Canada edition / April 01, 2020
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The WeedWeek News Brief, a free weekly news recap with Canada Editor Jesse Staniforth and Editor Alex Halperin, debuts on Zoom this Friday, April 3 at 10 a.m. Pacific. Register today!

1 FROM CRIMINAL TO ESSENTIAL

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Public Domain

As COVID-stricken provinces decided how much business to shut down, cannabis emerged as an essential item for which demand appears stable.
Globe and Mail, Bloomberg

Ontario, where 142 of 337 LPs are located, included REC retail and cannabis producers among its (long) list of essential services exempt from a provincial 14-day shutdown order. (The province is also temporarily loosening laws to support alcohol providers.)
MJ Biz Daily, BNN Bloomberg, the Star

Quebec also designated alcohol, REC retail, and cannabis production  "priority enterprises" and kept stores open--though the province will begin closing many essential stores on Sundays for cleaning and to give staff a break.
MJ Biz Daily, CTV News

  • The SQDC (as well as the SAQ) asked consumers to shop online when possible and respect physical distancing when shopping in physical stores.
    Global News
  • The provincial agency plans to go ahead with its plans to open two new stores next week.

Cannabis was named an essential service in BC, in Alberta, in Manitoba. No provinces or territories have shut down REC retail due to COVID.
MJ Biz Daily

https://twitter.com/BuzzDankyear/status/1243579584995397632

 

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2 BDC TO SECTOR: DROP DEAD; REPRIEVE FROM TRUDEAU

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https://www.flickr.com/photos/56723113@N00

In a sector already shaken by hundreds of layoffs, the COVID crisis has only exaccerbated the situation. In response, representatives from 74 regulated companies (LPs and REC retailers) signed a letter to finance minister Bill Morneau and industry minister Navdeep Bains calling for access to federal wage subsidies available to non-cannabis businesses through the Business Development Bank of Canada (BDC) and Export Development Canada.
Huffington Post, Twitter--@Ottawa_Cameron, BNN Bloomberg

  • BDC assistant vice-president Shawn Salewski responded by reiterating $95B in loans, tax deferrals, and wage subsidies would only be open to "businesses that qualified for BDC financing prior to the downturn."
    Globe and Mail
  • These do not include, per the BDC website, "businesses that are [...] inconsistent with generally accepted community standards of conduct and propriety."
  • Businesses must also be at least two years old to qualify for BDC funding.

Response to the dismissal was swift and shocked.

https://twitter.com/CCC_Cannabis/status/1244599148516687872

The Canadian Chamber of Commerce's National Cannabis Working Group noted that stimulus funding was announced "nearly three weeks ago," and to date the BDC has answered calls from the sector by repeating that it was "exploring broadening our support" without doing anything more.
Twitter--@CCC_Cannabis

The rejection sparked the creation of Legal Tender, a new lobby group of industry figures, associations, and companies advocating "for equitable treatment by the Business Development Bank of Canada (BDC) and federal government."

Outside the sector, Scott Reid, speechwriter to former prime minister Jean Chrétien--called for reevaluation of BDC eligibility criteria, if not a shift in policy.
Twitter--@_scottreid

On Monday evening, prime minister Justin Trudeau appeared to answer the appeals of industry when he announced the expansion of the initial COVID wage-subsidy program to all businesses large and small who've lost significant revenue due to COVID.
The Star

Early industry responses indicated great relief.
Twitter--@Ottawa_Cameron

3 SECTOR EAGER TO SERVE COVID EFFORT

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Before they were asked, some cannabis businesses sprang into action last week, providing hospitals personal protection equipment (PPE) and other materiel from their inventories that could be used to fight COVID-19. Then Health Canada asked executives from licensed parties for access to laboratory space that could help ease the enormous backlog in COVID-19 testing.
BNN Bloomberg, MJ Biz Daily

Prior to the Health Canada request, aid was piling in from a variety of industry parties.

The shift is happening across US industry as well, as American producers pivot to producing supplies for the pandemic. Others across the Canadian sector called on LPs that haven't yet donated to do their bit for the cause, and for those who have to keep up their work.
MJ Biz Daily, OHS Canada

4 COVID, INDUSTRY COLLIDE

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https://www.scientificanimations.com/

Health Canada announced that in spite of the pandemic, it is continuing to review license applications as well as security clearances. The regulator (which warned last week of "limited inspections") said the processes will likely be delayed.
MJ Biz Daily

Though cannabis sales have been up across North America, analysts projected COVID won't change sales very much. Consumers have been buying larger formats, implying hoarding, and there's no reason to believe sales will remain this high indefinitely.
Financial Post, GrowthOp

https://twitter.com/SarahSeale18/status/1244083357807513602

Jobs don't feel stable across a sector already having a bad year.
Global News

Are you one of those who lost work in the sector because of the pandemic? Cannabis at Work wants to help you: they've assembled a Canadian Cannabis Talent Help List to which you can add yourself if you've been laid off and are seeking new work in the sector.

Quick Hits

  1. After years of demands from advocates, the COVID crisis has forced the city of Vancouver—with permission from the federal government—to introduce a safe supply of opioids, stimulants, and benzodiazepines for drug consumers on the Downtown East Side.
    Twitter--@angelasterritt, CBC Vancouver

5 ANOTHER BAD WEEK FOR TGOD AND HEXO

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https://twitter.com/DSutton1986/status/1243974865306054656

Last week, the Green Organic Dutchman joined several other large LPs in announcing layoffs and closure plans. In TGOD's case, they will freeze a "largely completed" 1.3M square feet greenhouse in Valleyfield, Quebec, and lay off 30 employees from a total staff of 260.
MJ Biz Daily

  • The company spent $229M building the paused greenhouse facility, initially intended to produce 185,000 kg of product annurally, a number TGOD dramatically downgraded to 10,000 kg. Representatives said reaching the 185,000 kg target would require another $110M in investment.
    BNN Bloomberg
  • Jeffries analyst Owen Bennett called the refusal to get the facility running "a gross misallocation of capital."

This week, Hexo finally posted its delayed Q2 earnings, including a $298.2M net loss, nearly quintupling the $62.4M net loss the company reported last quarter.
Globe Newswire, Twitter--@MJBizDailyCAN

This week on the podcast
Karim Webb Brings Sauce to Social Equity

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6 REST OF THE SECTOR HURTING TOO

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BNN Bloomberg's David George-Cosh's reported seasonally adjusted cannabis industry contribution to Canada's GDP actually peaked in September (at $7.29B, up from $6.29B last February) and has been slowly declining ever since
Twitter--@itsdgc

CannTrust was granted protection under the Companies' Creditors Arrangement Act (CCAA), the filing of which will cause the company's stocks to be delisted from both the TSX and NYSE.
BNN Bloomberg


Cronos reported Q4 2019 and full-year earnings, increasing its gross loss to USD$20.4M from (a restated) USD$14.8M last quarter. The company posted a (restated) gross loss of $17.9M for all of 2019, down from $6.2M gross profits in 2018.
MJ Biz Daily

Organigram also reported it expected layoffs would result from the pandemic.
MJ Biz Daily

https://twitter.com/chiushley/status/1242551041473662976

7 RETAIL IN A DANGEROUS TIME

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The number of REC stores nationally continues to grow, reaching 840 last week. In Ontario, 50 stores will soon become 123. BC already had 175 stores with 43 more "coming soon," and of course Alberta had 433.
Twitter--@itsdgc

Some retailers aren't messing around with the pandemic: one store in Barrie closed temporarily to wait out COVID-19. But for those staying open, the safety of staff and customers is a key concern.
CTV News

New Brunswick crown REC monopoly Cannabis NB escalated from closing Sundays and reducing its hours a week and a half ago to actively screening customers for COVID-19 with questionnaires about symptoms and recent travel histories before entering stores.
Growth Op

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8 WHAT ABOUT DELIVERY?

image
Public Domain

To reduce COVID transmission, BC updated its REC retail system to allow click-and-collect, meaning customers can reserve products online or over the phone and collect them later. Products still need to be picked up in stores, however--the policy directive sent to retailers underlined the province was not going to allow REC to be sold online.
MJ Biz Daily, The Straight

Quick Hits

  1. Nearly 40 Ontario government employees in the cannabis sector are on the Sunshine List of public servants who make more than $100,000 annually.
    Twitter--@itsdgc
  2. WeedMD's production staff could be the first in the sector to unionize.
    London Free Press

9 CANNABIS DOESN’T STOP COVID

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https://commons.wikimedia.org/wiki/User:Durova

Toronto company Cannalogue became a lightning rod for anger when it submitted an application to Health Canada to study the effects of cannabis on COVID-19, a move that appeared to some an attempt to profit from a crisis there's no suggestion cannabis can help. (The International Association of Cannabinoid Medicines issued a statement underlining the lack of evidence "that individual cannabinoids [...] or cannabis preparations protect against infection with the SARS-CoV2 or could be used to treat COVID-19.")
Twitter--RebeccaSaah, @ErinProsk, @IACM_Bulletin

https://twitter.com/ErinProsk/status/1243539908335226881

The distinction between an submission and approval didn't stop multiple news sources from reporting on the story without interviewing anyone critical of the move.
GrowthOp, Toronto Sun, Cannabis Retailer

Quick Hits

  1. After years of demands from advocates, the COVID crisis has forced the city of Vancouver—with permission from the federal government—to introduce a safe supply of opioids, stimulants, and benzodiazepines for drug consumers on the Downtown East Side.
    Twitter--@angelasterritt, CBC Vancouver

 

10 REVIEWS: NOT ALL BAD OR GOOD

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The most widely shared REC product reviews are often the outliers--the hilariously (or painfully) bad reviews, or the surprisingly good ones. But most legal REC products are neither very good nor very bad. As LPs try to figure out how to continue improve product quality while staying compliant, consumers have spent the year trying to review the new array of legal products.

Brad "PancakeNap 420" Martin remains the country's foremost reviewer, with entries both on the GrowthOp and on his own website. He's been joined by other recognizeable voices like the husband-and-wife review team WhatsMyPot, and new voices like CannabisSensei.

  • Last week WhatsMyPot celebrated smaller, newer reviewers in a Twitter thread. They're worth following.
    Twitter--@WhatsMyPot

Quality remains a huge variable in legal flower, but reviewers represent the front lines of documenting and improving it.

Quick Hits

  1. Researchers at University of Saskatchewan's College of Agriculture mapped the cannabis genome, with an eye on making crops more resilient.
    Yorkton This Week
  2. There are fewer cannabis nurseries in Canada than you'd think—at the moment, only two companies offer seeds for sale, and one company offers clones (in Newfoundland only). Though there are still fewer than ten, two new nurseries were licensed to produce plants and seeds, which may indicate a move toward providing genetics for home growers.
    Twitter--@TrinaFraser