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WeedWeek Podcast
65. A Very Canadian Pot Scandal with Jesse Staniforth

Jesse Staniforth, Editor of WeedWeek Canada, updates Alex and Donnell on breaking Canadian stories. There is no lack of scandal: Cannabis giant Canopy Growth fired founder and CEO Bruce Linton and CannTrust, a major licensed producer, is estimated to lose C$350 Million for ignoring the law. New regulations limiting THC in edibles exacerbate the over-packaging crisis. The country continues to battle the illicit market which is now also available online and is known by the cool name "MOMS" (mail order marijuana sites). Plus, Alex and Donnell discuss Jay-Z's partnership with Caliva.

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1.
   

Health Canada Reg Drop Fever

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Public Domain

Health Canada announced its regulations for ingestibles/edibles, extracts, and topicals on Friday during a conference call with media. After four months of public consultations, the rules were scarcely different than the previous draft.
Financial Post

  • The regs will be published in Canada Gazette Part II on June 26 and will come into force on October 17, at which time producers must give Health Canada 60-day notification of their intent to produce new cannabis products. The 60-days should be considered a minimum wait period.
    MJ Biz Daily
  • New products will become available for purchase no earlier than mid-December. Vape pens will likely come first.
    Twitter
  • Edibles/ingestibles will be capped at 10mg THC per package to avoid "adverse reactions and accidental hospitalizations," prompting complaints it will exacerbate overpackaging and inconvenience MED patients.
    Twitter
  • Gummies will be allowed, but must not appeal to children. Health Canada will not tell industry which flavours, colours, shapes, or branding is permissible—they'll only inform LPs when they find products they believe "appeal to kids."
  • Sweetened vape products will not be allowed, nor will products containing alcohol, tobacco, or caffeine.
    CBC Politics
  • Ingestible extracts will be capped at 10mg THC per unit, with a maximum 1,000mg THC per package.
  • Extracts for inhalation will be capped at 1,000mg THC per package.
    Globe and Mail—Paywall
  • All extracts will be subject to a maximum package size of 90ml for liquid extracts below 3% THC, and 7.5 grams for solid extracts over 3% THC.
  • Edibles must be shelf-stable, not requiring refrigeration or freezing.
  • A Health Canada representative told us, "The framework that's been constructed does not allow restaurants to prepare and serve foods containing cannabis to the public"—though provincial/municipal law may allow restaurants to invite customers to bring their own.
  • The second-building rule stands: infused products must be made in a separate building from regular products.
  • The Health Canada rep also said, "Health Canada has committed to hold consultations on precise question of CBD as natural health product." [...] I'm not in a position to say with any certainty when those consultations would be launched."
  • Deepak Anand noted the requirement for tax stamps to fit onto edibles packaging "will result in massive outer packaging! Need new (smaller) tax stamps for smaller packaging and product forms."
    Twitter
  • Producers and retailers are excited. Valens GroWorks CEO Tyler Robson said, "It should really kick-start the industry. Retailers should start getting excited now that they can actually offer different products to really drive people to their stores."
    MJ Biz Daily

Quick Hits

  1. Lift & Co. estimates the new products will create 1.5M new cannabis consumers.
    InvestingNews
  2. The Ontario Cannabis Store issued a call for producers to submit products in the new "Legalization 2.0" categories.
    MJ Biz Daily
  3. The average edible high lasts six to eight hours, but edible experiences depend on individual metabolism.
    GrowthOp
  4. You should know what to do if your dog eats your edibles.
    CBC London
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2.
   

Tilray Merges with Privateer

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Public Domain

Tilray inked an agreement to merge with American private equity company Privateer Holdings, which previously owned roughly 77% of Tilray (75M shares). Privateer will become a wholly owned Tilray subsidiary.
CBC Business, Financial Post

Quick Hits

  1. The average online price of legal REC in five provinces has increased to $10.42 per gram even as supplies are becoming more stable.
    Globe and Mail—Paywall
  2. An industry analyst forecasted a dried-cannabis oversupply by the end of the year. "By January, we are going to be swimming in dried cannabis biomass," he said. The Leaf's Solomon Israel noted oversupply would drive down cost of legal REC, which would diminish the illicit market.
    Financial Post
  3. Companies planning to expand cannabis operations into Latin America and the Caribbean can read up on the process in a new guide from Meritas Law Firms.
    Twitter—Trina Fraser
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3.
   

Obstinate Toronto Dispensaries
Refuse to Be Closed

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

Roughly a dozen illicit dispensaries continue operating in Toronto, and they're fighting harder than ever against eviction efforts by city bylaw enforcers and police. In many cases, stores reopen after raids, sometimes even breaking sealed doors and windows to get inside. Then last Toronto figured out what seemed like a solution: last weekend they began blocking the fronts of illicit REC stores with stacks of giant concrete blocks.
CBC Toronto, Global News

Quick Hits

  1. Vancouver's illicit dispensaries shut down after an ordered from the BC Court of Appeal—but they're still selling online.
    Globe and Mail
  2. In provinces that allow home cultivation, it's illegal to grow cannabis in a place other than your own home—unless you have a MED permit.
    The Leaf
  3. An adults- and couples-only inn and spa in Ontario touted itself as "Canada's first publicly cannabis-friendly resort."
    The Leaf
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4.
   

Federal Business Bank Still Won't Work with Weed

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Crown corporation the Business Development Bank of Canada (BDC) admitted to lawyer Trina Fraser they will not fund businesses "involved in the transformation, cultivation and production of cannabis," though they said they would "review [their] position over time based on industry developments."

  • Cannabis brand manager Rachel Colic reported that venture capital companies partnered with the BDC are also banned from funding cannabis projects.
  • Fraser noted the industry could not be more legal than it is, and asked what the barrier to changing policy would be. BDC representatives responded, "Developments that could influence our current risk evaluation. It is a nascent industry, that we want to understand more and continue monitoring."
  • · Fraser responded, "That feels like a cop-out. We've had a federally legal framework for licensed production of cannabis for over 5 yrs now (medical and/or rec). BILLIONS of $ have been invested. Will you actively engage with industry to truly evaluate risk?"
  • BDC requested she contact them privately to continue the discussion.
    Twitter

Quick Hits

  1. The cannabis industry is fast becoming one of the largest employers in some Southern Ontario areas.
    London Free Press
  2. Health insurance plan sponsors and members are warming to MED coverage.
    Benefits Canada
  3. BC has shared none of its excise taxes with its municipalities, and some are saying municipalities that ban REC retail should receive a smaller share than those that allow and regulate cannabis stores. Saskatchewan municipalities also complain the province isn't sharing excise tax revenues with them.
    Vancouver Sun, CBC Saskatoon, Humboldt Journal
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5.
   

Montreal SQDC Branch May Strike

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Jesse Staniforth

At the SQDC outlet in Montreal's Rosemont neighbourhood, workers have voted for a strike mandate, saying they want better wages, paid holidays, and bonuses.
CBC Montreal

  • They're paid $14 per hour, which is just above the provincial minimum of $12.50, though they get enrolled in a retirement program and receive benefits available to other Quebec Crown employees.
    TVA Nouvelles
  • While $14 is a standard wage for retail work, SQDC employees say they require far more training than regular retail workers (the 20-hour SQDC onboarding course is the longest cannabis retail worker training in the country), and bear the responsibility of determining whether or not customers are impaired.
  • The SQDC was developed as a disconnected offshoot of provincial Crown wine-and-spirits agency the Société des Alcools du Québec. Ahead of legalization last year, the union representing SAQ employees fought hard against the SQDC being split into a separate agency, calling the tactic "a form of union busting."
    Montreal Gazette
  • SAQ employees are paid $20.46 per hour; the unionized SQDC employees hope they can get their pay up to $18 through pressure tactics. The union notes SQDC executive salaries are comparable with those at the SAQ.
    La Presse—In French

Quick Hits

  1. The SQDC reported $71M in sales in its first year ($57M in-store, $14M online), alongside losses of $4.9M representing "non-recurring startup costs." Government revenues from the SQDC's consumption and excise taxes added up to roughly $29.7M. The SQDC expects to make $20M profit next year.
    SQDC, MJ Biz Daily, Montreal Gazette, Bloomberg
  2. Quebec premier François Legault expressed sympathy for Gatineau residents who've complained about odours emitted by Hexo's production facility in rural Masson-Angers—which produces roughly one third of all REC sold in Quebec. Legault suggested he might tighten regulations on cannabis production sites. "We are looking right now in two or three different ministries to have rules put in place that ensure there is no negative impact on neighbours," Legault said.
    CBC Ottawa
  3. The Ontario Cannabis Store is inking supply agreements with new suppliers and brands—including Seth Rogen's Canopy subsidiary Houseplant.
    CNBC
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6.
   

Synthetic Cannabinoids—Not Opioids—Caused Teen "Cannabis" Overdose

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Two youths found unconscious in Milton, Ontario, after smoking what bystanders believed was cannabis were actually smoking synthetic cannabinoids—which they purchased from a head shop that had labelled them as the psychotropic herb salvia. (Both are illegal in Canada.)
CBC Toronto

Quick Hits

  1. Saskatchewan is the only province in which all REC retail—even wholesale and online—is private. It is the only province in which cannabis may be sold direct from an LP's warehouse without having to pass through a provincial wholesaler. Retailer Fire and Flower hopes to capitalize on the province's lax regulations and implement same-day delivery operated out of its wholesale centre.
    Globe and Mail—Paywall
  2. Anyone (except those in Quebec, Manitoba, and Nunavut) can join in the 4 Plants Cup, a cross-country contest for the best homegrown cannabis. It's a low-rent event driven by the shared love of home growing. Competitors will be split into professional growers and amateurs.
    The Leaf
  3. The Leaf debuted a web-based explorer to show consumers which REC products are produced by which LPs.
7.
   

Legalization: "A Gong Show"

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Cannabis businesspeople argued Canadian regulations cost the country its chance at a major cannabis market. Instead, CBD is wildly popular across the US but is still difficult to buy legally in Canada, while legal REC is treated shamefully, "almost like you’re buying something dirty in brown paper bags. […] Like liquor in the ’60s.”
Bloomberg

  • Canoe Financial chair and former Dragon's Den dragon Brett Wilson said the provincial and municipal interference in the legalization process has been "a gong show."
  • "The jobs are there, the work is there but regulatory impediments are extraordinary," he said.
    CanTech Letter

Quick Hits

  1. Aurora is investing $1.5M to upgrade its research and development capacity.
    Global News
  2. Zenabis CEO Andrew Grieve will waive compensation until the company has achieved its goals.
    The Province
  3. Aleafia announced it completed the planting of "Canada's first legal outdoor grow facility." Growers online quickly noted the plants were placed too close together, a proximity that may discourage flowering while encouraging the transfer of pest infestations between plants.
    Twitter
8.
   

Desperately Seeking Test-Labs

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A Radio-Canada investigation found there are too few testing labs nationwide, and far too few labs testing only cannabis. As a result, delays on lab results range from weeks to months.

  • Producers say delays are so long it affects the freshness and taste of their crops.
  • The introduction of edibles and extracts to the market will only worsen the situation.
  • The Canadian Cannabis Growers Association says Health Canada's "over-cautious" licensing process has contributed to the shortage.
    Ici Radio-Canada—In French

Quick Hits

  1. Through its subsidiary Spectrum (formerly Mettrum), Canopy announced a two-year research plan to explore new MED treatments and applications to specific illnesses. Among the aims for the project will be developing standardized MED formulations for consistent dosing.
    Grizzle
  2. Micro-cultivators cannot have "shared spaces" in which there are two or more licensed sites within a single perimeter—though they can be housed within the same building.
    Twitter—Trina Fraser
  3. Ontario electrical utility Hydro One is running a new line into Leamington with enough electricity to power the city of Ottawa. Most of that will go to light up the grow rooms of Aphria and other LPs in the area.
    Globe and Mail—Paywall
9.
   

UBC Scholars: Cannabis Driving Rules Too Strict

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Researchers at the University of British Columbia say Canadian drug-impaired driving laws are too stringent.
Western Star

  • In a five-year study published in Addiction, UBC researchers determined there was no increased risk of crash in the blood-THC levels currently considered to indicate impairment.
  • While levels of THC spike after smoking a joint and dissipate quickly, THC builds up in body fat and is released constantly into the blood for weeks.
  • UBC's Dr. Jeffrey Brubacher, lead researcher, said, "A medical marijuana user, for example, would never be allowed to drive."
  • Brubacher said he believed impaired-driving laws should be changed.

Quick Hits

  1. THC BioMed launched Pure Cannabis Cigarettes, which will have commercial cigarette-style filters. The company claims using a filter is "a better way of smoking pot," but filters in cigarettes do nothing to mitigate the harms of tobacco smoke. The press release also suggests the products can help smokers to quit, which would be an illegal health claim.
    NewsWire, Yahoo Finance, The Leaf
  2. Nanoemulsions are one of the key technologies that will allow easy infusion of cannabinoids—but there are concerns about how safe nanoemulsions are for humans to consume. Those who produce technologies competing with nanoemulsions are quick to point these concerns out, but independent health agencies are also uncertain whether nanoemulsions, according to one report, "may accumulate in the body, in particular in the lungs, in the brain and in the liver."
    Vancouver Sun
  3. One way to get good publicity in spite of Health Canada's stringent marketing laws is to partner with a charity and do good deeds, which CannTrust did in partnering with Project Share and Hospice Niagara.
    St. Catharine's Standard
10.
   

Degrassi Still Teaching
Helpful Lessons

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Degrassi-star turned harm reduction scholar Rebecca Haines-Saah (who played mean-girl Kathleen Mead) is bringing weed to Degrassi—again! This weekend in Toronto, 25 original stars will join fans from all over at Degrassi Palooza, a three day fans convention in Toronto. On Sunday at 11:00, Haines-Saah (along with NICHE CEO Jenna Valleriani and writer Rachelle Gordon) will present a "Cannabis 101" educational panel.

  • Given Kathleen Mead was the kid who found a joint in the tampon dispenser at school and introduced it to the girls at Melanie's surprise sleepover for Diana's birthday (season 5, episode 7), Haines-Saah is the right person to teach Degrassi fans about cannabis.

Quick Hits

  1. A all-party parliamentary health committee that toured the country to learn about methamphetamine consumption recommend decriminalization of drug possession.
    Globe and Mail—Paywall, Ottawa Citizen
  2. Public safety minister Ralph Goodale said he told US Homeland Security secretary Kevin McAleenan the US must take cannabis possession record suspensions seriously and keep records that "reflect the accurate legal status of Canadians." Since the government has not expunged criminal records, U.S. border officials may still refuse entry to pardoned Canadians. Goodale said the US was receptive to his request.
    The Star
  3. Qwest makes among the most expensive cannabis in Canada. But in spite of the price, a BC retailer told me at Lift last week, "Those premium products keep selling out. People buy everything we have."
    Leafly