Canada edition / April 08, 2020
SHARE:

Connect with WeedWeek on Twitter, Facebook, Instagram and LinkedIn!

Join us for the WeedWeek News Brief, a free weekly webinar where WeedWeek journalists recap and discuss the latest news. It airs Fridays at 10 a.m. Pacific Time. Register today!

You can check out our debut episode here.

 

1 SHOPPERS LINE UP AS REC NO LONGER ESSENTIAL IN ONTARIO

image

Following a sombre press conference on Friday during which a frightened-looking premier Doug Ford predicted the death toll from COVID-19 in Ontario alone may range from 3,000 to 15,000, the province tightened the list of workplaces considered "essential," and stripped private REC retail of its "essential" designation.
CBC Toronto, Vice, MJ Biz Daily, BNN Bloomberg

  • Ontario's 52 REC stores were required to close by 11:59 on Saturday night and remain closed for 14 days (with possibility of extension). The Ontario government changed course on Tuesday afternoon, not allowing in-person shopping, but permitting REC stores to reopen to offer click-and-collect order pick-up, and even allowing stores 14 days to offer same-day home delivery by qualified employees. (If you live and Ontario and want to buy cannabis, try calling your local REC store, checking out their website and social media posts to find out what options they've cobbled together.)
    AGCO, BNN Bloomberg
  • Licensed producers may continue production operations.
    Twitter--@itsdgc

Along with REC stores, Ontario also removed "essential" designation from hardware stores and pet stores, saying those businesses would have to sell by delivery only.
National Post

Though the AGLC licensed 12 stores under the new open-market system in March, the Ontario government initially decided the only legal REC in the province would be purchased through the Ontario Cannabis Store website, which would have to be delivered by Canada Post.
Twitter--@MattPMaurer

Critics were annoyed state-owned Ontario Cannabis Store, from whom all REC stores must buy their inventory, is in competition with the REC stores the government ordered closed, and is offering deals to draw customers from the private REC sector.
Twitter--@StoicAdvisory, @Mollytime777

On Saturday, shoppers lined up in huge numbers ahead of the midnight deadline. As occurred when PEI shut down its liquor and REC stores, shoppers in line didn't all respect social distancing.
CBC Ottawa, CBC Waterloo, CTV, Twitter--@JohnnnnyHopkins

  • My mother, in Ottawa, reported the line for the Superette ran three blocks and turned a corner, spanning two intersections.

Ontario joined Newfoundland and Nunavut in shifting REC retail to online portals only. REC retail remains on the list of essential services in Quebec, Alberta, and BC, as well as in several US states.
MJ Biz Daily, Financial Post

A note from the editor

Since 2015, WeedWeek has been the best way to keep up with the Green Rush. WeedWeek’s audience includes many of the most influential figures in cannabis because we are editorially independentAdvertisers have no influence on our editorial content.

We publish three free newsletters:

1) WeedWeek by founder Alex Halperin

2) WeedWeek California by Donnell Alexander

3) WeedWeek Canada by Jesse Staniforth As well as the WeedWeek Podcast and original reporting.

The original WeedWeek newsletter has 11,000 subscribers.

Tips, comments and complaints to Jesse jesse@weedweek.net.

To advertise with us contact events@weedweek.net.

2 REPRIEVE: DELIVERY, CLICK-AND-COLLECT ALLOWED IN ONTARIO

image
Public Domain

Many saw the public-health sense in closing REC stores. However, across the sector, insiders protested Ontario's initial refusal to legalize REC delivery or pick-up options, particularly given the government needed only to amend regulations as they had already with rules governing alcohol delivery. (Ontario adopted "Temporary Measures to Support Bars, Restaurants and Alcohol Retailers.")
Twitter--@G_Smitherman, @CCC_Cannabis, @TrinaFraser, @dycktionary

In a surprising about-face, the Ontario government approved an emergency order not only allowing retailers to continue click-and-collect sales, but allowing them--for 14 days--to deliver their products to customers (provided delivery people have received the provincial CannSell training). For 14 days, retailers will compete with the OCS's usual monopoly on delivery.
BNN Bloomberg

  • The bill was signed into law on Tuesday afternoon, allowing REC retailers to again offer click-and-collect services online or by phone. Retailers who want to offer delivery services will have to figure out how to do so quickly.

REC delivery is only fully legally available in two mid-population provinces--Saskatchewan and Manitoba. Critics wonder why delivery isn't also available in Alberta (and other provinces) if REC is "essential" and delivery could reduce indoor crowding.
Calgary Herald

WeedWeek's Guide to the California Cannabis Industry
Special Pre-Order Sale

To celebrate the release of WeedWeek’s Guide to the California Cannabis Industry we’re offering it to WeedWeek subscribers for just $20 with the code WWREPORT. That’s about 80% off the cover price.

“The combination of valuable macro data and anecdotal accounts from longtime industry leaders make this an essential read for anyone looking to navigate the waters ahead.”

Colin Earl, CEO Sisu Consulting

Offer Ends 4/20/20

3 ONTARIO RETAIL UNEASY

image

Prior to the news Ontario would allow REC delivery, many worried about how REC retail would survive, particularly those stores that worked so hard to open but might not reopen without access to the stimulus funds being withheld by the Business Development Bank of Canada.
Twitter--@dycktionary, @InfosecIvy, @PRx20302981, @JamesonBerkow, WeedWeek

Many also wondered: what about inventory? REC stores bought inventory from the OCS at a 35% markup expecting an increased demand for those products. Shouldn't they be allowed to return them--particularly since that will help prevent a supply shortage?
Twitter--@GoBlueCdn, @SarahSeale18, @JoVos

Toronto unlicensed dispensary chain CAFE, remembered for its flagrant refusal to shut down last summer, announced they'll be remaining open, but argued they were taking plenty of safety precautions.
NewsWire

At Alderville First Nation, as well as at Oneida Nation of the Thames, on-Reserve dispensaries have been ordered shut by Chief and Council. Oneida Nation on Thames banned entry by non-residents, since like many Reserves in Ontario, the Nation attracts visitors from all over with its tax-free gas, cigarettes, and cannabis.
Global News, London Free Press

This week on the podcast
A Sound Bath & Beverage in Venice

In February Donny traveled to Venice, California for a sound bath guided by the musical duo called Dynasty Electrik. This week, Alex Halperin unpacks what his co-host learned about this trendy form of sonic healing and what happens when it’s enhanced with the cannabis drink called bhang.

5 OTTAWA: MED IS ESSENTIAL SERVICE

image
Public Domain

After pressure from across the industry, Public Safety Canada included "cannabis for medical purposes" among its list of federally designated "Guidance on Essential Services and Functions in Canada During the COVID-19 Pandemic." MED advocates and sector representatives celebrated.
MJ Biz Daily, Twitter--@jon_zaid, @_deepakanand, @CCC_cannabis, @G_Smitherman

6 UNION CALLS FOR WORKER SAFETY

image
Jesse Staniforth

Last week, I mentioned WeedMD's production staff may be the first in the sector to unionize. That union began pushing for improved health and safety standards at WeedMD's London, ON production facility, 18 of whose employees are self-isolating due to recent travel or proximity to people sick with COVID-19.
London Free Press

  • In a letter to management, the United Food and Commercial Workers Union Canada (UFCW) argued workers needed expanded access to masks, PPEs, hand sanitizer, and staggered shift times to reduce crowding.
  • Following the letter, a union rep reported the company had taken several steps, including spacing workers, removing chairs from break rooms, and offering additional hand-sanitizing and hand-washing options.

The virus is taking its toll across the sector:

Manitoba LP Delta 9 is offering retail and production staff an additional $2 per hour "grateful pay" for their work during the crisis.
GrowthOp

Though early-pandemic sales booms for REC retail were an optimistic sign for some, US sales have begun to drop off dramatically.
Nasdaq

One thing the COVID crisis probably won't change is insurance--at least, not for the time being. However, Fuse Insurance CEO Kevin Lea noted increased REC delivery vehicles in some places will be offset by the number of other cars not on the road. (He warned REC retailers that non-pandemic-related risks like cyber breaches remain constant during crises like COVID.)
Insurance Business

Toronto's famous 4,000-pound concrete blocks--which the city used, to varying effect, to barricade access to scofflaw dispensaries last summer--have found a new job in the crisis. The blocks will now be used to encourage social distancing: they've been installed at the entrances of parking lots of popular areas.
Global News, CBC Toronto, DailyHive, BlogTO

7 BANKRUPTCY: THE NEXT PANDEMIC?

image

As far back as last fall, insiders have been warning this year would be marked by a series of bankruptcies. This week began to seem like the beginning of that wave.
Twitter--@TheCannalysts, Bloomberg, Financial Post, CanTechLetter, CBC Ottawa, Bloomberg

One day after CannTrust, mid-sized Kitchener-Waterloo LP James E. Wagner Cultivation sought creditor protection and announced a "consensual restructuring" supported by Trichome Financial.
MJ Biz Daily, NewsWire

8 LAYOFFS AT CANOPY AND ORGANIGRAM

image
Creative Commons / b4b2/Ben R

On Friday, Canopy temporarily laid off 200 retail employees, but reopened some of its REC stores --  Tokyo Smoke and Tweed -- with reduced hours and a click-and-collect model. Canopy initially closed all 23 of its company-owned stores to encourage social distancing.
BNN Bloomberg

This week, Organigram announced it had temporarily laid off 400 staff in a 45% reduction to its workforce. The company said it wished to prevent the spread of the COVID-19 among staff.

  • Materia Ventures CEO Deepak Anand said Organigram is providing laid-off staff "significant financial benefits including lump-sum payments to bridge income gaps left by government assistance, and absorbing employee portions of health, dental, and short-term disability premiums."
    Twitter--@_deepakanand
  • Analysts Jeffries predicted other LPs would follow Organigram in temporarily cutting staff, prompting production reductions that may recreate supply shortages.
    Twitter--@jefflagerquist

Layoffs are ongoing across other sectors as well, but a carefree few weeks ago the sector was already foundering.
Twitter--@reporton, Maclean's

Many cannabis executives spent the winter leaving their positions of their own accord, or being forced out by boards who felt they invested too much in greenhouses, ignored customers and product quality, and focused too little on profitability.
MJ Biz Daily

  • Executive compensation is becoming a point of contention. Last week, Cronos reported $7.3M in quarterly revenue--yet executives were paid a combined $18M last year, during which MJ Biz Daily's Matt Lamers pointed out they fell dramatically short of their 2019 targets for Net Revenue, Adjusted EBITDA & Production Volume. "That should weigh heavily on any compensation and accolades that were due for the company's executives," Lamers said. "Why else are they in business?"
    Twitter--@matt_lamers

Ousted Canopy's co-founder/CEO Bruce Linton predicted capital will be hard to come by for some time, making companies with significant war chests (he cited Canopy, Cronos, and Aphria) better-suited to weather the coming shortage.
BNN Bloomberg

Lift & Co announced a strategic partnership with events organizer MCI USA, which will take over "operational control" of Lift & Co events. The company pushed its summertime Toronto trade show back into November.
Globe Newswire

PRE-ORDER "THE CANNABIS DICTIONARY!

9 BEVERAGES HAVEN’T HAPPENED YET

image

Between Canopy's January decision to delay the rollout of its beverages and the rising challenge of COVID-19, cannabis beverages haven't had much opportunity to find their footing in the REC market.
MarketWatch, Beverage Daily

  • The first beverage products didn't begin arriving in Canadian stores until March. Canopy finally began releasing its beverages--mostly containing no more than 2mg THC, priced at $5.79 per can-- in Quebec roughly three weeks ago. They've since arrived in Ontario as well. I saw my first discarded Tweed can in the street last weekend.
    CBC Manitoba, Newswire
  • Beverages themselves remain largely scarce as consumers hoard dry flower and vape products for the uncertain weeks ahead. Companies haven't yet had much chance to determine how consumers feel about their offerings.
    Green Entrepreneur
  • A remaining obstacle is Health Canada's bizarre equivalency ratios, under which consumers can only buy a limited number of cans (in BC it's five) at a time, meaning they can't buy more than 10mg worth of THC per personal beverage order.
    Twitter--@KirkTousaw

Many companies are planning to bring beverages to market in the future--particularly CBD beverages, which many LPs are eager to sell.
Hemp Industry Daily

 

10 WHOSE PRESS RELEASE WAS THAT?

image
Craig Wiggins / GoBlueCdn

In the most surreal story of the week, both High Tide and Choom released the same press release, attributing an identical quote to High Tide president and CEO Raj Grover and to Choom CEO Corey Gillon.
Twitter--@GoBlueCdn, Stockwatch, Newswire

 

Quick Hits

  1. Various users noted social-media site Reddit had geoblocked access to its r/CanadianMOMs messageboard, a discussion and review forum about illicit mail-order-marijuana websites. Those accessing the messageboard from Canada receive a warning the content has been "restricted in your country in response to a legal request."
    Twitter--@WhatsMyPot, Reddit

  2. Hexo co-founder, director, and former Chief Brand Officer pledged $10,000 to the Ottawa Food Bank during the COVID crisis, and tagged the Wu Tang Clan, as you do. The Wu came through with a donation of their own. At last count, the drive had raised over $170,000 for the food bank.
    Twitter--@adammiron, CTV News

  3. Storz & Bickel's Volcano Medic 2 vaporizer received a Medical Device Licence from Health Canada.
    Cannabis Life Network