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1

Health Canada Suspends CannTrust Licenses

Wikimedia Commons / V Dollero

CannTrust announced Tuesday that Health Canada suspended its cannabis licenses.
NewsWire

  • Health Canada partially suspended CannTrust's standard cultivation licenses, and fully suspended CannTrust's licenses for processing, medical sales, and cannabis-drugs-and-research.
  • The company has to stop all planting immediately, but is allowed to cultivate and harvest existing lots, and to dry, trim, and mill that product.
    Globe and Mail
  • CannTrust has 10 business days as of Tuesday to respond to the action—meaning to argue the suspension is without merit, or to add new information.
    MJ Biz Daily, Twitter—Matt Lamers

If the company cannot convince Health Canada to remove the suspension, Health Canada will decide whether to revoke the licenses or reinstate them.

  • Interim CEO Robert Marcovitch said of the suspension, "CannTrust’s paramount and urgent priority is to satisfy regulators."

Health Canada has instructed CannTrust how to take measures to prove it had addressed the reasons for suspension.
Bloomberg

The suspension makes CannTrust far less desirable to potential buyers, who would take on any of the company's future liabilities—including retaliations against the company for wrongdoings made already public as well as those not yet known.
Financial Post

CannTrust has lost 75% of its value since the beginning of the scandal in July.
Bloomberg

  • Whistleblower Nick Lalonde, who worked at CannTrust from July 2017 to May, feels responsible for the impact of his actions and the ensuing scandal on CannTrust employees.
    Bloomberg
  • "I was hoping Health Canada would investigate those directly involved with the wrongdoing and that they would be reprimanded, but there are innocent people at CannTrust who weren’t involved and are likely to lose their jobs. It’s just not fair to them," he told Bloomberg

Following the suspension, Alberta Gaming, Liquor and Cannabis returned roughly $1.3M in CannTrust products.
Global News

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2

Second License Suspension: Evergreen Medical

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

On August 9, Health Canada suspended the cultivation, processing, and sales licenses of BC LP Evergreen Medicinal Supply over lack of compliance with federal law and Health Canada regulations.
MJ Biz Daily

  • During an unannounced April 29 inspection, Health Canada found infractions of good manufacturing practice, record keeping, inventory keeping, and license control.
  • A Health Canada spokesperson said the suspension protected public health and safety, "including preventing cannabis from being diverted to the illegal market."
  • In July, a BC Supreme Court judge ordered the company vacate a property on which it had failed to pay rent.
    Victoria News
  • Health Canada reported Evergreen responded to its suspension on September 9 and "is working on corrective actions."
    Bloomberg

Quick Hits

  1. Broken Coast has recovered enough from the fire at its production facility to begin accepting and shipping orders again.
    Twitter—Unity Marguerite
  2. Shopify is expanding into U.S. cannabis e-commerce by offering new features for hemp and CBD retailers.
    Twitter—Harley Finkelstein, Bloomberg

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3

Sector's First Fraud Case

https://www.flickr.com/photos/faceme/31724724240/

The Ontario Securities Commission accused Ben Ward, former CEO of publicly traded LP Wayland Group (formerly Maricann), and two other men of fraud at a second cannabis company.
Globe and Mail

  • Ward, Peter Strang, and Silvio Serrano are accused of issuing misleading statements while raising capital for company called Canadian Cannabis Corp. Ward was CEO and director of the company, while Strang and Serrano were vice-presidents.
  • Among other things, the OSC alleges the three siphoned "more than $3M" off 125 CCC investors, roughly half of them in Ontario. Full allegations are listed here.
    Financial Post, Deep Dive
  • An initial hearing will occur on September 30.

Citing the industry's "credibility problem," James West predicted the scandal would tighten already-strained access to capital.
Midas Letter

Quick Hits

  1. REC retail prices are down 2.3% since January, and declined 0.7% in August.
    Twitter—David George-Cosh
  2. The Star profiled Pasha Brands and associated legacy-market companies entering the legal game.
    Star

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4

Quebec Nails Low-Key Retail,
Ontario Gushes Money

http://alaincarpentier.com/

Quebec's provincial retail monopoly the Société Québécoise du Cannabis announced it closed its past quarter with $1.4M in net profit on $45.1M in sales.
Global News

  • Though the SQDC has opened fewer than 20 stores, Quebec consumers spend far more in stores ($39.5M) than they do on the SQDC website ($5.6M).
  • The SQDC's principal spending was on employee salaries.
    La Presse—In French

The Ontario Cannabis Store lost $42M in the last fiscal year, which ended the day before the province began its problem-plagued retail rollout. Of that number, at least $10M went to pay for renovations and equipment for stores under the previous Liberal government's plan to open provincial-monopoly Ontario Cannabis Stores, a project the Ford government abandoned almost immediately.

  • The Financial Post broke the $42M loss down in greater detail.
    Financial Post
  • Ontario's loss is confusing: though it had no physical stores in which to sell product, it also had none of the expenses associated with physical stores. Arguing again for greater transparency of the OCS, Brock business professor Michael J. Armstrong concluded, "just running the place consumed 60% of its regular spending. That’s a lot for a warehouse and a website." (Quebec only spent 24% on operations while it was running 12 stores, and does not rely on a central warehouse.)
    Globe and Mail

Processing of applications for new REC stores in Ontario is frozen for at least two weeks due to the judicial review of 11 disqualified applications, but the wait could be longer.
Twitter—Mikey Cannabis

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5

Alberta REC Retail Thrives, Ontario Dispensaries Strike Back

Jesse Staniforth

As British Columbia hit 104 REC stores this week, the city of Calgary alone has approved 209 REC stores—nearly halfway to the city's 450 liquor stores.
Calgary Herald

  • To date 105 applications have been rejected, largely for proximity to schools and daycares.
  • This week, Calgary has one REC store per 6,392 residents. Toronto has one REC store per 586,000.

With Ontario's new store licenses stalled while the courts look over lottery disqualification, that number isn't about to change soon.

In a combined front last Saturday, a number of unlicensed Toronto dispensaries chose to open their doors again to protest the lack of REC retail development in a province that needs stores very badly.

Quick Hits

  1. Here's a survey of federal leaders' cannabis policies, as well as their individual cannabis-consumption history.
    Montreal Gazette
  2. LPs offer surprisingly little for home-growers, while most provinces don't carry clones and few even carry seeds. Home growers hope that changes soon. Global News

6

Vape Illness Crosses Border

https://www.flickr.com/photos/87735223@N02/9832376464/

The vaping-related illness stalking US states crossed the border with the report of a London, ON–area high school student who was placed on life support due to vaping-related respiratory illness. (He has recovered.) The student was a daily e-cigarette user.
CTV News

  • Medical officials gathered information about the e-cigarette brands the student used and have passed it on to the federal chief medical officer of health, who is gathering information about vaping devices.
  • The case is fuelling public anger and suspicion about increased rates of teen vaping.
    CBC London
  • A spokesperson for Ontario's Health Ministry said two possible cases of vaping-related illness were under investigation.

Provincial health minister Christine Elliott said all Ontario hospitals have been ordered to report vaping-related illnesses to the provincial chief medical officer of health.
Globe and Mail

  • Elliott discussed the possibility of bans on flavoured vape products to dissuade teen users.

I haven't yet read a single article about Canadian vape illness that acknowledged widespread suspicion of illicit diluting agents, particularly vitamin E oil, as a likely cause of some or many vaping-related illnesses.
Leafly

Quick Hits

  1. The BC government has banned cannabis advertising anywhere alcohol is licensed as an effort to discourage mixing the two products.
    The Straight
  2. Pelham—the Ontario town where CannTrust's grew illicit cannabis—acknowledged public pressure and placed a moratorium on new cannabis facilities, but a cannabis producer is suing to quash the moratorium.
    Niagara This Week, Welland Tribune

7

Bruce Linton Goes Psychedelic

https://www.flickr.com/people/125112383@N06

Ousted Canopy co-founder Bruce Linton said he's involved in a variety of different companies. While he's an "activist investor (the good kind)" to Canadian LPs Slang Worldwide and DNA Genetics, he's also senior advisor and/or director of Michigan dispensary company Gage Cannabis USA, an animal health-and-wellness CBD company called Better Choice, and at Toronto-based medical psychedelics provider Mind Medicine, which develops MDMA- and psilocybin-assisted treatments for mental illness.

Quick Hits

  1. Quebec convenience store giant Couche Tard hopes to become a "key player" in the cannabis sector, and hopes to enter the US legal-REC market through its Circle K stores.
    Global News
  2. Seattle cannabis media portal Wikileaf will go public in Canada via reverse takeover, which we haven't seen much of this year but was the shortest route to a public offering in the sector last year.
    GeekWire

8

Two Weak-Weed Recalls

https://www.flickr.com/people/75612671@N03

Hexo issued a recall for a lot of Helios-brand REC dry-flower, which actually contained a different strain with half the listed amount of THC.
GrowthOp

Aurora recalled a lot of 15g containers of Blue Dream with nearly 20% less THC than marked.
Twitter—Deepak Anand

Quick Hits

  1. Symbolic of investor enthusiasm for the sector, Tilray has lost 90% of its stock value (worth $17B) since last fall.
    Bloomberg
  2. Short-sellers have done well as LPs across the sector have reported losses.
    Bloomberg

9

First Nation Protests Dispensary Raid

Jesse Staniforth

Supported by the Ontario Provincial Police, the Anishinabek Police Service raided a dispensary on Wahnapitae First Nation in Ontario—despite entreaties from Wahnapitae Chief Larry Roque, who attempted to convince the police to leave, saying the community is working to pass its own cannabis regulations.
Sudbury.com

Quick Hits

  1. Before legalization, dispensary workers used to be able to expect many judges would just drop charges. That may be changing. In London, ON, nine defendants arrested in dispensary raids immediately before and after legalization pled guilty to trafficking cannabis.
    London Free Press
  2. As flowering season is upon us, so apparently begins the season of people stealing whole plants out of neighbours' yards and sheds.
    Stratford Beacon Herald, St Catherine's Standard

10

MED Activism Ramps Up

CFAMM

Ahead of the election, MED advocates are pushing to make MED access a point of discussion.
Twitter—Kate Robertson

Quick Hits

  1. The Canadian Medical Association called for Ottawa to lower the maximum 10mg THC to 5mg per discrete edible or package of edibles.
    Calgary Herald
  2. You too can get a microcultivation license for "comfortably under $15k" (providing you already own a property on which there's a suitable standalone building).
    Reddit

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