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61. Go to Cannabis Camp with Meadow’s David Hua

@donnyshell comes to us from Camp Navarro in Mendocino County, where canna-tech company Meadow created a “weed camp” called Meadowlands. @donnyshell spoke with Meadow's CEO David Hua about the vision behind cannabis camp, the journey to creating one of the most popular dispensary POS systems, and how he stays positive in a sometimes brutal industry. Follow David Hua on Twitter at twitter.com/hua and check out Meadow at getmeadow.com. For more information about Meadowlands getmeadow.com/meadowlands

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Deloitte Hails Legalization 2.0—But Should We Trust Their Numbers?

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Deloitte published its third annual report on Canada's cannabis sector, and its numbers are fairly optimistic. (Optimism marked the two previous reports as well.)
Global, MJ Biz Daily

Its predictions include:

  • Alcohol producers may lose customers to the 35% of cannabis consumers who consider it an alternative to booze.
  • The Canadian sector is well-positioned to grow globally before eventually losing its advantage in cultivation to nations in warmer climes.
  • The number of Canadian LPs will be reduced by half as the industry expands. MJBiz Daily's Matt Lamers noted this could be bad for the 579 pending standard applications waiting for Health Canada approval, though in a response, a commentator noted the prediction anticipated "some LPs may be going to exit through acquisition."
  • The report calls the impending legalization of extracts, ingestibles, and topicals "Legalization 2.0," and predicts that market alone will eventually be worth $2.7B, with edibles representing $1.6B.
  • Topicals will be a $174M market, concentrates will be a $140M market, and tinctures and capsules will represent $116M and $114M respectively.
  • Infused beverages will dwarf them all, with a $529M annual market.
  • That prediction stunned some, as it is dramatically out of keeping with the market shares of the same products in California, whose population is slightly larger than Canada's.
  • Burnstown Farms CEO Mark Spear asked, "In what universe will beverage sales more the triple concentrates? Not a chance. I'll take friendly bets it's the opposite." Other critics echoed his disbelief.
  • Lincoln Johnson, CEO of extraction company EnCann, told me he shared Spear's incredulity. "If we look at other developed markets like CO/WA/OR/CA," he said, "It's not unreasonable to expect that edibles/beverages/etc. will take up substantially less than 20% of sales, with other concentrate types taking up 30-40%, and flower the remainder and declining over time. Vape pens aren't going anywhere and will likely dominate the concentrate/extract market as they do [in the U.S.]... Of course, the Canadian market might turn out to wildly different but I wouldn't be putting money on that bet."
  • Edibles sales are growing, argued Visual Capitalist, so it may not be fair to base future numbers on present consumption trends.
    Visual Capitalist

Quick Hits

  1. US LP Charlotte's Web announced it was delisting from the Canadian Securities Exchange and moving its listing to the Toronto Stock Exchange, where it may now trade because it sells hemp-based CBD products, which became legal in December with the passage of the U.S. farm bill. Expect other companies working in hemp to follow.
    Financial Post
  2. The BC Securities Commission settled with LP Beleave over market misconduct. The company admitted it claimed in April and June of last year that it had raised $10M in private placements, but had instead paid $7.5M "consulting fees" to those who would be "investing." The BCSC noted Beleave conducted an investigation when it became aware of the allegations and sacked its management.
    Twitter—Mike Hager, Globe and Mail
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Supply Shortage 2.0

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Various experts warn the legalization of extracts, topicals, and ingestibles will, will strain a supply chain that's only just beginning to stabilize itself.
Financial Post

  • Lawyer Trina Fraser warns the vast majority of companies have zero experience producing any of the coming products, which in Canada have only been available on the grey market.
  • Auxly Cannabis CEO (and Canopy co-founder) Chuck Rifici said, “We’ve made a very conscious effort to delay revenue" by stockpiling products ahead of Legalization 2.0.
  • Compounding the coming problem is the limited number of extraction facilities, which are widely believed to be heading toward a bottleneck, as companies like Valens GroWorks have been warning for several months now.
  • Contrary to Deloitte's predictions, Rifici—and Aphria interim CEO Irwin Simon—are betting on vape pens, and Valens is offering white-label (ready-to-be-branded) vape pens in 196 different options.

Quick Hits

  1. Lisa Campbell, of Lifford Cannabis and the newly established Cannabis Beverage Producers Alliance, said she wanted to see cannabis beverages treated equally to alcoholic beverages, and called the Health Canada requirement of a second site for all cannabis-related production the biggest obstacle for the cannabis beverage sector.
    Cannabis Canada Buzz
  2. Trying to figure out whether that cannabis promotion you're planning is Health Canada compliant? There's a flowchart for that now, courtesy of cannabis brand manager Rachel Colic and lawyer Chad Finklestein.
    Google Docs

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MED Activists Get
Registered Charity

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Toronto-based Hope for Health became the first cannabis charity to register with Canada Revenue Agency. The charity—started by the founders of Auxly Cannabis Group—aims to help MED patients gain greater control over product and LP choices (which have traditionally been limited by regulations), and intends to provide the patients it registers with a monthly stipend with which to purchase MED.
The Straight

Quick Hits

  1. Aleafia Chief Medical Officer Dr. Michael Verbora reported one of his patients received CBD oil bearing a warning it could be addictive, "when in fact it is not, and most preliminary evidence shows it actually may help with addictions."
  2. The owner of a Regina head shop charged with trafficking CBD in March 2018 has been given a 10-month conditional sentence and will not be incarcerated.
    CTV News
  3. If you buy MED you don't like, you can give it away, but you can't legally sell it. The Leaf
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Calgary: Canada's (Legal) Cannabis Capital

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If you asked me at any point before legalization which Canadian city would become synonymous with cannabis, my last choice would have been Calgary, in historically conservative Alberta. (My educated guess would have been Halifax.) I couldn't have been more wrong. As much as it pains me, a Montrealer, to admit this, Calgary is Canada's cannabis town.
Trailer Park Boys

Quick Hits

  1. During the Canadian Cannabis Summit in Calgary, Lift & Co VP Strategy Nick Pateras predicted "dramatic oversupply in two to three years."
    Calgary Herald
  2. Anishinabek Police Service said a REC retailer on Fort William First Nation, near Thunder Bay, would be breaking Ontario's REC retail law if it opens as planned.
    Thunder Bay News Watch
  3. Vancouver law firms are eager to find cannabis clients.
    Business in Vancouver
  4. As is the case in neighbouring Saskatchewan, which I mentioned last week, Manitoba laws forbid cannabis smoking or vaping in public places, including provincial parks. That means no one going to the Winnipeg Folk Festival will be able to legally smoke cannabis.
    The Leaf
  5. So far, Quebec has only charged one person for growing cannabis at home. Finance minister Lionel Carmant said his government would close loopholes that prevent the laying of further charges.
    Global News, Journal de Montréal—In French
  1. Gatineau, Quebec residents near Hexo's enormous Masson–Angers production site complain of strong cannabis odours from the facility. Hexo told GrowthOp their greenhouses are on agricultural land and meet all regulatory requirements for odour reduction. GrowthOp
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Canopy's US Footprint Remains Small—For Now

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Canopy will open hemp processing operations in seven American states but will not move forward with producing REC or MED in the U.S. until federal legalization.
Financial Post

Quick Hits

  1. Newfoundland's Liberal attorney general will investigate the province's supply deals. Opposition Conservatives have suggested the Liberal government displayed favouritism toward Canopy (a company started by two former Liberals). The decision has proven popular.
    CBC Newfoundland, CityNews
  2. MJ Biz Daily published a list of Canada's Most Reputable Cannabis Producers, but the most striking takeaway is that even Aurora, ranked number one, was unknown by 76% of respondents—while 89% didn't know CannTrust, ranked number three.
    MJ Biz Daily
  3. WeedMD launched a REC brand called "Color," with the American spelling, which for some reason drives me absolutely crazy, but might also suggest plans for eventual U.S. expansion.
    An anonymous source close to the company told me, "I think it honestly started as a spelling mistake, but they'll say it's to help prepare for the U.S market."

Twilight of the Dispensaries

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Dana Larsen

The BC Court of Appeals turned down an application from Vancouver's unlicensed dispensary owners for a stay of the B.C. Supreme Court decision ordering illegal dispensaries shut down. The nine stores involved in the application—including four locations of the franchise Weeds—were warned they would be held in contempt of court if they did not close immediately.
Vancouver Courier, Vancouver Sun, CTV News

Quick Hits

  1. The Globe profiled Toronto's budtenders and their relationships with customers.
    Globe and Mail
  2. After the Globe suggested the Ontario government would soon allow 50 more REC stores to open—and Lift & Co repeated the suggestion—provincial finance minister Vic Fedeli's assistant said, "It's not true. We do not have any plans at this moment in time to offer more licences."
    Globe and Mail, Lift, Vice
  3. Health Canada isn't considering legalizing psilocybin mushrooms just yet, though a representative acknowledged the agency has issued a formal "no objection" letter to a clinical trial on medical psilocybin.

Canada Needs
Thousands More REC Stores

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The Globe mapped Canadian REC retailers and discovered there are 0.8 stores for every 100,000 Canadians, compared with Colorado, where there are 10 per 100,000 residents. Newfoundland has 4.8 stores per 100,000 residents, and Alberta has 2.4. In order to meet demand, most provinces would need more than 3,000 more REC stores.

Quick Hits

  1. Vaporizer-maker PAX Labs announced a partnership with Aphria, Aurora, Organigram, and Supreme Cannabis to offer their products in pods compatible with the PAX Era vaporizer.
  2. POPCANN is a Toronto start-up whose product is mobile, regulatorily compliant cannabis stores, contained within a trailer and transportable to northern communities as well as to events like music festivals.
  3. Former executive director of the Colorado Department of Revenue Barbara Brohl said tax revenues from cannabis have been in steady decline since legalization and warned Canadians not to expect cannabis taxes to provide endless funds. However, she added, consumers in Colorado have proven they'd rather buy from regulated producers and sellers than from the unlicensed market—which has been forced out of state.

Pilots, Flight Crews, and Controllers get 28-Day Pre-Work Ban

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Transport Canada banned cannabis within 28 days of a shift for in-flight crews as well as air-traffic controllers.

  • Geneticist Ryan Lee noted, "Forget THC for second, which does not impair after just a few hours post-consumption. This effectively eliminates treatments involving CBD, CBG, CBN, CBDV, THCV - all NON-INTOXICATING cannabinoids."

Quick Hits

  1. Apps and games designed to tell you how high you are may not necessarily be trustworthy.
    Global News

Legalization With Room for Regular People

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Craft growers continue to argue Health Canada's new regulatory demand for completed premises—which cost roughly $1M—locks out potential micro-cultivation applicants. "Who do you know that earns maybe $50,000 a year that can plant a $1-million-dollar facility?" asked one grower.
The Tyee

Quick Hits

  1. Grower Travis Lane slammed the price of pre-rolls on sale at City Cannabis in Vancouver. "Even the $17 half-grammers are outrageous. $69 per gram is shameful gouging," he tweeted. Not long after, City Cannabis apologized and said they had "mislabeled the product list." Twitter
  2. The Smoke Free Ontario Act bans the display of vapour products "in any manner that would allow the consumer to handle them or see them," and vape retailers say that makes their products very difficult to sell.
    Global News
  3. Hunny Gawri, proprietor of Toronto's first REC store the Hunny Pot, says his store has had between 50,000 and 60,000 customers in the two months since it opened.
    The Star

Tracey Curley: In Memoriam

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Last weekend, cannabis communities across Canada were rocked by the news that firebrand activist, MED patient and advocate, businesswoman, and larger-than-life personality Tracey Curley had died at home of unspecified causes.
Leafly, Night Court Cannabis Edition, Twelve High Chicks, The Straight

  • As NICHE executive director Jenna Valleriani wrote in a moving tribute, Curley was feared, loved, and respected for her confrontational attitude and her unbending ethical devotion to patients at a time when, "There was no 'industry,' just a grassroots community of people engaging in civil disobedience because the laws needed to change."
    NOW Toronto
  • Figures from across the sector paid tribute to Curley online.
  • I only ever met Tracy very briefly but I got the sense that everything I'd heard about her was true. She was an intense and powerful character whose advocacy made many MED patients feel supported and loved. Her passing is an immense loss to the cannabis community, the cannabis business sector, and above all to her many friends and loved ones.

Quick Hits

  1. The federal Liberal government's cannabis records-suspension Bill C-93 passed through the house and returned to the Senate, which sits for four more weeks before summer.
  2. Ontario Provincial Police in the Kawartha Lakes region charged one man with being in control of a boat with cannabis readily available, while also charging his boating companion for having an open container of liquor.
    Global News
  3. Police in Aurora, Ontario laid multiple charges against a cannabis-delivery driver.
    TV News