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1

Quebec Court Rules Homegrow Ban Unconstitutional

https://commons.wikimedia.org/w/index.php?title=User:Stagiairec&action=edit&redlink=1

Quebec's Superior Court overturned the provincial ban on home growing. It was enacted by the previous Liberal government, but heartily supported by the sitting CAQ government.
Montreal Gazette

  • Justice Manon Lavoie found the sections of the Quebec Cannabis Regulations banning home cannabis cultivation infringed on federal jurisdiction and was therefore unconstitutional. Federal law allows up to four plants.
    Globe and Mail
  • The lawyer who won the case warned Quebeckers to expect the government will appeal or rewrite the law in order to make it constitutional. (Part of the issue was that criminal matters are the sole domain of the federal government: the Quebec government could, for example, develop a civil penalty for home growing). However, the judge called the provincial ban "a flagrant case in which the provincial law interdicts something permitted in the federal law."
    CBC Montreal, TVA Nouvelles—In French

Anti-cannabis Quebec premier François Legault said he found the decision "surprising," and justice minister Sonia LeBel called for "prudence" from Quebeckers while her government decides whether to appeal the judgment, rewrite the law, or let it stand.
Journal de Montréal—In French

  • Minister LeBel would not comment on how the decision might affect her government's calls to raise the legal age for cannabis to 21.
  • Lawyers in Manitoba, which also banned home growing, took note of the Quebec law being overturned, though it could be between months or years before a court case against the ban is built upon the Quebec court decision.
    CTV News

Earlier in the week, the Cannabis Council of Canada sent a letter to the Quebec government protesting the proposed 30% cap on THC in extracts, which would ban products like vape pens and hashish. The CCC pointed out in a La Presse op-ed that Quebec's draconian regs on vape products and edibles will encourage the public to continue consuming those same products on the illicit market.
Twitter, La Presse--In French

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2

More Ontario Lottery Shenanigans

Jesse Staniforth

While the Alcohol and Gaming Commission of Ontario was busy disqualifying all lottery winners who applied using addresses affiliated with REC retailer HighLife Cannabis, an anonymous Reddit user discovered other ballot-stuffing practices.
Financial Post, Leafly

The Reddit user discovered 15 submissions to the lottery in the names of Friendly Stranger owner James Jesty and his family members, as well as 50 submissions related to the names of Green Acre Capital's Matt Shaloub and Albert Soberano and their apparent relatives.

  • One of the most surprising names the Reddit user discovered among REC retail lottery entries was that of Vic Neufeld, who stepped down as CEO of Aphria in January following a short-seller attack. His name and those of other Neufeld family members appeared on 15 ballots.
  • The Reddit user concluded, "I believe the circle of influence of Friendly Stranger in this lottery process to be ~80 individuals [and] corporations."

Quick Hits

  1. The president of the Ontario Cannabis Store resigned after serving in the position for one year.
    CBC Toronto
  2. Cannabis NB has struggled for profitability, but New Brunswick finance minister Ernie Steeves says he's optimistic edibles legalisation will help bring the province's crown REC retailer into the black.
    CBC New Brunswick

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3

There's No Escape from CannTrust

https://www.flickr.com/people/34427466731@N01

At the same time as CannTrust was laying off 180 employees this week, representing 20% of its workforce, Bloomberg received documents showing that throughout last year CannTrust was expanding its genetics by bringing in seeds purchased on the illicit market as it was struggling to meet supply agreements.
Financial Post, Bloomberg

  • In order to mislead regulators, CannTrust employees "changed the names of as many as 20 strains to those which the company was licensed to sell in the legal MED and REC markets."
  • A MED grower who calls himself Kev in the Shed remarked, "What's even worse is tainting well known med cultivar names with who knows what."
    Twitter
  • Two strains from illicit seeds were grown and sold, ultimately representing roughly 1,000 plants.

Lawyer Trina Fraser noted that while such practices are breaches of regulation, given that Health Canada allowed illicit genetics to be brought into the legal MED market during its infancy "under s.10 declarations, you can’t argue that there is any health risk. Why shouldn’t existing licence holders be able to make this declaration as well?? It was a policy decision that feels arbitrary to me."
Twitter

Quick Hits

  1. Cannabis growing practices remain largely uncodified, which means some growers use dramatically different techniques than others. The professionalization of cannabis growing through college courses will hopefully change that.
    Globe and Mail

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4

Live from MJ BIZ CON INT'L

Jesse Staniforth

I'm writing this week's newsletter from the press box of Toronto's MJ Biz Con international, where I've been all week.

Reputation expert Dave Scholz from market-research company Leger Marketing said the CannTrust scandal is affecting the entire Canadian industry.
MJ Biz Daily

  • In an industry so young that companies have little differentiation to the public, an scandal by one company makes everyone look bad.

The convention's keynote speaker was former Progressive Conservative Prime Minister Kim Campbell, whose tenure lasted a scant few months between elections in 1993.
GrowthOp

  • Campbell presided over the Canadian "war on drugs" launched by her predecessor Brian Mulroney in the 1980s. Asked whether she regretted opposing cannabis, she responded that in the early 1990s cannabis was considered a gateway drug, and we hadn't yet had the shift of understanding that made legalization possible.
    Twitter
  • One attendee, potstocks investor Betting Bruiser, booed Campbell as she took the stage and was removed from the audience and ejected from the Convention Centre.

Overheard at MJBIZCON (or things I was told by people who asked to remain anonymous)

  • Many commented how there are fewer people than in recent years, and the decline in attendance reflects the disappearance of last year's unreasonable optimism in the sector. "Still deals to be made here, though," I heard someone say while they bemoaned the attendance. Other predicted this will be the last time MJ BIZ holds a Canadian event.
  • The Canadian cannabis industry is years behind in gathering data on its consumers. One MED user told me she'd been buying from Tweed for years and while they sent her weekly promotional emails, they never bothered to personalize the emails to reflect the products she was reliably buying every month. That's the industry writ large: some companies like Strainprint are collecting usage data, and some organizations are collecting retail data, but LPs know virtually nothing about what their consumers want in their cannabis products. Marketers don't know what consumers want so they don't know how to market to them. (Of course national law makes marketing very difficult.)

Health Canada isn't going to allow itself to be burned again a la CannTrust—recall reports this summer that HC inspectors walked past unlicensed rooms clearly full of plants that shouldn't have been there. Word on the floor of MJ Biz Con is HC inspectors will begin demanding facilities provide them physical maps on which licensed and unlicensed rooms are clearly marked so as to not repeat the CannTrust mistake.

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5

Aurora Drops Dutchman

https://commons.wikimedia.org/wiki/User:Pieter1

Aurora sold its stake in the Green Organic Dutchman for $86.5M, in a deal coordinated by "a syndicate of Canadian banks."
Yahoo Finance

After first struggling to find buyers in a chilly sector, Aurora was able to find investors who bought shares discounted from $3.14 to $3 each.
Globe and Mail, Twitter—Mark Rendell

The banks remain gun shy about working with cannabis, and this week investors reported BMO ceased allowing cannabis stocks to be shorted.
Financial Post

Quick Hits

  1. Hemp-reinforced concrete is becoming so popular that hemp producers are struggling to keep up with demand.
    Bloomberg

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6

Lawyer to Challenge Ottawa on Edible THC Limits

John Conroy

Lawyer John Conroy, who has been involved in major Canadian cannabis legalization cases (including the Allard decision, which legalized non-dried forms of MED) said his next constitutional challenge will be the federal government's regulations on edibles, extracts, and topicals.

  • He said the edibles-package limit of 10mg THC was far too little for MED users—who do not have access to edibles directly from the LPs they're required to buy from, and whose edibles will be subject to the same limits. (There is no distinction between MED and REC edibles.)
  • Conroy will challenge the ban under section 7 of the Charter of Rights and Freedoms, saying it can "'arbitrarily deprive' medicinal cannabis patients of their right to security of the person."

Quick Hits

  1. The US reversed the lifetime ban on a Canadian who carried CBD oil over the border (refusing to explain why, as usual), but that doesn't make it a good idea for you to try.
    CBC British Columbia, The Straight
  2. Edmonton police fined a store for selling CBD vape items but did not charge the owners, who "seemed to genuinely be under the impression that they were allowed to sell vape products containing CBD."
    The Star

7

Stocks, Investments,
and Company News

Public Domain

Analysts say Tilray's acquisition of Alberta REC retailer Four20 signals a return to focus on the Canadian market.
Yahoo Finance

  • Cowen analyst Vivien Azer cut her 12-month Tilray target from USD$150 to USD$60, though she remained positive about the company and said she believed the stock's downturn meant it was a good time to buy. Financial Post

Canopy Growth's investment arm Canopy Rivers said the company has received 1,523 pitches for funding and has chosen to invest in only 18. The company sees a large opportunity in selling US brands in Canada—since these can be legally marketed on the internet in the US, meaning brands available in Canada can receive wide US-based internet marketing campaigns without breaking Health Canada regs.
Yahoo Finance

Canopy's interim CEO Mark Zekulin did a series of media interviews in the hope of calming public nerves and soothing irate investors who've watched Canopy's stock decline 50% since April.
CNN Business

REC retail giant Fire & Flower keeps growing. This week it acquired eight more (as-yet unlicensed) REC retail locations in Alberta.
NewsWire

8

Feds Gave Vets $75M in MED

Public Domain / Canadian War Memorial

Cannabis use is way up among Canadian veterans—and opioid and tranquilizer use among vets is way down—but that comes at a price.

9

Assembly of First Nations
Meets to Talk Cannabis

https://www.flickr.com/photos/63428572@N00
Prime Minister Trudeau with National Chief Perry Bellegarde

Last week, Bill Blair met with First Nations representatives to talk about resolving the absence of Indigenous jurisdiction, rights, and concerns in the Liberal legalization framework. This week, the Assembly of First Nations had their own discussions—the First Nations Cannabis Summit, in Vancouver.
CBC Indigenous, NewsWire

  • The summit was attended by AFN Chiefs and their representatives, who talked about the potential for cannabis as an economic driver, the communities who do not want to deal with the plant, and the complexity of jurisdictional issues associated with cannabis in Indigenous communities.
    Globe and Mail

10

Cannabis a Hit at Farm Expo

https://www.flickr.com/photos/30624156@N00

For the first time in 151 years, Vancouver Island's Cowichan Agricultural Exhibition and Fair hosted a judging of the best home-grown cannabis along with perennial ag-fair favourites like best apples, jams, pies, and butter sculptures of prime ministers past and present in large hunks of butter.

  • Organizer Shari Paterson, who added cannabis to help widen the exhibition's appeal said, "Lots of competition here. People get pretty involved in it and want to win one of those blue ribbons."
  • Cannabis commentator Dan Adelman visited the exhibition and said, "They are so excited to have cannabis as a category and they say not only have they had an overwhelming amount of interest, they have had a ton of support outside of the cannabis community."

Quick Hits

  1. The Cannabis Mercantile Exchange announced its first-ever listing of CBG isolate: 13kg CBG isolate at 94.7%.
    Twitter

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