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1.
   

CannTrust; CEO Sacked, Chair Resigns

https://www.flickr.com/photos/52737173@N03 (Cropped)

Emails revealed CannTrust CEO Peter Aceto knew as early as mid-November that his company was growing in unlicensed rooms.
Globe and Mail

  • CannTrust director of quality and compliance, Graham Lee, wrote to Aceto and others on November 16 to report Health Canada did not snoop around the "unlicensed rooms currently full of plants." Lee mentioned "current risks," which also included a "large number of lost bottles [of product] we have not reported."
  • "Although serious, on their own, each of these can be talked through with [Health Canada]," Lee's email reads. "The concern is that together they will paint a picture with the regulator of a company not in control. We have dodged observations for items 1 and 6 despite having HC in the building."
  • Minutes of weekly production meetings between November 14 and 28 show seven employees including three vice-presidents discussing illicit growing. Lee reported he had told Aceto about growing in unlicensed rooms and was told to "continue as planned."
    Bloomberg

Aceto was revealed to have appeared in a CannTrust promotional video filmed in early 2019 directly in front of unlicensed cultivation room RG8 (identified by five employees), clearly full of plants. This is the same room in which former employee Nick Lalonde alleged he was directed to install fake walls.
Financial Post

Quick Hits

  1. Toronto seed-to-sale software company Ample Organics cut its staff from 120 to 102, across departments. CEO John Prentice said "capital is drying up in this space."
    Betakit
  2. As stocks have declined in the wake of the CannTrust scandal, capital has been harder to get. This owes in part to CannTrust, which recently closed its April USD$200M offering with established financiers, whom the scandal humiliated.
    Globe and Mail, Financial Post
  3. Flowr withdrew its plans to make a $125M offering and list on Nasdaq due to market conditions.
    Nasdaq

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2.
   

Quebec: Ban on
Sweet Edibles, Extracts Could Cost $300M

https://www.flickr.com/photos/25480181@N06

The government of Quebec's aggressively anti-cannabis Coalition Avenir du Québec government tabled stringent draft legislation designed to clamp down even further on edibles than Health Canada's regulations. The regulations will stand for public consultation for 45 days before taking effect.
CBC Montreal

Health minister Lionel Carmant said the limits "will also allow us to reduce [the consumption] of cannabis products in general."
CBC Montreal

  • Topicals will be banned in Quebec, for no reason given. Santé Cannabis founder Erin Prosk said, "Likely the existence of topical products conflicts with their mandate that cannabis is a harmful drug and people who buy them just want to be high."
    Twitter
  • Carmant was at pains to explain who would decide which products were "attractive to children," first saying it would be left up to the SQDC, then saying it would be the SQDC and the Ministry of Finance, then the SQDC and the Ministry of Health.
    TVA Nouvelles—In French

Deloitte estimated the ban would cost the sector $300M per year.
Globe and Mail

Quick Hits

  1. New research by Quebec alcohol NGO Éduc'alcool found 21% of Montrealers consume cannabis (compared to 18% throughout Quebec). English-speakers use the most cannabis (30%), ahead of French-speakers (25%), and "Allophones," those raised speaking both languages (15%).
    Éduc'alcool—In French
  2. The Globe mapped the density of access to REC retailers for communities across Canada, finding great density in some places and many areas where there's no retailer for hundreds of kilometres. It's impressive, check it out.
    Globe and Mail
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3.
   

At CAFE Dispensary
Sidewalk Sale, Police Lay
1g Possession Charge

Jesse Staniforth
CAFE Fort York in Happier Times

Toronto unlicensed dispensary CAFE chain stunned many when, after its last location was barricaded with concrete blocks last week, its employees showed up the next day to continue illegally selling REC on the sidewalk outside blocked stores. Mayor John Tory expressed outrage the dispensaries would not quit.
CTV News, The Star, CityNews, Global News

  • Consumers lined up to place orders with employees holding tablets and directed customers to pick cannabis up elsewhere.
  • Police dispersed crowds and arrested 18 over the weekend, including one 16-year-old arrested for buying cannabis then reselling it to those waiting in line.
    CBC Toronto
  • Toronto police reported that employees fled when police arrived, "leaving behind for police multiple iPads with customer names, financial information and orders, illegal product labelled for their customers along with debit machines and walkie talkie radios."
    Twitter

Toronto police charged one customer with knowingly possessing one gram of illicit cannabis—I wrote about it for Leafly.

Raids also occurred in Vancouver—where police busted two major extraction labs that were producing multi-million dollar yields of "shake, shatter, oils, balms, and edibles."
Vancouver Sun, The Straight, Twitter

Quick Hits

  1. Ahead of the lottery for Ontario's next 42 REC retail licenses on August 20, the major REC retail firms are trying to get as prepared as they can to partner with winners.
    Globe and Mail
  2. BMO charges business owners wishing to enter Ontario's REC lottery $3,000 to review their financial documents plus $1,000 for "monitoring and maintenance," making entry into the sector even harder for small businesses.
    MJ Biz Daily, Reuters
4.
   

WeedWeek's Careers Issue

For this week's Careers Issue, I interviewed Canadian CEOs and HR professionals about the shortage of expert-level talent.

  • Plus: On this coming Monday's episode of the WeedWeek Podcast, Donnell and Alex have an exclusive interview with Bruce Linton, former CEO of Canopy.
5.
   

Tobacco Giant Imperial
Invests $123M in Auxly

Lindsay Fox / http://ecigarettereviewed.com/

British behemoth Imperial Tobacco announced it will invest $123M (via convertible debentures worth a 19.9% stake) in Auxly Cannabis Group, formerly known as Cannabis Wheaton, founded by Canopy's first ousted co-founder, Chuck Rifici. (I profiled Rifici and the company in Leafly in 2017).
The Star, Leafly

  • Compared with Altria's $2.4B buy into Cronos last year, the investment is cautious.
    Globe and Mail
  • The deal will give Auxly access to Imperial's vaporizer technology ahead of extracts legalization this fall
    Bloomberg
  • Auxly's stoke rose 20% on news of the transaction.
    Financial Post
  • The British company is not related to Imperial Tobacco Canada.

Quick Hits

  1. Bruce Linton recalled RBC "firing" him as a client when he had $30M in the bank because he was a "reputational risk" as CEO of a licensed producer.
    Twitter—Max Cherney
  2. CIBC slashed its estimates on Aphria in anticipation of writedowns.
    Twitter—Amber Kanwar
www.bananabros.com
6.
   

WeedMD Partners with
Bilzerian's Ignite, Ignites Outrage

Screengrab of Dan Bilzerian's Facebook Account.

WeedMD announced its extraction subsidiary CX Industries signed an exclusive licensing deal with openly sexist canna-bro/gambler/Instagram personality Dan Bilzerian's Ignite International Brands.

  • Bilzerian did not comment on the deal. His second most recent Twitter post reads, "Just cuz your girlfriend posts a pic of you on her IG doesn’t mean she won’t fuck other guys."
  • In May, GrowthOp published a generous profile of WeedMD that presented the LP as "big on gender equality," with 50% female executives, 38% female directors, 50% female managers, and a 40% female workforce.
  • Figures across the sector reacted in disgust, some calling for boycotts. Tantalus Labs' CEO Dan Sutton said, "I was wondering who was going to be dumb enough to self nuke on that Ignite deal. The rest of us didn’t think twice on turning those dudes down. Brand suicide."
    Twitter

Quick Hits

  1. Corporate events in Toronto now sometimes feature full-service cannabis bars, offering pre-rolls and vaporizers. It isn't legal but it sounds like fun.
    BlogTO, Twitter—Harrison Jordan
  2. It's hard to tell who the next wave of cannabis consumers will be, but market research firms are sure trying to figure it out.
    GrowthOp
7.
   

Couche Tard Invests $380M
in Fire and Flower

Patrick Le Barbenchon

Quebec convenience store giant Alimentation Couche Tard (which also owns Circle K stores) will pay $380M over 36 months for a controlling 50.1% stake of REC retailer Fire and Flower, hoping to spur "aggressive growth."
Globe and Mail

Quick Hits

  1. The Boston Globe charted the history and present of Canadian legalization and contrasted it against Massachusetts' ongoing legalization process.
    Boston Globe
  2. Investor's Business Daily considered Canadian cannabis stocks in exhaustive detail.
    Investor's Business Daily
8.
   

Unlicensed Cannabis Has Made Tyendinaga Prosperous

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

Tyendinaga Mohawk Territory's dozens of dispensaries, which serve "thousands of cars on a daily basis," have touched off an economic boom in the First Nation, where home- and business renovations are becoming widespread and several new gas stations have opened to serve nearby Highway 401.
CBC Toronto

Quick Hits

  1. A group of Chiefs from Ontario, Saskatchewan, and BC argued while legal REC industry was "a historic an tangible opportunity" for First Nations, all face a barrier to entry because the federal government handed REC retail to the provinces—none of which have governance relationships with First Nations.
    Globe and Mail
  2. At Neyaashiinigmiing First Nation in Ontario, protests from community members stopped a planned outdoor MED production facility just before Health Canada approval. Band members say the First-Nations–owned Wiisag Corp. failed to properly consult with them.
    CBC Indigenous
  3. The Nunavut government slashed its markup on dry flower from $4 to $1 per gram after REC sales decline dramatically between Q1 and Q2 of the fiscal year. Nunavut REC prices are among the country's highest, averaging between $14 and $16 per gram against the national $10 average.
    GrowthOp
9.
   

New Drug-Impaired Driving THC Limits Only Applied in Rural Areas

Jesse Staniforth

Police aren't making much use of new limits on THC content in blood that came into law last year. There have been no charges under the law in BC, and eight in Alberta. The only place the new rules seem to be applied is in smaller municipalities in Ontario and Quebec—though drug-impaired driving arrests are on the increase in Quebec.
Global News, La Presse—In French

  • One police officer described blood tests as "literally the last resort." They must be completed within two hours of the incident in question, which may not be possible in busy hospitals in larger municipalities.

Quick Hits

  1. Newfoundland fishery towns hit by the decline of fish stocks hope cannabis can lift their economies.
    CBC Newfoundland
  2. At least 12 colleges and universities across Canada have added cannabis-related education and training to their course offerings.
    The Star
  3. WeedWeek founder Alex Halperin wrote about cannabis and driving for the Guardian.
10.
   

Cannabis Molecules 30 Times More Powerful than Aspirin

Researchers at the University of Guelph announced they had discovered how cannabis plants create pain-relief molecules as much as 30 times more effective at treating inflammation than Aspirin. The molecules, called "flavonoids," exist in all plants and create vegetable pigments. However, those in cannabis have particular anti-inflammatory potential.
Press Release, Sudbury.com

Quick Hits

  1. Tilray acquired UK boozy-gummies maker Smith & Sinclair for an undisclosed amount, with plans to develop CBD edibles.
    CNBC
  2. California's cannabeverage manufacturer Tinley Beverage Company said it's "closing in on a deal with a Canadian licensed producer," as new data suggests most Canadians want to try CBD beverages.
    BusinessWire

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