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Reg Shock:
Health Canada Suddenly and Drastically Changes License Rules


Health Canada abruptly announced that all MED and REC cultivators, MED and REC processors, and MED sellers must prove they have a fully built production site ready to go before they can begin applying for licenses, effective immediately. (The updated Cannabis Licensing Application guide is available here.)
NewsWire, Financial Post

Study: Fewer Canadians Want Edibles, Support Legalization


A study from Dalhousie University found rising consumer reservations about edibles and legalization in general—possibly due to fear stoked by media reports. The study is called "Edibles and Canadian consumers' willingness to consider recreational cannabis in food or beverage products: A second assessment."

  • The study found far more respondents (37%) identified as regular cannabis users—compared with Statistics Canada, whose recent National Cannabis Survey found 18% said they had used cannabis at least once in the last three months. Lead author Dr. Sylvain Charlebois, director of Dalhousie's Institute of Agri-food Analytics, said, "I have always been quite skeptical of StatsCan's methodology on anything, starting with the [Consumer Price Index]."
    Globe and Mail—Paywall
  • The study also found support for legalization has significantly declined, from 68.6% in 2017 to 50.1% today. "What was unanticipated was this deflated enthusiasm towards cannabis in general, let alone edibles," Charlebois told the Star.
    The Star
  • Despite a higher number of users across Canada, 33.8% said they would rather not work with a regular REC user. A plurality of respondents (37.8%) switched to the above-ground market after legalization, 30.8% continued buying only from the illicit market, and 29.6% bought from both.
    Chronicle Herald
  • Charlebois said the reason more than 60% still purchased illegal cannabis was "quality, availability, and price."
    CBC Nova Scotia
  • Only 36% of respondents plan to purchase edibles after legalization, down from 46% last year. Sixty percent said edibles make it too easy to green out.
    Food in Canada
  • Last year, 38.5% of respondents said they would eat a restaurant dish infused with cannabis. That number has declined to 25.5%.
  • NICHE director and BC Institute on Cannabis Use postdoctoral scholar Jenna Valleriani blamed media-stoked fear about edibles, particularly horror stories about overconsumption of unregulated, illicit edibles.
    Global News
  • Halifax RCMP mistakenly claimed a (ridiculously strong) 500mg edible seized in a raid "could be a fatal dose for a child," and CBC Nova Scotia ran the quote as its headline, before both organizations walked the comment back.
    CBC Nova Scotia, The Star

Drug-testing Machine Tricked By Tim Hortons Cake


Criminal defence lawyers Kyla Lee and Paul Doroshenko tested a Dräger DrugTest 5000 machine, the only saliva drug-testing device approved for use by Canadian police.

  • Doroshenko reported that he ate a poppy-seed cake on his way to the testing site, prompting a false-positive for opioids. An hour later, he also tested positive for opioids in his urine, "Meaning if I was arrested and compelled to provide urine, the Tim Horton's poppy seed loaf might spell my doom."
  • Kyla Lee reported a person who had never consumed cannabis tried a small amount of CBD tincture with less than 1% THC, and tested positive for cannabis. Coca tea provoked a false-positive for cocaine. "That's so concerning, because in our legal system we have a zero-tolerance threshold for cocaine," Lee told Global News. "Any detectable amount of cocaine in your system means you're guilty of a criminal offence."
  • In Canada, the devices are only used to test for cannabis and cocaine. Dräger representative Einat Velichover said the lawyers used a different version of the device than that which police use, which has only a two-option swab for those two drugs. She maintained further checks, such as breathalysers, would protect innocent drivers from being arrested.
    CBC British Columbia
  • At Waterloo's Wilfred Laurier University, a group of entrepreneurs has developed a non-saliva related cannabis-impairment test that examines the motion of the eyes to determine whether a person is too high to drive. Unlike saliva-testing devices, Guard-Ex's device is intended to test impairment.
    The Star

Projection: How Conservatives Would Handle Cannabis


Analyst Mike "InfoSec Dan Fielding" Zmuda penned a prediction of how Conservatives winning either minority or majority governments in the October election would affect the cannabis sector.
Night Court (Cannabis Edition)

  • A Conservative minority would not likely institute major changes, but would still have the power, intent, and opportunity to scrap the MED system and fold it into the REC system. This would delight the leadership, but not necessarily rank and file members, of the Canadian Medical Association.
    CBC Calgary, Twitter MDs
  • A Conservative majority might very well result in a nationwide home-cultivation ban, while the party might also scrap plans to legalizeedibles- and extracts-legalization plans. Meanwhile, if the Liberals let the clock run down on conviction-record-suspension Bill C-93 as I mentioned they might last week, those with possession convictions will not get a better offer from the Conservatives, who would likely abandon the pardons process.
    Le Devoir—In French

Quick Hits

  1. Gordon Cudjoe, vice president of the Canadian Association for Black Lawyers, said cannabis-records suspension Bill C-93 was a "token gesture" that wouldn't help Canadians of colour disproportionately persecuted under prohibition. During job interviews, he said, employers ask whether candidates have pled or been found guilty of a crime, rather than whether they have a criminal record.
  2. Physicians' MED authorizations (often described as "prescriptions," though they are not formally considered such) have increased 30% since April of last year, with 18,000 health-care providers authorizing an average of 2.1 grams daily.
    Twitter—Jenna Valleriani
  3. Across Canada's national and provincial parks this summer, cannabis will only be allowed on rented campsites—not shared areas like benches, trails, or any shared area with a roof.
    CTV News
  4. Kitchener, Ontario's Ever After EDM festival in early June, is the first of the country's summer music festivals to allow cannabis consumption. Each festival-goer will be allowed to bring up to 10 grams per person in pre-rolls only. They did not specify whether you could put all 10 grams into a single massive joint.
    CTV News, Withnail & I
  5. Real estate's primary problem with cannabis is the smell. Vice
  6. 420-friendly standup comedy in unlicensed venues has taken off in cities across Canada. Leafly

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Activist Hedge-Fund Slams
Canopy–Acreage Deal


US hedge fund Marcato Capital Management announced it would vote against Canopy's planned acquisition of Acreage Holdings, saying Acreage is one of the few US multi-state firms worthy of a "significant premium."

Quick Hits

  1. Canada has nowhere near enough REC retailers, according to data from AltaCorp Capital, which found Canada needs 3,640 locations to meet consumer demand, and only has 260 open or planned. Globe and Mail—Paywall
  2. The next few weeks will be crucial for outdoor growers who want to get their seeds in the ground—but all but one (unspecified) outdoor grower have yet to receive Health Canada approval.
    Growth Op
  3. The CEO of Constellation Brands, which owns 38% of Canopy and holds four seats on that company's board, seemed optimistic about cannabis beverages. "We would see cannabis-based beverages being a big portion of what you will see going forward," Bill Newlands said. Canopy CEO Bruce Linton said within three or four months of May 1, when they acquired the manufacturing site, five bottling lines will be up and running.
    Yahoo Finance
  4. Canopy purchased Niagara-region winery Coyote's Run Estate for $10M. Niagara Now
  5. Aphria chair and interim CEO Irwin Simon said "I want to make sure we get Canada right," before expanding into Europe.
  6. Cronos announced it expects its earnings to continue declining through the rest of 2019 as it continues building infrastructure, but that they will begin growing in 2020, when extracts will be legal.
  7. The Ontario Securities Commission issued an order to cease trading stock in LP Wayland Corporation, which hasn't filed audited financial statements or a management discussion and analysis report.
    Globe and Mail—Paywall
  8. A new US cannabis hedge fund will short Canadian LPs, which it said "have one hand tied behind their back" due to Health Canada's strict marketing regulations. It's emblematic of a trend where investors abandon Canadian cannabis as unprofitable.
    Financial Post
  9. Up Cannabis's new poster campaign found a novel way around Health Canada marketing restrictions: Advertising that winks at cannabis while seeming only to discuss finance/ (Sample copy: "Make a withdrawal from everything"), then links to an age-gated site. No mention of cannabis anywhere until you're past the age gate.
    The Message
  10. The Leaf's Solomon Israel noted Aphria REC brand Soleil is marketing via media partnerships that target moms as potential customers.
  11. Genetic research is becoming important, as companies hope to develop both protective qualities in their plants (like mould resistance) and breed for lesser-known cannabinoids that are currently too scarce to sell.
    Globe and Mail—Paywall
  12. Across Canada, REC retailers can't keep CBD products in stock—especially because of demand from elderly and first-time users.
    The Star
  13. The Canadian Health Food Association and the Canadian Hemp Trade Alliance lobbied Ottawa to remove CBD from the prescription drug list and reclassify it as a natural health product.
    Globe and Mail—Paywall
  14. Toronto firm Lobo Genetics claims it can use a DNA test to determine how you'll react to cannabis. But cannabis experts from the Centre for Addiction and Mental Health say we don't yet know enough about cannabis to make such predictions.
    CBC Toronto
  15. Lift & Co’s VP of Strategy Nick Pateras warned Canadians to take note of Oregon, where the state has produced seven years' worth of cannabis it can't export. A bill before the Oregon state legislature would allow regulators to freeze cultivation permits for the next three years.
  16. US biotech firm Qualis Cannabis Corporation is bringing its growing competition the Grow Off to Canada.
    The Growth Op

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In BC, cannabis production may be a saviour for communities where employment plummeted when forestry collapsed. In Alberta, job losses have been in the oil and gas sector, but cannabis may help revive towns staggered by the falling price of oil.
Calgary Herald


The dismantling of the dispensary system is hitting Vancouver patients hard. Though illegal they had enormous product selections, often affordably priced.
The Star

Jamie Shaw, of Groundwork Consulting and Pasha Brands said legalization has been far better for California than for BC, where provincial and federal regulations have limited the availability of healthy edibles for MED users.
Business in Vancouver


Some BC Liberal MLAs are petitioning their federal counterparts to intervene in disputes over the odours produced by cannabis production facilities in communities east of Vancouver, including Canopy's greenhouses in Aldergrove. The MLAs called on the feds to force the operators to upgrade their production and air-filtration practices.
Delta Optimist

Vancouver cannabis tourism operators say the province has too many laws—such as those banning cannabis use in the back area of a tour bus, away from the driver; those banning consumption lounges; and those preventing B&B owners from leaving free REC for guests—standing in the way of cannabis tourism.
Vancouver Courier


Canopy-subsidiary REC retailer Tokyo Smoke opened a Toronto location in HMV's former flagship location on Yonge Street.

A Tweed store in London, owned by a numbered company (unnamed company assigned a government number), was fined $50,000 for not opening in April. Ontario Public Service Employees Union president Smokey Thomas argued the fine was proof the Ontario government bungled REC retail. Thomas argued if the government had stuck to the Liberals' retail plan, Ontario would already have dozens of provincially run (and OPSEU-unionized) stores open.
London Free Press, CTV News, NewsWire

Globe and Mail reporter Jameson Berkow predicted cannabis prices in Ontario are beginning to fall.


Opposition Liberal MNAs tabled a motion calling on the CAQ government to delay the implementation of Bill 2, which would raise the age for cannabis consumption to 21 and ban cannabis use in places where tobacco is allowed.
Twitter—Annabelle Blais


Montreal borough Saint-Léonard, known for its large Italian population, wants to ban the SQDC from opening a retail location inside its limits.
CBC Montreal


New Brunswick is lagging behind other Atlantic provinces in per-capita sales, and Cannabis NB's general manager said the provincial agency couldn't get enough products, particularly cheaper "value end" products, which are the most in demand.
CBC New Brunswick

  • New Brunswick finance minister Ernie Steeves said the government is considering: bringing experts in to run Cannabis NB, scaling the business down and closing flailing stores and privatizing the industry.
    CTV News



Manitoba announced it will select winners of the REC retail draw—from a pool of 100 pre-qualified retailers—on May 15. Those operators will be given licenses to operate in smaller Manitoba communities to help the government achieve its promise that 90% of Manitobans will have legal REC within a 30-minute drive.
CTV News

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