Canada edition / August 31, 2019



One week on and Ontario's REC retail lottery continues to disappoint. In an August 30 "Update on the Status of the Cannabis Allocation Lottery," the Alcohol and Gaming Commission of Ontario revealed that 12 of last week's 42 lottery winners did not submit required paperwork by the Wednesday deadline and were disqualified, while one applicant withdrew.

With the exception of one store in a suburb of Ottawa, the initial second Ontario REC retail lottery passed over all towns and cities east of Oshawa. Rural Ontario should get used to a long wait for REC retail.
CBC Ottawa. Globe and Mail

  • Following the news that 13 of the 42 winners were not eligible for applications, however, the spread of stores in the province's East Region shifted: Ottawa and its suburbs got three license applications instead of one, while other cities north and east of Toronto got spots as well.
  • A Montessori preschool in Toronto's tony Beaches area complained after a REC retailer was awarded the right to apply for a license four doors away. "I'm really angry that nobody's considered the age group under six," said school co-owner Leigh Anne Jacques.
    Globe and Mail
  • Critics noted there is has been a pub located between the school and the proposed store since 1981.

Public Service Employees' Union (OPSEU) president Smokey Thomas renewed his demand that crown alcohol monopoly the Liquor Control Board of Ontario be allowed to create LCBO-directed provincial REC stores that would compete with private enterprise. Due to LCBO collective agreements, such stores would be staffed by OPSEU members.

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A report by Global News revealed the Ontario Cannabis Store—contrary to its privacy policy promise not to use or share customer data—has been selling customers' postal-code data to LPs.

  • A former Ontario privacy commissioner called the revelation "appalling."
  • An OCS spokesperson defended the program as providing valuable sales information to LPs to help them "evolve and improve their product offerings."
  • Noting the information came as a result of a refusal of an access-to-information request, Trina Fraser said, "The public has how the OCS is operating, how much it is earning, what it is selling. The secrecy is mind-blowing."
  • Global reporter Patrick Cain said, "No other province we talked to does this. BC said 'We don’t sell sales data, period, not by region, community or product.' Same with AB, NB, NS.

Quick Hits

  1. Former acting US attorney general Matthew Whitaker signed on as outside council for Toronto CBD firm Alternate Health.
    Vox, MJ Biz Daily
  2. Ottawa landlord John Sanders was ordered to partially forfeit a building he partially rented to illicit dispensaries from June 2016 to September 2018.
    Ottawa Citizen
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Statistics Canada data on legal REC sales between October 2018 and June 2019 found Alberta sold the most legal REC in the country: $123.6M (roughly $28.70 per capita).

  • Alberta was followed by Ontario, which sold $121.6M ($8.49 PC), and Quebec, which sold $119.2M ($14.21 PC).
  • As of Monday, Alberta has issued 277 REC retail licenses, allowing one store for every 15,550 residents (versus Ontario, which has one store per 596,666 residents). Analysts credit Alberta's success to widely available retail.
    Global News, GrowthOp

Headset released new retail data on Alberta REC sales between March and May.

  • The data found flower represented 73.3% of legal sales, and pre-rolls captured 18%.
  • The most popular package size was 3.5 grams (65.9% of units sold), followed by one gram (31.5%) and seven gram (2.2%).
    Globe and Mail

Alberta-based REC retailers Alcanna (owner of Nova Cannabis) and Fire and Flower agreed the supply shortage is over, saying inventory levels are so high they're going to keep opening stores until they hit the 15% cap on stores-per-single-owner (meaning 37 stores per company).
TV News

Quick Hits

  1. Saskatoon city council cut the licensing fee for a REC store from $10,000 to $85.
    Saskatoon Star Phoenix 

  2. Ottawa is giving Nunavut nearly $1M over five years to train police to catch stoned drivers.
    Nunatsiaq News


Emanuele Nardoni

Lots of soul-searching in BC following the news BC consumers spend less on legal REC than any province outside PEI.
CTV News, The Star

  • BC's Liquor Distribution Board acknowledged supply problems and delayed provincial and municipal approvals as hobbling that province's legal REC rollout.
  • Unlicensed BC bud is as good as it's ever been, while consumers have widely panned many legal REC products for poor quality at high prices. LPs may need to work harder to win over legacy buyers.
  • Alternately, the numbers might just mean BC needs a lot more stores.

REC retailers and growers accuse the BC government of making it too difficult to open legal REC businesses in the province. As in many places across Canada, growers in BC are also at odds with neighbouring residents who complain about cannabis odours.
CityNews, Penticton Western News

Wine, hard liquor, and coolers are setting sales records in the province.
CBC British Columbia

Quick Hits

  1. Another Canadian got banned from the US after attempting to enter while carrying CBD. US immigration lawyer Len Saunders warned there'd be more cases until the US legalizes cannabis or Canada warns travellers not to bring CBD across the border.
    CBC British Columbia

  2. Broken Coast suffered extensive damage to at least one of their drying rooms in a fire at their Cowichan Valley production facility last weekend.
    Cowichan Valley Citizen

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Quebec's conservative CAQ government called last month for even tighter limits on edibles (max 5 mg per edible) than Health Canada's already strict dosage limits on ingestibles (max 10mg per package). Quebec's 18 regional public health directors argued this week the province must go further, and called for Quebec to ban cannabis-infused soft drinks, juices, and sweetened beverages.
Montreal Gazette

Quick Hits

  1. MED activists and supporters in the MED industry are pushing to make removing the MED excise tax an election issue.
    Twitter—Cam Battley

  2. Spectrum Therapeutics is no longer paying Alberta's 16.8% provincial excise tax on MED, explaining it only did so for one year to help patients adjust to the new tax.



Tilray made its first move into the retail space, acquiring Alberta REC retailer Four20 (owner of High Park) for $110M.
MJ Biz Daily

Quick Hits

  1. In June, CannTrust was the third most reputable LP in Canada. Today, not so much. Though Australia is far less concerned than Denmark that it may have imported some of CannTrust's illicit cannabis.
    MJ Biz Daily, Business Insider

  2. Constellation Brands predicted its investment in Canopy cost it USD$54.8M this (current) quarter.

  3. Canopy Growth venture arm Canopy Rivers reported a $3M loss for Q1.



Pax Labs' general manager for Canada predicted the Canadian vape market would be a $600M industry by 2021.

Quick Hits

  1. Ratings agency Fitch warned Canadian banks aren't going to regain their interest in cannabis investments any time soon.
    Financial Post

  2. A GMP Securities analyst said US cannabis companies are underpriced and will soon eclipse Canadian companies.



Statistics Canada released the pilot test results of its study on Wastewater-based estimates of cannabis and drug use in Canada. The yearlong pilot project between March of 2018 and February of 2019 tested municipal wastewater in Halifax, Montreal, Toronto, Edmonton, and Vancouver (representing a combined 20% of the Canadian population) for traces of cannabis and other drugs.

  • The study found the highest concentrations of cannabis traces in Montreal and Halifax, whose results were between 2.5 and 3.8 times higher than those of Vancouver, Toronto, or Edmonton.
    CBC British Columbia
  • Cannabis use appeared to spike seasonally in May, June, and December, though study authors acknowledge those spikes may have been caused by "factors related to the wastewater sampling."
  • Cocaine traces were roughly standard across all cities.
  • Meth traces were much higher in both Edmonton and Vancouver than in Montreal, Toronto, and Halifax (in descending order) combined.

The report concludes the variation on per-capita traces of cannabis and meth suggests individual "large cities within the same country may have distinct drug-use profiles."
Vancouver Sun

Quick Hits

  1. Considering the first nine months of Statistics Canada numbers on cannabis economics since legalization, Bloomberg's David George-Cosh concluded, "The cannabis black market GDP (market value of all the final goods and services produced) has declined by 21% since cannabis was legalized in Canada in October. Also, the legal cannabis industry's GDP has doubled since legalization. It's also almost surpassed the black market in less than a year."

  2. Another Newfoundland REC retailer attacked provincial REC regulations, saying prices on bulk items are too high and it's unfair that stores can only sell products directly related to cannabis.
    Western Star


Jesse Staniforth Isadore Day after National Indigenous Hemp and Cannabis Conference

Weeks ahead of dropping the writ for the October 21 federal election, Justin Trudeau's Liberal government began meeting with First Nations representatives about the cannabis industry in their territories.
CBC Indigenous

  • Eight First Nations have accepted working with the Ontario provincial government's REC retail program, while many others refuse any partnership they worry weakens their jurisdiction.
    CBC Indigenous
  • Isadore Day, CEO of Indigenous consulting company Bimaadzwin, was one of those who met with Bill Blair. Day proposed a First-Nations controlled regulatory scheme on "a parallel track" to federal and provincial rules.
  • Also at the table is Manny Jules, chief commissioner of the First Nations Tax Commission, who proposes a portion of excise taxes should be given to a "First Nation revenue fund" to serve First Nations far from urban centres.

Blair acknowledged the complexity of the problem, but said "The prime minister has been very clear that he wants this resolved in a nation-to-nation way."

Quick Hits

  1. Despite creating jobs and a new legal industry, legalization hasn't done much to raise the profile of the federal Liberal party, and many of the ridings that benefit most from legalization are set to vote Conservative this fall.

  2. Conservative MP Cheryl Gallant accused prime minister Justin Trudeau of hypocrisy for "using this carbon tax to prevent more emissions and carbon dioxide into the atmosphere. But by virtue of lighting up a joint […] we have a new law which […] promotes the emission of carbon dioxide."
    Growth Op



Cannabis companies are making significant infrastructure investments as they pin their hopes on edibles and beverages, though it isn't clear how big a market those products will capture.
The Star

  • The most popular edible in REC legal US states is gummies, which don't melt easily and can be quietly consumed in places like airports, concerts, and uncomfortable family dinners.
  • But gummies are also among the likeliest products to run afoul of Health Canada's ban on REC products that could "reasonably considered to be appealing to a young person."

As LPs attempt to develop gummies that will appeal only to adults, they also have to figure out how to standardize potency to reflect labeled cannabinoid contents.
CTV News

Quick Hits

  1. CBD is useful for some medical conditions, but certainly not all. MDs would prefer it if you talked with them before turning to CBD for, say, bipolar disorder.
    CBC Radio—The Current

  2. GrowthOp breaks down the different forms of cannabis delivery available from province to province.