twitter—Matt Lamers, Courtland Sandover-Sly, MJ Biz Daily Employees at two of Clarity Cannabis's seven BC REC stores voted to join the United Food and Commercial Workers union, becoming the first private-sector budtenders to unionize. (Public sector workers at Quebec's SQDC retailers began unionizing shortly after legalization). Nanaimo Bulletin, La Presse—In French Beginning in April, the Saskatchewan Lottery and Gaming Authority will begin accepting applications to open REC stores in communities smaller than 2,500. As of September, they'll accept applications for licenses in stores anywhere in the province. Twitter—David Brown The Nova Scotia Liquor Commission, that province's crown REC retail monopoly, announced plans to open twice as many REC stores as are presently open. The move will give the province 14 more stores. CBC Nova Scotia, Global news

8 ONTARIO CONSUMPTION CURIOSITY SPARKS CALL FOR LOUNGES

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After last week's announcement that Ontario would be considering public REC consumption—but wouldn't allow any smoking or vaping, some wondered why they couldn't have places with smoking or vaping on site. National Post columnist Jesse Kline noted a majority cannabis consumers prefer inhaling cannabis products, and wondered why Ontarians can have public alcohol-consumption spots but not REC lounges. National Post
Edmonton is poised to begin reviewing reports on how to allow REC lounges, though they're stuck waiting for go-ahead from the province. Someone close to the discussions told me the province seems almost certain to shut down the idea. Global News, Edmonton Journal

Quick Hits

  1. As REC retailers have become more concerned about robberies, REC firm Fire & Flower instructed franchisees not to fully obstruct their doors and windows—just the parts through which cannabis or accessories are visible. Twitter—Business of Cannabis

9 NATIVE CANNABIS NEWS

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JESSE STANIFORTH
Peepeekisis Cree Nation in Saskatchewan became the fourth First Nation in the province to open a dispensary without permission from the province or Ottawa. The community's band council allows the store, which will create 15 jobs in the community of 491. Regina Leader-Post, CTV News
As Nunavut's legislative assembly, the Inuit territory's MLAs will be working to pass a bill amending the Nunavut Cannabis Act, designed above all to allow physical retail stores (such as have been called for by Iqaluit). Nunatsiaq, CBC North

Quick Hits

  1. Federal Conservative leadership candidate Peter MacKay, former attorney general, minister of national defence, and minister of foreign affairs, told a BC newspaper he disagreed with legalization, saying, "It should have been de-criminalized. […] What I most worry about is the impact on young people, the mental health implications, the impaired driving implications. It was forced." Kelowna Daily Courier

10 INSIDER INSIGHTS

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Geneticist Ryan Lee dove deep into discussions of "strain" and cannabis botany. Plus here's a discussion with Ryan in which he answers questions like "What happened to place-name cultivars like 'Acapulco Gold' and 'Panama Red'?" Twitter—Chimera Genetics BC LP Shelter's business developer Kyp Rowe broke down questions about the pricing process for smaller growers, including an explanation of the whole process. Twitter—Kyp Rowe North 40 Cannabis, Saskatchewan's first micro cultivator, lamented the challenge of bringing pesticide/fungicide-free, whole-plant-dried, hand-trimmed, one-month-cure buds to wholesalers, brokers, processors, and retailers who " all want to pay the same as what they pay for industrial weed". Twitter—North 40 Cannabis And various parties debated whether a $20 eighth of unknown "Indica" was a good or a bad thing. Twitter—Courtland Sandover-Sly