WeedWeek
POLITICS
   

Be Frank With the Border--Within Limits

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Public Domain

The trick to crossing the border as an industry insider, says RavenQuest BioMed CEO George Robinson, is to be direct and honest but not volunteer information unless they ask.

  • Robinson is up front that he works in the industry and his company operates and owns assets only in Canada. (CBC Saskatchewan)

Smoking Down, Edibles Up

Smoking is still the most common way Canadians consume cannabis, but rates are declining as vaping and edibles are on the rise. (Straight Cannabis)

Stats Can's Sewer Data

Statistics Canada's first tests of wastewater sewage to gauge traces of THC revealed Montreal consumes 1,922 grams per week of cannabis, Toronto consumes 1,257 grams, and Vancouver consumes 721 grams. All calculations have margins of error of nearly 50%. (Surrey Now, Twitter--David Brown)

Health Canada will publish draft regulations for edibles legalization the next few weeks. A public consultation process will follow. (MJ Biz Daily)

MED Activists Condemn Double-Tax

Activists stepped up efforts calling for Ottawa to remove both excise tax and sales tax from MED products, which are not applied to other prescription medication. Patient advocates were on Parliament Hill this week meeting with MPs to explain their cause. (CTV News)

DUI with CBD?

Even driving after using CBD may be enough to get you charged with DUI--because many CBD products contain enough THC to meet the very low threshold police use to determine impairment.

  • Drivers may also be fined for having open containers of CBD products in their cars. (Globe and Mail--Paywall)
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Public Domain

Canadian and American scientists have located the previously hidden DNA of cannabis, confirming THC and CBD are produced by different genes. They also isolated genes that determine cannabis potency. (The Star)

Cannabis research is booming, but scientists now face the challenge of determining standards for variables like standard unit-doses of THC and other cannabinoids. (The Leaf)

Quick Hits

Moving from the illicit market to the commercial mainstream can be a difficult move, but some cannabis boosters believe it's best for normalizing the culture and the plant. (GrowthOp)

There's no legal way to buy seeds, so home growers are asking MED growers for seeds and clones as gifts or in trade. (The Star)

The RCMP and the Canadian Armed Forces continue to work together to find and destroy illicit outdoor cannabis farms. (Vice)

Three quarters of MED users still get their cannabis illegally--from friends, online dispensaries, or traditional dealers. (Globe and Mail--Paywall)

Eight universities have Health Canada licenses to cultivate cannabis for scientific purposes. (National Post)

Health Canada released its allowable limits for solvent residues in oils produced by LPs. Solvents are illegal for home use on cannabis.

BUSINESS
   

Shortage Will Remain a Fact of Life

The supply shortage may well go on for months--with British Columbia predicting the drought may extend for another year and a half. (MarketWatch) Mixed Bag for Q3 Earnings

  • Chronic shortages have left major LPs watching provincial regulators' supplies around the clock to snap up inventory as soon as it becomes available. Many have staff working through through the night to watch provincial wholesaler data on available products. (Financial Post)
  • Though the industry hopes the rise of microcultivators will help diversify their product sources, the Globe and Mail reports Health Canada has only received 15 microcultivation applications to date. (Paywall)
  • Insiders (like Cannabis Compliance's Deepak Anand) questioned the low application number and suggested it was likely regional rather than national. (Twitter)
  • Applications only opened on October 17, and are reportedly onerous, so it may also be only 15 prospective growers have met all of Health Canada's requirements.

17 of 29 LP CEOs Just Say No

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Public Domain

A new anonymous poll by Bloomberg discovered only 17 CEOs of 29 legal cannabis producers in Canada and the US admitted using their products either medically or recreationally.

  • Six other CEOs, despite being reassured their responses would be anonymous, refused to answer.

Some LPs Raise Prices While Others Look Offshore

Greencamp reports while the shortage is continuing, premium brands Zenabis, Flowr, and Broken Coast have raised their prices.

Mixed Bag for Q3 Earnings

A Seeking Alpha survey of Q3 earnings noted the quarter had yielded "good results" for Aurora ($29.7M revenue) and "strong results" for CannTrust ($12.6M revenue).

  • Canopy delivered "disappointing results" ($23.3M revenue) Aphria ($13.3M revenue) and Cronos ($3.7M revenue) reported "weak results," Hexo had "muted results" ($1.4M revenue) and Tilray had "very weak results" ($10M USD revenue).

Cannabis Stocks as Trendy (and Risky) as Crypto

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Public Domain

A survey of Canadians by the Ontario Securities Commission found only 18% of cannabis investors made purchases following advice from a financial representative or portfolio manager, while 32% relied in whole or in part on advice from friends and family.

  • A majority (66%) of cannabis investors invest only in the cannabis sector, and 24% have invested more than $10,000.
  • Men aged 18 to 34 are the most enthusiastic, with 13% already investing and 36% considering doing so.
  • The OSC cited similar patterns of high-risk trading in cryptoasset investments, and warned against trendy investing.
  • I spoke to Andrew "Molly" Udell, managing director of the Cannalysts, who called the OSC infographic, "mostly a ‘cover your ass’ exercise, to help inure them from litigation. [...]And it’s not as benevolently driven as appearances would suggest."
  • Udell connected the youth of the sector's most enthusiastic investors to the upsurge of non-traditional investing, saying, "Millennials are notoriously suspicious about most things - they’ve been lied to for all of their lives, and their networks exert far more influence that traditional financial media or paid placements by analysts (hopefully they don’t bother to read the latter)."
  • "Greed induces strong behaviour in people," Udell noted. "The fact that so many retail investors are actually buying/writing options - despite knowing little about their exposures - is a great example of this."
  • Udell stressed it's impossible to predict how these trends would shape the next year of investing in the sector, except that "people who walked in buying Namaste at anything, or buying Tilray at $300 - aren’t likely able to withstand headwinds. New/incremental capital available for use is very high though, a hangover of yields sucking for so long."

RedeCan: "If Those Were Bugs, They Were Good Bugs"

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Last week, Niagara-area LP RedeCan was forced to recall all 3.5-gram bottles of its B.E.C. strain with lot-code 4B2L3 after receiving five complaints of mould contamination. However, other customers were complaining on Reddit they had found dead insects in their cannabis. (CTV News)

The Party's Over for Branding

This summer, Canada was awash with questionably legal marketing by LPs. Festival sponsorships, poster-ads, and billboards were widespread, and while Health Canada complained, it didn't yet have the teeth to crack down. That grey area ended on October 17, and a cannabis lawyer says LPs who didn't take advantage of it missed a crucial chance to build their brands. (Cannabis Law)

  • Lawyer Trina Fraser counselled the best way LPs can avoid breaking Health Canada's strict marketing laws is to "know the power of the super fan" to get happy customers to market on the company's behalf. (Twitter)

Quick Hits

Canopy will help fund a $12.6M U.K. study to determine if cannabis can reduce opioid dependence. (The Star)

Second Cup franchisees are suing the coffee chain that recently shifted its focus to cannabis. They have a series of complaints, including allegations the Second Cup misused franchisee funds. (Global News)

A customer who received a high-THC Hexo oral spray mislabelled as high-CBD, low-THC is suing BC Cannabis Stores as well as Hexo. (Kamloops This Week)

Florida LP Trulieve went public on the Canadian Securities Exchange via a reverse takeover of a mining company. It raised $65.8M. (Tallahassee Democrat)

Tragically Hip-affiliated Newstrike Brands inked a deal with chip-and-salsa producer Neal Brothers. (CBC Business)

Dixie Brands became the first infused-cannabis company to go public on the Canadian Securities Exchange. (Globe NewsWire)

The number of people seeking jobs in the Canadian cannabis industry has quintupled since last year. (BC Business)

Thirty countries have legalized MED and six are buying Canadian cannabis exports. (Daily Hive Grow)

The tech area of the cannabis sector is growing quickly. (CBC Business)

Entirely illegal Mail-Order-Marijuana operation The Green Ace released a professional-looking press release to celeberate "[taking] the lead in providing premium marijuana strains Canada-wide." (Digital Journal)

New Podcast Episode

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48. Weed on Wall Street with Business Insider's Jeremy Berke

New York-based reporter Jeremy Berke joins Alex and Donnell to discuss how Wall Street banks are wading into the green rush. Plus, a few words on data firm Headset’s partnership with mainstream data juggernaut Nielsen and the accounting giant Deloitte.

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PROVINCIAL
   

Alberta

Calgary police say the first month of legalization was uneventful, and "the sky has not fallen."

Illegal cannabis continues to prosper, say Alberta police and retailers. Edibles are a large part of a trade, and prices are lower than provincially mandated minimums. (Calgary Journal)

University of Alberta professors cautioned against seeing CBD as a panacea. (Folio)

British Columbia

The man who oversees cannabis sales for BC wants to give consumers what they want, but says logistics and supply chain delays mean it will be some time before that becomes routine. (Vancouver Sun)

Police are sounding the alarm over the wide availability of high-THC edibles that look like regular candy (and are often packaged as such) and bear either no or little warning to keep away from children. (CBC Vancouver)

The University of British Columbia launched its Canopy Growth Professor of Cannabis Science position, which will be filled by epidemiologist M-J Milloy. He plans to study the use of cannabis to fight the opioid crisis. (The Star)

Suddenly faced with powerful competition in Ontario and Alberta, the strains known as BC Bud may be at risk of being forgotten. (Globe and Mail--Paywall)

The BC Liquor Distribution Board put out a call for photographers to take cannabis photos--so long as they don't glamorize cannabis. (Vancouver Sun)

Ontario

The Alcohol and Gaming Commission of Ontario released its guide to the REC retail application process.

  • Lawyer Deepak Anand relayed Ontario's REC retail application costs, renewed every two years, announced in a provincial cannabis webinar.
  • Per-business operator license fee: $6,000.
  • Per-store license fee: $4,000.
  • Per-manager retail license fee: $750. (Twitter)
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Just outside Tyendinaga Mohawk Territory, Ontario Provincial Police ticketed a man $215 for driving a vehicle with cannabis within reach. The man said he bought the 27 grams of cannabis on Tyendinaga Territory and police fined him $180 for unlawfully purchasing cannabis. (Global News)

  • The stop did not occur inside Tyendinaga, a Reserve under the Federal Indian Act in which many do not consider the provincial government--including the Ontario Provincial Police--to have any authority. (APTN)
  • There are between 30 and 50 dispensaries in Tyendinaga, all unlicensed by the province. Locals have signalled their willingness to provoke a constitutional challenge should provincial police make any attempt to curtail their business. (The Star)

Ottawa Public Health says they're getting no excise tax money with which to fund their programs to lessen negative effects of REC legalization. (CBC Ottawa)

An illegal compassion club in Windsor that was raided two weeks ago is now giving cannabis away for free in return for donations of food and clothing for charity. (Windsor Star)

A man attempted to enter a Simcoe, Ontario provincial courthouse with "a large quantity" of cannabis in his possession, which security screeners detected. He was charged with possession for the purpose of selling. (CTV News)

Quebec

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Jesse Staniforth
Montreal SQDC Customers on REC Day One

Within days of election in October, the conservative CAQ government asked Ministry of Health staffers and the Quebec Institute of Public Health for research to justify the party's plan to raise the age of consumtion from 18 to 21. They were annoyed when the bodies delivered the same research they had given to the outgoing Liberal government--recommending the age be 18. (Le Devoir--In French)

Following on reports suggesting lobby videos visible from outside Société Québécoise du Cannabis outlets were breaking Quebec's cannabis law by describing strains as "energizing," "euphoric," or "calming and relaxing," the SQDC pulled the video. (Montreal Gazette)

Quebec cannabis consumers are signing a petition calling on the Société Québécoise du Cannabis to ban single-use plastic packaging.

  • The petition's author suggested a $1 deposit redeemable upon return of plastic packaging for reuse, options for consumers to bring their own containers, and packaging made from hemp-based plastics. (Global News)

Applications for production licenses by Quebec producers represent 62 of the 600 applications presently in the Health Canada queue. Producers and municipal officials across the province want Ottawa to hurry up and help get Quebec businesses up and running. (TVA Nouvelles--In French)

The first college-level cannabis processing program in Quebec will likely begin next spring. The course will specialize in teaching post-harvest work like oil extraction.
(Radio-Canada--In French)

Maritimes

Newfoundland's RCMP reported the number of criminal cases involving cannabis has gone down, while the number of ticketable violations has gone up.

  • The most common charges are smoking in public or having open cannabis in a vehicle.
  • Now that police can fine users on the spot rather than going through the drawn out process of charging them and going to court, they may feel more inclined to go after cannabis users. (King's County Register)
  • Lawyers warned this summer that laws against possession of illicit cannabis (as well as against public smoking) would encourage police to take greater interest than before in fining cannabis users. (The Leaf, Global News)
  • A spokesperson for the RCMP in Newfoundland and Labrador noted drivers may carry sealed cannabis anywhere they like, but once the seal on the package is broken, it must be transported out of reach of the driver. (CBC Newfoundland)

Nova Scotia's illegal dispensaries are fighting to stay open because they say they serve a medical need for users who may have difficulty accessing MED through LPs' online mail-order systems, or shouldn't be forced to wait for mail delivery. (Global News)

Ten percent of Nova Scotians, and 7% of Halifax residents, purchased legal REC in the first three weeks of legalization, but 20% intend to do so in future. (The Star)

Prairies

Manitoba Premier Brian Pallister said he would not share Manitoba's cut of federal cannabis excise tax revenues with his province's municipalities for the time being. (Winnipeg Free Press)

Cannabis stores are buoying businesses in a once-derelict Winnipeg neighbourhood. (CBC Winnipeg)

Saskatoon opened its first REC store, which allows only one purchase per customer, though "size doesn't matter." (CBC Saskatoon)

The North

There have only been two impaired driving convictions related to cannabis in Iqaluit since legalization. RCMP Staff-Sgt Garfield Elliott said in September he did not expect legalization would make much difference to impaired driving, and this week he said he stands by that statement. (Nunatsiaq News)