Business Archives

Week in Weed – March 9, 2024

Written by Staff on March 9, 2024. Posted in Business, Cannabis News, Government, International.

The big news this past week was Statistics Canada releasing cannabis sales figures for 2022-2023. We also took a deep dive into Alberta’s sales figures for the same time frame.

Cannabis consumption areas are beginning to emerge in a few places in BC following a recent rule change.

BC’s Budtenders Union announced a new store unionized, while we updated a previous unionized store that voted to decertify.

Ontario passed new legislation that bans growing cannabis in childcare settings and creates more opportunities for the province to engage with First Nations communities around provincially regulated cannabis stores.

We also shared our monthly cannabis jobs update.

In our Cannabis Insight section, we shared a piece on navigating the challenges of brand partnerships and another on five ways retailers can grow their sales.

We also celebrated trailblazing women in cannabis in recognition of International Women’s Week.

In other cannabis news…

Following the release of Stats Canada’s cannabis data for 2022-2023, many mainstream sites picked up on aspects of the figures, including a decline in alcohol sales while cannabis sales grew.

Manitoba news outlets were quick to share that Manitoba had the highest rise in recreational cannabis sales across Canada in the 2022/2023 fiscal year at 23%.

Yukon released its sales numbers for 2022-2023. During the fiscal year ending March 31, 2023, cannabis sales in Yukon totalled $11 million, a 9.4% increase from the year prior. Dried cannabis was the highest product category, accounting for 64.6%. Inhaled cannabis extracts were the second highest at 24.9%.

CanMar announced a strategic partnership with the Canadian Cannabis Exchange (CCX) and Loud Lion Supply. CCX will serve as CanMar’s exclusive B2B Cannabis Brokerage/Exchange Strategic Partner on The Hub, CanMar’s community platform.

Tilray Brands Inc. announced two new releases from Broken Coast. Cherry Cheesecake and EmergenZ are now available in Canada across select regions and retailers, including Alberta, Manitoba, and Ontario, with further expansion planned nationwide.

Ontario-based Sensi Brands Inc. announced the launch of SensiMed.ca, a new medical cannabis marketplace. Sensi Brands operates Station House, a producer in southeastern Ontario with a farmgate licence, and the Potluck and Sensimilla brands and Good Greens Medical.

A labour arbitrator says global fertilizer giant Nutrien was justified in keeping an employee out of work at the Saskatchewan potash mine until the company was satisfied the cannabis he used for sleep would not leave him impaired on the job site the next day.

High Tide Inc. opened its second Canna Cabana in Mississauga, Ontario. This opening will mark High Tide’s 164th Canna Cabana branded retail cannabis location in Canada, and the 55th in Ontario.

Tilray’s hemp asset, Manitoba Harvest, announced its new instant Superseed Oatmeal in three flavours with hemp hearts.

Aurora Cannabis Inc. announced the availability of medical cannabis pastilles for doctors to prescribe to patients in Australia. The 30-pack pastilles are available now in three formats, including Aurora THC Pastilles in Watermelon flavour (5mg THC), Aurora CBD Pastilles in Peach flavour (10mg CBD), and Aurora Balanced Pastilles in Yuzu Lemon flavour (5mg THC, 10mg CBD), exclusive to MedReleaf Australia.

HYTN Innovations Inc. announced the completion of a Good Manufacturing Practices audit by Australia’s Therapeutic Goods Administration at their Kelowna, BC facility. The audit was in coordination with Australia’s Promethean Biopharma.

Health Canada updated its page on physical security measures for cannabis licences.

A new study from researchers in Newfoundland suggests that healthcare providers have significant knowledge gaps in authorizing medical cannabis, which limits their practice competence and confidence in this area. Referring patients to cannabis clinics while enforcing harm-reduction strategies was an interim option for patients to access cannabis for medical purposes.

International cannabis

In his State of the Union address, US President Joe Biden said: “No one should be jailed for using or possessing marijuana,” leading to tons of headlines and speculation. The statement was just a reiteration of his existing policy. In 2022, Biden pardoned thousands of people with cannabis possession convictions and called for cannabis to be rescheduled. The decision is now with the US DEA.

Law enforcement

Police in Winnipeg say they identified 64 individuals as testing positive for cannabis while driving. Provincial Offence Act notices were issued for improper storage, as well.

Police in PEI say four people failed roadside tests for cannabis.

Police in Victoria, BC, arrested a man selling cannabis outside a high school.

Authorities in Ireland seized 36 kg of cannabis on a flight from Toronto intercepted at Dublin Airport.

Ontario bans home grows in (some) child care settings, allows for agreements with First Nations cannabis stores

Written by David Brown on March 8, 2024. Posted in Business, Cannabis News, Government, Ontario.

Ontario passed legislation this week that, among other things, bans growing cannabis in homes where childcare services are provided and further allows the province to enter into agreements with First Nations communities to support cannabis regulations on reserves.

Bill 157, Enhancing Access to Justice Act, 2024, which passed on March 5 and received Royal Assent on March 6, includes the two amendments to Ontario’s Cannabis Control Act.

The amendment related to childcare specifically prohibits the cultivation, propagation, or harvesting of cannabis in dwellings in which child care, as defined in Ontario’s Child Care and Early Years Act, 2014, is provided.

The rule creates an exception for in-home childcare services, which is defined as child care provided at the child’s home, or place where residential care is provided for the child, and there is an agreement between a home childcare agency and the care provider that provides for the agency’s oversight of the provision of care.

British Columbia has had a similar restriction on home cultivation and consumption in childcare settings since 2018.

The Bill was introduced by the Ontario Conservatives, and while it did receive support from the opposition NDP, at least one member questioned the need for these changes.

Kristyn Wong-Tam, the NDP critic for the Attorney General, critic for small business, and member of the Standing Committee on Justice Policy, questioned the need for the rule change, calling it a “non-issue,” and admonishing the government for recent policy changes that allow companies to operate up to 150 cannabis stores in the province, an increase from a previous cap of 75. That rule change came into effect in January

“I wonder why the government would make such a hoopla about a non-issue like cannabis in childcare facilities and then move to quietly advance the centralization and the consolidation of big cannabis corporations by giving them much more expansion power,” said Wong-Tam while the bill was being debated in the House.

“I have heard from small cannabis businesses who fear this will hurt them, and I have heard from larger cannabis businesses who believe that the limits on the numbers of cannabis stores that a company can have are too low,” Wong-Tam added in an email to StratCann. “I wish that understanding this decision played a larger role in the debate. When I reached out to cannabis stakeholders, many informed me that I was the first MPP to ever ask them how Ontario’s legislation could be enhanced. I invite cannabis stakeholders to engage their provincial government more regularly at Queen’s Park so we can learn from you about what your businesses need.”

“I invite cannabis stakeholders to engage their provincial government more regularly at Queen’s Park so we can learn from you about what your businesses need.”
Kristyn Wong-Tam, Ontario NDP

The second piece of legislation related to cannabis was a change to the provincial cannabis act, allowing the province to enter into agreements with First Nations communities to support cannabis regulations on reserves.

Any such agreements would require any regulations created by First Nations to adhere to provincial and federal regulations while providing a chance for band councils to oversee their own retail cannabis business in their communities.

There are currently only seven licensed recreational cannabis retailers on First Nation reserves in Ontario, while many others operate outside of the provincial framework and, at times, outside the framework of the First Nations government within the reserve that they operate in.

During the bill’s second reading, Doug Downy, Ontario’s Attorney General, said the legislation was created in concert with First Nations communities and leadership.

“This comes on the heels of much conversation with First Nations partners and communities,” said Downy, “and the aspirations they have for a safe and regulated market to protect their youth and their communities, just as we seek to do the same in the rest of the province of Ontario.”

Previously, the provincial cannabis regulations authorized the Minister to enter into arrangements and agreements with a council of the band with respect to specific cannabis regulation issues on a reserve.

Under the newly added language, provincial legislation will authorize the Lieutenant Governor in Council to make regulations to implement the arrangement or agreement. These regulations can then modify or clarify the application of the Act, and establish requirements that apply on a reserve and incorporate rules established by the council of the band.

Featured image: Rama Cannabis, one of the seven provincially-regulated cannabis stores currently operating within First Nations communities in Ontario

Ontario to allow retailers to own up to 150 cannabis stores, proposing to ban cannabis cultivation in home-based child care facilities

November 30, 2023

More stores, products, lower prices, mean cannabis sales continue to climb in Ontario

December 17, 2020

BC continues to debate increasing 8-store cap for cannabis retailers

January 11, 2024

Cannabis Jobs Update – March 2024

Written by Sarah Clark on March 7, 2024. Posted in Business, Cannabis News, Producers, Retail.

Seeking employment within the cannabis industry? A wide variety of opportunities are available across Canada.

In our March round-up, we’ve curated a sample of current cannabis job openings. From roles in cultivation and regulatory compliance to retail positions, there are diverse avenues for anyone looking to get started or expand their career in the cannabis sector.

SNDL Inc. recently posted a Wholesale Manager, Strategic Partnerships position at the Toronto location. This role will manage bulk biomass procurement and sales and international business opportunities.

Aurora Cannabis currently has 26 openings posted, including Head of Channel Partnerships & Operations (remote), Director, Operations (Bradford), Plant Work Technician (Pemberton), Manager, Corporate Account and Consolidations (remote), and several others.

Greentone, located in Bécanour, QC is seeking a Directeur(trice) qualité for its quality assurance and control team.

The Certus Group, a job placement agency, is seeking a new business development-focused Sales Executive, Logistics, Cannabis Division to lead sales efforts for a “Global Top 10 Logistics and Freight Forwarding Leader.”

Auxly Cannabis Group Inc. is seeking a Territory Manager for Alberta Central to be the face of Auxley within the retail community, and also a Cloud System Administrator to join the technology team.

Production:

BZAM Ltd. has posted several openings, including a full-time Processing Associate in Ancaster, ON.

Motif Labs is also on the hunt for a Production Associate (Cannabis) to support the Extraction or Refining team at its Aylmer, ON location, as well as a Supply Planner responsible for strategic inventory and supply planning.

Decibel Cannabis Company in Creston, BC, is looking for a Plant Health Technician.

Marketing/Branding:

High Tide Inc. is looking for a Marketing Coordinator to join their dynamic. The position is based in Calgary, AB.

A Little Bud has a hybrid remote position (White Rock, BC) for a Cannabis Social Media Specialist for their retail brand.

Kindling Cannabis, located in Toronto, ON, has an opening for a Director of Digital Marketing.

Bold Growth Inc., in Saskatoon, SK, is looking for a Brand Manager to enhance their brand, trade marketing and digital marketing.

Retail:

Plantlife Cannabis is expanding and has multi-locations across Calgary South looking for Sales Associates.

Canna Cabana is seeking Part-Time Sales Associates for several locations, including Muskoka, ON and Medicine Hat, AB.

Cannabis NB has an opening for a Chef(fe) d’équipe/Team Lead in the Sant John area.

Circle K continues with several Budtender openings across cities in Ontario, and also one Part-Time Budtender for their Paradise, Newfoundland and Labrador location.

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Cannabis Jobs Update – February 2024

February 11, 2024

Cannabis Jobs Update – January 2024

January 3, 2024

$11 billion in cannabis sales has created 151,000 new jobs and added $43.5 billion to Canada’s GDP

February 1, 2022

AGLC reports its first cannabis profits

Written by David Brown on March 6, 2024. Posted in Alberta, Business, Cannabis News, Government.

Alberta’s cannabis distribution agency posted its first year of profits for fiscal year 2022-2023, bringing in over $18 million from over $600 million in sales after its operating expenses and costs.

The cost for the AGLC to bring in $618.9 million in sales from April 1, 2022, to March 31, 2023, was $558.5 million, leaving the agency with $60.4 million in net revenue. Operating expenses for AGLC’s cannabis operations took away another $49.3 million of that, leaving it with a net income of a little over $18 million.

This is nearly three times as much as the $7 million forecasted in the province’s 2022-2023 budget. The province also brought in $164 million in cannabis tax.

As a comparison, in the same time period, gaming brought in nearly $1.6 billion for AGLC, while liquor brought in $825.1 million. The AGLC’s operating expenses for its cannabis operations were higher than for alcohol ($37.8 million), despite sales for alcohol being 14 times higher than cannabis. In 2023, AGLC contributed $2.4 billion from gaming, liquor and cannabis operations to the General Revenue Fund, with cannabis accounting for less than 1%.

In the 2021-2022 fiscal year, the agency had a loss of almost $4.4 million for its cannabis operations. In 2021, the agency posted a $12 million loss.

Market insight

Unsurprisingly, dried flower sales still dominate the Alberta market, accounting for 33.4% of all sales. When combined with pre-rolls and milled flower, which AGLC lists separately, this is nearly 59% of all sales from dried flower products.

Vapes represent just over 20% of total sales in dollars, while extracts are almost 12%.

Dried flower sales declining

Despite still controlling the bulk of sales, dried flower (excluding pre-rolls and milled flower) showed its third year of declines, from $237.9 million in fiscal year 2021, $226.5 million in fiscal year 2022, and $206.9 million for the 2023 fiscal year, as of March 31, 2023.

Milled cannabis flower, however, did increase from $15.7 million in 2022 to $23.9 million in 2023. Just $2.6 million was sold in the fiscal year covering 2020-2021. Pre-roll sales increased from $120.8 million in 2022 to $131.8 million in 2023.

Sales in dollars from vapes, extracts, edibles, oil, beverages, capsules and soft gels all increased, while topicals and seeds decreased (as well as non-liquid beverages).

Most cannabis stores per capita

Alberta has the highest number of retail stores per person in Canada, and 27% of licensed cannabis producers are based in Alberta. The number of cannabis stores as of March 31, 2023, was the same as the previous year at 756. The agency currently lists 752 as of March 5, 2024.

Cannabis sales in Alberta were about $130 per capita, compared to about $95 in Ontario in the same time frame.

Cannabis licensees are the least satisfied with the AGLC out of all its licence types, with approval of 92% for liquor licensees and agencies, 96% of charitable gaming licensees, 95% of gaming retailers and operators, and 84% of cannabis licensees.

There were 2,085 cannabis products available and 143 contracts with licensed producers of cannabis, including 38 contracts with Alberta-based licensed producers. About 89% of Albertans who purchase cannabis say they are satisfied with the product variety, and 86% of Albertans say they are satisfied with the accessibility to purchase cannabis.

From 2022-2023, the AGLC conducted 4,944 inspections of cannabis licensees, with a 98% compliance rate. This compares to 4,662 inspections of gaming licensees and 20,643 inspections of liquor licensees, both of which had a 99% compliance rate.

Cannabis sales continued to increase in 2022-2023, with extracts leading the charge

Written by David Brown on March 6, 2024. Posted in Business, Cannabis News, Financials, Government.

Cannabis sales and other activities related to managing cannabis brought in $1.9 billion for the provincial and federal governments in the year ending March 31, 2023, according to new data from Stats Canada.

This represents a 24.4% increase from the previous year and includes net income from provincial cannabis authorities, excise taxes, retail sales taxes, other specific taxes, as well as licenses and permits.

People in Canada purchased $4.7 billion worth of cannabis from provincial cannabis authorities and other retail outlets, a 15.8% increase ($600 million) from the previous year.

Cannabis sales increased the most in Manitoba (+23.7%), while New Brunswick (-0.4%) reported the most significant decline.

On average, Canadians spent $150 per person of legal age on cannabis in the most recent fiscal year ending March 31, 2023, an increase from $132 per person in the previous year. On average, people in Yukon spent the most at $314 per person, while people in Quebec spent the least at $88 per person.

The amount of dried cannabis the average Canadian purchased in the most recent fiscal year increased slightly from the previous year, from $94 per person to $97, and inhalable extracts increased from $24 to $37 per person.

Inhaled extracts on the rise

While dried cannabis was still the most popular product category, its market share continued to decline as concentrates, especially vapes, gained more shelf space. Sales of dried cannabis declined from 71% market share in 2021-2022 to 64.9% in 2022-2023.

The largest contributor to the increase in overall cannabis sales across Canada was inhaled extracts, which rose by 59% in the 2022 to 2023 fiscal year. This category accounted for 67.6% of the $600 million increase in sales from the previous year, or more than $405 million.

Newfoundland and Labrador, which only began allowing sales of cannabis vape pens in 2022, saw the biggest increase in inhaled extract sales, at 307% increase. PEI saw a 144.7% increase in extract sales. Sales of inhaled extracts in Alberta were 32.5% of total sales, the highest portion in Canada, followed by New Brunswick at almost 31%.

The overall market share of cannabis extracts increased from 18.1% to 24.9% in the 2022-2023 fiscal year compared to the year prior.

Sales in dollars of all cannabis products increased from the previous year except for topicals, seeds, and other cannabis products, which, combined, saw a decline from $52.7 million in 2021-2022 to $21.1 million in 2022-2023.

Sales by all cannabis authorities in Canada were $3.6 billion, with the cost of sales being $2.8 billion for a total of $796.6 million in gross profit.

After subtracting additional expenses and adding other income, the net income of cannabis authorities in Canada was $428.4 million.

Total taxes and other revenue collected on the sale of all recreational cannabis sold in Canada was $1.5 billion. Federal excise and customs duties were $227 million, while provincial and territorial excise tax brought in another $711 million.

The net income of all cannabis authorities, total taxes, and other revenue was $1.9 billion, an increase from $1.5 billion in the previous year.

In comparison, in the most recent fiscal year, the control and sale of alcohol brought in $13.6 billion for the provincial and federal governments. While significantly more than cannabis, this represented just a 0.1% increase from the previous year.

Cannabis industry union adds new stores, loses one

Written by Staff on March 6, 2024. Posted in British Columbia, Business, Cannabis News, Producers, Retail.

Employees at a Vancouver cannabis store that joined the BC Budtenders Union in 2022 quietly voted to decertify the union a few months later.

Employees at Eggs Canna on East Hastings in downtown Vancouver voted to join the union in early 2022, but changed course shortly after that, says co-owner Oana Cappellano in a recent email.

Eva Prkachin, a representative with the Budtenders Union, UFCW 1815, confirms that the employees at this location agreed to decertify union membership, meaning it no longer acts as their bargaining agent.

Employees at the Eggs Canna location declined to comment, but Prkachin characterizes the decertification as the result of the union successfully negotiating for changes to different in-store policies. Cappellano shares a different perspective, saying staff opted to leave the union because they were disappointed with the contract the union negotiated, including making promises they could not keep.

At the time, UFCW 1518 said Eggs Canna was the first cannabis store outside of Vancouver Island to join its ranks. Since then, employees at a Seed and Stone location in Chilliwack joined the Budtenders Union.

Prkachin says since then, a second Seed and Stone location, this time in Delta, joined the union, and most recently, a third Trees Cannabis location, as well as Fireweed Cannabis in northern BC and Canna Cabana in Vancouver on Davie St. joined. The Canna Cabana location opened in November 2023.

Prkachin tells StratCann that the union is currently seeking to make contract negotiations easier for employees looking to unionize.

“We’re in the process of lobbying the government right now, in concert with employers, to hopefully pull together some boilerplate language around that kind of stuff so we can get to the meat of bargaining a bit faster. It’s an area where workers have to wait too long for both sides to come to an agreement.”

As of March 5, 2024, UFCW 1518 has organized at eight cannabis retail companies in BC, some with several locations, as well as one cannabis producer. These businesses are:

Seed & Stone
Clarity Cannabis
Trees Cannabis
Canna Cabana
Yaletown Cannabis
Fireweed Cannabis
Burnside Buds
Original Farm
Potanicals (cannabis producer)

Cannabis consumption spaces beginning to open in BC

Written by Staff on March 5, 2024. Posted in British Columbia, Business, Cannabis News, Retail.

A cannabis store in Penticton hopes to become one of the first cannabis stores in the province with a designated consumption area.

Cannabis Cottage, located in downtown Penticton, says it hopes to have its grand opening for the outdoor consumption space on April 20, bringing in food trucks, local artists, and performers.

This was what we were hoping to do from the beginning. We secured a space with the hope that at some point the government would allow for consumption spaces as well. So right now we’re just jumping over the moon.
Marianna Wolff, Cannabis Cottage

The store owner, Marianna Wolff, says she chose the location for her store, on a major thoroughfare in the city’s downtown, because it had a large front yard that could serve as a lounge space for customers.

Initially, BC’s rules did not allow for such a consumption space, but a rule change announced in February of this year finally made it possible. That rule change made it so that existing patio spaces where smoking and vaping of tobacco products are allowed can now also allow cannabis use.

It also made it so that cannabis stores, like Cannabis Cottage, can advertise consumption spaces. BC first engaged the public about these proposed changes in 2023 as part of a broader industry outreach initiative.

“We are totally thrilled,” says Wolff. “This was what we were hoping to do from the beginning. We secured a space with the hope that at some point the government would allow for consumption spaces as well. So right now we’re just jumping over the moon.”

She says she has worked with her neighbours, which includes a church, to ensure they are okay with the use of the outdoor space as a lounge. All of them gave their approval. The parish members did ask that no consumption occur during the operating hours of its Sunday School, something Wolff said she was happy to accommodate.

She says she chose the space specifically because it was not near areas like parks or schools, and would have the approval of its neighbours.

“The spot itself I feel is very indicative of spaces that can be good candidates for outdoor cannabis consumption without disrupting anybody who doesn’t necessarily want to have to smell it.”

Cannabis Cottage first experimented with bringing in local food trucks during a customer appreciation event last fall.

“It was very successful. It was a great show of how you can have designated space for people to enjoy their cannabis in a similar way that you might go to a brewery and enjoy a beer or go to a winery patio and enjoy a glass of wine.”

The format is similar to one taken by a cannabis retailer in Cumberland, BC, on Vancouver Island.

Max Oudendag has been assisting Michael Arneja, the owner of Cumberland, BC’s Trugreen Cannabis, on a large outdoor community space that will include a formal cannabis consumption area.

“We’re excited to be in a position to explore how to break down the stigma of cannabis consumption and find a way to integrate that into a healthy community gathering space,” Oudendag told StratCann late last year.

Like the pop-up event Cannabis Cottage held last fall, Trugreen held several pop-ups in 2023 as a test run for their project, which they say they have been working hand-in-hand with the province to develop.

Arneja says they also plan on launching a grand opening for the first stage of their outdoor consumption space in Cumberland on April 20, as well.

His vision extends beyond the mere creation of a cannabis consumption area, instead seeking to nurture “a stigma-free space where the community can gather and celebrate the cannabis culture with a responsible blend of cannabis use and community building.”

“We’ve been operating these pop-ups to see what the space could look like, and to get feedback from the community on what they want it to look like,” he adds, highlighting the project’s community-driven nature.

Sam Jones, the owner of 2% Jazz Coffee, a cafe in Victoria, says that beginning in April his store will be hosting monthly cannabis-themed events, as well.

“It’s a very casual affair,” explains Jones. “There’s no smoking indoors at all. No buying, nothing like that. It’s just an open cafe where people can go out on the patio and smoke a joint. Then you can come back in and enjoy a coffee and some good conversation.

Instead, he works with local cannabis companies who help host the event, which can serve as a learning session for those interested. The coffee shop will also be hosting a cannabis seed exchange on the last Friday in March.

“We just want to provide a space where the idea of having a joint can be normalized.”

-Note: This article was edited to include information on the 2% Jazz Coffee.

BC releases What We Heard report on cannabis consumption spaces

January 10, 2023

BC seeking feedback on cannabis consumption spaces for cafes, festivals, spas, and more

April 6, 2022

BC: Report on cannabis consumption spaces by end of year

June 22, 2022

Week in Weed – March 2, 2024

Written by Staff on March 2, 2024. Posted in Business, Cannabis News, Government, International.

Lots of cannabis news from StratCann this week.

Tim Wilson took a deep dive into the complexities of excise tax reform. Spoiler, you’re gonna need to get the provinces on board.

Meanwhile, the House of Commons Standing Committee on Finance called for changes to cannabis tax in a non-binding decision.

New data from Stats Canada showed household spending on cannabis is down, driven by declines in the medical market and the illicit market, despite increases in the legal non-medical market.

An Ontario cannabis store shared a creative approach to get around social media restrictions.

A BC cannabis company is bringing infused poutine to the Quebec market, and BC’s Community Savings rolled out pre-approved credit cards for cannabis companies.

TobaGrown’s lawyers have filed an appeal against last year’s court ruling that upheld the province’s home grow ban.

In stonk news, there were a flurry of financial reports this week, with the biggest being BZAM getting CCAA protection due to ongoing financial challenges.

In addition, Greenway Greenhouse, Cronos, Avant Brands, and Nextleaf Solutions all shared their financial reports.

Wayne Patrick Consumer Products is pursuing a Sale, Refinancing and Investment Solicitation Process due to insolvency.

A new study raised questions about the accuracy of eyelid tremors as evidence of cannabis impairment, and researchers at UBC launched a clinical trial exploring CBD for bipolar depression.

Finally, an unlicensed cannabis store in New Brunswick was fined $20,000 by a judge.

In other cannabis news last week

MJBiz had a scoop this week, reporting that the CRA will be calling on provincial wholesalers to garnish payments intended for producers that owe money to the tax authority. Three provincial wholesalers confirmed that the CRA told them to garnish payments originally intended for licensed producers over unpaid taxes. The CRA is owed more than $200 million.

CBC broke a story about a Manitoba foster home where former and current employees say staff had been providing underage youth with cannabis as a harm reduction tool. The Manitoba government says it is cutting ties with the organization. The owner is criticizing the province for the move.

The Windsor Star ran a piece on CannTrust’s Peter Aceto, who says he became the “fall guy” for the company’s previous problems.

Following news of his passing, Post Media ran a story on former Prime Minister Brian Mulroney’s involvement with Acreage Holdings, a cannabis company located in BC but operating in the US.

Vancouver-based seed-to-sale platform Elevated Signals raised $7.9 million to aid the expansion of its manufacturing operations software into new sectors.

A resident of Enniskillen, Ontario, raised concerns over the local council’s decision-making process on new zoning rules for cannabis operations, highlighting what they say is a significant oversight. A letter from Cannim Canada, indicating its intention to apply for a license to grow cannabis in a local greenhouse, was not shared with the council before it made changes to zoning rules aimed at mitigating odour and light pollution.

The Union of BC Municipalities’ (UBCM) Community Safety Committee received a report on cannabis policy as part of its February executive meeting.

The Good Shroom Co Inc., a cannabis company, announced its expansion plans in Quebec, Alberta, and Prince Edward Island.

Tilray Brands, Inc. announced its new Good Supply infused ‘Juiced’ cannabis pre-roll multi-packs in several provinces.

Quebec cannabis producer Jubilee is introducing new edibles infused with minor cannabinoids CBG and CBN, along with two new flavours. Additionally, the brand announced new infused topicals coming in spring, as well as body butters and bath salts. Jubilee products are available in Ontario and Alberta.

Heritage Cannabis released its Q4 2023 and year-end financial results, with $11,409,434 in gross revenue for the three months ending October 31, 2023, and a comprehensive loss of $14,123,548. Its loss for 2023 was $19,906,411, down from a loss of $23,937,773 in 2022.

Ayurcann Holdings Corp. announced its results for the three and six months ended December 31, 2023, with $10.7 million in gross revenue and $771,622 in losses.

And lastly, MTL Cannabis announced its financial and operational results for the three and six months ended December 31, 2023, with nearly $9 million in gross profit, $248,286 in losses, and an estimated selling price of $1.84 per gram for dried flower.

Manitoba group files appeal against cannabis home grow ban

Written by David Brown on March 1, 2024. Posted in Business, Cannabis News, Government, Manitoba.

The group challenging Manitoba’s ban on growing cannabis at home filed an appeal today against a recent court decision to uphold the ban.

In a ruling posted in October 2023, a Manitoba judge dismissed an application by a Winnipeg resident who was challenging the legality of Manitoba’s ban on people growing their own cannabis.

The Manitoba law, which has been in place since 2018, was challenged by resident Jesse Lavoie, who argued the provincial ban was unconstitutional and an overreach of provincial authority.

The provincial government argued that the ban on growing cannabis at home was within the province’s power in the name of protecting public health and safety.

Although the ruling was somewhat sympathetic to Lavoie’s lawyer’s arguments, Court of Queen’s Bench Justice Shauna McCarthy sided with the arguments made by the Government of Manitoba, saying that the penalties, while strict, were not overly punitive or a violation of the balance between provincial and federal jurisdiction. The province of Manitoba, she ruled, has the right to ban growing cannabis at home, even if federal law allows people to grow up to four plants.

One of Lavoie’s lawyers in the case, Kirk Tousaw, told StratCann they planned to appeal the ruling. That appeal was filed on March 1, 2024.

The law was put in place by the Progressive Conservative Party of Manitoba, which had been in power since 2016. The Manitoba NDP, which formed government after an election in 2023, had previously said they do not support the ban. Lavoie, who operates the company TobaGrown, which has spearheaded the effort to challenge the ban, says he hopes the province will hold to that commitment.

“We urge the NDP government to change the law now and to not spend anymore taxpayer dollars defending the PC’s bad law.”
Jesse Lavoie, TobaGrown

“TobaGrown has been at the forefront of advocating for a repeal of the ban on home cannabis gardens since day one,” Lavoie tells StratCann. “We have worked hard in the courts to challenge the constitutionality of the ban while also remaining open to discussions about a political solution.

“Since the NDP was elected in October 2023, we have consistently communicated that our preference would be to see the law changed by the government, not the courts. We very much hope that the NDP does the right thing for the people of Manitoba and repeals this prohibition.

“But we continue to also believe that the ban is an improper use of the criminal law power by the provincial government and that it is unconstitutional. And that means we remain committed to appealing the trial court’s decision to the Manitoba Court of Appeal. That hearing is expected to be this spring, and we are therefore filing our Appeal Facta to ensure that Manitobans have the same right to grow four plants at home that all Canadians outside Quebec currently enjoy.

“We urge the NDP government to change the law now and to not spend anymore taxpayer dollars defending the PC’s bad law.”

Several requests for comment on the party’s stance on home grow bans were unanswered, but sources close to the file tell StratCann that an announcement may come from the province in the coming weeks.

The House is scheduled to have its first sitting in 2024 on March 6.

In April of this year, the Supreme Court of Canada upheld a similar ban on home-grown cannabis in Quebec, ruling that the province has the authority to enforce such a ban, even in the face of federal rules allowing up to four plants per household.

Quebec and Manitoba were the only two provinces to challenge that authority, banning home growing entirely, as did the territory of Nunavut. While Quebec’s rules implement fines for those found growing cannabis, Manitoba’s ban creates criminal penalties and a $2,542 fine for growing non-medical cannabis in a residence, as well as up to a year in prison and forfeiture of personal property.

In their conclusion, the judge wrote, in part: “The applicant has failed to meet his onus of proving that section 101.15 is in pith and substance criminal law, rather than an area under provincial jurisdiction. Rather, I have found that the pith in substance, or the dominant purpose, of the prohibition against home cultivation in Manitoba, is to support the provincial government scheme enacted to control and regulate the purchase, distribution, and sale of cannabis in a manner which is consistent with the public interest.”

The province’s cannabis laws, including the ban on growing cannabis at home, were put in place by the previous Conservative government in Manitoba. The Manitoba NDP formed government following an election on October 3.

Nextleaf Solutions reports record revenue

Written by Sarah Clark on March 1, 2024. Posted in British Columbia, Business, Cannabis News, Producers.

Bucking industry trends, BC-based cannabis company Nextleaf Solutions reported their third profitable quarter this week.

Nextleaf reported $4.1 million in revenue, paying nearly $1 million in excise taxes while bringing in $132,821 in income. The quarter, ended December 31st, 2023, was the company’s highest gross sales period, generating more than $4.1 million.

This is an increase from the same quarter in 2022 when the company had $1.4 million in revenue and reported $559,013 in losses.

Nextleaf sells cannabis extract products like oils, soft-gels, and vape pens in markets across Canada. It also provides toll-processing services for other producers. The company’s house brands, including its Glacial Gold and High Plains Cannabis brands, only launched into Alberta in August 2023.

The company anticipates launching nine new products nationwide in Q2 2024, including Glacial Gold infused pre-rolls.

In its recent 2023 financial report, BC-based cannabis processor Nextleaf Solutions Ltd. says it achieved four quarters of consistently positive cash flow in the past fiscal year.

“I have a personal affinity towards Alberta and its success for us as a Company, having spent over 20 years there,” said Emma Andrews, Interim CEO, in a press release. “This was my first full quarter as interim CEO, so I spent time visiting retailers in Alberta to support our Company’s launch. It was gratifying to see first-hand how the products are gaining immediate traction and how the value proposition is resonating early on with retailers, particularly with our softgel SKUs,”

As of December 31, 2023, Nextleaf Solutions had working capital of $1,033,496 (up from $780,408 as of September 30, 2023).

Cronos shows declining losses, increased cost of sales in 2023

Written by Staff on February 29, 2024. Posted in Business, Cannabis News, Financials.

Cronos Group Inc. says it has improved its cash flow in 2023 due to lower operating expenses and increased exposure to international markets.

Cronos, the Canadian company behind cannabis brands like Peace Naturals, shared its Q4 2023 financial results on February 29, reporting $23.9 million in consolidated net revenue for the last three months of 2023 and $87.2 million in sales for the year ending 2023.

This represents a slight increase from $22 million in consolidated net revenue in Q4 2022 and $86.7 million in sales for fiscal year 2022.

However, this net revenue couldn’t cover the costs of doing business for Cronos, which reported $45 million in net losses in Q4 2023, a decline from $76.1 million in losses in the same quarter for 2022. Annual losses were also down, with Cronos reporting $70.4 million in losses for 2023 compared to nearly $155.2 million in 2022.

The cost of sales increased from $71.3 million in 2022 to $74.5 million in 2023.

Cronos says the increase in its year-over-year sales was largely due to higher sales in Canada and exports to Germany and Australia. These improvements were somewhat offset by lower cannabis flower sales in Israel, which it blames on the Israel-Hamas War and increasing competition. Israel has also pushed back against Canadian cannabis producers it accused of “dumping” product into its market, saying this is undermining local growers.

In Q3 2023, Cronos also announced plans to wind down operations at its Winnipeg, Manitoba facility (“Cronos Fermentation”). In the second quarter of 2023, Cronos exited its United States hemp-derived CBD operations.

“In 2023, we significantly improved our cash flow from operations driven primarily by operating expense savings, while simultaneously expanding our portfolio of borderless products in Canada and Israel and entering two international markets, Germany and Australia,” said Mike Gorenstein, Chairman, President, and CEO of Cronos.

Cronos sells the brands Spinach, Lord Jones, Peace Naturals, and Lit (Israel).

Cronos enters into deal to sell, leaseback Peace Naturals Campus

November 27, 2023

Cronos closing cannabis fermentation facility in Winnipeg, Manitoba

August 8, 2023

Israel opens “anti-dumping” investigation into cannabis imports from Canada

January 26, 2024

Avant Brands brings in $30 million in revenue with a $5 million loss

Written by Staff on February 29, 2024. Posted in British Columbia, Business, Cannabis News, Financials, Producers.

Kelowna-based Avant Brands Inc. announced its audited financial results for the fiscal year ended November 30, 2023.

The company behind the BLK MKT brand brought in record gross revenue of $30.2 million in the year leading up to November 30, 2023, but still recorded a net loss of almost $5.2 million. Net loss from operations alone was $1.5 million in the same period, compared to $8.5 million in the previous year.

This represents a year-over-year increase in gross revenue compared to 2022 and a decline in net loss of $6.6 million for the year leading up to November 30, 2022.

In the most recent report, net revenue was $26.3 million from the sale of 7,105 kg of cannabis, while the cost of sales was nearly $17.3 million. The company paid $3.8 million in federal excise taxes.

The increase in net sales is attributed to a $1.4 million sales growth in recreational revenue and a $5 million sales growth in international export/wholesale.

Recreational cannabis sales accounted for 60% of net sales during the year ended November 30, 2023, with export and B2B sales comprising 39% of total revenue. Avant has exported to Israel, Australia, and Europe. Companies exporting to Israel have faced recent pushback from the industry and government there. Avant says it completed “significant” sales to Israel and Australia in the year ending November 2023, and it is preparing to fulfil further orders with existing export clients, as well as being in discussions with new potential clients.

While Avant undertakes some B2B sales, it says its primary focus is on selling flower it produces in-house. It sells an array of its products like BLK MKT, Tenzo, Flowr, Cognōscente, and Treehugger brands into markets across Canada, including BC, Saskatchewan, Manitoba, Ontario, Quebec, and Atlantic Canada. It sells products in Alberta through its online medical cannabis portal (www.greentecmedical.ca).

Avant operates six production facilities in BC, Alberta, and Ontario, including four in BC.

The overall weighted average selling price of cannabis sold decreased by 25% to $4.23 per gram. Non-medical cannabis sales averaged $6.31 a gram for the year ended November 30, 2023, compared to $7.18 per gram in the comparative period of the prior year.

Avant says the decrease in the average selling price is primarily due to price compression in the industry combined with product sales and a $300,000 sales provision.

Like many other cannabis companies, the cost of operations increased for Avant compared to the same period in 2022. Operating expenses increased by $1.8 million, or 26%, over the prior year’s comparative period. Avant says this is due to higher regulatory fees, performance bonuses, and estimated professional and audit fees.

The cannabis producer says it has a yield-per-plant of 63-99 grams of flower and 10-32 grams of trim. It says the fair value of its cannabis is $3.69 per gram of flower and $0.2 per gram of trim.

Since its inception, the Company has incurred losses and has an accumulated deficit of $65,913 as of November 30, 2023, which has been funded primarily by the issuance of equity, convertible debentures, secured credit facilities, and advances from related parties.

“There is a material uncertainty related to these conditions that may cast significant doubt on the Company’s ability to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business,” it reports in its financial statement. “The Company’s ability to continue as a going concern depends upon its ability to generate profitable operations or raise adequate financing in the future.”

What’s the big stink? Rural Okanagan LP addresses odour concerns

January 20, 2023

GTEC Holdings

March 25, 2020

Cannabis companies have numerous ways to market their products

December 10, 2020

Household spending on legal cannabis increases while illegal decreases

Written by Staff on February 29, 2024. Posted in Business, Cannabis News, Retail.

Household spending on cannabis in Canada declined in the last two years following an increase in the first three years of legalization.

The newest figures from Statistics Canada show the annual percent change in real household final consumption expenditure, with that percentage declining from a 2021 high of 0.126% to 0.056% in 2022 and 0.039% in 2023.

The decline in household spending on cannabis is largely driven by a consistent decline in spending on products from the unlicensed cannabis market. Meanwhile, spending on cannabis from the licensed sector has been increasing on an annual basis, with some quarterly fluctuations.

The most recent quarter reported, Q4 2023, showed a slight decline in this category from a previous high watermark of $1.5 million, but is still up year-over-year.

Household expenditures on cannabis from the unlicensed sector were at a low of $465,000 in Q4 2023, down from about $1.2 million in Q4 2018.

Expenditures of cannabis for medical purposes have also declined, from a high watermark of $155,000 in Q1 2019 to $82,000 in Q4 2023. There is no distinction between sources in this category (elicit or illicit).

“Household final consumption expenditure” refers to the total amount a household spends on goods and services purchased for final use by the household.

In 2021, the average annual spending on goods and services per household in Canada was $67,126, with a median net worth of Canadian families of $329,900 as of 2019.

Based on current prices, spending on cannabis products for non-medical use from licensed cannabis producers (legal market) fared slightly better than cannabis products for non-medical use purchased from the unlicensed market.

Stats Canada bases their data for the illicit market on information provided by Canadians about cannabis use.

Increased cost of production adds to growing concerns for Greenway

Written by Sarah Clark on February 29, 2024. Posted in Business, Cannabis News, Ontario, Producers.

Greenway Greenhouse Cannabis Corporation’s nearly $1.4 million in revenue in the last three months of 2023 still saw the Ontario cannabis producer in the red $1.6 million, according to their most recent quarterly report.

This is an improvement from the previous quarter when the company reported a net loss of $576,461. For the first three quarters of 2023, the company reported a comprehensive loss of nearly $3.4 million compared to just over $1 million for the same period in 2022.

Gross profits for the last three months of 2023 were also down compared to the same period in 2022, from $234,849 to $1.9 million.

The losses are attributed to increased production costs like labour and utilities, as well as a lower price per gram of cannabis. The cost of goods sold in the third quarter of 2023 was nearly $1.2 million compared to $508 thousand in the previous quarter.

The company says it has insufficient cash to pay creditors for current working capital obligations and operations for the next twelve months, referencing “significant doubt about the Company’s ability to continue.”

In addition, its quarterly report cautions that the company’s “ability to continue as a going concern is dependent upon its ability to obtain sufficient additional funding and to generate sufficient revenues and positive cash flows from its operating activities to meet its obligations and fund its planned investments and operations.”

The concerns are not new and have been mentioned in previous quarterly reports.

Greenway is sitting on more than $2 million in dried cannabis, compared to about $1.5 million in Q1 2023.

It operates a cannabis nursery facility in Kingsville, Ontario, and a flowering and processing facility in Leamington, Ontario.

It reports an average cash cost per gram of $0.75 for finished goods inventory on hand as of December 31, 2023. The company’s biological assets were comprised of 11,026 plants (March 31, 2023 – 6,519), which were, on average, 59% (March 31, 2023 – 43%) complete, and it was expected that they would yield approximately 1,364 kg (March 31, 2023 – 1,193 kg) of dry flower.

Biological assets refer to the value assigned to pre-harvest cannabis plants still in the process of growing, relating to expected yield.

*Inside Greenway’s cannabis nursery. Image via Facebook.*

Ontario cannabis store finds creative way to get around social media restrictions

Written by David Brown on February 27, 2024. Posted in Business, Cannabis News, Ontario, Retail.

Ontario cannabis retailer Stok’d Cannabis has released a series of ads it says circumvent social media platforms’ restrictions on cannabis advertisements by promoting neighbouring brands.

The retailer, with five locations in Ontario, collaborated with several local businesses to mention the store in relation to their own business, often employing cheeky puns throughout the ad.

The ads included businesses like a bookstore, an electrician, a nail shop, and a sandwich shop, all located near or affiliated with the cannabis store.

The campaign ran in January as sponsored posts on several platforms, a transit shelter, and local radio.

Lisa Bigioni, co-founder and CEO of Stok’d, says they are still collecting data from the campaign to see how effective it was, but notes she has already seen increased foot traffic, and customers have told her they have seen the ads.

She says the ads all went out on accounts connected to the local businesses, not their account.

She explains that the biggest challenge they were seeking to circumvent is not federal ad restrictions but enforcement of social media policies.

“I think that the Health Canada restrictions I understand, and I think we did our part to not go against those restrictions. It’s the social media challenges that we have that I think was the bigger win. The ads were put out almost a month ago, and no one caught that there was this cheeky innuendo about a cannabis store.

“And we know that social media accounts shut down cannabis advertising as soon as they see it and none of them caught it, and I think that was the bigger win.”

Erin Kawalecki, partner and chief creative officer at Angry Butterfly, who partnered with Stok’d on the project, says that the local businesses appreciated the approach.

“While our goal was to promote Stok’d, it was also important to be authentic to the different
businesses we were partnering with,” says Kawalecki. “Finding that common language that promoted both was key, and a lot of fun, too.”

“The trickiest part was while we thought this could work, we weren’t entirely sure until the
ads went live and passed through all the different filters,” adds Bernice Lo, VP, Executive
Creative Director, Angry Butterfly, “We had plan B and C ready to go, just in case.”

The geo-targeted, 21+ campaign launched last month across multiple channels including
paid/sponsored posts and prerolls, evening radio, and select TSAs, but Angry Butterfly says the story was kept out of the ad industry press until the media finished its run to ensure the news didn’t reach the likes of Meta, Google, etc. to avoid pushback.

https://vimeo.com/913526553/a238e66c5d?share=copy

https://vimeo.com/913526921/f367776517?share=copy

https://vimeo.com/913526962/3f084f9760?share=copy

We did a thing! Advertising in the cannabis space is hard, unless you have ⁦@BrentChoi⁩ and team at Angry Butterfly on your side. And fabulous neighbours, of course! https://t.co/CAvaxJEHNd
— stokdcannabis (@stokdcannabis) February 27, 2024

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House of Commons Standing Committee on Finance calling for changes to cannabis tax

Written by David Brown on February 27, 2024. Posted in Business, Cannabis News, Government.

The federal House of Commons Standing Committee on Finance is recommending a change to how cannabis excise taxes are applied.

The change calls for moving from a rate of $1 per gram or 10% of a producer’s selling price (whichever is higher) to a 10% ad valorem rate. This rate currently applies to dried or fresh cannabis, cannabis plants and cannabis plant seeds.

Tax on cannabis extracts, edibles and topicals is a flat rate of $0.01 per milligram of the total THC of the cannabis product. These products would not be subject to an ad valorem duty rate, unlike dried cannabis, fresh cannabis, cannabis plants and cannabis plant seeds.

The committee also calls for investments for First Nations engagement in the Cannabis Act review, with the Assembly of First Nations calling for $50 million over the next five years.

The recommendations from the House of Commons Standing Committee on Finance (FINA) are part of the recent Report of the Standing Committee on Finance. The report is based on meetings launched in June 2023 in anticipation of the 2024 budget due in April.

The Committee also held pre-budget hearings in the fall between September 21, 2023 and November 17, 2023. In addition to meetings in Ottawa, the committee travelled across Canada to hear from a range of Canadians.

The Committee also invited other House of Commons standing committees for the purpose of holding meetings and providing recommendations for its pre-budget consultations.

The committee heard nearly 170 presentations and received over 850 written briefs, the largest number ever received for that process.

You can read that report here.

The cannabis industry has been calling for reforms to the federal excise tax rate for years now, arguing it ends up being a tax rate of as much as 30 percent or more of their revenue.

The most recent figures show the federal government has collected more than $2.5 billion in cannabis excise tax. Nearly $2 billion of tax has gone back to the provinces, which collected 75% of the excise, while more than $566 million went to the federal government.

Also, the Canada Revenue Agency is owed more than $200 million in unpaid taxes.

“As at March 31, 2023, the total amount receivable for Cannabis duties is $221,238,299,” Sylvie Branch, a CRA spokesperson, told StratCann earlier this year. “This outstanding balance represents funds owed to the CRA and is not broken by federal, provincial, and territorial components.”

A recent report also says that the CRA is now calling on provinces to garnish payments to cannabis producers who have not paid their excise taxes.

In a statement to the committee last October, then-President and Chief Executive Officer, Cannabis Council of Canada’s (C3) George Smitherman told the committee the issue with cannabis taxes was dire.

“We need adjustments to the excise tax formula and to costly matters about how the formula operates. We need the elimination of a special tax of 2.3% in the name of a regulatory fee charged by Health Canada that neither alcohol nor tobacco pay. This is about $75 million off the bottom line of companies.”

Smitherman also called for the elimination of Health Canada’s 2.3% regulatory fees on cannabis products, as well. He recently stepped down from his role with C3.

Despite ongoing lobbying efforts, Budget 2023 did not include any changes to these taxes.

Budget 2022 called for a more streamlined approach to the cannabis industry, which included the creation of a “Cannabis Strategy Table” led by the Department of Innovation, Science and Economic Development (ISED), with the goal of providing an opportunity for the federal government to hear from industry leaders and identify ways to work together to grow the legal cannabis sector in Canada.

ISED announced a cannabis industry “forum” recently for those purposes.

Health Canada’s quarterly financial report for the quarter ended December 31, 2023 calls for $131.1 million for the renewal of the federal framework for the legalization and regulation of cannabis in Canada.

Canada assessed more than $500 million in excise taxes for fiscal year 2020-2021

February 13, 2023

Campaign for cannabis excise tax reform releases policy white paper

May 27, 2022

Cannabis industry disappointed by lack of tax reform in Budget 2023

March 28, 2023

Wayne Patrick Consumer Products pursuing a Sale, Refinancing and Investment Solicitation Process due to insolvency

Written by Staff on February 26, 2024. Posted in Business, Cannabis News, Ontario, Producers.

Two Ontario-based cannabis companies are pursuing a Sale, Refinancing and Investment Solicitation Process (SISP) through court due to low cash flow.

Hamilton, Ontario-based cannabis companies Wayne Patrick Consumer Products Ltd. and WPCP Ltd. had their Notice of Intent proceedings continued under the CCAA on February 20.

In a court filing, the companies’ representative says the applicants are insolvent. They are balance sheet insolvent, unable to meet their liabilities as they become due, and are in a liquidity crisis.

The Applicants produce and distribute cannabis products in Ontario, Saskatchewan, Yukon, Northwest Territories, Nunavut, Newfoundland and Quebec. Both of their operations are run in a leased facility located in Ontario.

In their last six months, both companies have suffered losses due to high staff turnover, increased enforcement by the CRA, declining investor interest, higher interest rates, and decreased demand for cannabis products in a highly saturated and competitive market.

The company also says it has had to sell some of its inventory at a loss.

Wayne Patrick Ltd. owns 100% of Wayne Patrick Consumer Products Ltd. Wayne Patrick Ltd. is a private corporation incorporated under the OBCA. Its head office is also in Toronto.

On January 15, 2024, the Canada Revenue Agency (CRA) gave notice to WPCP that the CRA would not be renewing its license under the Excise Act when it expired on February 7, 2024.

A few weeks later, on February 7, 2024, two of the applicants, Wayne Patrick Ltd. and WPCP, each filed an urgent notice of intention to make a proposal under the Bankruptcy and Insolvency Act to prevent, among other things, the termination of the Excise License by CRA.

The Applicants have consolidated debt in excess of $5 million, including owing approximately $650,000 to CRA and $37,000 to Health Canada for annual licensing fees. They also have unpaid trade debt and other unsecured debt of approximately $2 million. The Applicants’ have missed the past two payrolls, and approximately $42,000 of payroll is in arrears.

In 2020, Wayne Patrick Ltd. acquired Beleave Kannabis Corp. through Beleave’s own CCAA proceeding, the facility that Wayne Patrick operated out of. It is about 10,000 sq ft, with multiple production rooms, including a hash production room, multi-use rooms, and a large vault for storage of finished goods. Their Health Canada licence is set to expire on May 11, 2028.

Community Savings rolls out pre-approved credit cards for cannabis members

Written by Staff on February 26, 2024. Posted in British Columbia, Business, Cannabis News.

Community Savings, a BC-based credit union, has announced the launch of pre-approved business credit cards for its cannabis membership. This industry-first offer finally gives cannabis businesses in BC guaranteed access to credit cards, a long overdue change in the financial services available for the industry.

Typically, credit cards are a standard payment solution available to any small business, but obtaining a business credit card for cannabis businesses has – until now – been a highly discriminatory process. Many cannabis businesses are rejected by credit card providers solely because of their legal business in cannabis. Community Savings has successfully campaigned for policy change to ensure cannabis businesses have credit card access. This is a significant milestone, changing the way access to basic financial services is provided to cannabis businesses in BC.

Cannabis businesses have been forced to operate without a fully functioning banking system for too long. The industry was legalized five years ago, but big banks have ignored this sector’s needs and credit unions like Community Savings have stepped in.
Mike Schilling, President and CEO of Community Savings Credit Union

Community Savings offers three business credit cards with a range of benefits. The No Fee Cash Back Visa allows you to earn cash back for the purchases your business regularly makes. The Visa Low Rate Business Card features a low annual fee and low interest rate, and the Visa Infinite Business Card offers valuable rewards and first class privileges with a competitive annual fee and a limited time 5,000 welcome bonus points offer. Other card benefits may include zero liability fraud protection, purchase protection and extended warranty, trip cancellation and interruption insurance, as well as lost or delayed baggage protection.

Commenting on the launch, Mike Schilling, President and CEO of Community Savings Credit Union, said, “Cannabis businesses have been forced to operate without a fully functioning banking system for too long. The industry was legalized five years ago, but big banks have ignored this sector’s needs and credit unions like Community Savings have stepped in.

Credit cards are an essential financial product for businesses. Community Savings is proud to now pre-approve every one of our cannabis members to ensure access to this basic payment product. Every day, we work with our members to help grow the cannabis industry, starting with access to the right financial services.”

Five years after legalization, access to basic financial services is just one barrier facing Canada’s legal cannabis industry. Notably, cannabis growers and producers pay federal taxes of a staggering +30% of top-line revenue, in addition to overly burdensome regulatory compliance costs experienced by all cannabis businesses. Despite the challenges, the cannabis industry has grown about 10% year-on-year since legalization and supports the jobs of nearly 100,000 Canadians. With the right legislative framework, the industry has an opportunity to grow to increase its economic competitiveness and meet global demand.

As a pro-cannabis business financial institution, Community Savings is the largest provider of banking services to BC’s cannabis sector of growers, processors, retailers and ancillary businesses.

This month, the credit union, together with We Can Capital Inc. launched another industry-first innovative invoice factoring program crafted for British Columbia’s licensed cannabis producers (LPs). This initiative gives LPs access to affordable and readily available working capital to support growth. More information on Community Savings’ affordable invoice factoring for cannabis licensed producers in BC can be found here.

Community Savings Credit Union announces affordable invoice factoring for cannabis licensed producers

February 22, 2024

BC credit union receives award for cannabis campaign

November 21, 2022

Cannabis businesses continue to face barriers with Canadian banks

February 1, 2021

Canadian Cannabis Exchange facilitates sale of Ogen production facility and equipment

Written by Staff on February 26, 2024. Posted in Alberta, Business, Cannabis News, Producers.

SOLICITATION FOR OFFERS

Canadian Cannabis Exchange Ltd. (“CCX”), by and through the court appointed Receiver, Alvarez & Marsal Canada Inc. (“A&M”), announces the exclusive sale of Ogen Ltd. and Ogen Holdings Ltd.’s (collectively, “Ogen”) property, which includes a production facility and equipment. A&M has selected the CCX to act as marketing agent to assist in carrying out a court-approved sale and investment solicitation process (the “SISP”). The SISP has been designed to solicit interest in, and opportunities for, a purchase of, or investment in all or part of Ogen’s property.

Sale Package Information:

The Ogen facility is a 57,300 sq. foot, Health Canada licensed production facility on a 2.32-acre lot located at 5430 30^th Street SE, Calgary. The facility is newly renovated and equipped with state-of-the-art HVAC, mechanical, lighting, and security systems. Highlights of the facility include over 30 individually secured and environmentally controlled production areas, along with office space and a loading dock. Opportunity for repositioning is created through the available 15,000 kVa incoming power capacity and a convenient location only 15 minutes from the downtown core within Calgary’s Foothills Industrial Park.

In addition to the Ogen facility, there is a diverse range of cannabis production, processing, and packaging equipment. The complete list of equipment is supported by reference photographs categorized by function into saleable buckets.

Ogen’s Health Canada license, under which the production facility operates, can also be transferred as a component of the sale. This license authorizes the holder to conduct activities under both Standard Cultivation and Standard Processing subclasses subject to the conditions stated in the Health Canada Cannabis Act and Cannabis Regulations.

Information regarding the sale package can be found in the Opportunity Summary.

Interested parties who wish to receive additional materials can do so by accessing an exclusively shared data room. Parties are required to execute a Confidentiality Agreement for Data Room Access to gain access, which can be obtained by following the link below or by contacting CCX directly ([email protected]; 587-877-4687).

About Ogen:

Ogen is a pioneering name in the cannabis industry, dedicated to producing premium, high-quality products that redefine the standards of excellence. Ogen filed a Notice of Intention to Make a Proposal on June 26, 2023 pursuant to Section 50.4(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended. On November 3, 2023, A&M was appointed the receiver and manager of Ogen and its current and future assets, undertakings and properties other than certain excluded assets.

About CCX:

CCX serves as a wholesale distribution channel in the legal Canadian cannabis market, connecting Licensed Producers with buyers and sellers, offering price transparency and standardized supply contract terms. The CCX platform has facilitated transactions exceeding 100,000 kg of flower and extracts with over 600 Canadian Licensed Producers as collaborators.

High taxes, regulatory fees, low margins meant the end of the road for OGEN

November 9, 2023

OGEN latest Alberta cannabis company to close

November 7, 2023

Week in Weed – February 24, 2024

Written by Staff on February 24, 2024. Posted in Business, Cannabis News.

Several interesting, unique stories came from StratCann this past week. David Brown published an in-depth look at the current state of the hemp industry in Canada, and the challenges it faces in scaling up to meet demands.

A new study from researchers at the University of Waterloo and the University of Toronto says retail cannabis stores in Canada are evenly distributed across different neighbourhood types.

ISED’s “Cannabis Industry Forum” was finally formally announced this week. While some outlets reported this was the “launch” of the forum, this is simply the first formal announcement of a list of names that have been floating around for about a year now.

A Manitoba cannabis brand is taking a former partner to court and the SQDC says it is pulling back operating hours at twelve branches.

BC’s Community Savings Credit Union announced new affordable invoice factoring for cannabis licensed producers.

A Kelowna cannabis store received a fine of $7,000 for failing to check ID, an expensive lesson. Burb Cannabis was finally able to open its new store near UBC after a nearly three-year wait and New Brunswick’s eighth private cannabis store opens in Hampton

We also shared our newest from our profile series, this time speaking with Kootenay Cultivar about their approach to small batch craft cannabis.

In other news…

Canadian cannabis company Mendo Medical is bringing the California-based Beard Bros Pharms brand to the Canadian market. Beard Bros products will be available in early March.

Simply Solventless Concentrates says it is set to launch six third-party branded products in Alberta and one in Ontario.

First launched in Ontario, HYTN Innovations Inc. announced the expansion of its 100 mg THC Nano Shot Citrus to the British Columbia and Alberta markets. Each Nano Shot bottle delivers 100 mg of nano-emulsified THC in accurate 0.05 mL increments.

Klonetics announced they have successfully exported their cannabis products to Israel and Australia.

Canopy Growth Corporation announced the introduction of five new pre-roll products across the Company’s adult-use cannabis portfolio from brands 7ACRES and Hiway.

Aurora Cannabis Inc. announced that Simona King, a former executive of Bristol Myers-Squibb, a leading multinational pharmaceutical company, has been appointed as Chief Financial Officer of the Company, effective February 21, 2024.

Researchers and health experts are expressing concern at the potential for high-potency THC products to have harmful health effects, particularly among young men, reports CBC. The Schizophrenia Society of Canada recently launched the Cannabis and Psychosis Project, an online resource to help address some of these concerns. Hospital visits for cannabis-induced psychosis increased by 220% in Ontario between 2014 and 2021.

BC teens are trying cannabis, alcohol, or tobacco at the lowest rate in 30 years, according to a new survey from the McCreary Centre Society, a Vancouver-based non-profit that does research on youth health. The Society will publish an in-depth look at youth cannabis use in early 2025.

From the report: “In 2023, 22% of youth had ever used cannabis, which was a decrease from previous survey years (e.g., 25% in 2018, 30% in 2008, and 41% in 1998). Youth who had used cannabis had most commonly first tried it at age 14 or 15. Compared to 5 years earlier, there was a slight increase in youth who used cannabis for the first time at age 12 or younger (15% vs. 14% in 2018), and a decrease in the percentage who waited until they were 15 or older to try it (44% vs. 47% in 2018).”

Cannabis industry event Token Tuesday came back to Winnipeg this past week, with its largest show yet, according to many who attended.

Manitoba NDP’s Minister of Sport, Culture, Heritage and Tourism, Glen Simar, says the government will continue to take a close look at the province’s retail model, which includes the possibility of government run stores.

Cannabis NB will bring its Cannabis Expo to the Fredericton Capital Exhibition Centre on March 16. The Cannabis Expo is a cannabis education tradeshow that’s expertly crafted for 19+ New Brunswickers who consume cannabis, as well as those who are just curious about the industry and these products.

International cannabis

One of the biggest cannabis news stories this week was when Germany passed a law allowing individuals and voluntary associations to grow and hold limited quantities of cannabis. Later this year, the law will allow for cannabis cultivation clubs, similar to Uruguay, as well as personal cultivation of up to three plants for private consumption, and the possession of up to 25 grams of cannabis.

New Brunswick’s eighth private cannabis store opens in Hampton

Written by Staff on February 23, 2024. Posted in Business, Cannabis News, Government, New Brunswick, Retail.

New Brunswick recently announced the eighth private retail cannabis store in the province, located in Hampton, about a 30-minute drive from Saint John.

The provincial government first announced its plans for around a dozen new stores in 2021. It began vetting for ten new private cannabis stores following a tender process that ended in October 2022.

The newest store is the second Cannabis Xpress location in New Brunswick. The retail chain was also the first private cannabis store to open in the province in June 2023. Cannabis Xpress currently has 14 locations in Ontario.

*Local MLA Gary Crossman with Cannabis Xpress owner Chris Jones*

“We are excited to finally open our newest store in Hampton,” says Cannabis Xpress owner Chris Jones. “The town has been very welcoming, as well as the residents who are excited that we are open so that they have a more reliable, convenient place to buy their legal cannabis products.

Jones tells StratCann that the new location’s grand opening was the biggest store opening in the franchise’s history, with the highest number of sales and customers. He also says Cannabis Xpress is the largest private retailer in New Brunswick by revenue, and he expects to open a third location in St. Andrews this spring.

“The private model is very successful and we hope they allow us to continue expanding since it is easier for CNB to work with a group that has scale and can continue to grow versus new operators. The model and working with Cannabis NB is much easier than Ontario, they are very supportive of the growth and success of our business—great people.”

In the agency’s most recent quarterly report in January, total sales were $23.9 million, an increase of 10.5 per cent compared to the same period last year. Net income for the quarter was $6.0 million, 26.5 per cent above the prior year’s third quarter net income of $4.8 million.

New Brunswick has taken some relatively unique approaches to cannabis retail since opening its public-only model in 2018. In addition to being one of only two provinces with a mixed public and private retail mode (BC is the other), it is one of only three provinces (along with Ontario and BC) to have a formal farmgate retail licensing system in place.

There are currently six cannabis producers in New Brunswick now licensed to allow on-site sales direct to consumers, including the recent addition of a cannabis nursery.

Cannabis NB will bring its Cannabis Expo to the Fredericton Capital Exhibition Centre on March 16. The Cannabis Expo is a cannabis education trade show that’s expertly crafted for 19+ New Brunswickers who consume cannabis, as well as those who are just curious about the industry and these products.

In it’s 2024-2025 Strategic Plan, the provincial cannabis agency also says they are exploring possible options for “on-site consumption opportunities” that can increase legal access and “meet the needs of current and potential customers.”

Bill tabled in New Brunswick to allow private cannabis stores

November 30, 2021

Burb opens store near UBC after long wait

Written by Sarah Clark on February 23, 2024. Posted in British Columbia, Business, Cannabis News, Retail.

Following a nearly three-year wait, Burb Cannabis was finally able to open its new location near the University of British Columbia on Friday, February 23.

The new store, at 5784 University Blvd., is located just outside campus boundaries but represents the closest cannabis store to the University.

The application for the location had received pushback from some in the community who argued such a store didn’t fit the neighbourhood and would put students at risk. However, a Metro Vancouver committee voted to approve the application earlier this month, sending it to the MVRD Board for the final decision.

BC Premier David Eby, when he was still the BC Attorney General, was among those who spoke out against the location at the time.

However, the UBC student union was supportive, with Alma Mater Society president Eshana Bhangu noting that there are multiple liquor stores close to campus that face no such community concerns.

A small handful of local media organizations attended the grand opening, with the Vancouver Sun reporting that John Kaye, co-founder and CEO of Burb, welcomed a gathered crowd, saying, “Let’s cut the ribbon, let’s get high.”

This is the final store Burb can currently open in BC. The province has a cap of eight stores per owner, although it is currently considering raising that to some degree.

Kaye tells StratCann he’s supportive of raising the cap, especially since the BC government’s own BC Cannabis Stores are not capped in the same way.

“We’re very supportive of raising the current eight store cap in BC, and feel the new cap should be 16. There are 36 BC Cannabis Stores. How is that fair?”

The new store will operate Monday through Saturday from 9am to 11pm, and Sunday from 10am to 10pm.

“Our focus is on offering the best menu possible, with exclusive products you’ll only find at Burb, such the Jellee hand-rolled hash-holes, Book Club Exclusives, and limited run merchandise and accessories,” stated Peter Pittson, general manager at Burb UBC and Co-Founder of Book Club, a cannabis community and products company.

Burb Cannabis receives final approval from MVRD for store near UBC

June 27, 2022

Proposed cannabis store near UBC receives approval from committee

June 9, 2022

Surrey Board of Trade says its time for cannabis stores in the city

March 1, 2023

Community Savings Credit Union announces affordable invoice factoring for cannabis licensed producers

Written by Staff on February 22, 2024. Posted in British Columbia, Business, Cannabis News, Producers.

A BC-based credit union is launching a new invoice factoring program intended to meet the needs of British Columbia’s federally licensed cannabis producers.

Community Savings Credit Union’s new program aims to help provide BC cannabis producers with access to affordable and readily available working capital to support growth.

The “affordable invoice factoring program” will enable BC LPs to receive payments from their BC and Ontario government distributor invoices early. Waiting several weeks, or in some cases, months, for these payments can be a significant challenge for cannabis producers, especially smaller producers with thin margins and little extra cash flow.

Ensuring these producers can receive payments from the BC and Ontario distributors gives companies more leverage in the market and is a more affordable alternative to current factoring options available, says Community Savings in a press release.

Access to banking has been an ongoing challenge for the cannabis industry in Canada, with all sorts of companies that work in or serve the cannabis industry often finding themselves unable to access even a basic account, much less institutional lending. Community Savings Credit Union is one of a handful of organizations that have worked to create solutions for cannabis companies that other institutions turned away. They even recently launched an account specifically for micro-cannabis licence holders.

Mike Schilling, President and CEO of Community Savings Credit Union, says: “As a pro-cannabis credit union, we are proud to be the only industry-owned solution to give BC LPs affordable access to working capital from their provincial receivables. We have the ability to purchase every BC and OCS invoice for every BC LP today, helping BC cannabis producers with continued growth.”

Community Savings partnered with We Can Capital, which provides financial assistance for the cannabis industry, on the project.

Joshua Reynolds, partnerships director at We Can, says this new factoring program is a way to help out BC’s storied cannabis industry.

“In British Columbia, we are fortunate to have a long-standing and renowned cannabis market. However, cannabis businesses have not always had access to the full range of financial tools necessary for success. This relationship with Community Savings will redefine the role of factoring and demonstrate its value as an exceptional growth tool. We take pride in offering highly affordable invoice factoring that is industry-driven, providing BC LPs with access to their own working capital to maintain their status as leaders in Canada.”

One example Community Savings provides of how factoring can work is of a BC cannabis licensed producer selling $150,000 worth of pre-rolls to the Ontario Cannabis Store (OCS) with a maximum of 60-day payment terms.

“We know that sooner than 60 days payment can and does happen, but the consistency is unpredictable and not healthy for operational cash flow,” explains the company in a press release. “One week later, the LP received an additional order for $100,000 worth of pre-rolls. In order to fulfil that product order quickly, the LP sells the already-delivered OCS invoice to Community Savings Credit Union and We Can Capital for up to 85% advance against this $150,000 receivable for much-needed working capital, with a same-day turnaround on funds.

“The LP can now facilitate the production of the new order without delay. This instant cash can also allow the ability to negotiate better terms with suppliers that offer a discount for early cash payments. Without invoice factoring from Community Savings and We Can Capital, this BC LP would previously have needed to wait for the original payment to start an additional production run.”

Dayna Lange, the CFO of Tricanna Industries and Community Savings Credit Union cannabis member, says the program will help cannabis producers like Tricanna build better supply chain relationships.

“Having instant access to our own money has been a game-changer for the way we approach the continued growth and reputation of our business,” says Lange. “With a one-day funding and settlement model, we are able to continue to increase sales and maintain strong relationships with our suppliers. This is long overdue, and we are very encouraged to see mainstream financial services supporting BC cannabis.”

Cannabis producers in BC interested in learning more about the program can find more information here.

Cannabis Industry Forum finally formally announced

Written by Staff on February 21, 2024. Posted in Business, Cannabis News, Government.

Innovation, Science and Economic Development Canada (ISED) has finally formally announced its Cannabis Industry Forum.

The long-awaited announcement, (archived here) released on Feb 21, 2024 but backdated to February 16, officially provides the names of a handful of industry executives, the majority from publicly held corporations.

The group was first formed in 2023 but the official list of names was not shared previously with the public. The members have also engaged with Morris Rosenberg, Chair of the expert panel leading the legislative review of the Cannabis Act which is expected to be tabled in the House of Commons in the coming months.

Hugo Alves, CEO, Founder and Director of Auxly Cannabis Group Inc., chairs the Forum. The membership also includes:

Philippe Dépault, President and Founder, Québec Craft Cannabis Inc.
Taylor Giovannini, President and Founder, Oceanic Releaf Inc.
Beena Goldenberg, CEO, Organigram Holdings Inc.
Raj Grover, Founder, President and CEO, High Tide Inc.
David Klein, CEO, Canopy Growth Corporation
Miguel Martin, CEO, Aurora Cannabis Inc.
Rosy Mondin, President of Soma Labs Scientific Inc. and Director of Cannaworld Ventures Inc.
Tyler Robson, President of Cannabis, SNDL Inc.

François-Philippe Champagne, the Minister of Innovation, Science and Industry says the forum represents a chance for industry to weigh in on regulatory challenges.

“For Canada to be a leader in this global economy, we require the ability to adapt to new industries and sectors that benefit Canadians. The Cannabis Industry Forum helps create innovative solutions to barriers that exist in this industry. Through active collaboration, Canada is working with industry leaders to become an innovator and leader in this changing economy.”

Featured image of Rosebud Farms in BC

The SQDC pulls back on operating hours of twelve branches

Written by David Brown on February 21, 2024. Posted in Business, Cannabis News, Government, Quebec, Retail.

The Société québécoise du cannabis (SQDC) says it will be adjusting the closing time of a dozen locations across the province.

Beginning February 25, 2024, the twelve stores listed below will close at 6:00 pm from Monday to Wednesday rather than 9:00 pm. The change is being implemented due to lower than average traffic at these locations.

The SQDC says the new, revised schedule will be similar to that in effect in several neighbouring businesses.

The targeted branches’ operating hours will now be:

Monday to Wednesday from 10 am to 6 pm;
Thursday and Friday from 10 am to 9 pm; and
Saturday and Sunday from 10 am to 5 pm.

The 12 stores:

Aylmer
The Tuque
The fall
Magog
Mont Tremblant
Rimouski
Wolf River
Rouyn-Noranda
Sainte-Agathe-des-Monts
Shawinigan (90-minute delivery available)
Valleyfield
Vaudreuil-Dorion

Earlier this month, SQDC also announced they plan to close one location in Montreal. A termination notice was sent to members of the Canadian Union of Public Employees (CUPE), which represents the majority of union members in SQDC branches, and says the end of employment will be March 23, providing time to fully close the store down.

The SQDC currently has 98 locations across Quebec. This will be the first store to close in the province. In an interview with StratCann in 2023, the then-president and CEO of the SQDC said the province was shifting away from approving new stores with a new focus on approving new products to attract consumers.

CUPE president David Clément told the Canadian Press at the time that he believed the store closure was retaliation against the union for a job action against several SQDC stores that recently ended.

The SQDC brought in $33 million for its third quarter of the 2023-2024 financial year, which ended December 30.

Featured image via Google Maps

A Manitoba cannabis brand is taking a former partner to court

Written by Staff on February 20, 2024. Posted in Business, Cannabis News, Manitoba, Producers.

Several Manitoba cannabis companies are at the heart of a notice of claim recently filed in a Manitoba court.

TobaGrown, Inc. and TobaRolling, Inc. filed a notice of claim in Manitoba on February 16 against the owners of Kief Cannabis Company, Ltd. and Lucky Ventures, Ltd. The defendants have 20 days to reply to the notice.

In the claim, Jesse Lavoie, owner of TobaGrown and TobaRolling, claims that the owners of two other Manitoba cannabis businesses unfairly removed him from a business partnership, causing his own companies to suffer significant financial hardship.

TobaGrown’s lawyers contend that the principal of and a shareholder in Kief Cannabis, Jesse Denton, entered into an agreement with Lavoie to allow Toba Rolling to distribute its TobaGrown and other branded cannabis products from Kief’s federally licensed facility.

The claim also contends that Lavoie and Denton entered into an agreement with another Manitoba cannabis entrepreneur, Tim Doerkson, to create the cannabis brand “Lucky Stash” for the Manitoba market.

Although the agreement between TobaGrown and Kief was fruitful, the claim alleges Denton terminated the agreement in 2023, effectively locking the company and its partner brands out of not only the Kief facility but the Manitoba market entirely. TobaGrown now claims that Kief is in breach of contract, owing Toba more than $100,000, as well as equipment and cannabis held at their facility.

It also contends that Denton violated his “fiduciary duties” to the business arrangement, causing TobaGrown to suffer damages it says he is liable for, and that both defendants acted with an intent to injure the economic interests and reputation of Lavoie and the Toba brand.

These allegations have not been proven in court. Neither Denton nor Kief responded to requests for comment.

BC micro files notice of claim alleging non-payment from processing partner

February 16, 2024

Processing the pain: Financial disputes in a tight cannabis market

October 23, 2023

Two BC cannabis companies in conflict over payment

August 19, 2023

Kelowna cannabis store fined $7,000 for failing to check ID

Written by Staff on February 19, 2024. Posted in British Columbia, Business, Cannabis News, Retail.

It was an expensive Valentine’s Day for one cannabis store in Kelowna when a judge ordered them to pay a $7,000 fine for an employee forgetting to check ID.

Kiaro Cannabis in Kelowna was subject to a targeted inspection in July 2023 in which an underage agent was sold a package of cannabis gummies. The employees on duty did not ask for the minor agent’s ID or their age.

In rendering their decision, the general manager of the BC Liquor and Cannabis Regulation Branch (LCRB) ruled that store management did not take proper actions to ensure staff were properly checking ID, leading to the decision to implement the penalty of a $7,000 fine.

For a first offence of this type, which was the case here, BC has a range of penalties, such as a licence suspension for seven to eleven days and/or a monetary penalty of $7,000-$11,000.

Kiaro operates four Cannabis retail stores in BC, including the Kelowna location, as well as Vancouver, Port Moody, and Victoria.

BC’s Minors as Agents Program (MAP) utilizes young people under the age of 19 to test if cannabis and liquor stores in BC are checking IDs. The program works with two adult agents and one minor. One adult agent first enters the store to assess if it’s safe for the minor to enter. If deemed safe, the minor then enters the store and selects a product to buy.

If the purchase is made successfully, the minor agent then returns to a car where the second adult agent awaits to collect the product. At the same time, the first adult agent communicates the action to the store employees on duty.

In this case, the Branch alleged that the minor agent purchased a five-pack of Strawberry Mango SOURZ by Spinach for about $7. The store clerk, later identified as the manager on duty, sold the product to the minor.

In their defence, representatives for Kiaro discussed the chain’s internal policies for staff training and practices for checking ID. In their ruling, the Branch determined that the store had provided evidence that it had an adequate training program and an effective ID policy for teaching all its employees when and how to request ID. However, it also ruled that there was little evidence about how the policies are being implemented in the Kelowna store where the infringement occurred.

The store noted that the manager on duty who sold the cannabis to the minor was suspended without pay for five days and had a written warning added to their file.

Ultimately, BC determined that the store had not demonstrated due diligence in ensuring its policies were being properly taught and executed in its stores. The Branch also recommended that the licensee consider introducing a pop-up question on its point of sale system where an employee must answer yes or no to “have you asked for ID?” before being able to complete a sale.

The retailer may now apply for a reconsideration of this compliance order in accordance with BC law, within 30 days.

BC is sometimes more lenient in its rulings. In a case heard in 2023, it was found that a cannabis retailer was not responsible when an employee failed to check the ID of a customer. This was because the store demonstrated that it had an extensive training program in place.

While the employee was fired for their oversight, the retailer, Eggs Canna, did not have to face a $7,000 monetary penalty or shut down for seven days.

New cannabis study shows no significant change in rates of use-disorder post-legalization

May 15, 2023

Calgary police confirm: cannabis store robbed on Boxing Day morning

December 30, 2021

Canada releases What We Heard Report on the Cannabis Act review

October 10, 2023

Week in Weed – February 17, 2024

Written by David Brown on February 17, 2024. Posted in Business, Cannabis News.

This week at StratCann, we were first to share the story of BC allowing smoking and vaping cannabis on public patios, and the announcement of several new cannabis distributors in Manitoba.

StratCann’s David Brown investigated concerns around federal sampling rules, with Health Canada confirming such actions are compliant as long as all applicable federal and provincial requirements are adhered to.

StratCann’s Tim Wilson looked into a group of Ontario’s independent cannabis retailers who are taking on predatory pricing.

We also shared our newest monthly cannabis jobs report, news that Christina Lake Cannabis completed its acquisition of BZAM’s former Midway farm, OrganiGram’s most recent quarterly report showing $15 million in losses, and the SQDC’s newest quarterly report showing it sold $200 million worth of cannabis in Q3 2023.

BC’s CSU enforcement group conducted three raids of cannabis stores on First Nations’ Land, and Health Canada issued a product recall of BonBon Turkish Delight cannabis edibles in Ontario.

A BC micro producer filed a recent notice of claim alleging non-payment from the processing partner.

In StratCann’s profile series, we looked at seed-to-sale service provider ALCannTrace.

In other cannabis news this past week, it was somewhat slow.

The CannExpo will be in Toronto from March 22 to 24, 2024, at the Enercare Centre in Exhibition Place. This three-day event is open to industry and the adult public. Attendees can enjoy budtender sampling and a culinary stage, among other features.

Radio Canada spoke with Lynne Petit, secretary of the Retail Cannabis Council of Manitoba (RRCMB) and owner of the Midnight Show Cannabis store in Beauséjour, about her concerns with Manitoba’s two-tiered retail licensing system that allows big box stores and convenience stores to sell cannabis products.

Rubicon Organics announced their new CEO, Margaret Brodie. Brodie has been with Rubicon since it was founded in 2015 and began her tenure as the company’s CFO. She was appointed Interim CEO on January 1, 2023.

A new study published in Cannabis and Cannabinoid Research says that exposure to cannabidiol (CBD) in pregnancy reduces heart function in young male offspring. The team included Western University researchers Mina Nashed, Sebastian Vanin, Mohammed Sarikahya, and Steven Laviolette, and Queen’s University researcher David Natale.

Researchers from the University of British Columbia released a paper on how cannabis use can help manage stimulant cravings among people who use unregulated drugs like crystal meth, cocaine and crack.

BC-based Allied Corp, a Canadian cannabis supplier with its production centre in Colombia, announced that it had signed another 3-year sales agreement to supply another international distributor with THC flower.

Benzinga did a writeup on Decibel Cannabis and its success in the pre-roll market in Canada.

About 200 farmers, industrialists, and policy experts will be at the Renaissance Edmonton Airport Hotel this Feb. 21 to 23 for the Future is Here Conference on Industrial Hemp. Organized by the Alberta Hemp Alliance, the conference aims to promote the growth of Alberta’s industrial hemp sector.

There were 64 filings under the Companies’ Creditors Arrangement Act (Canada) in 2023, a 64% year-over-year increase. Of these, five were from the cannabis industry.

The National Post did a laughable bit of prohibitionist clickbait, completely misrepresenting a Deloitte report that StratCann covered last month, claiming it says the illicit market is “flourishing” in Canada.

The actual report shows that the illicit market continues to decline significantly, with the legal market becoming increasingly competitive in terms of price and variety. For some reason, the National Post really seems to want weed to stay illegal, I guess.

Law Enforcement:

Quebec police arrested three in connection with a cannabis export scheme to the US.

OPP raided seven illegal dispensaries, seizing 63 kg of flower and 500 vape pens. Seven were arrested.A Quebec man received a 12-month suspended sentence to be served at home on charges of growing, propagating and harvesting cannabis under the Cannabis Act.

International Cannabis

Ukraine passed a law legalizing medical cannabis. The bill will come into force six months after it is officially published.

SQDC sold more than $200 million worth of cannabis in Q3 2023

Written by Sarah Clark on February 14, 2024. Posted in Business, Cannabis News, Financials, Government, Provinces, Quebec, Retail.

Quebec’s Société québécoise du cannabis (SQDC) brought in $33 million for its third quarter of the 2023-2024 financial year, which ended December 30.

Quebec’s portion of federal excise taxes, plus local taxes, brought in an additional $76.5 million to provincial coffers, for a total of $109.5 million in sales and tax revenue.

The SQDC’s total sales between September 10 and December 30, 2023, reached $201.6 million, compared to $187.3 million in the same quarter of the last financial year, an increase of 7.6% year-over-year.

This is an increase from $61.4 million from cannabis sales and taxes in the second quarter of 2023, selling $151.7 million worth of cannabis.

Quebec sold 37,215 kg of cannabis in Q3 2023, compared to 33,242 kg in the same quarter for 2022 and 27,498 kg in the previous quarter for 2023.

The vast majority of sales continue to be through brick-and-mortar SQDC stores, while just 2,357 kg of cannabis were sold through SQDC’s online store, for a total amount of $12.3 million. A police captain in northern Quebec recently said that the provincial government’s limits on payment options for online cannabis orders are pushing people to the illicit market.

Of the $201.6 million in cannabis sales, flower sales accounted for $167.7 million (83%), while other cannabis producers were $34 million.

The SQDC now has 98 branches, compared to 92 at the end of the third quarter of the previous fiscal year. It recently announced it was closing one store in Montreal.

The SQDC also says it has improved its product categories, particularly in extracts, edible products and formats, adding to increased sales and better meeting consumer demand. The SQDC recently put out a call for “off-cycle products” like 7-gram flower SKUs, pre-roll multi-packs, resin, and rosin, among others.

On November 13, 2023, the SQDC and the employees represented by the Canadian Union of Public Employees (CUPE-5454) signed new collective agreements, putting an end to the labour conflict and leading to a gradual return to normal activities.

On November 27, 2023, Suzanne Bergeron joined the organization as President and CEO.

The interim financial report for the quarter from September 10 to December 30, 2023, is available now on SQDC.ca.

Ontario’s independent cannabis retailers band together to tackle predatory pricing

Written by Tim Wilson on February 14, 2024. Posted in Business, Cannabis News, Ontario, Retail.

Independent cannabis retailers in Ontario are fighting back against LPs selling products at what they say are predatory prices in discount chain stores.

A core group of 14 owners, representing 23 top-performing stores, will be monitoring large LPs who feature and promote products at razor-thin margins, and who they say are suspected of financing these low prices via data deals.

This independent retail group, which operates in separate markets in Ontario and freely shares information, will then advise the larger community of independent stores.

“We decided to either minimize or eliminate the position of LPs engaging in data deals that fund predatory pricing structures,” says Jennawae Cavion, founder of Calyx + Trichomes in Kingston. “We’re doing this while amplifying the LPs who don’t engage in data deals, who support independent retailers, and who engage in healthy business practices that stimulate longevity.”

The group is developing a three-tier list for categorizing LPs: those suspected of engaging in predatory data deals; those working with collectives; and those LPs that are data-free and don’t pay listing fees.

Of these, the companies suspected of doing data deals will face the most scrutiny, and possibly be boycotted.

“We talk about what we see in each of our markets, and we share information about which products are selling at such low prices that it doesn’t make sense,” says Owen Allerton, the owner of Highland Cannabis in Kitchener. “We can shine a light on bad behaviour by LPs, avoid those companies, and work with producers who play fair. We have a huge amount of buying power, and won’t be tricked into subsidizing our competitors.”

This informal group is different from organizations like the Independent Retail Cannabis Collective (IRCC) in that it doesn’t function as a buying organization that seeks group benefits or discounts. There is, in effect, no business model.

The group does, however, act with solidarity when it comes to member interests, and will even be adding maps to store websites highlighting other members in case customers are travelling to other cities.

It is also more than willing to school the market.

“I think the LPs currently look at making deals with retailers with predatory pricing as a net positive,” says Sam Gerges, the owner of MaryJane’s in Toronto. “Once they understand and see that it’s actually a net negative because we will offload them, they will start making decisions differently.”

A Wider View

Member retailers contacted by StratCann noted that this independent retailer group, while informal and without a written mandate, can provide support in other areas where there might be common ground.

“Other issues of concern are getting rid of the excise tax, increasing the limits on edibles, and allowing for parcel shipping of recreational cannabis in Ontario,” says Nick Baksh, founder of Montrose Cannabis, in Pickering.

The independent retailers are working together to share good business practices, and to offer expertise wherever possible.

“We’ll share anything from product recommendations to brands we like, HR best practices, creative ideas that work,” says Cavion. “We also support any projects the others are working on.”

However, while these and other issues are a meaningful part of discussions within the group, the concerted action will be to provide a collective response to predatory pricing.

“If you’re a brand and are into predatory pricing with certain box retail chains,” says Baksh, “slowly but surely, we’ll find out and make new room.”

The concern isn’t only that these practices unfairly discriminate against smaller players but that with the status quo, independent retailers are, in effect, subsidizing practices that threaten their businesses.

“LPs pay a handful of retailers money they generate from the sales in our stores to help them fund predatory pricing structures,” says Cavion. “Independents are then forced to sell at a loss, while the LPs erode their own brand value. It’s lose, lose, for both LPs and independents.”

While it is legal for licensed retailers to enter into agreements with LPs for the sale of data for business intelligence purposes, the suspicion is that data deals are really a cover for listing fees and preferential treatment. But nothing is stopping independent retailers from fighting back and supporting LPs with quality products and ethical business practices.

“Small, independent growers making quality craft cannabis are unable to compete and pay retailers these crazy listing fees that have become so common,” says Cavion. “They don’t have the millions of dollars needed to engage with a handful of large groups that have many stores. And why should they? Quality cannabis should sell itself!”

An overarching theme of the initiative is that those LPs suspected of working with discount retailers on predatory pricing will have their products boycotted.

“We won’t support people who are funding our demise,” says Gerges from MaryJane’s, which has been Toronto’s number one ranked cannabis store by sales since Q1 2021.

“We can’t have a cannabis market where shelf space and the supply chain ecosystem are controlled by larger corporations which will only stock what they get paid to stock. The Canadian consumer deserves the best product, not the product willing to pay the most. These smaller LPs don’t have money to get on the shelves of these predatory pricing retailers; we independents will be their safe haven.”

Onside with the OCS

The Ontario Cannabis Store (OCS), the provincial Crown corporation with the legal monopoly for wholesale distribution of recreational cannabis, has ameliorated the situation somewhat by increasing the number of SKUs available through its Flow-Through program.

This move has provided more opportunities to create distinct value propositions.

“Generally, we are feeling pretty good about the OCS,” says Allerton. “With an abundance of SKUs, we can carry products that others don’t and avoid going head-to-head with the discount chains.”

In a tough market, where many retailers are struggling to stay above water, having the provincial wholesaler adjust policies and reduce margins is providing some relief.

“OCS does a lot of the heavy lifting for us,” says Baksh, from Montrose. “At the same time, via Flow-Through I can access a lot of stuff that isn’t otherwise getting to market, and isn’t stocked at the warehouse in Guelph.”

Independent retailers have informed the Alcohol and Gaming Commission of Ontario (AGCO)—the Crown agency that regulates cannabis in the province—that deals based on revenue or units sold contravene the inducement regulations. To date, nothing has been done, either for lack of evidence, or will, or perhaps a sense that the jurisdictional responsibility lies with Health Canada.

At this stage, it doesn’t matter: independent retailers are stepping up and taking the fight to the big guys. The small group of top-performing retailers represents over $60 million in sales and is attached to another larger group, representing another 100 stores, accounting for $200 million in sales.

“Given that there are over 1,700 cannabis outlets in Ontario, of which approximately 300 are low-volume chain stores, is it really worth it to pay these data deals to get shelf space?” says Allerton. “Maybe it’s time to start operating with integrity, which gets you love not only from our group, but from all the independent retailers in Ontario.”

Organigram reports $15 million loss due to lower international revenue and medical sale

Written by Sarah Clark on February 13, 2024. Posted in Business, Cannabis News, Financials, New Brunswick, Producers.

Organigram reported a net loss of $15.8 million in Q1 2024 and a 16% decrease in net revenue compared to the same period last year.

The New Brunswick cannabis producer attributes the decline in net revenue to a reduction in international revenue and medical sales and a “reduction in the gain on fair value of biological assets.”

It wasn’t all bad news, though, as Organigram also achieved positive adjusted EBITDA and positive cash flow from operations of $7.7 million and improved sequential quarter-over-quarter adjusted gross margin from 17% in Q4 Fiscal 2023 to 31% in Q1 Fiscal 2024.

Organigram says they maintained the number two market position in Canada for the last five consecutive months as of the end of Q1 Fiscal 2024, and held the top position in milled flower and concentrates, the number two position in edibles, and the number three position in pre-rolls. Market position is based on data from multiple sources like Hifyre, Weedcrawler, provincial board data, and internal modelling.

The company also closed the first $41.5 million tranche of a previously announced $124.6 million investment from British American Tobacco.

It also reintroduced its Edison Jolts to the market, with $2.9 million in sales in Q1 2024, which was previously removed from shelves following orders from Health Canada. The company recently relaunched the product in several provincial markets. In a previous quarterly report, Organigram complained of lower net revenue and margins due to the declining price of cannabis flower, as well as a higher cost of sales, THC inflation, and Health Canada no longer allowing the sale of “ingestible extracts” like the Edison Jolts.

Organigram also launched 22 new SKUs in the quarter, completed its first craft harvest from the newly completed expansion of its Lac-Supérieur facility, and completed planting the first grow room using seed-based production resulting from technology acquired from the strategic investment in US-based Phylos Bioscience Inc.

In May of 2023, Organigram made its first investment into the US cannabis market by issuing a strategic convertible loan to Phylos, intending to help Organigram accelerate the launch of products containing THCV in the Canadian market.

Organigram continues to wait for EU-GMP certification of its Moncton facility.

The company also continues to maintain it has lost market share due to other companies engaging in THC inflation.

“We believe that the cannabis industry in Canada has begun to reach an inflection point that will remove supplies in the market and accelerate consolidation,” said Organigram CEO Beena Goldenberg. “Companies engaging in THC inflation who have dubiously enjoyed temporary competitive advantages to artificially inflating their labelled THC content are facing more pressure as Health Canada and the OCS have announced random THC testing protocols.

“We have also seen the CRA begin to garnish companies who are in arrears on their excise taxes and many companies are already stretching their payables to preserve cash. As capital markets have dried up and increased enforcement removes unfair advantages and penalizes those who don’t contribute to the health of our sector, the Canadian market will experience a shakeout. As this materializes, Organigram stands to cement itself as a long-term industry leader, owing to its strong balance sheet, increasing production efficiency, industry-leading R&D and reinvigorated focus on international expansion supported by Project Jupiter.”

Organigram says Project Jupiter will target investments in emerging cannabis opportunities internationally to help Organigram reach new markets.

The company’s gross revenue in Q1 2024 was $56.3 million, compared to $60.8 million in the previous quarter. It paid $19.8 million in excise taxes for a net revenue of $36.5 million.

Featured image via investors.organigram.ca

Manitoba announces several new cannabis distributors

Written by Staff on February 13, 2024. Posted in Business, Cannabis News, Government, Manitoba, Producers.

On February 9, Manitoba Liquor & Lotteries announced five companies that successfully applied to provide cannabis distribution services in the province.

Manitoba Liquor & Lotteries (MBLL), which oversees the sourcing and distribution of cannabis to retailers in the province, first announced they were seeking new applicants to handle distribution in 2023.

The successful applicants, 100 Lbs., 1CM Inc, Lineage Distribution, Kief Cannabis Company, and Valiant Distribution Canada, have entered into twelve-month renewable agreements with MBLL and now must get a Cannabis Distributors License from the Liquor, Gaming and Cannabis Authority of Manitoba (LGCA), to be permitted to begin operations.

Several of these companies have already been providing distribution services in the province as holders of federal production licences, or in partnership with a federally-licensed cannabis producer. This new licensing process allows Manitoba to further regulate and oversee these activities.

Graham Taylor, President and CEO of Lineage Distribution, is one of those companies that are already offering distribution services. He says he’s happy to see another evolution of the Manitoba cannabis market. Lineage also distributes cannabis in Saskatchewan and the Territories.

“We’re thrilled to be officially announced as a distribution partner with the MBLL and to continue expanding our services to the Manitoba market and beyond,” Taylor told StratCann.

Another company listed in this new announcement, Valiant Distribution, is owned by High Tide, which also owns the Canna Cabana chain of retailers. Canna Cabana currently has eleven locations in Manitoba.

Raj Grover, founder & CEO of High Tide, says they are excited to expand their wholesale and distribution services into Manitoba through Valiant Distribution Canada. Valiant also wholesales cannabis products and consumption accessories in Saskatchewan, and consumption accessories through their Calgary warehouse, as well as its experience distributing in the United States and Europe.

“We look forward to building on our record of delivering efficiency and a high level of service in Manitoba and encourage other provinces to follow Manitoba and Saskatchewan’s lead in leveraging private sector expertise in wholesale distribution and fulfilment services.”

Three other companies, Delta 9 Logistics Inc., Open Fields Distribution, and Maqabim Distributors Inc., are currently licensed by the LGCA for cannabis distribution on behalf of MBLL.

The province’s goal in bringing on new cannabis distribution partners is to improve storage capacity to meet greater product demand while reducing delivery times, especially for small, rural, and remote retailers.

Manitoba also still allows cannabis producers to bypass distributors and ship products directly to retail stores, which is how several cannabis distributors have been operating in the province.

In June 2023, the MBLL announced it was seeking to improve lead times and retail receiving compliance, something many Manitoba cannabis retailers have been frustrated by, especially remote, rural stores. This included introducing a new 20-day purchase order deadline and a new five-day retail receiving requirement.

As of January 2024, Manitoba listed 198 privately-run retail cannabis stores, 115 of which are in Winnipeg (up from 194 in October).

Christina Lake Cannabis completes acquisition of Midway farm

Written by Sarah Clark on February 12, 2024. Posted in Business, Cannabis News, Producers.

An outdoor cannabis producer located in BC announced today that it has completed the acquisition of a new outdoor cultivation site in Midway, BC.

Christina Lake Cannabis (CLC) first announced the deal on February 5, which included the acquisition of outdoor cultivation facilities in Southern British Columbia, related harvesting and manufacturing equipment, and approximately 19,000 kg. of biomass for a total purchase price of $3 million.

The facilities, which include all associated lands, support buildings, and related equipment, along with the biomass, were formerly owned by BZAM. BZAM had previously also purchased a hotel in Midway to house its employees at the outdoor farm near the US border.

“This acquisition will solidify our position as a key supplier to the country’s top brands,” said Mark Aiken, Chief Executive Officer of Christina Lake Cannabis. “We are expanding our growing capability to meet rising customer demand. The increased capacity is a catalyst for robust topline growth and improved profitability by harnessing economies of scale. As the demand for our products has continued to grow over the last 2 years, we have had to supplement our own cultivation with tens of thousands of kilos of biomass supply from the wholesale market. The Midway acquisition secures our supply chain providing CLC with cost certainty and solid control over input quality.”

The Midway property is 342 acres, with just over 100 acres of licensed cultivation space. With this acquisition, CLC will expand its total licensed outdoor cultivation footprint to over 120 acres. Potential further expansion of additional acreage is available and could be licensed by the Company should the demand arise.

“Over the last 18 months CLC has focused on operational efficiencies and investment in their processing infrastructure,” said Jay McMillan, Chairman of the Christina Lake Cannabis Board of Directors, in a company press release. “This has resulted in increased productivity and expanded capacity. The investment in the Midway property now aligns CLC’s cultivation and processing capability, positioning the company for future growth.”

Christina Lake Cannabis plans to plant its first “proprietary” 80-acre crop in spring 2024, expanding to 100 acres in 2025. In the company’s most recent quarterly report for Q3 2023, it showed nearly $9 million in revenue and almost $500,000 in income.

Featured image via christinalakecannabis.com

Week in Weed – February 10, 2024

Written by David Brown on February 10, 2024. Posted in Business, Cannabis News, Government, International.

It’s been another busy week in Canadian cannabis news. StratCann’s own Tim Wilson uncovered that the CRA is currently owed more than $200 million in unpaid cannabis excise taxes. Despite this, the federal government continues to issue payments to provinces to the tune of nearly $2 billion since legalization.

We also looked at how to navigate the world of bankruptcy and restructuring in the cannabis industry, and how formerly dry municipalities put cannabis stores in industrial zones.

We looked at Pure Sunfarms’ sister company receiving approval to begin building a cannabis greenhouse in the Netherlands, and a Canadian cannabis company importing genetics from New Zealand.

A police captain in Quebec says the SQDC needs to do more to compete with the illicit market in Nunavik, while the SQDC says they are closing a store in Montreal.

The town of Beaumont, Alberta, passed new rules for medical cannabis production to move it out of residential neighbourhoods, and a judge in Ontario ruled police violated Charter rights in a 2021 raid of an unlicensed, online cannabis store.

Aurora Cannabis reported a net loss of $25 million in its most recent quarterly report, while Canopy Growth reported a loss of $216.8 million.

Chatham-Kent Police raided an illegal cannabis shop, seizing cannabis, psilocybin, and LSD, while the OPP raided 7 illegal dispensaries, seizing 63 kg of flower, 500 vape pens, and made 7 arrests.

In other cannabis news…

Jeff and Vicky Curtis of TruQuartz and Boro and Beyond spoke with the news about their desire to see cannabis consumption spaces in BC. The BC government is looking at the issue but has been clear that indoor inhalation is off the table.

Catherine Lemay, assistant general counsel, IP at Hexo, spoke with ISED about how various IP rights are used in the cannabis industry and discussed some things to consider if you have an invention you think may be worth something. Full transcript here.

Mainstream media finally picked up on the story StratCann broke in Canada a few weeks ago about Israel accusing Canada of dumping medical cannabis into their market. The Toronto Star shared comments on the subject from Global Affairs Canada and several Israeli cannabis companies.

Prince George, BC Councillor Garth Frizzell is asking the province where the city’s share of tax revenue is. He noted the Union of B.C. Municipalities continues to lobby the province for municipalities’ share of the “grass tax.”

Tilray Brands is bringing beverage brand Mary Jones from Vancouver’s Jones Soda Co. to the Canadian cannabis market, starting with Ontario in Q1 2024. Green Hedge will support sales and field marketing for Mary Jones in Canada.

RCMP in PEI say they made five impaired by cannabis arrests in three days. Police are awaiting blood sample test results and anticipate these cases will be in court at a later date.

The Town of Caledon, Ontario, would like to know whether residents want to see legal cannabis stores in the municipality. The survey is open until March 1.

Some residents in eastern BC near Lumby say they are frustrated by recent changes to a zoning bylaw to allow a large cannabis facility. Bylaw 3000 expands the allowable size of buildings from 500 m2 to 1400 m2 for buildings with a base not consisting entirely of soil.

Nextleaf Solutions Ltd. announced a wholesale distribution agreement with Lineage Distribution, a licensed cannabis processor and distributor based in Niverville, Manitoba. Lineage will exclusively distribute Nextleaf’s complete product catalogue of over 35 SKUs across four initial categories. The Agreement encompasses Manitoba, Northwest Territories, Nunavut, and the Yukon Territories.

MediPharm Labs Corp. announced receipt of GMP certification for their Barrie, Ontario facility from ANVISA, the governing body of Brazil’s pharmaceutical industry. MediPharm Labs now has GMP certification from the United States FDA, European Union, and Australia’s TGA, and holds a drug establishment license from Health Canada.

A new study from researchers in Ontario says cannabis-involvement in self-harm Emergency Department (ED) visits almost doubled over 12 years and may have accelerated after medical cannabis legalization. The results, caution the researchers, cannot determine whether cannabis is increasingly causing self-harm ED visits or whether individuals at high risk of self-harm are increasingly using cannabis. While many headlines focussed on anxiety, the study itself was much more broad and only mentions “anxiety” twice. Of the 158,912 self-harm ED visits in Ontario between 2010 and 2021, 4.9 % involved cannabis.

The Cannabis Benchmark’s Canada Cannabis Spot Index for February 9, 2024, shows the average LP wholesale selling price for cannabis continuing to decline to $4.73 per gram, down from last week’s C$4.82 per gram.

Greenway Greenhouse Cannabis Corporation announced that it has surpassed 20,000 kg of product sold since its inception. Greenway will deliver its first brand, MillRite, to the Ontario Cannabis Store this fiscal quarter.

Cannabis NB plans to open new stores in Fredericton, Saint John, and Moncton. They will soon be hiring employees. The average vape price per gram equivalent in Canada fell to $8.65 in Q4 2023, a 9% decrease from the previous year. Vape products accounted for significant portions of cannabis sales, with Alberta leading at 22%, followed by British Columbia and Ontario.

314 Pure Cannabis engaged in a Sales Process

Written by Contributor on February 9, 2024. Posted in Alberta, Business, Cannabis News, Producers.

SOLICITATION FOR OFFERS

On January 11, 2024, Harris & Partners Inc. was appointed as the receiver (the “Receiver”) of all the assets, undertaking and properties of 314 Pure Cannabis Ltd. (“314 Pure” or the “Company”) pursuant to an Order of the Court of King’s Bench of Alberta (the “Court”).

The Company operated a cultivation and hydroponic growing cannabis facility located in Crossfield, Alberta (the “Facility”). The Facility is approximately 21,700 sq. ft. in size on a lot that is approximately 3.0 acres.

314 Pure also owns a total of approximately 15.61 acres of land surrounding the Facility, of which 12.61 acres have been deemed as excess land. 314 Pure owns the Facility and related production equipment.

On February 9, 2024, the Receiver commenced a Sales Process (“Sales Process”). The Sales Process is being conducted in accordance with the procedures, which can be located on the Receiver’s website: www.hpiadvisory.com/314pure.

Interested parties who wish to pursue a potential acquisition and receive additional diligence materials will be required to execute a Confidentiality Agreement, which can be obtained by contacting Avison Young directly ([email protected]; 403-232-4381).

Per the Sales Process, non-binding letters of intent must be submitted by no later than 5:00 pm (Calgary Time) on March 15, 2024.

Harris & Partners Inc.
Jill Strueby, Senior Vice-President
403.800.1574
[email protected]

Net loss of $25 million for Aurora Cannabis in most recent quarterly report

Written by Sarah Clark on February 8, 2024. Posted in Business, Cannabis News, Financials, International, Producers.

Aurora Cannabis Inc. saw a net revenue of $64.4 million and a net loss of $25.2 million in the third quarter of fiscal year 2024.

This represents an increase in revenue of $3.3 million and a decrease in net loss of $37.2 compared to the same period in the prior year.

Aurora attributes the decrease in net loss primarily to an increase in gross profit of $32.7 million and a reduction of operating expenses of $10.4 million, offset by an increase in other expenses of $5.9 million.

Adjusted gross profit before fair value adjustments was $32.4 million in Q3 2024, compared to $28.0 in the prior year quarter, an increase of 15.7%.

Revenue from sales of cannabis for medical purposes was the bulk of Aurora’s revenue at over $48 million. The company attributes this growth primarily to expansion of its export market in the most recently reported quarter.

Aurora also announced that one of its wholly owned subsidiaries has acquired the remaining approximately 90% equity interest of Indica Industries Pty Ltd (“MedReleaf Australia”). MedReleaf Australia holds the number two position in the Australian medical cannabis market.

“Fiscal 2024 is on track to be our strongest to date, driven by the continued strength of our differentiated business model and our focus on profitable global medical cannabis markets. Our international medical net revenue grew 41% year-over-year in Q3, demonstrating Aurora’s ability to meet diverse patient needs in markets across the world,” said Miguel Martin, Chief Executive Officer of Aurora, in a press release.

“The acquisition of MedReleaf Australia will make Aurora the largest global medical cannabis company in nationally legal markets and will allow us to leverage our success in providing pharmaceutical grade cannabis across 15 countries,” Martin added. “MedReleaf Australia is expected to be immediately accretive to Adjusted EBITDA, while accelerating our path to generate positive free cash flow this calendar year.”

Revenue from Aurora’s plant propagation program also increased compared to the same quarter in the previous year, from $6.6 million to $7.3 million.

Aurora has nearly $300 million in working capital and more than $112 million in biological assets, compared to more than $400 million in working capital and $93.7 million in biological assets in the same quarter of the previous year.

Aurora Cannabis’ growth buoyed by increased medical exports, cut flower business

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Israel opens “anti-dumping” investigation into cannabis imports from Canada

January 26, 2024

Canadian cannabis nursery to import unique New Zealand genetics

Written by David Brown on February 7, 2024. Posted in Business, Cannabis News, International, Ontario, Producers.

Canadian cannabis producer Apollo Green expects to soon carry genetics supplied by a New Zealand medical cannabis company, Rua Bioscience.

The unique cultivar, from the region of Tairawhiti, will be available through Apollo Green at a future date.

A wholly owned subsidiary of Australian Biortica Agrimed, Apollo Green specializes in unique genetics and provides access to plant breeder’s rights protection with DNA fingerprinting of all genetics. The arrangement with Apollo Green also opens Rua Bioscience’s genetics to existing sales channels in Europe, North America, and Australasia.

Apollo Green, located about 20 minutes east of Ottawa, is licensed as a cultivator and processor but bills itself as a cannabis nursery with a focus on unique genetics.

Oisín Tierney, Director of Business Development at Apollo Green, says the company, which primarily serves as a B2B nursery for commercial cultivators, is focussing on bringing in genetics from breeders around the world.

“We’re very excited to be partnering with Rua,” Tierney tells StratCann. “They are one of many breeders to work with at the moment. Ultimately, at Apollo Green we’re on a mission to offer cultivators curated phenotypes from reputable breeders from all over the world.”

“We’re always cultivating partnerships with breeders. We never stop pheno-hunting, and our ultimate goal is to be a one-stop shop for unique genetics for the commercial market.”

“What we’re looking at is genetics with landrace traits that are different to what you might find, typically, in North America.”
Oisín Tierney, Apollo Green

Tierney says part of their goal is to help refresh or reinvigorate cannabis genetics, especially in North America, which become so focused only on high THC cultivars. Although it has imported genetics before, this will be the first time the company has brought in live clones from outside the country.

“We’re Looking for genetic variability,” he explains. “The traits of (cannabis) genetics are being condensed. And variety is being reduced as the industry continues to breed, especially in commercial production. So what we’re looking at is genetics with landrace traits that are different to what you might find, typically, in North America.

For their part, Rua Bioscience is equally excited by the partnership and the ability to bring their unique landrace cultivar to other growers around the world through Apollo Green.

“We are excited about this partnership with Apollo Green and Biortica Agrimed, as it aligns perfectly with our vision to take our unique strains to the world,” said Paul Naske, CEO of Rua Bioscience. “This is more than just an agreement; it’s a bridge connecting New Zealand’s exceptional cannabis genetics to the world.”

“We welcome Rua to the Apollo Green and the Biortica Agrimed family,” said Tom Varga, CEO of Biortica Agrimed.

Licensed to cultivate since 2016, Rua Bioscience is a Māori community-owned company that launched its first prescription medicine in April 2022.

Genetic authentication of cannabis cultivars

October 11, 2021

BC cannabis nursery Klonetics announces deal with California’s Seed Junky Genetics

September 29, 2022

How the THC obsession is killing classic cultivars

March 10, 2023

Quebec closing cannabis store in Montreal

Written by Sarah Clark on February 6, 2024. Posted in Business, Cannabis News, Government, Quebec, Retail.

Quebec will have one less cannabis store in Montreal soon, as an SQDC location is expected to close on March 2.

The news, shared first by the Canadian Press, says the Plaza Saint-Hubert location, with 11 employees, will be closing on March 2. A termination notice was sent out to members of the Canadian Union of Public Employees (CUPE), which represents the majority of union members in SQDC branches, and says the end of employment will be March 23, providing time to fully close the store down.

The SQDC has 98 locations across Quebec. This will be the first store to close in the province. In an interview with StratCann in 2023, the then-president and CEO of the SQDC said the province was shifting away from approving new stores with a new focus on approving new products to attract consumers.

CUPE president, David Clément told the Canadian Press that he believes the store closure was retaliation against the union for a job action against several SQDC stores that recently ended.

The SQDC’s most recent quarterly report, released in November 2023, showed the province had brought in $61.4 million from cannabis sales and taxes in the second quarter of 2023, selling $151.7 million worth of cannabis.

Featured image via Google Maps

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February 5, 2024

SQDC sold more than $150 million worth of cannabis this summer

November 17, 2023

Cannabis sales in Quebec plateauing, as SQDC continues to focus on enhancing consumer experience

June 12, 2023

Formerly dry municipalities put dispensaries in industrial zones to test the waters

Written by Contributor on February 6, 2024. Posted in British Columbia, Business, Cannabis News, Government, Ontario, Retail.

Municipalities in BC that reversed their ban on cannabis dispensaries have used industrial zones as a testing ground for their first store, and two owners offered differing opinions on the strategy.

Following the legalization of cannabis in 2018, the British Columbia and Ontario provincial governments allowed municipalities to opt out of permitting dispensaries.

Two dispensary CEOs who opened the first stores in Tofino and Delta, BC, say industrial zones were the only place they could start their business. Non-commercial locations were selected to address city government concerns about cannabis storefronts being visible to minors on their way to school or going home, the owners said.

When there is no store in Surrey, BC, what are people going to do?
Vikram Sachdeva, Seed & Stone

Putting a municipality’s first store in an industrial area creates challenges for owners to reach customers, according to Vikram Sachdeva, CEO and founder of the Seed & Stone dispensary chain.

“This industrial area concept has to go away,” Sachdeva said.

Sachdeva opened Delta, BC’s first cannabis brick-and-mortar store, in November 2021 after working directly with the mayor and city staff to create a policy for dispensaries.

Sachdeva explained that the industrial location was a compromise with municipal officials who were hesitant about not allowing a dispensary downtown.

Since then, five more dispensaries have opened in Delta, including three in strip malls, BC’s Liquor and Cannabis Licensing data shows.

When Seed & Stone opened the first dispensary in Hope, BC, in September 2022, Sachdeva worked with local officials to ensure the location was in a strip mall.

Pitt Meadows, BC, is currently working with Seed & Stone on opening the municipality’s first cannabis storefront after agreeing to hear applications for dispensaries in July 2023.

A similar story with a different perspective played out on Vancouver Island.

The first Tofino, BC, cannabis store suggested to city officials that it should open in an industrial zone in January 2020, Michael Holekamp, CEO of Daylight Cannabis Company, said.

Holekamp said his store in Tofino, next to breweries and automotive shops, is a trial by the city before potentially opening up in commercial areas. “It makes sense up there,” Holekamp said.

Daylight Cannabis is currently operating with a temporary permit because Tofino still doesn’t have permanent regulations on dispensaries, Holekamp explained.

Small towns have limited commercial operation spaces in industrial areas, and Holekamp said he intentionally never requested municipal officials change the zoning of his store from industrial to commercial.

“Technically right now, there is no legal zoning,” Holekamp said.

A second dispensary has since opened in Tofino, this time in a commercial area, Holekamp confirmed.

Sachdeva argues that making a greater dent in the illicit grey market requires putting cannabis dispensaries where people already shop.

Health Canada’s 2023 survey showed that 73% of cannabis users reported purchasing cannabis through the legal market.

“When there is no store in Surrey, BC, what are people going to do?” Sachdeva said.

“They’re going to go to other municipalities, or they’re going to call their guy that they’ve been calling for the last five to ten years.”

Holekamp agreed that grey market competition was a concern but said whether or not it’s more prevalent in municipalities without dispensaries was hard to tell.

North Vancouver saw a slow growth of dispensaries after lifting its ban, according to Geoff Dear, owner of Muse Cannabis, the city’s first dispensary.

But within 12 to 18 months, there was greater competition in the city, and Muse felt it in their bottom line.

Dear said limits on the number of stores in cities and minimum distances between dispensaries can help fight market saturation.

Government data shows there are now 60 dispensaries in the ten municipalities that have lifted their prohibition on cannabis storefronts.

Local media reports show that Surrey, North Vancouver, Tofino, Hope, Delta, and Pitt Meadows in BC initially opted out of allowing dispensaries before reversing course.

In Ontario, the municipalities of Mississauga, Tecumseh, LaSalle, and Milton took the same path of granting dispensary permits after initially refusing to.

The number of dispensaries in each city that reversed its ban are Mississauga (24), North Vancouver (9), Milton (9), Delta (6), LaSalle (5), Hope (3), Tofino (2), Tecumseh (2), Surrey (0) and Pitt Meadows (0) according to BC’s Liquor and Cannabis Licensing and the Alcohol and Gaming Commission of Ontario.

Surrey, BC, announced on January 25 that it planned on allowing up to 12 dispensaries in the city after first exploring a lift on its ban in July 2023.

~William Koblensky Varela is a reporter, editor, and journalist

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March 1, 2023

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SQDC needs better online payment options, says police captain

Written by Sarah Clark on February 5, 2024. Posted in Business, Cannabis News, Quebec, Retail.

A police captain in northern Quebec says the provincial government’s limits on payment options for online cannabis orders are pushing people to the illicit market.

Patrice Abel, a captain with the Service de Police du Nunavik, a region that makes up the northern third of Quebec, tells Nunatsiaq News that he estimates that more than 80% of the residents in the region still purchase their cannabis from the illicit market.

This is juxtaposed with new figures from Stats Canada showing nearly three-quarters of consumers in Canada are purchasing products from the legal market.

One of the reasons so many in Nunavik are still buying cannabis from the illicit market, says Abel, is a lack of legal retail stores and the requirement to use a credit card when purchasing from the SDQC.ca, Quebec’s legal online cannabis portal.

Illicit online stores, meanwhile, offer other payment options such as electronic money transfer services like PayPal.

Société québécoise du cannabis (SQDC) is the only retail store in Quebec allowed to sell cannabis, with 98 locations across the lower third of the province.

The Kativik Regional Government is the representative regional authority for most of the Nunavik region of Quebec and has expressed concern about cannabis legalization and its potential impacts on the community in the past.

About 60 percent of the region’s 14,000 inhabitants, 90% of whom are Inuit, are under the age of 25. According to a report in 2017, Nunavik has the highest rate of use of cannabis in Québec.

Nunavik has 14 communities that are only connected by air, and several of them are “dry” communities.

A study was launched in 2021 to better understand cannabis use in Canada’s territories, as well as areas like Nunavik.

A new three-year study to determine how cannabis is used in Canada’s territories has been launched by a group of university researchers and health experts, with funding from Health Canada.

A study in 2015 found that cannabis consumers in Nunavik had lower body mass index, lower amounts of fat on their bodies, and two times lower risk of being obese.

In Quebec, the minimum legal age to possess or purchase cannabis is 21 years.

Image via wikimedia commons.

Navigating the world of bankruptcy, restructuring in the cannabis industry

Written by David Brown on February 5, 2024. Posted in Business, Cannabis News, Government, Producers.

Five years into a legal non-medical cannabis market in Canada, the industry is beginning to mature in many ways, including the unfortunate demise of many hopeful companies.

Bankruptcies, insolvencies, and restructuring are becoming more common, even as new licences continue to come in every month.

“…the company should be getting key creditors on board before the filing. You don’t want to surprise people.”
Dina Kovacevic, Insolvency Insider

A relative handful of cannabis companies filed for creditor protection in 2023, according to listings by Insolvency Insider Canada, which focuses on the Canadian insolvency market.

One of the most common filings is for the Companies’ Creditors Arrangement Act (CCAA), which allows insolvent companies to restructure their businesses and finances. With proper planning, a company can take this step to avoid declaring bankruptcy, says Dina Kovacevic, Editor at Insolvency Insider.

Typically, she explains, if a cannabis company is in trouble, it can either file for CCAA protection, or a notice of intent to make a proposal, or an “NOI” under the Banking and Insolvency Act. This is, ideally, a step taken to avoid being put into bankruptcy or receivership by a creditor or a company declaring bankruptcy themselves.

One of the most significant points Kovacevic stresses is for distressed companies to ensure they take steps in advance if they see themselves running into long-term financial issues.

“If a company is facing financial issues and it wants to restructure, it doesn’t just want to go out of business, and perhaps it fears that its secured lender is going to put it into receivership. I’d say that it has several options.

“The first option is to try to work with its creditors and suppliers on an out-of-court restructuring plan. The second would be to file for CCAA protection, and even in that type of situation, I would say that the company should be getting key creditors on board before the filing. You don’t want to surprise people.”

“You have to critically self-assess where you are. Doing nothing isn’t an option. It’s being very critical of yourself as a business owner. How are you competing?
Clark Lonergan, BDO Canada

Clark Lonergan, a Financial Recovery Services partner in BDO Canada’s Toronto office, reiterates that any company facing financial challenges needs to make tough choices early on in the process to ensure they can either bring in new investment or creditors, or have a chance to wind down their operations and liquidate assets on a timeline they control.

“You have to critically self-assess where you are,” he says. “Doing nothing isn’t an option. It’s being very critical of yourself as a business owner. How are you competing?

“What’s your balance sheet look like? Do you have sufficient capital to weather the ups or downs? And who are your stakeholders? Do you have bank debt? Is it all equity? How are you competitive in this market?”

Assessing these issues well beforehand can make a huge difference. Bringing in others who can assist in the process can also be important.

“When you get into a level of distress, it becomes more crisis management,” adds Lonergan. “So you’re dealing with stakeholders, focussing on liquidity, on meeting payroll and dealing with creditors who need to be paid. So the additional perspective of an advisor can mean the business can still run, while ensuring you have someone able to steer you through that process, with all the available options and resources you as a business owner might not know about.”

The cannabis industry had an initial burst of interest due to the excitement of legalization, he argues, but that excitement and “wild west” mentality was quickly tempered by the realities of a complex, highly regulated industry.

These realities will continue to settle in in the coming years, says Kovacevic at Insolvency Insider.

“At the end of the day, we’re still expecting more,” she says. “It’s still early in the industry cycle, people are still dealing with oversupply. There’s a lot of growing pains, a ton of consolidation that’s happening. So I think we’re still in the pretty early stages of this.”

BC’s Tantalus Labs lays off majority of workforce as it files for restructuring

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Pure Sunfarms’ sister company receives approval to begin building cannabis greenhouse in the Netherlands

Written by Sarah Clark on February 4, 2024. Posted in Business, Cannabis News, International, Producers.

A Canadian company will be one of a handful of companies producing cannabis for Dutch coffee shops as part of a new program in the Netherlands.

Village Farms International Inc., the parent company of BC cannabis producer Pure Sunfarms, recently announced that it had begun building its first indoor cannabis production facility in Drachten, Netherlands. Village Farms acquired Village Farms’ majority-owned (85%) subsidiary, Leli Holland in September 2021.

Village Farms intends to start production for the fourth quarter of 2024 and says Leli Holland plans to sell flower and hash products across consumer-preferred formats, including pre-rolls.

“As a limited license market with a long-established consumer base and a cannabis-friendly regulatory environment, the Netherlands represents a very attractive near-term opportunity in our international cannabis strategy,” said Michael DeGiglio, President and Chief Executive Officer, Village Farms.

“We are thrilled to build on our rich history in the Netherlands to leverage our experience as a leading, profitable cannabis business in Canada for this first major European recreational market. Our two-phased approach to ramping up production enables us to enter the market in a timely and capital efficient manner in line with the roll out of the Dutch Program. We look forward to contributing.”

The Dutch government announced its plans for the project in 2022, which include exploring the possibility of a “closed cannabis chain” for cannabis coffee shops in several cities across the country.

In December 2023, the first cannabis under this program made its way to the first approved coffee shop.

The goal of the closed-loop experiment is to explore the possibility of a quality-controlled cannabis production and distribution system in the country as an alternative to the current “tolerance policy” that has not-legal-but-tolerated “coffee shop” style points of sale and unregulated, illicit growers who supply them.

“By regulating the sale of cannabis, we have a better insight into the origin of the products and the quality,” Dutch Health Minister Ernst Kuipers said recently. “In addition, we can better inform consumers about the effects and health risks of cannabis use.”

The Dutch cities of Breda and Tilburg are home to the first two shops to sell this cannabis. The Leli Holland nursery is reported to be located an existing building in an industrial district in the city of Drachten.

The municipality of Smallingerland recently granted the company a permit to begin retrofitting the location. Drachten is a village within Smallingerland.

The policy that provides for these shops to exist was first introduced in the Netherlands in 1967, allowing adults to buy small amounts of cannabis in designated “coffee shops.” However, the issue of how to properly regulate the supply of these coffee shops has long-simmered in the country over concerns with public safety and law enforcement, especially with many of the commercial growers located in residential areas.

In 2009, an advisory committee looking into the issue recommended a small-scale experiment to explore how to regulate coffee shops’ supply. In 2015, the Association of Dutch Municipalities added to the pressure on the government to regulate these supply chains.

This led to the creation of the Coffee Shop Chain Act, which was successfully passed through parliament in 2020. Since then, the Dutch government has been preparing for the study based on the input of its expert committee.

The committee—which consisted of experts in public health, addiction, law enforcement, local government, criminology, and law—held round table discussions with stakeholders like mayors, coffee shop owners, cannabis producers, regulators, scientists, cannabis users, and addiction experts.

The committee recommends including numerous small and medium-sized cities across the country. Seventeen out of 23 municipalities who applied were eligible to participate.

In addition to better monitoring of both the safety of the cannabis and its supply chains, the program will also seek to evaluate consumer purchasing habits. This includes data such as how many purchases occur within the currently “tolerated” system vs the entirely unregulated illicit market.

Like Canada, the committee’s report also discusses the challenges of such an experiment and any possible future legalization, which contradicts existing international laws. This is one reason why the government is not seeking to import any cannabis for this trial.

Growers selected for the program must pass various microbial and pesticide testing standards and potentially adhere to Good Agricultural Practice (GAP) and Good Manufacturing Practices (GMP). The committee also recommends a “soft” approach to any recommendations for irradiation or remediation, given stakeholder feedback citing consumer distaste for such a designation.

Product labels will be required to include warnings, related information, and a THC logo, and products must be sealed in a resealable, child-safe container. Selected growers will be required to be registered with the Chamber of Commerce.

Featured image of the location where the Leli Holland facility will be built. Image via Google Maps

First regulated cannabis makes its way to Dutch coffeeshops in new pilot project

December 15, 2023

Netherlands to experiment with regulated cannabis supply chain

January 9, 2023

Large shipment of Canadian cannabis seized in the Netherlands

August 31, 2023

Week in Weed – February 3, 2024

Written by David Brown on February 3, 2024. Posted in Business, Cannabis News, Government, International.

It was another busy week of industry news at StratCann. We looked at a new market scan from Deloitte that compares pricing in the legal and illegal market, shared the news of George Smitherman moving on from his long-held position as head of C3, and looked at new market figures that show revenue on cannabis production rallying in the second half of 2023.

Alberta announced several changes to their cannabis rules, including cannabis sampling rules, event sales, and more. The BCLDB’s newest quarterly report shows the market continues to mature, with a greater variety of products eating into dried flower dominant market share, while also showing some of the first significant declines in overall sales.

We also shared the newest evolution in the retail chain behind Trees Corporation seeking investors or buyers in an effort to hold on to its stores in BC and Ontario. Nextleaf Solutions announced that they are debt-free and cash flow positive.

We also shared the story of Kootenay Aeroponic, a micro cultivator and processor located in Creston, BC.

Last but not least, our friends at Marigold PR announced their upcoming Radical Femmes networking event in Toronto on March 8, Canada’s largest networking event celebrating women in cannabis.

In other cannabis news

Cannabis consumers in Nunavik, located in the northernmost region of Quebec, are much less likely to purchase cannabis from the legal market compared to the rest of Canada, say the Nunavik Police Service. The region has no legal storefronts, and online purchases from SQDC.ca require a credit card, something many residents don’t have, says an insightful article at Nunatsiaq.com. A Nunavik police captain argues the province should allow more payment options to better compete with the illicit market.

BC’s Village Farms International announced it has begun the build-out of its first indoor cannabis production facility in Drachten, Netherlands. Through its subsidiary, Leli Holland, Village Farms holds one of 10 licences permitting legal production and distribution of recreational cannabis in the Netherlands under the new Dutch Program. The Company is targeting the start of production in the fourth quarter of 2024. Leli Holland plans to sell flower and hash products, including pre-rolls. Village Farms owns Pure Sunfarms in BC and Balanced Health Botanicals in the US.

High Tide released their audited 2023 financial results, with fourth-quarter revenue of $127.1 Million, adjusted EBITDA of $8.4 Million, and free cash flow of $5.7 Million—all records for the company. Among the results, revenue from High Tide’s Cabanalytics platform, including ad revenue, was $26.3 million for fiscal 2023, compared to $21.7 million for fiscal 2022, representing an increase of 21% year-over-year. Cabanalytics revenue grew to $6.8 million in the fourth fiscal quarter of 2023, representing an increase of 3% sequentially.

Aurora Cannabis announced (further?) share consolidation and an upcoming quarterly report investor call.

Law enforcement

Winnipeg Police announced a new Don’t Drive High campaign, as well as two arrests related to a convenience store found to be selling illegal cannabis and tobacco products.

Another person in Ontario who was caught up in a large-scale raid against illegal cannabis operators in 2020, called Project Woolwich, received a 12-month conditional sentence recently. The man was among 17 people from Niagara, the GTA, and British Columbia arrested in August 2020 following the joint police investigation.

Montreal Police were assisted by the Sûreté du Québec, Laval police, and OPP in 11 raids on residences and commercial buildings in Montreal, Laval, Blainville, Saint-Lin-Laurentides, Mirabel, and Sainte-Anne-de-la-Pérade, with more than one tonne of cannabis and 4,930 cannabis plants seized. Three arrests were made.

The Halifax Regional Police arrested four people for illegally selling cannabis, seizing 50 pounds of cannabis, 400 edibles, 300 grams of cannabis resin, and $3,000 in cash.

A large drug bust in Brantford, Ontario, resulted in the seizure of large amounts of cannabis, cannabis oil, and hash, as well as psilocybin, MDMA, cocaine, cash, and weapons.

A man in Ontario was ordered to pay a fine and court costs related to the odour of cannabis bothering his condo neighbours and breaking condo rules.

Meanwhile, a Vancouver man received a conditional sentence for selling cannabis, psilocybin, and GHB from a tent in the city’s Robson Square.

International cannabis news

The New York Times did an in-depth piece on the differences between inhaled cannabis and cannabis edibles and their potential effects and risks.

In a nice step forward, the Colorado Tourism Office is finally including cannabis content in its promotional material.

Washington state lawmakers are looking at ways to crack down on cannabis store robberies, which industry leaders say have been happening at an alarming rate. They are also looking at allowing people to grow up to four cannabis plants at home.

In the US, cannabis sales are booming while alcohol wanes, as more drinkers—especially younger ones—see cannabis as a healthier alternative, reports Bloomberg.

Radicle Femmes celebrates women in cannabis on March 8

Written by Contributor on February 2, 2024. Posted in Business, Cannabis News.

Marigold PR, an award-winning public relations agency to the North American cannabis industry, presents the inaugural Radicle Femmes, Canada’s largest networking event celebrating women in cannabis.

Held on International Women’s Day, March 8, 2024, in Toronto, ON, the event is in collaboration with VIP sponsor the Ontario Cannabis Store (OCS), as well as cannabis advisory firm The Panther Group, creative agency Sister Merci, and cannabis wellness brand Solei. Radicle Femmes will highlight the achievements of women entrepreneurs, professionals, and advocates in shaping the industry landscape, and will discuss challenges that women continue to face, including access to funding and low representation in the sector.

Held at Soluna Toronto, this event will draw a diverse audience, including entrepreneurs, marketers, consultants, retail decision-makers, licensed producers, brand representatives, and various ancillary services. The format will feature a dynamic program of panel discussions and valuable networking sessions that create a platform for business opportunities. The event’s official tagline, “I can’t believe we still need these events,” reflects the sentiment of many women in the cannabis industry and beyond, as the Women Entrepreneurship Knowledge Hub estimates that only 18% of businesses are majority-owned by women in Canada.

“Women are underrepresented in leadership positions in many industries, including the cannabis industry, despite their significant contribution to the sector,” says Tanya Watkins, Vice President, Corporate Affairs, Social Responsibility & Strategic Engagement at the OCS. “The OCS’s commitment to enabling a vibrant cannabis marketplace is tied to supporting a diverse and inclusive industry. We’re proud to sponsor Radicle Femmes, which celebrates the many contributions of women who continue pushing the legal cannabis industry forward.”

Radicle Femmes invites potential partners to join in celebrating and promoting women in cannabis. Sponsorship packages are available and offer a unique opportunity to align your brand with this impactful event. For more information on sponsorship opportunities, please contact [email protected].

Esteemed media partners of the event include ADCANN, Cannabis MarketSpace, Cannabis Prospect Magazine, Cannabis Retailer, Grow Opportunity, and StratCann. Media representatives are encouraged to be part of this event. For more information, please contact [email protected].

Attendance at Radicle Femmes is strictly limited to those aged 19+. Pre-registration is required to guarantee your spot.

To stay up to date with event details, follow @radiclefemmes. For more information and to register for the event, please visit Eventbrite.

Read the press release here.

Nextleaf Solutions announces they are debt-free, cash flow positive

Written by Sarah Clark on February 1, 2024. Posted in British Columbia, Business, Cannabis News, Producers.

In its 2023 financial report, BC-based cannabis processor Nextleaf Solutions Ltd. says it achieved four quarters of consistently positive cash flow in the past fiscal year.

The company is now debt-free, which is attributed to reduced operating expenses, increased revenue, and improved gross margin. Nextleaf reports total gross revenue for the fiscal year-end (FY) 2023, totalling nearly $10 million, with a gross profit of $2.3 million.

The cannabis producer’s year-over-year gross revenue increased by $4.6 million, representing a growth of 186.1% compared to the previous year. In just the fourth quarter of 2023, Nextleaf generated around $3.3 million in revenue, a 24% increase from the previous quarter and a 77.7% year-over-year growth from Q4 of FY2022.

Located in Coquitlam, BC, Nextleaf offers an array of cannabis 2.0 products, such as cannabis oils, capsules and vape pens.

Nextleaf has experienced significant commercial growth in Fiscal Year 2023, marked by a series of impactful initiatives and successes. In 2023 it launched 15 new products into the Canadian non-medical market, including three softgel SKUs, four ingestible oil SKUs, and eight vape SKUs. It also recently launched an in-house brand called High Plains that includes infused pre-rolls.

The company’s products are now distributed in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Nova Scotia. The company’s Glacial Gold brand is the top-selling cannabis softgel brand in BC, a category that saw an uptick in sales in BC in 2023. It was the number four selling softgel in Ontario in Q4 2023.

“This was a monumental year for our business. 2023 delivered the framework for financial stability. This provided the confidence that we have the tenacity, talent, technology, and tactics to ride the waves inherent in this industry. Despite the complexity, we’ve remained very focused on delivering one simple premise…value,” shares Emma Andrews, Interim CEO.

“We’ve worked through growing pains and roadblocks, overcoming setbacks and stigma. It has fortified our team, and I’m proud of how far we’ve come,” continues Andrews, “we’ve put in a lot of hard work to get here, and we’re just getting started. There’s a collective understanding of the unique inflection point we are at.”

Note: Nextleaf is located in Coquitlam, not Port Coquitlam as this article briefly stated.

Canada’s cannabis production rallied in second half of 2023

Written by Sarah Clark on February 1, 2024. Posted in Business, Cannabis News, Producers.

Cannabis production in Canada rallied in the second half of 2023 after a seven-month decline following a high water mark in November 2022.

Chained at 2017 dollar rates, the value of cannabis production in the legal industry in Canada reached $6.47 million, the highest it has been in 2023 since February.

While the regulated industry has shown steady year-over-year growth since 2018, the level of growth has been slowing as the industry begins to hit a potential ceiling in demand within the confines of the regulations.

The low in June 2023 of $5.78 million was the lowest since November 2021, as the industry appears to be potentially levelling out.

Legal cannabis stores, which, although not as pronounced as cannabis production, have also been increasing year-over-year since 2018 despite some slight monthly declines. Through 2023, however, those increases began to slow down, with November’s $1,079,000 being slightly lower than October’s $1,082,000, although still well above $872,000 in November 2022.

At the same time, the unregulated cannabis industry has been slowly but steadily declining over the same time. In October 2018, the GDP for the unregulated cannabis industry was $2.73 million, with month-over-month declines since, arriving at $1.64 million in November 2023.

Money from unlicensed cannabis stores showed a similar decline, with revenue in October 2018 at $1.26 million, followed by month-over-month declines to just $692,000 in November 2023. Legal, fully-regulated retail stores passed unregulated stores in December 2021.

Alberta makes changes to cannabis sampling rules, event sales, and more

Written by David Brown on January 31, 2024. Posted in Alberta, Business, Cannabis News, Government, Producers, Retail.

Alberta Gaming Liquor and Cannabis (AGLC) made several updates to their Retail Cannabis Store Handbook and the Cannabis Representative Handbook this week, effective immediately.

The changes relate to authorizations to sell cannabis at age-gated events, new guidance for cannabis sampling and cannabis sales between retail stores, among other changes.

Following changes last year when AGLC began allowing producers to provide product samples to retailers, the provincial agency has now made amendments to its rules to allow samples of packages larger than 3.5 grams.

Under the new rules, if a sample product is not available in the 3.5 gram size, the smallest available size of the product may be provided as a sample. Each product may be sampled no more than twice per calendar year.

Licensed cannabis retailers may also now apply to AGLC for a licence extension for the purposes of selling cannabis at a minors-prohibited entertainment event or cannabis industry trade show.

In addition, cannabis sales between licensed cannabis retailers, regardless of ownership structure, are now permitted in Alberta. The required 120-day wait time between cannabis transfers has also been removed to allow unlimited transfers of cannabis products between licensees owned by the same legal entity.

Another change is that licensed cannabis retailers are now able to apply to AGLC for a licence extension for the purposes of selling cannabis at entertainment events or cannabis industry trade shows. These events must be age-gated to preclude minors.

Cannabis retailers can now also leave cannabis products in locked display cases overnight, rather than having to move them to and from locked storage every night and morning.

This means cannabis products must either be stored in a locked showcase in the customer area or a locked storage room accessible only by authorized staff.

The AGLC has also updated its policies to align with the agency’s Cannabis Waste Management Fact Sheet 2023.

C3’s George Smitherman steps down, organization seeks new President & CEO

Written by David Brown on January 31, 2024. Posted in Business, Cannabis News.

The Canadian Cannabis Council (C3) announced today that its President & CEO is stepping down.

George Smitherman, who has served as the head of the cannabis industry organization for four years, says he is proud of his work and looking forward to new opportunities.

“(I’m) excited for new opportunities and proud of the work we accomplished over the past four years,” Smitherman told StratCann. “Looking forward to watching the continued evolution of C3 and the Cannabis sector from the sidelines.”

The organization made the announcement in an email sent to its members at 4:19 am on January 31, saying Smitherman has left an “indelible mark” on C3.

“His leadership, thinking, and indomitable spirit have been instrumental in driving positive change for our industry and fostering a culture of collaboration and excellence among our members,” wrote Rick Savone, Chair of the Cannabis Council of Canada. “We extend our heartfelt thanks to George Smitherman for his service and wish him nothing but success and joy in his future endeavours.”

“George is stepping down after four successful, eventful years as our President. C3 is now beginning a recruitment campaign to succeed him,” Savone added in an email to StratCann. “The organization has grown exponentially over George’s tenure, and our work as the leading industry association representing producers is more impactful than ever. In a few weeks, we’ll have a new organizational leader and our achievements will continue to generate benefits for our members. We’re eager for this next stage of development, both for George and for C3.”

The Canadian Cannabis Council’s board says they will now begin a formal search for a new Executive Director and are encouraging those interested in the position to send their application to [email protected].

In the interim, C3 Treasurer Tamara Lovi and C3 Secretary Elisabeth Sieber will assume the role of Acting Co-Executive Directors, ensuring the smooth continuation of C3 operations.

The Board says it has been working to define its strategic priorities for 2024, with a mandate to continue to push for financial viability, a level playing field with the illicit market, and enhanced communications to consumers.

The Cannabis Council of Canada bills itself as a national and international representative of the country’s licensed producers and processors of cannabis, with a mission to promote industry standards, support the development, growth, and integrity of the regulated cannabis industry, and serve as an important resource on issues related to responsible use of cannabis for medical and non-medical purposes.

Smitherman has a long history in Ontario politics. He started with C3 in March 2020. Previously, he had worked in the cannabis industry in various roles. He was also a candidate for Mayor of Toronto in 2010 and served as the Ontario Minister of Energy and Infrastructure and Deputy Premier of Ontario from 2008–2009, and the Minister of Health and Long Term Care, Deputy Premier of Ontario from October 2003–June 2008.

Smitherman was also previously a member of the Ontario legislature from 1999 to 2009, and was the first openly gay MPP in Ontario’s history.

Trees Corporation seeking investment or buyers

Written by Sarah Clark on January 30, 2024. Posted in British Columbia, Business, Cannabis News, Ontario, Producers.

A court-appointed monitor of Trees Corporation, which operates a chain of 10 cannabis stores in BC and Ontario, is conducting a sale and investment solicitation process for the cannabis company.

FTI Consulting Canada Inc. is undertaking the process on behalf of Trees Corporation, Ontario Cannabis Holdings Corp., Miraculo Inc., 2707461 Ontario Ltd., OCH Ontario Consulting Corp., and 11819496 Canada Inc. (collectively, “Trees” or the “Companies”) in the Companies’ Creditors Arrangement Act (CCAA), R.S.C. 1985, c. C-36, as amended.

In December 2023, Trees announced that it and its subsidiaries would be filing for creditor protection under the CCAA. The group had been seeking additional financing to keep it operating. On December 22, 2023, Trees was granted creditor protection.

The company lists among its assets, in addition to its ten locations, an established loyalty program and a “long-standing and respected cannabis heritage originating on Vancouver Island.”

On January 2, 2024, the applicants received an extension for their proceedings until February 29, 2024. Then, following orders granted by the court on January 29, 2024, FTI Consulting Canada and Trees started the sale and investment solicitation process (SISP), and a transaction agreement was approved to serve as the “stalking horse bid” in the SISP. A Stay of Proceedings was then extended to April 12, 2024.

Those who wish to submit a bid in the SISP must deliver a non-binding letter of interest to the Monitor and Trees, together with the other materials and information required under the SISP, by no later than 5:00 p.m. (ET) on February 29, 2024. Final binding offers are due in accordance with the SISP by no later than 5:00 pm (ET) on March 15, 2024, unless extended in accordance with the terms of the SISP.

Trees started as a “legacy” era medical cannabis dispensary in British Columbia before eventually transitioning to the legal market.

The former director and general manager of Trees received a fine from the BC government in 2021 of $771,557.50 for its continued operation prior to receiving a licence from the province. In the same year, workers at a Trees location joined The United Food and Commercial Workers Union (UFCW) 1518’s “BC Bud Union”.

BC’s cannabis market continues to mature, as sales appear to plateau

Written by David Brown on January 30, 2024. Posted in British Columbia, Business, Cannabis News, Government.

The declining price of cannabis means wholesale cannabis sales in BC in the last three months of 2023 were down from the previous three months, even as the volume of cannabis sold increased.

The figures were released as part of the BC Liquor Distribution Branch’s (LDB) Q3 report for 2023, covering October, November, and December.

Following an ongoing trend over several reporting periods now, 28 gram and 3.5 gram SKUs sold the most in terms of dollars, while 7 gram and 14 gram formats saw the most significant year-over-year increase in terms of dollars and grams sold.

Sales of 3.5 gram SKUs were down 21% from the same period last year in terms of dollars and 14% in terms of grams sold.

Sales (in dollars) of 7 gram SKUs increased by 81% and 80% in grams sold, while 14 gram SKUs increased 26% (in dollars sold) and 45% in grams sold. Sales in dollars in the 28 gram category increased 11%, while they also increased 18% in grams sold.

Sales were up for all producers in terms of units sold and year-over-year sales except for ingestible extracts, which declined following Health Canada’s ruling that some of these products are non-compliant.

Sales for beverages were up 21% from the same period last year in terms of dollars sold and units sold, edibles by 19% in sales and 46% in terms of units sold, flower sales in dollars were up by 9% and 4% by units, inhalable extracts sales were up 40% and 45% in units, pre-rolls up 20% and 34% in units, seeds up 10% in sales and 49% in units, topicals up 9% and 15%.

Ingestible extract sales were down 13% in terms of dollars and 20% in terms of units. Drilling down in this category, oils and tinctures were down 18% in dollars sold and units sold, while capsules and pills increased by 27% in dollars sold and 22% in grams/volume. Other ingestibles (i.e. products like lozenges that are consumed as edibles but classified by producers as extracts) were down nearly 66% in sales and SKUs sold.

Sales of disposable vape pens saw a significant increase, by about 100% in sales and units. Sales of shatter, vape kits, and wax were down in dollars and volume. Wax saw the biggest decline, with 74% less sold in dollars and SKUs.

Infused pre-rolls saw a big jump, with an 83% increase in sales and 73% increase in units sold. Resin and Rosin sales increased by 54% in dollars and 69% in SKUs.

Cart sales were up 21%, while units-moved increased by 23%.

The most popular edibles were chews or gummies, with 89% of sales, followed by chocolate at 8%, baked goods at less than 2%, and edibles and hard candies at 1%.

Inhalable extracts are divided with carts at about 48% of sales in dollars sold, followed by inhalable extracts like infused pre-rolls at 38%. Disposable vape pens were about 4% of sales, followed by resin, rosin, shatter, and hash at under 3% each.

Direct Delivery

Sales in Direct Delivery increased as well, with 702,478 grams sold in Q3 2023 compared to 362,180 last year, a 94% increase in volume for a total of $3,167,456 in sales, compared to $2,575,585 in the same quarter in 2022.

However, this was a decline from the previous quarter, where sales were 821,718 grams sold for a total of $3,777,539 in sales.

Wholesale sales in Direct Delivery increased by 23% from the same period last year, with almost $3.2 million sold. The average price per gram sold in DD was $4.51, and $3.93 for flower, down from $7.11 and $6.45 last year.

This decline in sales from Q2 2023 was driven by lower sales of cannabis flower, with $2,259,307 in Q2 and $1,863,265 in Q3. Pre-roll sales were $896,215, down from $968,026 in the previous year.

Sales of edibles and beverages were up 25% from the same quarter last year, with $16,169 sold in Q3 2023 vs $12,945 in Q3 2022.

Ingestible Extracts were way up compared to the same period last year and last quarter. In Q3 2023, sales of this product category were $24,502, doubling from $12,923 in Q2 2023 and tripling from Q3 2022’s $8,773.

More info is available here.

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January 11, 2024

BC’s cannabis Direct Delivery program is growing, but fees still too high

May 29, 2023

Report: Price of legal cannabis almost on par with black market

Written by Sarah Clark on January 29, 2024. Posted in Business, Cannabis News, Retail.

A new report from Deloitte and Canadian cannabis data analytics company Neobi compares Canada’s legal and illegal cannabis markets, highlighting the advantages and challenges that the legal market faces.

On average, the price of cannabis flower in the legal market was about 10% more expensive than from illegal market. While the average cost of 3.5 grams on the legal market was $9 and $6 on the black market, the average price for 7 grams was $5.84 and $5.35, respectively, while 28 grams was $4.32 and $4.24.

The study scanned products from 624 legal private recreational cannabis stores and 57 illicit online stores in May and June 2023. Unsurprisingly, the scan found a greater variety of products in the illicit market, with more of a focus on cannabis flower and extracts, as well as larger package sizes than its legal counterparts.

This greater variety was highlighted by cannabis edibles, often with more THC and in more recognizable candy formats than legal edibles. Illegal stores were also not held back by SKU size limits like the 30-gram purchase limit for legal stores, which also likely helps the illicit market out-price the licit one.

Although both sides of the market show a majority of flower products sold in 3.5 gram SKUs, there was a more even balance of different sized SKUs at illegal stores than in the legal market. Legal stores were far more likely to carry 3.5 gram SKUs.

In the illicit market, 17.3% of flower products were in greater-than-28-gram package sizes, including a small amount as large as 56 grams (0.6%), 112 grams (6%), 224 grams (6.1%), and 448 grams (4.6%).

While unregulated, illegal websites had a high number of flower and extract products listed, they were also less likely to carry pre-rolls, beverages, and vapes compared to legal recreational stores.

The price difference between the scanned legal and illegal sources of dried cannabis flower was about 20% on average, with illegal online stores being cheaper than their heavily regulated and taxed counterparts. This price difference was more evident in smaller SKUs, while those at 7 gram and larger were

The average price a gram of cannabis flower in the illicit market was $6.24 per gram, while it was $7.96 per gram in the legal market. On average, illicit flower product prices were 78.4% of those in the legal market indicating prices in the legal market are catching up to the illegal market as compared to a 55% difference in 2019.

This price difference was most pronounced in smaller SKUs like 3.5 gram, where the illegal market was 67.8% cheaper than the legal market. The pricing for 28 gram offerings was almost the same, with average illicit prices 98.1% of the average legal recreational prices.

For a 28 gram SKU, the legal and illegal market prices were $4.32 and $4.24 per gram, respectively.

All of the sampled illegal cannabis websites allowed e-transfer as the primary payment method, with even accepting Bitcoin—only a few accepted credit cards. Unsurprisingly, 78% of illegal sites had no age gate, and many products used “common television, film, and other media brands,” potentially adding to buy appeal.

Products like psilocybin mushrooms, LSD, and DMT were found on 63% of illegal websites.

The report also says there were many instances of these illegal websites containing malware and even possible identity theft phishing schemes.

All the websites selling illicit cannabis added tax for all products at checkout, although the report says it’s uncertain whether these taxes are remitted to the government.

Five years into legalization, cannabis industry reaches saturation point as legal weed takes more than 70% market share

October 16, 2023

Canadians bought more than $16 billion worth of cannabis in the first five years of legalization

January 8, 2024

What’s the ideal approach to regulating cannabis?

January 23, 2024

Week in Weed – January 27, 2024

Written by David Brown on January 27, 2024. Posted in Business, Cannabis News, Government, International.

There are several headlines in cannabis news this week. On the international scene, StratCann reported on Israel opening an investigation into concerns that Canadian cannabis companies are flooding the Israeli medical cannabis market. Domestically, Cannabis was recently added to the Canadian Free Trade Agreement, although cross-province sales are not likely any time soon, experts say.

In BC, the Fraser Valley Regional District is holding a public hearing for new zoning regulations for cannabis production, while Surrey released a survey on a proposal for allowing up to 12 cannabis stores in BC’s second largest city. The city has banned cannabis stores since legalization began.

StratCann’s deep-dive reporter Tim Wilson asked industry experts like Trina Fraser, Tanner Stewart, George Smitherman, and others, about the ideal approach to regulating cannabis.

We also shared an article on the state of the BC cannabis industry with comments from Antidote’s Shannon Ross and Victoria Cannabis Co’s Kype Rowe.

In Ontario, a judge ruled that a “frivolous” statement of claim against cannabis retailer High Tide had no hope of succeeding. We also shared a lighthearted story involving Shrek, Dutchie, and a Toronto-area cannabis store.

In the Prairies, Saskatchewan Polytechnic teamed up with Mother Labs to tackle powdery mildew.

And, last but not least, we shared a profile on Kootenay Aeroponics’ deep roots in BC’s cannabis community.

In other cannabis news…

The RCMP eased its policy on cannabis use by members earlier this month, saying simply they must be fit for duty when reporting for work. This is a change from a previous rule that required a 28-day restriction between cannabis use and duty.

An Ontario man is suing the province for $2 million following an OPP raid on his cannabis production facility in Wellington North in 2021. The investigation concluded in January 2023 without charges being laid. The man alleges the police trespassed and damaged property, ultimately interfering with his ability to make money, all because of a negligent police investigation.

Cronos says its Spinach brand was the number one flower brand in Canada in 2023, with a 6.9% market share in the fourth quarter, based on figures from HiFyre. The same data shows Spinach as the second best-selling cannabis brand in Canada across all categories as of December 2023 and the best-selling edible brand in Canada.

High Tide Inc. announced that its Canna Cabana retail cannabis store, located at 118 Millennium Drive, Fort McMurray, will begin selling recreational cannabis products on January 27, 2024. This opening will mark High Tide’s 163rd Canna Cabana-branded location in Canada, the 79th in Alberta, and the first in the Regional Municipality of Wood Buffalo.

A new study that looked at the risk perceptions related to driving after cannabis use (DACU) among Canadian and US adults showed that Canadians perceived driving within two hours of cannabis use as more dangerous than Americans and reported that more of their friends would disapprove of DACU.

Cannabis activist Chris Enns says he’s leaving the industry—and cannabis—behind as his charges have been dropped. Enns said he’s looking to forge a new path in life, reports the CBC, and has told the Crown prosecutor handling the case that he intends to close his dispensary, Farm Assists, on Gottingen Street in Halifax. He said he will perhaps study law at Dalhousie University.

The Grow Up cannabis expo shared their Top 50 Dankest Canadians, which included StratCann’s own David Brown! Yay! Or is it Most dank?

Heritage Cannabis Holdings Corp. announced it is releasing new RAD products, including “liquid diamond vapes” and its new Juicy Hoots vape carts.

Aurora Cannabis Inc. announced the launch of three new cannabis-infused beverages, all available exclusively to veteran patients at first: Neon Rush, Strawberry Pineapple Tropical Fizz, and Pineapple Coconut Fizz, which can be purchased at Aurora Medical.

Canada released info on Health Canada’s Drug Analysis Service (DAS) and Cannabis Laboratory (CL) laboratories across Canada, which analyze suspected illicit substances seized by Canadian law enforcement agencies. Cannabis was identified in a total of 8,800 samples during this period.

International Cannabis

Finally, The New York Times ran a piece on a former US Navy lieutenant, Wanda James, who is a prominent advocate of racial justice in the changing cannabis landscape. The Times writes that Ms. James, 60, has owned multiple cannabis businesses over the years, including a pair of dispensaries and an edible company, which has given her a platform to speak about what she believes to be racial injustices in the industry.

Oh, and Nigeria says it seized 32.5 kg of “Colarado Indica” that was imported from Canada.

Saskatchewan Polytechnic teams up with Mother Labs to tackle powdery mildew

Written by Sarah Clark on January 26, 2024. Posted in Business, Cannabis News, Labs, Research, Saskatchewan.

Saskatchewan Polytechnic has partnered with Saskatchewan-based cannabis nursery Mother Labs on a breeding program focussing on screening for mildew resistance.

The applied research project was first proposed by Mother Labs, who brought the idea to Saskatchewan Polytechnic’s BioScience Applied Research Centre (BARC). The Centre gives experts from private industry access to the polytechnic’s applied research expertise.

“Our partnership with Sask Polytech symbolizes a significant stride towards addressing a spectrum of challenges in the cannabis industry,” says Jordan Hannah, Director of Operations at Mother Labs.

Researchers use PCR-based molecular markers as a way to look for agronomic traits in cannabis plants.

Students from the BioScience Technology program extract DNA from tissue samples and use PCR-based markers (Polymerase chain reaction) to screen breeding lines for the presence or absence of specific genes.

“PCR tests, similar to the COVID PCR tests previously used for out-of-country travel, were employed by our students in the investigation of cannabis plants,” says research chair Blaine Chartrand. “Specifically, our students used PCR testing to detect plants that contained genes for resistance to powdery mildew and to determine their sex for breeding applications.”

“Collaborating with Mother Labs allowed students to gain insights into the cannabis sector through facility tours and firsthand learning experiences,” he adds.

The team accurately determined the sex of 40 different cannabis plants using PCR tests.

The Mother Labs project was funded by the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP).

Saskatchewan Polytechnic received cannabis research and analytical licenses from Health Canada in 2023.

“As the cannabis industry continues to mature, it will be vital to develop excellent breeding programs and energy-efficient methods of propagation. Sask Polytech’s applied research will draw on techniques that are well established in the traditional agricultural space and adapt them for use in the cannabis industry to improve plant quality and performance,” said Dr. Susan Blum, Associate Vice-President of Applied Research and Innovation at Sask Polytech at the time.

Read more about this project at saskpolytech.ca.

Other industry collaborations

This is not the only instance of such a project in Canada. Powdery Mildew is one of the most common diseases that cannabis growers often struggle with, especially in humid climates. Because of this, the industry in Canada and abroad is looking to identify and even patent genetics with resistance to the disease.

In 2020, more than $4.2 million in federal, provincial, and industry funding was announced to aid with research at the University of British Columbia (UBC) into enhanced cannabis cultivars, focusing on disease resistance for issues like powdery mildew.

The project, Fast-Track Breeding of Powdery Mildew-Resistant Cannabis, involved UBC researchers Dr. Loren Rieseberg and Dr. Marco Todesco, in partnership with Aurora Cannabis.

Aurora said they had filed a provisional patent application on powdery mildew resistance that was discovered through this program and will take legal action to protect their research and development.

Breeding is, of course, not limited to looking to address powdery mildew. In 2023, UBC’s Dr. Todesco also announced they were teaming up with a geneticist at Aurora to adapt cannabis for outdoor production.

Israel opens “anti-dumping” investigation into cannabis imports from Canada

Written by David Brown on January 26, 2024. Posted in Business, Cannabis News, International, Producers.

Israel’s Ministry of Economy has sent notice to cannabis producers in Canada that it is initiating an anti-dumping investigation concerning the importation of medical cannabis from Canada to Israel.

A notice on the Israeli Government’s website dated January 18, 2024, is addressed to 10 different Canadian cannabis producers: Village Farms International, Organigram Holdings, Tilray Canada, Hexo Corp (owned by Tilray), The Green Organic Dutchman, Canopy Growth Corporation, SNDL, Cronos Group, Auxly Cannabis Group, Decibel Cannabis, and “all the medical cannabis manufacturers in Canada who export their goods to Israel.”

“The Commissioner for Trade Levies at the Ministry of Economy and Industry, announced by virtue of his authority according to Section 24(d) of the Law on Trade Levies and Defence Measures, 5591 – 1991, of his decision to open an investigation on his own initiative into the export import of cannabis from Canada, after he found that special circumstances of actual damage exist or the probability of actual damage to the local manufacturing industry and a causal link between the imported imports and said damage.” reads the document, translated.

It also contains a questionnaire for importers and exporters, which includes questions about financial statements of the company over the last three years, descriptions of the company’s ownership structure, as well as questions about the products and prices, THC and CBD levels, shipping terms, payments, and much more.

The document notes the action is being taken due to “special circumstances” and concerns over Canadian companies flooding the Israeli market with cannabis products.

The notice also includes a letter sent to Michael Mancini, the Chief Commercial Counselor with the Embassy of Canada, informing them of the investigation, dated January 15, 2024.

Canadian cannabis companies have been increasingly sending cannabis products to markets like Israel, Australia, and Germany, followed by Argentina, the UK, and the US.

Data presented last year by Health Canada indicated that cannabis exports may continue to increase significantly, with more than a thousand applications already submitted as of September 12, 2023. Canada has exported 140,958.40 kg of dried cannabis and 37,230.01 litres of cannabis oil since October 2020, with almost half of that dried cannabis (62,535.65 kg) exported in the last 12 months of data from Health Canada (July 2022-June 2023).

The federal regulator has received 1,211 applications from Canadian companies seeking to export cannabis since the beginning of the fiscal year on April 1, 2023, and has approved 1,147. In a presentation made online on Tuesday, October 24, a representative with Health Canada said they expect these numbers to continue to increase.

The number of applications and permits issued has been increasing on an annual basis, with 1,805 permits issued in 2022-2023, 1,421 in the previous year, 1,267 in 2020-21, 1,213 in 2019-20, and 272 in 2018-19.

Canada only allows the export of cannabis for medical or scientific purposes, or for hemp products.

*Some Canadian cannabis brands listed by an Israeli cannabis company, Bol Phrama*

Israel had more than 132,000 patients registered to receive cannabis for medical purposes as of November 2023. It began allowing imports of cannabis in 2019. A report in the Jerusalem Post in January 2023 referred to the decision to allow medical cannabis to be imported into Israel as one that has “pushed local growers and producers to desperation.” The country’s demand for cannabis at the time of the article was 52 tons per year while Israel’s own growing and production capacity is around 100 tons, continued the article.

According to Israel’s Cannabis Magazine, the investigation was triggered by five Israeli cannabis companies contacted the ministry with concerns that cannabis imports were causing prices to drop too low for them to compete.

Surrey releases proposal for up to 12 cannabis stores in BC’s second largest city

Written by David Brown on January 24, 2024. Posted in British Columbia, Business, Cannabis News, Government, Retail.

The city of Surrey, BC, which has banned cannabis stores since the beginning of legalization, is now proposing to allow up to 12 cannabis stores in the city.

The plan, detailed in a survey the city recently posted online, says if it moves forward, there would be a maximum of two in each of Surrey’s six communities.

The city has developed a draft framework to guide the location and selection criteria, and is asking residents to complete the survey to provide feedback on the draft framework.

Surrey is the second-largest municipality in British Columbia, after Vancouver, with a population of more than 560,000 people. Vancouver, which has more than 660,000 people, currently has 80 cannabis stores, according to the city’s document (83 listed as open or in the queue according to BC).

In 2023, Surrey City Council began exploring the possibility of allowing cannabis stores, directing city staff to develop a plan. In July of that year, council sent a plan back to city staff to be reworked to address some councillors’ concerns.

The initial plan would have limited the number of store locations to one in each of Surrey’s six town centres (City Centre, Guildford, Fleetwood, Newton, Cloverdale, and Semiahmoo), with a preference for a city‐owned site in each Town Centre as the first location.

Councill expressed concern at the proposed locations and the idea of the city being a landlord for a cannabis business.

The new plan proposes a 200 m distance requirement from “sensitive uses and areas to limit exposure to children and youth,” as well as existing cannabis retail and production locations.

The city also says it has developed an application process for future cannabis retail store proposals. If applicants meet all pre-screening requirements, applications will then be reviewed and ranked based on the experience of the operator, a parking and access plan, visibility, lighting and crime prevention design, signage and building face design, and for Surrey-based businesses.

Deepak Anand, who lives in Surrey and is a principal at ASDA Consultancy Services, which works in the cannabis space, says the number of stores Surrey is proposing is not enough, given the city’s size.

“While Surrey moving away from being a retail desert five years after legalization is certainly progress, the ratio of one store for 47,000 people is, frankly, ridiculous. Surrey easily has the capacity and demand for over 80 stores based on its population and in comparison to other municipalities of its size.”

The Surrey Board of Trade released a statement today saying they applaud the new proposal, and hope it is implemented this spring.

“As the City invites public input through the Retail Cannabis Framework Survey, the Surrey Board of Trade supports a framework that is developed collaboratively with the cannabis industry and the public,” said Anita Huberman, President & CEO, Surrey Board of Trade. “Surrey can implement a safe and efficient cannabis regulatory framework, including amendments to zoning bylaws, business licence bylaws, bylaw notice enforcement bylaws, and municipal ticket information bylaws.”

The Surrey Board of Trade released a report last year calling on the local government to begin allowing cannabis retailers to operate in the municipality. Jasroop Gosal, Policy & Research Manager for the Surrey Board of Trade, said the board had concerns with how long the proposed plan will take to implement, while other cities in BC and across Canada have already moved forward.

Surrey City Staff held a workshop in 2023 with cannabis retail industry members to gain insights and feedback on a revised cannabis retail policy and application process.

BC has a long way to go create a thriving cannabis industry

Written by Contributor on January 24, 2024. Posted in British Columbia, Business, Cannabis News, Government, Producers.

Shannon Ross has an idea to make BC cannabis the talk of the town again.

The once notorious province could get some of its edge back by letting people enjoy cannabis together in public, just like you would consume craft beer.

“I think the most effective thing we could do to get back on the stage and become a powerhouse, not only in British Columbia, but the whole international scene, is consumption spaces,” says Ross, co-founder of Antidote Processing in the Kootenays. “That would be a game changer.”

We’re not a financially successful industry for the majority of small businesses right now. We have our hands tied behind our back trying to create legal cannabis businesses.
Shannon Ross, Antidote Processing

Ross wants to know how the BC government plans to support consumption spaces. She says one of the biggest hindrances right now is the inability to get together and use cannabis socially. Ross wants public cannabis spaces to be similar to finding a place to enjoy a pint with pals. There’s still too much stigma around cannabis, she says.

She suggests creating farmers’ market-style gatherings as a valuable way for consumers to meet farmers, especially with the limitations placed on advertising.

“The marketing restrictions are so challenging on a federal level that the BC government could facilitate that consumer-grower connection and allow some marketing efforts to happen in a way that’s conducive to finding balance,” she says in an interview with StratCann.

There has to be a happy medium that encourages a certain level of responsible education and marketing, she adds.

“It’s really about connecting people and allowing them to consume,” she says, adding that even the big conferences are fading now.

Still, there are things that BC is doing well to set the stage for long-term relevance, namely farmgate and direct delivery. Ross calls them both tools for proactive change, but there are barriers to taking advantage.

The 15% markup on direct delivery products erodes the incentive, and getting retailers on board can be pretty tricky, she says. Also, there are extra expenses tied to both direct delivery and farmgate that cannabis businesses simply can’t justify.

“It takes a ton of resources that we don’t have yet,” says Ross.

“Right now the industry isn’t mature enough. We’re not a financially successful industry for the majority of small businesses right now. We have our hands tied behind our back trying to create legal cannabis businesses.”

On the bright side, Ross says the provincial government has been receptive and is showing some curiosity toward cannabis by attending industry events. She says they are hearing the voices of craft growers and adapting.

She argues that the federal government is the biggest problem, particularly the excise tax. She says that until the excise tax is reduced, people won’t jump on these programs.

“The biggest challenge is access to capital in order to meet a lot of the regulatory requirements. Banks don’t want to loan very much and there’s still so much stigma, just being able to have a low interest loan… even access to $25,000. A lot of people aren’t even able to transition to legal because there’s no access to capital.”

Kyp Rowe has a bit of a different perspective on which level of government is the most significant hindrance.

“The base hindrance is the province,” says Rowe, president of Victoria Cannabis Company (VCC). “Everybody wants to scream and yell at the feds with their excise tax, Health Canada, this, that, and the other thing. The biggest assholes in this entire industry are the provinces. The fact that they are quadruple-dipping into our pockets is making this entire industry unsustainable.”

Rowe lists the PST, GST, 15% direct delivery markup, and the province’s monopoly over the wholesale game.

“The whole thing is doomed to fail and to crush the small producer.”

While the Direct Delivery Program is a great start—“I love it,” he says—the 15% markup is aggravating. “I move my weed 30 feet into my farmgate store and I’ve got to cut them down 15%? That’s fucking ludicrous,” says Rowe.

“The Direct Delivery Program in totality as far as the rest of Canada is concerned is extremely progressive. It’s a way for the producers to make direct connections with the retailers without having the province right in the middle of it, mucking up the waters.”

Rowe also applauds farmgate but says it won’t benefit many BC producers.

VCC is only the third company to get its farmgate licence since the program came into effect over a year ago. He blames the low uptake on locations, as many facilities are in industrial parks or remote areas that don’t get much traffic. Conversely, VCC is located minutes from downtown Victoria and has 44,000 cars going past it daily.

Rowe says BC’s Liquor and Cannabis Regulation Branch made the process of getting its farmgate licence easy.

It was the City of Victoria that dragged their feet. He says it took a year to get on the city’s docket for rezoning as they kept getting bumped from the agenda. Then, in order to get approval, VCC had to pay $60,000 for a sidewalk, which cut down its parking availability.

“We had to harass the city.”

“Three levels of government you have to deal with in the cannabis industry. They don’t talk to each other. We don’t have any power. To effect change is almost impossible.”

~David Wylie. David is a writer, father, and founder of The Oz., which covers cannabis from a consumer perspective.

Canadians bought more than $16 billion worth of cannabis in the first five years of legalization

January 8, 2024

Few BC growers interested in farmgate a year after program launched

October 25, 2023

BC’s cannabis Direct Delivery program is growing, but fees still too high

May 29, 2023

Ontario Court rules “frivolous” statement of claim against cannabis retailer had no hope of succeeding

Written by David Brown on January 22, 2024. Posted in Business, Cannabis News, Ontario, Retail.

An Ontario judge has ruled a statement of claim by one cannabis retailer against another, as well as the provincial cannabis regulator, is frivolous and vexatious.

In a ruling posted on January 19, 2024, an Ontario Superior Court judge ruled that a claim filed by Ontario cannabis retailer Highland Cannabis Inc., with one location in Kitchener, ON, against High Tide Inc., which owns the largest chain of cannabis stores in Canada, had no hope of succeeding.

Highland Cannabis Inc. launched its action against High Tide and the Alcohol and Gaming Commission of Ontario (AGCO) in relation to a data breach at the AGCO in 2022. The leak showed data for the sales figures at retail cannabis stores for the months of July 2021 and December 2021. Law enforcement is still investigating the leak.

High Tide had asked the court to dismiss the action against the company, arguing it was “frivolous, vexatious, and an abuse of the court’s process.”

Highland Cannabis told the court that representatives of High Tide approached Highland’s owner with an offer to purchase the store following the data breach. In that meeting, High Tide is alleged to have told the owners of Highland Cannabis that it was aware of the independent retailer’s sales figures.

Although the two parties initially discussed a sale price, it ultimately did not move forward.

The court documents say High Tide received the leaked data from two sources, and there have been no allegations that the retail chain forwarded or disseminated the leaked data to any other party. It did review the data, though.

The owner of Highland Cannabis argued that High Tide accessed the data inappropriately, giving it an unfair advantage against Highland Cannabis. They also allege that another location High Tide was interested in, the Ira Needles location, was also based on their access to the retail sales data. The court disagreed, saying High Tide had identified the location prior to the leak.

Messages between the two parties, shared by the court, show that High Tide offered to buy the Highlands Cannabis location for $7.2 million.

Editor’s note: This article initially stated that Highlands countered High Tide’s offer of $7.2 million, asking for $10 million. While Highlands stated anticipated growth to $10m/y, this was not a counter offer. They did not make a counter offer. In addition, while Highland commenced this action against High Tide and the Alcohol and Gaming Commission of Ontario (AGCO), the dismissal here is only in relation to the action against High Tide, not the AGCO.

Featured image via Google Maps

“Data scraping” concerns some Ontario cannabis retailers

February 9, 2023

OCS confirms data leak, OPP opens investigation

May 10, 2022

Is the price right? Retail cannabis feels the squeeze

August 8, 2022

Cannabis added to Canadian Free Trade Agreement, but cross-province sales not likely any time soon

Written by David Brown on January 22, 2024. Posted in Business, Cannabis News, Government.

The newest version of the Canadian Free Trade Agreement (CFTA) has now been expanded to include trade in non-medical cannabis.

For the first time, the CFTA, which came into force in 2017, includes references to cannabis and the cannabis industry, with the word cannabis appearing 238 times within the text, primarily clarifying provincial rules and regulations.

Although this doesn’t mean any immediate changes to how cannabis is sold in Canada, some say it could lead to potential allowances for cannabis retailers to ship products to residents in other provinces.

Keyli Loeppky, the director of Interprovincial Affairs at the Canadian Federation of Independent Business, says she believes the inclusion of cannabis within the CFTA has the opportunity to open up cross-province sales of cannabis, pending further provincial approval.

“Putting it in the CFTA is a positive first step,” Loeppky tells StratCann. “What we’re cautiously watching is how provinces put rules in place in order to limit the sale and distribution of cannabis across the province.”

She says the issue is similar to how provinces regulate the sales of alcohol, with restrictions on direct-to-consumer, out-of-province sales, and consumers bringing alcohol back with them from another province.

A 2023 report from CFIB highlights these kinds of restrictions, noting Manitoba is the only province to allow inter-jurisdictional alcohol shipments, while Nova Scotia and British Columbia allow direct-to-consumer shipments of wine from any jurisdiction. BC and Saskatchewan also have an agreement to allow consumers to order craft spirits and wine directly from producers in the other province and have them delivered.

“Right now, there are no federal restrictions around the movement of cannabis within Canada, but provinces can put in place rules that restrict shipping between provinces,” adds Loeppky. “So exactly what we’re seeing with alcohol where someone in Alberta can’t order a craft beer from Ontario directly to their home because there are rules in place to prevent that.”

Deepak Anand, principal at ASDA Consultancy Services, agrees this is a big step forward.

“By facilitating the movement of non-medical cannabis across provincial/territorial borders, we create a platform for open dialogue and understanding. Inclusion in the Free Trade Agreement is not only about commerce; it is also a transformative step towards a progressive and stigma-reducing approach to the regulation, distribution and consumption of cannabis within Canada.”

Harrison Jordan, a lawyer with Substance Law, specializing in cannabis law in Canada, says the addition of cannabis into the inter-Canadian trade agreement is an important step, even if he doesn’t see it resulting in any immediate changes due to provincial limitations.

“The recent inclusion of cannabis into the CFTA is welcome news as it normalizes cannabis with other industries,” Jordan tells StratCann. “The inclusion means that provinces are generally prohibited from imposing barriers to inter-provincial trade subject to exceptions that had to be reserved by each jurisdiction when it was included just recently. The problem is that all the provinces have reserved some right to restrict or authorize the importation or sale of cannabis into their borders or limit market access, so we likely won’t see much, if any, interprovincial retail sale of non-medical cannabis.”

Still, federal excise tax stamps are a sticking point, argues Jordan.

“Even if the provinces didn’t seek the reservations they obtained, practically speaking, interprovincial retail sales would be difficult to implement because of excise stamps. The CRA expects that cannabis products be stamped with the respective stamp of the province that the consumer is located in at the time of delivery to them. Wholesalers in each province, run exclusively by the respective provincial government with the exception of Saskatchewan, only purchase from processors and provide to the province’s retailers cannabis products that are stamped for that specific province.”

The CFTA was created as a replacement for the Agreement on Internal Trade (AIT). It allows provinces to reconcile any differences in their jurisdictional rules and regulations that could disrupt trade within Canada.

It has encouraged provinces and territories with personal use exemption limits for the amount of alcoholic beverages transported by individuals across provincial/territorial boundaries, for personal use, for example, to either remove or increase these limits. However, the Supreme Court of Canada has somewhat upheld such limits, although not in the name of restricting trade.

The decision to include non-medical cannabis trade under the CFTA came about in December 2022, at the conclusion of a meeting of the Committee on Internal Trade, made up of provincial and territorial governments, as well as Ottawa.

This resulted in the Second Protocol of Amendment to the CFTA, which describes the relevant amendments to the CFTA for cannabis trade.

The CFTA aims to help implement advancements to Canada’s internal trade framework to enhance the flow of goods and services, investment, and labour mobility, eliminate trade barriers, expand procurement coverage, and promote regulatory cooperation within Canada.

The changes include a list of cannabis industry-related codes, such as:

A – Cannabis.
B – Services incidental to the production of cannabis plants.
C – Manufacture of cannabis.
D – Wholesale trade services, including on a fee or contract basis.
E – Retailing services, including on a fee or contract basis.
F – All other cannabis-related services not covered by B, C, D, and E.
G – Cannabis accessories

The definition of cannabis in the CTFA is the same as the definition within the federal Cannabis Act and is subject to any changes in that legislation, with some exceptions. It does not include industrial hemp, cannabis sold for medical purposes, drugs containing cannabis or combination products (as defined in the Cannabis Regulations), or cannabis that is not exempt from the application of the Food and Drugs Act.

A scan of provincial rules and regulations by StratCann shows a handful of provinces that explicitly disallow retailers to ship product to people outside of the province or for consumers to order non-medical cannabis from outside the province.

Federal regulations allow provinces to oversee the sales and distribution of non-medical cannabis while allowing the sale of medical cannabis cross-country.

Week in Weed – January 20, 2024

Written by David Brown on January 20, 2024. Posted in Business, Cannabis News, Government, Other.

This week in Canadian cannabis news, StratCann asked why Trudeau seems to have forgotten about the fledgling cannabis industry. We highlighted the challenges facing the industry, reported on Ontario’s Safari Flower Group receiving CCAA protection, Aberta’s OGEN initiating the sale of its brand, intellectual property, product line, genetics, and declines in retail cannabis sales in fall 2023. We also explored Simply Solventless’ acquisition of Lamplighter and shared about GrowerIQ completing its acquisition of Ample Organics.

In other cannabis news in the past week…

A trial in Ontario Superior Court of Justice involved ten defendants raising a constitutional question about their ability to sell cannabis at stores on First Nations reserves without having the required licence or approval from their chiefs and councils. The trial is expected to conclude in February.

Compostable packaging company TIPA announced it will be providing packaging for edibles brand Wyld for its products in the US and Canada beginning this year. Wyld introduced “Canada’s first compostable cannabis packaging” in 2021, with further compostable expansion in 2022.

Winnipeg Free Press did a write-up on Manitoba’s “controlled access” retail cannabis licence that allows cannabis to be sold in convenience stores. The author spoke with Kerri Michell of Farmer Jane, Omar Khan of High Tide, and a representative of the Liquor, Gaming, Cannabis Authority of Manitoba about industry concerns that such licences should be restricted to rural areas only.

Radio Canada took a look at some of the unique cannabis edibles in Quebec, speaking with François-Olivier Hébert, research associate at the neuroscience axis of the University of Montreal Hospital Center (CHUM); Alexandre Poulin, co-founder of Gayonica; Geneviève Giroux, vice-president of supply and marketing at the Société québécoise de cannabis (SWDC); and Serge Brochu, professor emeritus at the School of Criminology at the University of Montreal.

The Ontario Land Tribunal has provided a deadline of May 30, 2024, for cannabis producer Redecan to provide odour mitigation documents to the town of Pelham, where it operates a production facility, says the municipality’s former Cannabis Control Committee. The issue has been brewing for years in the community, with some outspoken residents frustrated by the smell of cannabis. Phoena (formerly CannTrust) was previously located in the community before closing its doors in 2023.

A Halifax barista who spoke with the Halifax Examiner says he was fired after vaping medically prescribed cannabis (CBD) in 2022 while working at a local Starbucks. He says he is trying to raise awareness of the issue.

After five years with Canopy Growth, Les Serres and Steve Bertrand, originally Canadian greenhouse tomato growers, say they have pivoted away from cannabis and back into produce—this time radishes. They also converted their former cannabis drying room to grow mushrooms (oyster and lion’s mane).

Canopy Growth Corporation announced that it has entered into subscription agreements with certain institutional investors in a private placement offering of 8,158,510 units at a price per unit of US$4.29 for aggregate gross proceeds of approximately US$35 million.

CordovaCann Corp. provided an update on its Star Buds Cannabis Co. retail operations in Canada. Star Buds has 11 locations in Canada and generated $3.5 million in revenue in the last quarter of the 2023 calendar.

Organigram announced the appointment of Karina Gehring to its Board of Directors. She is one of two directors (including Simon Ashton) designated by BT DE Investments Inc., a wholly-owned subsidiary of British American Tobacco (“BAT”), as nominees to Organigram’s board. The global tobacco giant has invested heavily in the New Brunswick cannabis producer.

PEI will be opening it’s fifth cannabis store next week.

The Supreme Court of Canada dismissed a BC man’s drug trafficking appeal relating to 101.5 pounds of cannabis found during a traffic stop, along with edibles, cannabis oil, and cash, despite the initial judge in the case ruling the search was unlawful.

A civil forfeiture case in British Columbia involving a couple that Vancouver Police say are connected to a large cannabis oil extraction lab and a cannabis grow operation is raising questions about the province’s civil forfeiture process and police procedures. The case can be read here.

Members of Winnipeg City Council backed away from a proposal calling for a ban on hookah lounges in the city, instead passing a motion calling on the provincial government to consider regulating herbal shisha the same way it does products like tobacco and cannabis, reports the CBC. City staff’s presentation to council included a jurisdictional scan of smoking bylaws in other provinces that, while not directly related to cannabis, intersect with similar challenges for any indoor inhalation of cannabis.

GrowerIQ completes acquisition of Ample Organics

Written by Staff on January 19, 2024. Posted in Business, Cannabis News, Services.

GrowerIQ, a cannabis technology company, announced this week that it had completed its successful acquisition of Ample Organics, a pioneering force in Canadian cannabis technology.

The acquisition was finalized in December 2023 and signifies a major expansion in GrowerIQ’s footprint within Canada and on the international stage, introducing exciting technological options to the portfolio available to licensed cannabis producers worldwide.

This significant all-cash acquisition positions GrowerIQ as the market leader in Canada and Europe, boasting the largest market share in the sector, says GrowerIQ in a press release. The company is pleased to confirm that all members of Ample Organics’ team have joined GrowerIQ, further enhancing the combined entity’s capabilities.

John Prentice, the former Founder of Ample Organics, expressed his enthusiasm about the acquisition, stating, “This marks another significant milestone for Ample Organics. Joining forces with GrowerIQ opens up new opportunities for innovation and growth for the company within the cannabis technology landscape. The combined expertise and resources of both teams will undoubtedly create brilliant solutions for licensed cannabis producers globally.”

Andrew Wilson, Founder of GrowerIQ, shared his vision for the combined entity, stating, “The acquisition of Ample Organics is a strategic move that aligns with our mission to provide the most effective management solutions for our incredible producers around the world. We are excited to welcome the talented team from Ample Organics and look forward to our journey together.”

About Ample Organics:

Founded in 2014, Ample Organics is a pioneer in the cannabis technology ecosystem. The technology platform makes compliance easy by tracking individual plants from seed to consumer and reporting every detail of the growth, production, and sales processes. The software continues to be a trusted solution for cannabis producers, manufacturers, distributors, physicians, clinics, laboratories, retailers, and educators. For more information, visit www.AmpleOrganics.com.

About GrowerIQ:

GrowerIQ is the operational backbone ERP that unites the fragmented systems required by cannabis production facilities around the world. The company now powers facilities in more than a dozen countries and four languages, enabling true seed-to-sale traceability. For more information, visit www.GrowerIQ.com.

For inquiries, please contact:

Andrew Wilson, CEO, GrowerIQ, [email protected], +1 (855) 892-7500

Three month decline in retail cannabis sales in 2023

Written by Staff on January 19, 2024. Posted in Business, Cannabis News, Other, Retail.

Cannabis retail sales continued to decline in Canada from a peak in August 2023, according to new figures from Statistics Canada.

Cannabis sales reached a record high of $589 million in the summer of 2023 before experiencing three straight months of decline, ending with sales of $511 million in November of the same year.

Sales in November 2023 were still higher than November 2022 at $445 million, and the same as the previous year’s peak of sales in December, which was also $511 million. All numbers are using retail sales at 2017 constant prices.

Cannabis sales have declined every November since 2020 before experiencing a boost in December and another decline in January and February, a trend seen in many retail sectors. In November 2022, sales dropped to $411 million from a peak of $471 million that August, before peaking at $511 million for the year. Sales fell to $442 million in February 2023.

While sales still show increases on an annual basis, the three-month decline in retail cannabis sales in 2023 was the steepest overall decline since legalization. The decline comes at a time when both the cannabis industry and the broader Canadian economy are facing challenges, with consumer spending in many sectors declining, including food and beverages and beer and wine.

The number of retail stores across Canada also continues to grow, although the pace has slowed considerably compared to the first four years of legalization. As of October 2023, there were 3,682 (up from 3,654 in October) cannabis stores in Canada, excluding provincial online stores.

British Columbia: 511 public and private stores, either open or “coming soon”, a decline from 513 in October.
Alberta: 749
Saskatchewan: 185 (up from 176 in October)
Manitoba: 198, 115 of which are in Winnipeg (up from 194 in October)
Ontario: 1,778 listed as authorized to open (up from 1,770 in October)
Quebec: 104 (up from 98 in October)
New Brunswick: 25 public stores, plus seven private stores and six farmgate stores for a total of 38
Nova Scotia: 49
PEI: 4
Newfoundland and Labrador: 52 (from 49 in October)
Northwest Territories: 6 brick-and-mortar locations, plus 1 private online store
Nunavut: 1
Yukon: 6

A recap of Ingestible Extracts in 2023

December 26, 2023

Cannabis sales declined in September

November 24, 2023

Canadians bought more than $16 billion worth of cannabis in the first five years of legalization

January 8, 2024

Simply Solventless acquires Lamplighter

Written by Staff on January 17, 2024. Posted in Business, Cannabis News, Producers.

Simply Solventless Concentrates (SSC), the company behind the Frootyhooty and Astro Labs cannabis brands, announced today that it has acquired the Lamplighter recreational cannabis brand for $600,000.

SSC provides an array of cannabis concentrate products like vape pens, hash, and infused pre-rolls. Lamplighter has similar products in markets across Canada, including Ontario, Alberta, and British Columbia, expanding SSC’s portfolio.

The deal adds up to 21 additional product listings from SSC in large product categories in Ontario, Alberta, and British Columbia.

The purchase price will be paid from future Lamplighter cash flow, equal to the net book value of the tangible assets acquired.

Jeff Swainson, President and CEO of Simply Solventless Concentrates, said in a press release that the acquisition will help the brand house expand further into the Canadian market.

“With Canadian LPs exiting the business-to-consumer market in Canada to focus on international sales, SSC has the opportunity to complement our strong organic revenue growth with acquisitions of quality assets that are accretive to revenue and profitability.”

“With projected 2023 Lamplighter gross revenue of $6.8 million, and similar revenue projected for 2024, we believe the acquisition will contribute value to our shareholders.”

SSC’s brand, Frootyhooty, launched nine initial SKUs in Alberta in December 2023. SSC plans to launch thirteen additional Frootyhooty SKUs in Alberta and Ontario during February 2024, with launches in other provinces to follow.

SSC expects the first Lamplighter sales in February 2024 and for the integration of the Lamplighter brand to be completed by May 2024.

At the end of 2023, SSC, which trades on the TSXV as HASH, completed a previously announced qualifying transaction by way of a reverse takeover (RTO).

In accordance with that RTO, SSC implemented a consolidation of its then-issued and outstanding 11,000,000 common shares on the basis of one new common share for every two existing common shares. It also joined with its wholly-owned subsidiary, 2366191 Alberta Ltd. (Subco), to form Massive Hash Factory Ltd., a new wholly-owned subsidiary of SSC.

SSC also announced this week the appointment of Randeep Gill to the position of Vice President, Commercial. Gill holds a Bachelor of Science degree in Pharmacy, a Pharmaceutical QA/QC post-graduate diploma, and a Plant Production and Facility Management diploma.

OGEN initiates sale of brand, intellectual property, product line, genetics

Written by Staff on January 16, 2024. Posted in Alberta, Business, Cannabis News, Other, Producers.

OGEN, a cannabis company that recently announced it was shutting down, has initiated the sale of its brand, intellectual property, product line, and genetics.

The sale, announced on January 16, 2024, includes OGEN’s fully trademarked brand, IP assets, marketing plans, campaigns, and social media accounts. The sale is being facilitated by the Canadian Cannabis Exchange (“CCX”).

The sale also includes 77 SKUs sold in eight provinces, including pre-rolls, dried flower, and milled flower, in a range of packaging configurations.

The selection also includes 13 cannabis cultivars for sale that Ogen says were developed through a 5-year pheno-hunting process and are supported by a collection of “historical potency results, rooted clones, and seeds.”

For all inquiries about the sale, contact CCX here.

OGEN announced it was closing its doors in November 2023. Darren Brisebois, President of OGEN Cannabis, told StratCann that high taxes and regulatory fees combined with low margins meant the end of the road for the Alberta producer.

Brisebois says the decision to close was not his; it was at the discretion of their lenders as well as pressures from the CRA.

The company, he said, which had to let nearly ninety employees go after hearing the news of receivership from their lender, had around 25,000 cannabis plants at various stages of production that had been scheduled for destruction.

High taxes, regulatory fees, low margins meant the end of the road for OGEN

November 9, 2023

OGEN latest Alberta cannabis company to close

November 7, 2023

Safari Flower Group receives CCAA protection

Written by Staff on January 16, 2024. Posted in Business, Cannabis News, Ontario, Producers.

Safari Flower, an Ontario-based cannabis producer, received CCAA protection on January 12, listing over $55 million in liabilities.

The Safari Flower Group says it intends to use the restructuring process to effect a reverse vesting orders (RVO) transaction with one of its secured lenders that can be used as a way to inject cash into a company.

Next Edge General Partner (Ontario) Inc., in its capacity as general partner of NE SPC II LP, will be providing a DIP loan.

Reverse vesting orders can be used to assist in recovery in complex insolvencies in Canada, especially in instances where traditional alternatives of asset sales or restructuring plans are not effective or practical.

Brigitte Simons, CEO of Safari Flower Company, says the goal is to restructure the company’s inherited debt, emphasizing that they are still growing and selling cannabis.

“Safari elected for a secured debt restructure of our indoor grow facility and Niagara land footprint after setting goals in 2023, achieving them, and putting them in front for valuations against a timeline of a Sales Initiated Solicitation Process and a CCAA end point.”

“Safari will be backed by our secured lenders in the CCAA to support the company through a healthy balance sheet and it’s international sales growth agenda. The CCAA program enables us to focus on our mission and our employees that carry the path forward for Safari’s global craft and medical cannabis flower products.”

With a 59,000-square-foot indoor facility located in Fort Erie, Ontario, the Safari Flower Group holds international certifications that permit the company to supply cannabis to the European, Israeli, and Australian medicinal cannabis markets.

Safari Flower Co. received EU-GMP certification in December 2023.

“We are thrilled to have built a foundation on quality systems and developed professional talent to deliver cannabis to the stringent safety standards that patients demand in trust, the EU-GMP certification, a testament to our unwavering dedication to quality and compliance,” Simons said at the time. “This achievement reinforces our commitment to ENUA’s brand providing a medicinal variety of cannabis flower by small batch grows.”

Safari was cash-positive at its year-end in 2021 but has not been able to maintain profitability according to Insolvency Insider, noting that Safari attributes this to the price compression in the Canadian market.

The cannabis industry in Canada has experienced significant financial challenges. At least 72 cannabis companies filed for some form of creditor protection in 2023, according to listings by Insolvency Insider Canada, which focuses on the Canadian insolvency market.

Note: This article has been updated to include current comments from Brigitte Simons.

Week in Weed – January 13, 2024

Written by David Brown on January 13, 2024. Posted in Business, Cannabis News, Government, International.

In cannabis news this week, StratCann covered the newest Canadian cannabis survey that shows the legal market is continuing to eat into the illicit market in Canada, with nearly 3/4s of all purchases coming from the regulated market.

In another article, we highlighted that Canadians bought more than $16 billion worth of cannabis in the first five years of legalization.

We also looked at an update from BC as it continues putting off its decision on raising the retail store cap from eight, and Tilray’s newest quarterly report in which they lost less money than last year.

We also looked at two more cannabis stores in BC that were targeted in early morning burglaries.

Tether’s sampling event is coming to Vancouver on January 24, and we profiled Proficiency Testing Canada and how they are improving laboratory data quality with real cannabis samples.

In other cannabis news in Canada and elsewhere…

CTV interviewed the owners of The Vault Hemp & Cannabis Boutique in Manitoba, which has a new location opening in Gilbert Plains. The company’s first store was in an abandoned CIBC bank building, hence the name. The Gilbert Plains location is one of five new stores The Vault hopes to open in Manitoba in 2024, bringing the chain’s total to eight across the province.

University of Saskatchewan (USask) researchers are developing models to more accurately determine the effects of cannabis on consumers by conducting studies that utilize a novel cannabis smoke delivery system to burn commercially available cultivars.

Sales of alcohol are down, while cannabis is up, writes CTV Atlantic.

THC BioMed Intl Ltd., located in Kelowna, BC, is facing delays in filing its annual financial statements due to unpaid auditor fees, which also led to a management cease trade order by the British Columbia Securities Commission. The company expects to receive payments from various provincial cannabis operations in Canada later this month, which it believes will be enough to settle the outstanding audit fees.

A new report shows that federal scientists in the US recommend easing restrictions on cannabis. The recommendations are contained in a 250-page scientific review provided to a Texas lawyer who sued the US Health and Human Services officials for its release and then published it online on Friday night.

Legal market continues to eat into illicit market in Canada while reported cannabis use remains the same

Written by Sarah Clark on January 12, 2024. Posted in Business, Cannabis News, Government, Research.

Health Canada’s most recent summary of its annual survey of cannabis users shows an increasing number say they are purchasing products through the legal, regulated market (73%).

The percentage of respondents who use cannabis and reported daily, or almost daily, use has been stable since 2018 (~25%), including among youth (~20%).

There was, however, an increase in the number of people aged 16-19 who reported using cannabis at least once in the past 12 months, from 37% in 2022 to 43% in 2023. This number has fluctuated between those two percentages since legalization.

All other age groups reported a slight decrease in cannabis use from the previous year.

**Past 12-month cannabis use for non-medical purposes, by sex and age group, 2018 to 2023**

The annual Canadian Cannabis Survey (CCS), which Health Canada has been conducting and releasing since 2017, helps track trends among cannabis consumers before and after cannabis was legalized.

The new 2023 survey results are based on data collected from May 2 to July 20, 2023, from around 11,690 respondents aged 16 and older across all of Canada.

The survey also asked Canadians about their perception of how socially acceptable products like alcohol, tobacco, e-cigarettes, and cannabis are. All products showed an increasing social acceptance, with regularly drinking alcohol being seen as the most accepted at 75%, followed by eating or drinking cannabis (58%), vaping cannabis(55%—this combines two questions on vaping dried cannabis and liquid/solid cannabis extracts), and smoking cannabis (54%).

The number of Canadians who reported using cannabis with alcohol and/or together declined in 2023.

The perceived risk of using these products was highest for smoking and vaping nicotine, although both were down slightly from the previous year. This was followed by drinking alcohol, which saw the perceived risk increase significantly from previous years. The perceived risk of vaping cannabis also increased from the previous year, although less so than alcohol.

Those who perceived risk of smoking cannabis increased slightly from the previous year, a trend over the last few years, while the perceived risk of eating and drinking cannabis has continued to decline.

Around 26% of those Canadians surveyed aged 16 and older admitted to consuming cannabis for non-medical purposes in the past 12 months. This number has remained relatively steady since legalization, which was 22% in 2018 and 27% in 2022.

Of those Canadians who reported using cannabis, 57% reported using cannabis three days per month or less, while 15% reported daily cannabis use.

Fifteen percent reported getting their cannabis from a “social source” such as sharing with friends or family. Just 5% reported growing their own cannabis or having it specifically grown for them. Both of these sources have declined since legalization..

Only 3% of people reported using an illegal purchase source such as an illegal store, illegal website, or “dealer,” down from nearly 30% in 2018. A new data point captured in 2023 shows that only 2% reported getting their cannabis from a storefront in a First Nation community.

Men continue to be more likely than women to report using cannabis, while those who identify as bisexual (56%), another sexuality (54%), or lesbian or gay (48%) were more likely to report using cannabis compared to those who identified as heterosexual or straight (23%).

**Frequency of cannabis use for non-medical purposes among those who have used cannabis in the past 12 months, 2018 to 2023**

Dried flower continues to be the most commonly used cannabis product, although the figure continues to decline as other products become available. In 2023, 60% of cannabis users said they consumed dried flower, down from over 80% in 2018.

Edibles were the second most commonly consumed cannabis product in Canada in 2023 at 54%, up about 41% in 2018. Vape pens were the third most popular cannabis product, with about 34% of consumers choosing these products, up from about 18% in 2018 (respondents could choose more than one product).

Cannabis oils and capsules for oral use were the fourth most popular cannabis product in Canada, with 26% reporting using these products, up from about 18% in 2018.

**Cannabis products usedamong those who had used cannabis in the past 12 months, by reason for use, 2023**

Dried flower was the product most commonly used daily or near-daily, followed by vape pens, ingestible oils and capsules, concentrates, and topicals. Edibles and beverages were more widely consumed less than once a month.

Of those who smoked or vaped dried cannabis, the average amount used was just under 1 gram (down from 2018 and 2022).

Those who used edible cannabis consumed about 1.4 servings (up from 2018 and 2022).

The average amount of cannabis oil for oral use consumed was 2.3 millilitres (up from 2018 and 2022).

In 2023, consumers who used vape pens reported using an average of 10.3 puffs a day. Those who drank cannabis beverages daily reported having 1.2 drinks.

Only around 10% of Canadians who reported using cannabis in the past 12 months, and just 4% of all Canadians, said cannabis had been grown in their home in the same reporting period, down from 2020 and 2022.

About one-fifth of those who reported having cannabis grown in their home (21%) said it was grown by a person authorized by Health Canada to grow for medical purposes for themselves or for another person. The average number of plants was 3.4; people who reported more than 25 plants were not included in the averages to allow for comparability to previous years.

Survey: Legalization has improved access to medical cannabis in Canada

January 17, 2023

Stats Canada says some cannabis users are one toke over the line

August 3, 2023

Canadians use more cannabis at higher rate than other countries

February 11, 2021

BC continues to debate increasing 8-store cap for cannabis retailers

Written by David Brown on January 11, 2024. Posted in British Columbia, Business, Cannabis News, Government, Retail.

The BC government says it needs more time before it decides on previously announced potential changes to its retail cannabis rules, such as the number of stores one company can own.

Following a feedback process, the BC Liquor and Cannabis Regulation Branch (LCRB) will need additional research to decide whether it should increase the number of cannabis stores one company can operate in the province. The current limit is eight.

“In a dedicated pursuit of continuous improvement and industry responsiveness, the Liquor and Cannabis Regulation Branch (LCRB) is committed to reviewing these market controls,” said BC Minister of Public Safety and Solicitor General Mike Farnworth in an email posted online by a board member of the Retail Cannabis Council of British Columbia (RCCBC).

“Most recently, they concluded an engagement focused on licence cap considerations. This engagement involved discussions with industry partners and licensees, fostering a constructive dialogue to ensure a well-rounded understanding of the intricacies involved. The Ministry has now completed an initial analysis of the feedback and determined that additional research is required before any changes to current market controls, including the CRS licence cap, can be considered.”

If the government can have 39 stores then we should be allowed to. If the government doesn’t have the same rules for us and for them, I don’t find it to be a fair game.
Vikram Sachdeva, Founder & CEO, Seed and Stone

Farnworth, who serves as the province’s lead on the cannabis file, previously told a group of cannabis industry stakeholders in April 2023 that the province was considering raising the retail cap and making changes to their tied house policies, among other possible regulatory and policy charges.

“The Liquor and Cannabis Regulation Branch has now completed initial analysis of the feedback from this engagement. The ministry will engage further as we continue to explore this and other possible market controls.”
BC Ministry of Public Safety and Solicitor General

Under BC’s rules, a “tied house” is a connection between a cannabis retail store licensee and a cannabis producer, which is not allowed. Several other provinces have permitted this type of relationship, with a handful of cannabis producers running retail stores under the same name or through an affiliated company.

The Ministry confirms they are continuing to look into these issues but have yet to arrive at any specific decisions.

“The ministry recently concluded an engagement which specifically focused on licence cap considerations,” a representative with the Ministry of Public Safety and Solicitor General shared with StratCann.

“The LCRB has now completed initial analysis of the feedback from this engagement. The ministry will engage further as we continue to explore this and other possible market controls.”

The Ministry did not provide any additional information on the status of the tied house rule or any engagement; instead, it just explained the definition of tied house in response to a direct question about the engagement process.

Industry response

A representative for the Retail Cannabis Council of British Columbia (RCCBC), representing several BC cannabis retailers who opposed raising the cap, says they are happy with the province’s decision not to make a decision yet.

“We are pleased that the LCRB has decided to take the time to further research the potential market impacts of a licence cap increase,” Jaclynn Pehotas, the Executive Director of RCCBC told StratCann via email. “A significant majority of our membership made it very clear via member polling that an increase to the cap was not a change they were in favour of and felt that an increase would be detrimental to their businesses.

“We communicated these polling results to the team at the LCRB with the recommendation that other market controls should be considered prior to any change in the current eight store cap. It is an unfortunate fact that the sector has seen significant negative impacts on licence holders in other provinces due to over saturation of the retail market. RCCBC feels it is critical to the health of the BC cannabis sector to protect our existing small businesses from the risk that oversaturation presents.”

“A significant majority of our membership made it very clear via member polling that an increase to the cap was not a change they were in favour of and felt that an increase would be detrimental to their businesses.
Jaclynn Pehotas, Retail Cannabis Council of British Columbia

Jeff Guignard, the Executive Director of BC’s Alliance of Beverage Licensees (ABLE BC), which also operates an advocacy group for cannabis retailers in the province, says he understands the province is taking its time to get the policy right. ABLE had previously advocated for the cap to be raised to 12 stores.

“Given the lengthy history of BC’s cannabis culture, there are a lot of diverse perspectives on the best way forward. I think the government is working hard to understand and respect those perspectives, which is why these consultations take time. In our conversations with Solicitor General Mike Farnworth, he seems genuinely committed to making the right policy changes, which is encouraging.

“We’re encouraged that the government is working hard to understand the whole picture before it acts. For example, we’ve also been advocating for a minimum door-to-door distance criteria between retailers to be implemented at the same time as a small increase to the eight-store cap. We know from our work on behalf of liquor stores that distance rules are a very effective way to protect investments and ensure fair competition. It would make sense for those two things to be implemented at the same time.”

“A small increase to the eight-store cap would be good news for industry, especially if it’s combined with a regulated minimum distance between new stores. It would support incremental growth for businesses already at the cap, while still protecting the diversity of individual businesses at their current size. Increasing to the cap to 12 or 16 stores would give everyone room to grow while still preventing any one chain of stores from growing large enough to skew the market. Long term, increasing the cap will be essential for the financial health of BC’s cannabis retailers.”

“I understand the concerns of the mom-and-pop stores. I started out with one store, but my dreams and my goals are bigger. I want to be able to serve more communities and scale this business out.”
Vikram Sachdeva, Seed and Stone

Vikram Sachdeva, the Founder & CEO of Seed and Stone, a retailer with five locations in BC, says he thinks there is a need for a modest increase, especially since the BC government currently has 39 stores across the province.

“All I’ve ever wanted is a fair playing field,” Sachdeva tells StratCann. “If the government can have 39 stores then we should be allowed to. If the government doesn’t have the same rules for us and for them, I don’t find it to be a fair game. I’m not saying 50 stores or 100 stores, all I’m saying is if it’s eight, maybe double that to 16 stores.”

This kind of increase would address the concerns of those who don’t want to see large chains dominating the market, like in Ontario, where the retail cap was doubled to 150 on January 1 of this year.

“I understand the concerns of the mom-and-pop stores. I started out with one store, but my dreams and my goals are bigger. I want to be able to serve more communities and scale this business out.”

Sachdeva adds that getting even one new store approved, given the myriad of checks and balances in place for cannabis stores in BC, plus distance regulations in many cities, means Seed and Stone even getting to 15 stores would be a considerable feat.

Omar Khan, the chief communications and public affairs officer at High Tide Inc., which owns and operates the largest chain of cannabis stores in Canada, says he believes lifting the cap in BC will help the government better displace the illicit market.

High Tide owns Canna Cabana, with 162 current locations in British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario. It has eight locations in BC.

“Given the relative strength of the illicit market in BC, we encourage the provincial government to continue looking for ways to work with legal cannabis retailers like us to secure a sustainable and thriving legal cannabis sector in the province. This includes looking at reasonable increases to the provincial retail cannabis store cap and lowering provincial wholesale markups.”

Other regulatory changes

The province has also previously committed to reviewing the direct delivery program that allows producers to send directly to retailers, as well as the 15% service fee that applies to products sold through the program. Many in the industry say the fee, which is the same fee charged on product physically sold through the provincial distribution centre, is too high to make the program viable.

However, a representative with the Ministry of Public Safety and Solicitor General could only confirm that they are continuing to look into the issue, noting that any profits generated by the LDB’s cannabis sales are remitted to the provincial treasury to support vital public services such as healthcare and education.

“The ministry is currently considering potential adjustments to the direct delivery program, including exploring changes to the 15 per cent charge that is applied to direct delivered cannabis products.”

BC announces more changes for cannabis retailers

April 26, 2023

BC again moving forward with direct delivery

August 26, 2022

BC bought $420 million worth of (legal) cannabis last year

August 30, 2022

Two cannabis stores in BC targeted in early morning burglaries

Written by Staff on January 10, 2024. Posted in British Columbia, Business, Cannabis News, Retail.

Two cannabis stores in BC have faced break-ins this week, causing significant damage to the stores and a loss of product.

The most recent store to report a burglary was UEM Cannabis in Langley, which first posted about the incident on their social media. The post, shared on Tuesday, January 9, says that in the early morning hours of that day, two vehicles, a truck and a car, arrived with six individuals who broke into the store.

The individuals reportedly did significant damage to the store itself to gain access, with the men quickly making off with products like vape pen batteries, cannabis beverages, and extracts.

UEM Cannabis is one of the busier cannabis stores in BC, selling a large volume of cannabis products from their location in the middle of BC’s Lower Mainland. UEM also has a location in Vancouver. An employee at the Langley store told StratCann on Wednesday, January 10, that they are still open for business.

Seed and Stone’s Chilliwack location was the second store to face a similar burglary. Seed and Stone operates five stores in BC.

Vikram Sachdeva, the Founder & CEO of Seed and Stone, confirms with StratCann that the burglary also occurred around 4:30 in the morning, similar to the previous burglary at UEM Cannabis. No employees were present at the store at the time.

Sachdeva says, like UEM, his store faced considerable damage from the burglars gaining entry to the store and then gaining access to glass display cases. He says the store is currently closed but is expected to open again in the coming days.

Retailers need to be very vigilant, he argues, as the industry has a “target on its back” with many assuming cannabis businesses are awash in cash.

“We face so many issues,” says Sachdeva. “Banking is hard to come by. Margins are slim. And when we face something like this, it can be easy to get discouraged. But we just keep pushing forward. It’s what we have to do.”

He says the community has already shown him a lot of support, with customers stopping by the store offering encouragement and his landlord being very cooperative.

“From a business point of view it puts another roadblock in front of us. But we are still here, still doing the work.”

Robberies and burglaries of cannabis stores are not uncommon in BC and other provinces. Two cannabis producers in BC were taregetted last year, as well.

Around a dozen stores have been the targets of sometimes violent robberies in the Calgary area in the last few months. Stores in Calgary have been previously targeted, as well. Several stores in Ontario were the victims of break-ins, and there were at least two incidents of arson in early 2023.

Featured image of Seed and Stone storefront in Chilliwack that was targeted by burglars.

A screenshot from a security video shared by Seed and Stone online showing the two vehicles used

These two vehicles were used to break into our Langley store last night.
If you recognize this truck or car or see them pls let us know or contact the Langley police dept.
Thank you everyone #langleybc #langleycrime #langley #willowbrook #fraservalleycrime pic.twitter.com/5sXeY3oYQw
— UEM Cannabis (@UEMCannabis) January 10, 2024

Tilray reports $46 million loss in Q2, 2023, compared to net loss of $62 million in the prior year quarter

Written by Sarah Clark on January 9, 2024. Posted in Business, Cannabis News, Producers.

Tilray reported the financial results for the second quarter of its fiscal year 2024 ended November 30, 2023, with a loss of US$46.2 million.

The company reported record net revenue of US$194 million, an increase of 34% in the second quarter compared to US$144 million in the prior year quarter.

Cannabis net revenue increased 35% to US$67 million in the second quarter compared to $50 million in the prior quarter. The gross margin for cannabis was 31% compared to 43% in the second quarter of the previous year.

Net revenue from Tilray’s alcohol sales increased 117% to US$47 million in the second quarter.

Tilray says it leads the Canadian cannabis market in revenue, sales volume, and market share with a 12.5% position during its second quarter, leading sales in cannabis flower, oils, concentrates, and THC beverages, buoyed by its acquisition of HEXO Corp. and Truss Beverage.

Tilray also says it is continuing to focus on expanding its distribution of medical cannabis into various international markets. It also hopes that it can expand its distribution of cannabis products into the US, pending any future changes to the country’s federal cannabis laws, especially by utilizing Tilray’s investment in the US brand Med Men.

Net revenue from cannabis sales for the six months ended November 30, 2022, was US$108.5 million, while adjusted gross profit was US$51 million.

For the three months ending November 30, 2022, net revenue on cannabis products sold was US$50 million, with an adjusted gross profit of US$21 million.

For the three months ended November 30, 2023, net cannabis revenue was US$67 million, with an adjusted gross profit of US$24 million.

Revenue from Canadian medical cannabis during this time period was US$6.4 million. Revenue from Canadian adult-use cannabis was US$73 million. Revenue from wholesale cannabis was US$4.3 million, and revenue from international cannabis was US$11.4 million, for a total of US$67.4 million, after some US$27.8 million in taxes.

Revenue from Canadian medical cannabis sales remained relatively the same as in the same reporting period from the previous year, while revenue from Canadian adult-use cannabis, wholesale cannabis, and international cannabis sales increased significantly.

Featured image via Tilray.com

Canadians bought more than $16 billion worth of cannabis in the first five years of legalization

Written by Sarah Clark on January 8, 2024. Posted in Business, Cannabis News, Retail.

Canadian cannabis stores sold more than $16 billion worth of cannabis products from October 2018 to October 2023, according to the newest figures from Statistics Canada.

Despite monthly fluctuations, Cannabis sales continue to climb in Canada year over year, with more than $448 million sold by the nearly 3,700 cannabis retailers nationwide as of October 2023. This is an increase from about $392 million in October 2022, although down from an August 2023 high of almost $467 million.

Monthly retail cannabis sales across Canada, October 2018-October 2023

The number of retail stores across Canada also continues to grow, although the pace has slowed considerably compared to the first four years of legalization. As of January 2024, there were 3,694 cannabis stores in Canada, excluding provincial online stores.

British Columbia: 510 public and private stores either open or “coming soon”
Alberta: 749
Saskatchewan: 182
Manitoba: 207, 115 of which are in Winnipeg
Ontario: 1,787 as authorized to open
Quebec: 98
New Brunswick: 31 public stores, plus six private stores and six farmgate stores for a total of 43
Nova Scotia: 49
PEI: 4
Newfoundland and Labrador: 52
Northwest Territories: 6 brick-and-mortar locations, plus 1 private online store
Nunavut: 1
Yukon: 6

Cannabis sales continue to grow across Canada

October 31, 2023

Canadian retail cannabis sales passed $420m in June 2023

August 23, 2023

Micro cannabis licences continue to increase across Canada

October 31, 2020

Week in Weed – January 6, 2024

Written by David Brown on January 6, 2024. Posted in Business, Cannabis News, Government, International, Micro, Producers, Retail.

This week at StratCann, we look at new and revoked production licences in 2023, with micros outpacing standards for new licences; asked if “deli style” options could help address THC inflation concerns; and shared our monthly cannabis jobs update.

We also shared a new research article comparing attitudes about cannabis in the US and Canada, news of a recall in BC due to labelling errors (check your labels, QAPs!), and news of a drunk driver crashing into a cannabis store in Ontario.

In other cannabis news:

Local outlet Orilla Matters spoke with several Ontario cannabis retailers—Susan Yu, owner of BudTimez Cannabis, Ayla Qualls of Tokyo Smoke, and Jay Belcourt of Bigfoot Cannabis—about what makes rural cannabis shops succeed.

The National Post took a look into the long-standing challenges that those operating legal cannabis businesses in Canada face when it comes to banking, speaking with C3’s George Smitherman, Sam Gerges of MaryJane’s Cannabis shops in Toronto, and Nick Baksh, owner of Toronto cannabis retailer Montrose.

CBC spoke with Vancouver cannabis retailers Mike Babins of Evergreen Cannabis and Ehren Richardson of Sunrise Cannabis about high markups by the LDB, as well as Vancouver City Councillor Pete Fry about the lack of excise tax sharing by the province, both topics StratCann readers are very familiar with. An audio version of the story is also available.

Village Farms announced the first shipment and launch of two cannabis brands in the United Kingdom, Pure Sunfarms and The Original Fraser Valley Weed Co., which will be distributed by 4C LABS, a Canadian medical cannabis company with import and distribution licences in the UK. Pure Sunfarms has also exported cannabis to Germany, Australia and Israel.

Auxly Cannabis Group Inc. announced that it has signed a non-binding term sheet to amend and restate the credit facility between its wholly-owned subsidiary Auxly Leamington Inc. and a syndicate of lenders led by the Bank of Montreal as administrative agents.

The Journal of Agricultural and Food Chemistry posted a paper on the chemical composition of commercial cannabis [love the alliteration!], compiling a list of >6,000 chemical constituents in commercial cannabis.

Calgary police are investigating a recent break-and-enter at the Co-Op Cannabis Store on Centre Street North. They say about $500 worth of merchandise was taken before the three suspects left.

Humble & Fume Inc. has filed for CCAA protection. It announced that the Company and its subsidiaries, Humble & Fume Inc. (Manitoba), P.W.F. Holdco, Inc., Windship Trading LLC, B.O.B. Headquarters Inc., Fume Labs Inc., and Humble Cannabis Solutions Inc. (together with the Company, collectively, the “Humble Group”) have initiated proceedings in the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act.

A new study in the International Journal of Drug Policy made rounds this week. While many headlines have focussed on how the study did not find evidence of increases in health service use or incident cases of psychotic disorders in the first 17 months of legalization in Ontario, it did note “clear increasing trends in health service use and incident cases of substance-induced psychotic disorders” over a broader observation window (2014–2020).

Another study published this week says that approximately one-third of people who consume cannabis reported experiencing at least one adverse event within the past 12 months, including 5% of consumers who sought medical help for an adverse event, most commonly for panic attacks, feeling faint/dizzy/passing out, heart/blood pressure problems, and nausea/vomiting.

Science News published a piece on how the teen brain is especially susceptible to the harms of THC.

International Cannabis

Finally, in international news, London’s Volteface did a nice in-depth writeup on the current state of the Dutch cannabis pilot project supplying regulated cannabis to a handful of the country’s famous cannabis cafes. Across the pond in the US, a judge in Alabama has temporarily blocked the state from issuing licences to medical cannabis facilities amid an ongoing legal battle over how they selected the winning companies.

Canadian cannabis company named in lawsuit against federal government

Written by Staff on January 4, 2024. Posted in Business, Cannabis News, Producers.

A cannabis company in Canada is named in a class action lawsuit recently filed by two migrant farm workers who say their rights were violated under Canada’s Seasonal Agricultural Workers Program and the Temporary Foreign Workers Program.

The lawsuit, seeking a half billion dollars in compensation, was filed in Ontario against the Attorney General of Canada. It alleges that the federal government in Canada violated the workers’ rights to liberty and security of the person under section 7 of the Charter.

The Plaintiffs, Kevin Palmer from Jamaica and Andrel Peters from Grenada, are agricultural workers who came to Canada on a series of fixed-term contracts as part of the Seasonal Agricultural Workers Program (SAWP) and the Temporary Foreign Workers Program (TFWP-Agricultural) programs. The lawsuit contends that the two workers brought this action on their own behalf and that of all other current or former migrant agricultural workers in the SAWP and the TFWP-Agricultural Stream over the past 15 years.

They allege that the imposition of “tied employment” in both programs violates the rights of Class Members under sections 7 and 15 of the Charter because it prevents workers from leaving their employment and finding a new job in Canada.

The lawsuit alleges that Peters, a 28-year-old father of two from Grenada, first came to Canada in 2018 through the SAWP on a five-month contract to work at a cannabis farm near Leamington that the lawsuit says was operated by federally licensed cannabis producer Tilray, formerly by Aphria. (In December, 2020, Aphria and Tilray announced plans for a merger, with Aphria losing its name in the deal.)

The lawsuit continues, stating that Peters arrived in April or May 2018 and worked until approximately October 2018 before returning to Grenada. Then, in April 2021, Peters signed a new two-year contract with Tilray. In late May 2022, Peters went back to Grenada for a two-week vacation, the first time he had been able to return home to see his family in three years, argues the lawsuit.

While in Grenada, Peters says he received a phone call from Tilray telling him his employment was being terminated without cause. A letter from Tilray followed, confirming that he was dismissed without cause, effective June 14, 2022.

Peters then received two weeks’ pay in lieu and notice, but he alleges he was not allowed to return to Canada to retrieve any of his belongings.

He says that while working at the cannabis farm, he lived in a bunkhouse on the farm property with around a dozen other migrant workers, with approximately six people sharing a bedroom.

Peters alleges he worked around 45 hours every week and was paid $14 per hour to start before receiving a raise to $15 an hour. He was not eligible for any overtime pay and had deductions for EI taken out of his paycheck. Despite this, he was unable to make any EI claims.

The Plaintiffs, in this case, estimate that the Government of Canada has collected more than $472 million in EI premiums from Class Members and their employers since 2008 while excluding these Class Members from ever benefiting from these services.

Peters also says he was concerned about the safety of some of his job duties, which included pruning, spraying the plants with chemicals, inspecting plants, and working in the processing room. Despite his stated concerns, he says he was not provided with a respirator, gloves, or similar safety equipment.

The lawsuit also alleges that while working at the Tilray facility during COVID-19, he and other migrant workers were not allowed to leave the farm property, although Canadian workers were.

That kind of tied employment, argues the lawsuit, restricts the freedom of migrant agricultural workers to resign from their employment and seek employment at a different agricultural employer. If a worker quits their job, they are unable to seek new employment in Canada and instead must leave the country.

The basis of such programs is rooted in racist ideology, the lawsuit contends, and was created “as a means to restrict the freedom of Black and Indo-Caribbean farmworkers on racial grounds,” detailing the foundation of this argument extensively.

“Canada’s prolonged collection of EI premiums from Class Members—impoverished workers from the global south—while systemically undermining their ability to access regular and sickness benefits, was a scheme that enriched it at the expense of those who needed those benefits the most. It has irreparably harmed the lives of Class Members, putting them at a demonstrably disadvantaged position in comparison to those who have the freedom to access benefits for which they pay premiums.”

A request for comment was sent to Tilray. They were not immediately available for response.

The entire lawsuit can be read here.

Employment protections for cannabis consumers in Canada and the US continue to evolve

May 31, 2021

Workers at Ontario Tokyo Smoke location vote to unionize

March 14, 2021

BC court rejects retailers’ lawsuit calling for enforcement against cannabis stores on First Nations land

September 19, 2023

Cannabis Jobs Update – January 2024

Written by Staff on January 3, 2024. Posted in Business, Cannabis News, Producers, Retail.

As the cannabis landscape continues to evolve, so does the demand for skilled professionals across various sectors. Whether you’re an experienced industry veteran or a newcomer seeking entry, our carefully compiled list features diverse opportunities that span cultivation, marketing, research, and beyond.

Dive into our monthly resource and take the next step of your journey in the dynamic world of cannabis.

Production:

Battle River Pharmaceuticals Inc., a cannabis producer in Ponoka, AB, is looking for a Production Worker/General Laborer, with work including harvesting, trimming, drying cannabis plants), packaging and facility sanitation. Full and part-time positions are available.

Cielo / Alta Verde Québec Inc., in Lachute, QC, is looking for a Technicien(ne) en Cultivation (Cannabis)/ Horticulture. Responsibilities include preparing equipment for cultivation, harvest and trimming, monitoring plant activities, and more.

White Ash Group client is looking to add a Quality Assurance Director/QAP in the Southern Ontario area.

Bold Growth is seeking a manufacturing assistant in Saskatoon, SK, to assist with tasks such as harvesting and processing cannabis.

Canopy is looking to hire a Senior Product Manager, Edibles & Beverages. This is a remote position.

Rose Lifescience Inc. in Huntingdon, QC, is seeking a Manager, Operations Quality Implementation.

Sugar Cane Cannabis in Williams Lake, BC, is seeking a Quality Assurance Person.

ANC Cannabis in Edmonton, AB, is seeking a warehouse worker.

Marketing/Branding:

Pure Sunfarms in Delta, BC, has a posting for a Brand Activation Manager with a base salary of CA$72,000/yr – CA$90,000/yr.

The OCS in Toronto, ON, is currently seeking several roles, including a Procurement Category Lead, a Senior GRC Specialist, a Senior Manager, Financial Planning & Analysis, a DevOps Engineer, and more.

Nextleaf Solutions Ltd., located in Coquitlam, BC, has an opening for a Sales & Marketing Coordinator for $50,000–$60,000 a year.

Retail:

CannabisNB currently lists several positions, including store manager, assistant store manager, team lead, and more.

Affx Cannabis, a cannabis store in Hamilton, ON, is seeking a full-time Cannabis Educator.

The Boston Beer Company in Toronto, ON, has an opening for a Cannabis Brand Execution Manager for their TeaPot brand of infused cannabis teas.

Spiritleaf in Whistler, BC, is seeking a Store Manager, starting at $65,000 a year.

HAVE A JOB POSTING YOU’D LIKE FEATURED ON STRATCANN.COM?

Let us know.

New micros outpaced standard cannabis licences in 2023, while revocations of both increased

Written by David Brown on December 31, 2023. Posted in Business, Cannabis News, Government, Producers.

Canadian cannabis production licence revocations and expirations picked up steam in 2023 as some producers threw in the towel, but they were still slightly outpaced by new licence holders entering the arena.

There were 154 new licences issued in 2023, and 133 licences revoked at the request of the licence holders or allowed to expire by the licence holder. There were also two licences suspended.

Of those new production licences, micros outpaced standard licences, with 93 new micros, 57 new standard, and four new cannabis nursery licences.

Of the revocations, 60 were standard licences, 41 were micros, and six were nurseries. Of the 26 licence expiries, 13 were standard, and 13 were micros. Both suspended licences are/were standard licence holders. One was later revoked at the request of the licence holder, while the other remains suspended.

New, revoked/expired, and suspended Canadian cannabis licences, 2023

Ontario is home to the most commercial cannabis production licences with 30%, followed closely by BC (25%), and Quebec (21%). Combined, these three provinces represent more than 75% of all licences in Canada. The Yukon is the only of Canada’s three Territories with a federal cannabis production licence, Arctic Pharm.

PEI has the most producers on a per-capita basis, with one for every 22,000 people, followed by BC with one producer for every 24,000, and New Brunswick and Nova Scotia with one for every 32,000 residents.

Newfoundland had the least number of producers on a per-capita basis, with one for every 77,000 residents followed by Manitoba with one for every 64,000 residents, and Ontario with one for every 55,000 residents. With 951 federal licences and a population of nearly 40.5 million people, Canada has approximately one licence for every 43,000 residents.

As of December 31, 2023, there were 951 federal cannabis production licences in Canada. Of those, 481 are standard licence holders, 407 are micros, another 25 are cannabis nurseries, and 38 are authorized for medical sales only. (Note: Health Canada’s list currently includes nearly 50 revoked, expired, and suspended licences, bringing the total number of licence holders on their list to over 1,000)

Cultivation – 75
Processing – 117
Cultivation/Processing – 289
Micro-Cultivation – 238
Micro-Processing – 45
Micro-Cultivation/Micro-Processing – 124
Nursery – 25
Medical Sales Only – 38

According to Health Canada’s figures, since October 17, 2018, there have been 240 licences revoked at the request of the licence holder, three revoked by Health Canada, and 39 allowed to expire by the licence holder, for a total of 282 inactivated licences (and one currently suspended).

Featured image of Jazz Cabbage, a micro cannabis cultivator and processor in Nova Scotia

New cannabis licence applications continue to come in, even as revocations increase

June 19, 2023

Micro cannabis licences continue to grow in popularity

November 15, 2022

Health Canada announces changes to sale authorization of cannabis products to processing licences

October 19, 2023

Week in Weed – December 30, 2023

Written by David Brown on December 30, 2023. Posted in Business, Cannabis News, Government, International.

It was a predictably slow news week as we approached the end of the holidays. At StratCann, we were busy recapping our coverage of the cannabis industry over the past year. We looked at changes to cannabis rules and regulations in 2023 and compiled a recap of everything that happened with Ingestible Extracts in 2023. We also pulled the top seven Canadian cannabis stories of 2023.

We ran our newest feature piece from StratCann author Tim Wilson, who spoke with several thriving Canadian cannabis companies about what it takes to succeed in an incredibly competitive market.

In other cannabis news…

Global News Calgary reported on a new study from researchers at the University of Alberta that showed that women are turning to cannabis to relieve menopausal symptoms. They also spoke with a registered nurse at The Cannabis Nurses in Edmonton who helps menopausal women find the right products and doses.

The National Post did an in-depth feature on cannabis excise tax, with comments from Barry Katzman, CEO of Peak Processing, Owen Allerton, CEO of cannabis retailer Highland Cannabis, Ari Cohen and Tabitha Fritz of Fritz’s Cannabis Company, Niklas Kouparanis, CEO and co-founder of Bloomwell Group, one of Germany’s largest private cannabis companies, Darwin Fletcher, who is the founder and CEO of CANEXEC, and StratCann’s own David Brown.

Lineage Distribution (formerly Rogue Processing) was featured in an in-depth piece in the Winnipeg Free Press. The company was recently approved for a distribution agreement with Manitoba Liquor and Lotteries Corporation. The article also features comments from Trent Emmel of T8C, a cannabis grower in Saskatchewan, and CJ Cowan from Bud Mountain Aeroponics in Calgary.

The Barrie retail cannabis market is saturated, says Barrie Today, with 25 stores in the city listed as authorized to open and another five applications in progress. The author spoke with local retailers Ryan Grenville of One Plant Retail and Ray Le, manager at Budssmoke.

In November, Ontario announced it would soon increase the limit of cannabis retail store authorizations from 75 to 150 per licensed retail operator and their affiliates. That change comes into effect January 1, 2024.

High Tide will be opening its first Canna Cabana in Mississauga, Ontario. This opening will mark High Tide’s 162nd Canna Cabana branded location in Canada, the 54th in the province of Ontario and the first in Mississauga.

In April, Mississauga City Council voted to approve a motion to lift its prohibition on cannabis retail stores and permit them to be located in the second-largest city in Ontario. There are currently more than two dozen cannabis stores listed by the AGCO as being authorized to open in Mississauga.

Molecule Holdings Inc., a Canadian cannabis beverage production company with brands like Phresh and Dulces, announced the revocation of the “failure to file” cease trade order issued on October 5, 2023. Trading in the common shares of the company is expected to resume soon.

Cannabis News outlet Green State ran a piece entitled Dabbing culture and the rise of concentrate consumption. It referenced Vancouver’s Boro and Beyond, a company that sets up dab bars to help educate consumers about dabbing and the different tools that go along with it.

A man in Quebec was ordered to pay more than $100,000 for smoking cannabis in his condo, against condo rules.

A woman in Blind Bay, BC, reported she believed there was a grow operation in the neighbourhood because she could smell it in the air. Police explained that legislation allowed up to four plants to be grown at one residence, or there could be a licenced grow operation in the area.

An appeal of a conviction relating to charges connected to cannabis production and trafficking at Muileboom Organics was dismissed in Ontario. However, the court found that the sanctions imposed by the trial judge—a fine, forfeiture, conditional sentences, and probation—the inclusion of the electronic monitoring and house arrest for the duration of the conditional sentence orders resulted in a sentence that was demonstrably unfit.

The court deleted the electronic monitoring conditions in both conditional sentence orders and set aside the probation order. Muileboom was operating under personal and/or designated medical production licences.

Changes to cannabis rules and regulations in 2023

Written by Staff on December 27, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Government, International, Manitoba, Ontario, Saskatchewan.

Like most regulations, cannabis regulations in Canada are constantly changing and evolving.

When federal cannabis legalization came into force in 2018, followed by regulatory regimes in provinces, First Nations, and municipalities, it was the beginning of a long, never-ending cycle of push and pull between industry, consumers, and regulators for a standard that balanced all of these interests.

While the current legislative review of the federal Cannabis Act is looking at the impact of this legislation on Canadian society, changes to the federal Cannabis Regulations are ongoing.

In 2023, we have seen several examples of these regulations changing—at all levels of government—in most instances for the better as far as industry and consumers are concerned. While some of the “big picture” needs of industry are not always immediately met, such as excise tax reform or an increase of the 10mg THC limit for edibles, small changes to federal regulations continue to make at least modest improvements in the daily activities of the industry.

Below are a few examples from Health Canada, the provinces, First Nations, and municipalities.

Health Canada cannabis regulations

As of October 1, 2023, Health Canada said it would phase out inspections for authorized activities change requests from processors to add the activity of sale of extract, edible, and topical cannabis products. This change applies to all processing licence holders, micro or standard.

In March 2023, Health Canada published a Notice of Intent in the Canada Gazette, Part I, seeking feedback on potential amendments to the Cannabis Regulations. The agency’s goal with these potential amendments is to streamline and clarify existing requirements, eliminate duplicative requirements, and reduce burdens where possible.

The federal regulator also extended various regulatory “flexibilities” first put in place during COVID-19 restrictions, and federal compliance and enforcement efforts continued to increase in 2023, especially for personal and designated growers.

What’s going on with CBN in Canada?

Not all changes were seen as positive, though. Health Canada had been engaging with industry for much of 2023 on the subject of “minor intoxicating cannabinoids” such as Delta-8 THC, THC-V, as well as CBN, among others.

In August, Alberta’s AGLC contacted some producers, informing them that it would be including the amount of CBN and/or THCV in a cannabis product within the total THC, claiming this was based on Health Canada’s rules. However, Health Canada noted no such rules yet existed. By September, the AGLC had reversed that decision, pending further guidance from Health Canada.

Then, in late December, Health Canada finally released the expected guidance for cannabis producers on cannabis products with intoxicating cannabinoids other than delta-9-THC, which included CBN. This document is currently still just guidance, not a regulatory change.

Of course, these federal regulations come with an assortment of fees, with Heath Canada collecting more than $60 million in the most recent fiscal year.

In October, Health Canada released a document offering background and considerations for guidance on microbial and chemical contaminant tolerance limits, seeking feedback from industry on the proposed changes.

Provinces

Several provinces also announced regulatory changes or plans for changes in 2023. British Columbia says it is considering several changes to its cannabis regulations, especially around the rules for cannabis retailers. It has been seeking feedback on its plan for modest changes to rules that could see cannabis consumption on patios.

In May, the province repealed its requirement for cannabis stores to use window coverings, and in September, they announced that cannabis producers could provide samples to retailers.

BC also announced funding to support Indigenous cannabis businesses.

Also in May, Manitoba suspended its 6% Social Responsibility Fee from retailers. To the frustration of many, in October, a Manitoba court upheld the province’s ban on growing cannabis at home. The ruling is being appealed.

Although the Manitoba NDP said they wanted to make several changes to the province’s cannabis policy, including saying they did not support the provincial ban on growing cannabis at home prior to this year’s election, since they formed government in October the province has been mum on the subject.

In Saskatchewan, the SLGA announced in June that all cannabis retail stores in the province were no longer required to ask for proof of age on every retail transaction for in-store purchases and pickups. In addition, effective immediately, the SLGA will only require personal and corporate disclosures for the applicant and any individuals, corporations, and other entities with an ownership stake of at least 10 percent of the applicant.

Also, Saskatchewan retailers who have received a cannabis store permit from First Nations Cannabis Licence Authorities (FNCA) are able to purchase cannabis from registered suppliers and permitted wholesalers in the province. With FNCA approval, they can also sell cannabis wholesale to other provincially-approved retailers.

In March, Alberta’s AGLC said cannabis producers can now provide samples to retailers and in October, it announced several changes to its cannabis rules and regulations, including enabling self-attestation for age-gating for retailers, providing producers with more information about where their products are selling, and allowing cannabis stores to use specific terms in their signage.

Previously, Alberta had one of the strictest age-gating rules of any province in Canada, with retailers only able to show product information on their websites if users had verified their age with an ID, either in-person or through an online form. Most provinces simply require a self-attestation, such as entering a date of birth or answering yes or no to a simple age prompt.

The province is also considering allowing white-label cannabis products and, in October, reduced the SKU listing fee for cannabis producers. In December, it announced several changes to its retail cannabis regulations that will come into force on January 31, 2024, including allowing cannabis retailers to operate temporary sales locations at adult-only events like trade shows and festivals.

In November, Ontario’s OCS announced they would begin a pilot program to test some cannabis products being sold in the province, drawing mixed responses from the industry. In August, the OCS announced changes to how it would store consumer data. In the same month, the Alcohol and Gaming Commission of Ontario (AGCO) and the OCS announced they had developed a new data platform to help simplify retailers’ cannabis reporting requirements.

In July, the OCS began allowing deliveries from smaller vehicles, making it easier for smaller cannabis producers to send shipments to their distribution centre. The OCS also began reducing its margins and moving to a fixed markup pricing model.

Ontario also plans to double the number of cannabis stores a retailer can operate from 75 to 150 and is proposing to ban the cultivation of cannabis in homes that offer childcare services.

First Nations

The Mohawk Council of Kahnawake gave the go-ahead for retail sales of cannabis in the community to begin when it voted to lift the moratorium on sales and possession for retail sales during its Monday meeting. The chief responsible for the dossier said she expects sales to begin in the New Year.

StratCann interviewed MCK Chief Tonya Perron about their plans for cannabis regulations in 2021. The lifting of the moratorium allows the Kahnawake Cannabis Control Board (CCB) to begin issuing the three licences that will be available for sales of cannabis, and possession of cannabis for sale, as soon as they get through what Perron expects will be a mountain of work on awarding those licences. Numerous stores operating in the area say they do not recognize the Council’s authority.

Municipalities

In April, Mississauga City Council voted to approve a motion to lift its prohibition on cannabis retail stores and permit them to be located in the second-largest city in Ontario. There are currently 26 cannabis stores listed by the AGCO as being authorized to open in Mississauga.

Surrey, a large municipality in British Columbia, is also looking into allowing cannabis stores. Pitt Meadows, another municipality in BC’s lower mainland, recently began allowing them on a case-by-case basis.

International cannabis

A new cannabis flower monograph was adopted at a session of the European Pharmacopoeia Commission in June 2023. The monograph on cannabis flower is now available online and will be published in European Pharmacopoeia (Ph. Eur.) Supplement 11.5 in January 2024.

Anything we missed? Let us know.

A recap of Ingestible Extracts in 2023

Written by Sarah Clark on December 26, 2023. Posted in Business, Cannabis News, Government, Producers.

One of the more significant stories of 2023 was that of ‘ingestible extracts’ – products sold for oral consumption that contain more than 10mg per serving and per package, as limited for edible products by federal regulations. StratCann was there for every step of this evolving industry subject, analyzing its impact on producers, distributors, retailers, and consumers.

The subject continues to evolve, with products appearing, disappearing, and, in some cases, reappearing again, while Health Canada maintains that these products are not compliant. Nonetheless, consumers love them based on all available sales numbers.

First launched by Organigram in 2021, several other products followed suit by mid-2022. By early 2023, Health Canada had begun telling producers they could no longer sell these products. In March, several other companies confirmed with StratCann that they would also pause production, with Health Canada giving companies until May 31, 2023, to cease selling and distributing those products.

Health Canada also issued a warning to the public in March about these products, urging consumer caution.

On March 31, Organigram filed for a judicial review of Health Canada’s decision to require an end to sales of “edible extracts” that exceed the federal 10mg THC packaging limit.

Organigram’s argument in their application to the court was, in part, that the Jolts Lozenges are not edibles because they do not contain any sweeteners and that Health Canada was not transparent in their decision-making process.

In August, a judge approved Organigram’s application for judicial review of Health Canada’s decision to effectively ban these products. The case was then sent back to Health Canada for their opportunity to respond.

Rather than agreeing with Organigram’s contention that the products were compliant, the judge ruled that the federal health agency’s process to reach that conclusion was unfair and deserved further analysis.

The judge ruled that the unfairness of Health Canada’s decision on the ingestible extracts was partly due to it including additional factors in its decision-making process that Ogranigram was not given an opportunity to respond to.

In October, Organigram began offering their Jolts products again in several provincial markets, saying that Health Canada had accepted the Judge’s ruling and that its initial ruling on Jolts being out of compliance is void.

Following that announcement from Organigram in November, Health Canada said it was in the “redetermination process” regarding its initial ruling on Edison Jolts.

Health Canada maintains that it considers any product intended to be consumed in the same manner as food is not an extract. The agency sent out a memo to licence holders in December again reiterating this point, noting that the “classification of a cannabis product does not mean that the product is compliant with all regulations pertaining to that class of cannabis. Licence holders are responsible for making sure their cannabis products meet all the applicable requirements of the Cannabis Act and Cannabis Regulations.”

Interestingly, the disappearance of these products from shelves in BC appears to have led to an increase in the sales of cannabis oil capsules, with some consumers potentially discovering these products for the first time. While the capsules can still only contain up to 10mg THC each, they come in containers of 10, 30 or even 100, and at a much lower price.

Canada’s 10mg edibles limit empowering black market, hamstringing legal industry

June 13, 2022

Edible extracts, direct delivery make a big splash in BC

March 6, 2023

How edible extracts are getting around the 10mg limit

December 5, 2022

Week in Weed – December 23, 2023

Written by David Brown on December 23, 2023. Posted in Business, Cannabis News, Government, International.

It was a relatively slow week in cannabis news as we moved into the holidays. Still, StratCann covered several big stories, including Alberta announcing several changes to retail cannabis regulations, such as allowing cannabis sales at some festivals and events. We also looked at new testing results from a group of labs looking at inflated THC levels, and some interesting news about synthetic cannabinoids in Canada’s illicit market.

In Canna Pubco news, Canopy is getting rid of its This Works brands, Organigram posted a net loss of $248.6 million in 2023, and Auxly Ottawa recalled one lot of Mandarin Cookies from Manitoba due to a minor labelling error.

We also looked at an interesting story in BC where one First Nation has filed a lawsuit against a group it says is using its land to, among other activities, grow and sell cannabis without a licence, and spoke with some cannabis retailers about the newest string of robberies and burglaries.

In other cannabis news…

The National Post shared a piece on the “monopoly” the OCS enjoys on online sales, speaking with Jennawae Cavion, executive director of NORML Canada and owner of Calyx+Trichomes, along with Sam Gerges, owner of MaryJane’s Cannabis, and Nick Baksh of cannabis shop Montrose. Unsurprisingly, given the source, the piece quickly morphed into a call for more enforcement against illicit online retailers. The OCS had 42.8 million in sales through OCS.ca, their online consumer store, or about 3% of total sales for the OCS. This is down from $72.7 million in the previous year.

Trees Corporation announced that the company and its subsidiaries had received an order for creditor protection from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act. The Trees Group currently has 13 branded Trees storefronts in Canada, including nine stores owned and operated in Ontario and four stores owned and operated in BC.

Organigram appointed a new CFO, Greg Guyatt, formerly of Phoena Holdings Inc (formerly CannTrust), effective January 8, 2024.

Quebec’s Médicibis, owner of Mendo Medical, announced an agreement with Ontario micro cultivator Kilometer Cannabis Limited, operator of the Headwater Cannabis brand. The agreement means the Mendo Medical platform, mendocannabis.ca, will now include Headwater’s offerings.

Tilray announced the launch of two new cannabis edibles across Canada, including Ontario, British Columbia, Alberta, and Saskatchewan, under its Chowie Wowie brand. Both products have 10mg THC and 10mg CBD.

High Tide is opening a Canna Cabana location within the Tsuut’ina Nation in Alberta. This opening will mark High Tide’s 160th Canna Cabana branded retail cannabis location in Canada, the 78th in the province of Alberta, and the first Canna Cabana on the Tsuut’ina Nation. The Tsuut’ina Nation is located southwest of Calgary.

Stat’s Canada’s monthly update shows cannabis sales up by 0.4% (at 2017 constant prices) from the previous month.

A new survey shows the prevalence of youth reporting that cannabis is easy to access in Canada has declined since legalization, however, a substantial number of underage youth continue to report that cannabis is easy to access.

The Global Cannabis Times also recently interviewed Raj Grover, CEO of High Tide, where he says they are just 4.5% of Canada’s total brick-and-mortar store count, but 9.5% of the Canadian retail market share in terms of dollars.

The Good Shroom Co Inc., which sells cannabis products in several provincial markets under its Nordique Royale brand, as well as wellness beverages, released its financial results for the quarter ending October 31, 2023. The company saw revenue of $1,510,586 and $92,126 in net profit, primarily from cannabis sales. The same quarter last fiscal year was a net loss of $191,569.

An Enniskillen, Ontario, man who has been fighting to keep cannabis from being grown at a Tilray greenhouse just 28 meters from his home now has permission to be part of a hearing at the Ontario Land Tribunal. Cannim Canada, an Australian-based cannabis company, has already received a licence to cultivate and process cannabis at the Lasalle Line greenhouse.

Laval Police in Quebec say they recently dismantled a “vast” network of cultivation and sale of cannabis that operated in the territory of Laval, Montreal, as well as in the North and South Crown.

International cannabis

A Colombian-Canadian cannabis company near Bogota is frustrated by regulatory red tape and political hurdles it says are stifling the country’s cannabis industry. Reuters reports that more than 17 acres of land owned by a Colombian-Canadian company near Bogota was once meant to grow 25 varieties of cannabis, but over the past year, weeds have overtaken greenhouses, and 200 of its 218 employees have been fired.

“We’re going from bad to worse. It’s slow agony and the clock is going against us with pressure from partners and without cash flow,” said the owner of the Colombian-Canadian company, who asked for anonymity because he is seeking new investment to save his $20 million business.

Hong Kong customs officers have arrested three men and confiscated 228kg of cannabis hidden in a seaborne tire shipment from Canada.

US President Joe Biden has announced pardons for certain federal cannabis convictions and clemency for 11 people imprisoned for non-violent drug crimes. The executive order covers those convicted under the federal law of simple possession, attempted simple possession, or use of cannabis. The White House has said thousands of people would be eligible for the pardons.

Cannabis stores in Canada continue to be targets for robbers and burglars

Written by David Brown on December 22, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Ontario, Producers, Retail.

Cannabis stores in Canada continue to be targets for robbers and burglars, while retailers say they are doing what they can to mitigate risks.

A recent string of violent armed robberies in Calgary made headlines in the last few weeks, adding to the number of burglaries, thefts and vandalism at cannabis stores in several provinces in recent weeks and months.

Police recently made arrests related to that string of armed robberies in Calgary, and two men were also recently arrested on charges relating to another armed cannabis store robbery, this time in Gleichen, Alberta, just outside of Calgary.

Other stores in Calgary have also been previously targeted.

A business in BC was also recently burglarized on December 6, with $2,500 worth of cannabis products stolen from a store in Masset, on Graham Island in Haida Gwaii. The thieves gained entry by breaking the front window of the store.

Several stores in Ontario were the victims of break-ins, and there were at least two incidents of arson in early 2023.

Cannabis growers and processors have not been immune, either. Earlier this year, at least two cannabis producers in BC’s Lower Mainland were the victims of early-morning burglaries.

Alberta and BC have repealed their rules that required stores to have window coverings, which retailers said made their employees less safe in such incidents. Ontario is also considering such a change.

Retailers say they are having to spend more money to secure their stores as this new “cost of doing business” continues.

Brionne Lavoie, the owner of the Frontier Cannabis store in Masset that was recently burglarized, says he’s now installing heavy vault doors on his storage rooms to avoid similar break-ins in the future. In addition, the value of the cannabis stolen and damage to the store was below the deductibles for his insurance.

“At the end of the day it’s all deterrence,” says Lavoie. “If someone wants to break in or cause harm, they’re going to find a way without the extent of bank security, it’s just one of those things.”

Lisa Bigioni, co-founder and CEO of Stok’d Cannabis, which has four retail locations in Ontario and experienced two break-ins the week before Christmas 2022, told StratCann earlier this year that they have made several upgrades to their properties.

“Metal gates have now been installed in our stores, and we sleep a lot better at night. It’s been costly. The gates were about $2,000 per store.”

“The fact that we’re compliant with our security cameras helped us capture them in action,” says Bigioni. “And this helped the police find them. In both cases, the police arrived before we did. The detective assigned to the cases was fantastic, and kept us well-informed along the way. Based on the evidence, he was confident the guys would be caught, which they were less than a week later.”

Ryan Roch, who owns two cannabis stores just outside Calgary, says he has a similar perspective, saying retailers can guard against this by being more vigilant with security measures.

“Just keep your head on a swivel,” says Roch. “Do cash drops on a regular basis so there’s no excess cash sitting around. Make sure security cameras are working. Make sure staff are properly trained. Make sure you have panic buttons. There’s a lot you can do to make sure it’s a much safer environment.”

BC First Nation files lawsuit against group it says is using its land to grow and sell cannabis without licence

Written by Staff on December 21, 2023. Posted in British Columbia, Business, Cannabis News, Government.

A First Nation in British Columbia has filed a lawsuit against individuals it says are, among other activities, using the Nation’s land for growing and selling cannabis without a license.

The Nisg̱a’a Nation, located northeast of Prince Rupert, filed a lawsuit in the Supreme Court of British Columbia on December 14, 2023, accusing a group referring to themselves as the “Raven Clan Outlaws” of illegally occupying and undertaking harmful activities at a site within Nisg̱a’a traditional territory and the Nass Wildlife Area.

“The occupants’ activities at the site include: damaging forest resources by clear-cutting trees; erecting permanent cabins and structures; marketing accommodations; operating a farm; raising and selling livestock near waterways (now at risk of contamination),” reads a press release from the Nation. “They also appear to be growing and selling cannabis without a license. They have stated they do not recognize provincial or federal laws, and we understand that they have not applied for or received approval from any government to use this land.”

Nisg̱a’a Lisims Government (NLG) launched the lawsuit in order to stop what they say is an unsanctioned occupation of their land, arguing that under the Nisg̱a’a Treaty, Nisg̱a’a citizens have constitutionally protected harvesting rights within the Nass Wildlife Area and they have a responsibility to Nisg̱a’a citizens and to protect Nisg̱a’a treaty rights as well as the environment.

The actions of the Raven Clan Outlaws, the suit continues, prevent Nisg̱a’a citizens from exercising their treaty rights to safely harvest wildlife in the area, noting that hunting near an occupied site would be dangerous and against Nisg̱a’a laws. The occupants, it says, are clear-cutting forests, not complying with environmental and cannabis legislation, polluting the grounds with farm waste, and potentially contaminating nearby waterways.

“Nisg̱a’a Lisims Government is taking this action to protect our citizens’ rights, our traditional lands, and the larger Nass Wildlife Area,” said NLG President Eva Clayton. “The occupiers are causing real harm to the environment and cannot be allowed to continue to undertake their unlawful activities at the site. The Nisg̱a’a Treaty provides our citizens with the right to hunt and harvest wildlife to provide for their families, as they always have. We will do everything we can to protect these hard-won rights.”

A statement on their website says the Nisg̱a’a Nation is represented by NLG, which has the authority to pass laws on a broad range of matters. It also states the Nisg̱a’a lawmaking authority is concurrent with federal and provincial authority.

The Raven Claw Outlaws are described on their website as reoccupying stolen lands, saying they do not apply for permits to harvest resources on traditional lands, do not recognize provincial legislation on traditional lands, and do not recognize federal legislation on traditional lands.

A phone number on the Outlaw’s website is no longer in service. A link on their website directs to a “Mail Order and Local Delivery Cannabis Dispensary” with the Outlaw’s fist and raven logo, saying the crops are grown on traditional land and under traditional law.

The website also mentions plans for a store at the Ravens Nest Ranch located at 11km on Cranberry Connector on Gamlakyeltxw Lax Yip.

The Gitanyow Hereditary Chiefs October newsletter refers to both the Ravens Nest Ranch, established in 2023, as well as community members working to build capacity “on the farming of pigs, chickens, rabbits, cannabis, and hemp.”

The Nisg̱a’a Nation is named within BC’s Cannabis Control and Licensing Act.

You can read more about the lawsuit here.

Organigram posts net loss of $248.6 million in 2023

Written by Sarah Clark on December 19, 2023. Posted in Business, Cannabis News, New Brunswick, Producers.

Organigram reported that net revenue increased 11% to $161.6 million in 2023, but the cannabis producer still had a net loss of $248.6 million, according to its new fiscal report.

The New Brunswick-based company had $233.6 million in gross revenue in the past year, paying $72 million in federal excise taxes. The cost of sales was $136.4 million.

The company leveraged its spending to help secure its position in several product categories in Canada, holding the top position in the milled flower, gummies, and hash categories, the number three position in Ontario and Quebec, and the number one position in Atlantic Canada (according to Organigram’s market scans). It also says it holds the number three position in dried flower.

Organigam introduced 16 SKUs in the last quarter of 2023 for a total of 143 in the market. It sells an array of cannabis products in Canada under brands like Edison Cannabis Co., SHRED, Big Bag O’ Buds, Holy Mountain, and others.

It also completed its first harvest at its “craft” cultivation and hash production facility in Lac-Supérieur, Quebec, which it acquired in 2021 from Laurentian Organic. Organigram has made significant inroads in the market with its SHRED X Rip-Strip hash brand.

Another highly popular product from the Maritime producer, Edison Jolts, has faced pushback from Health Canada, but the company recently relaunched the product in several provincial markets. In a previous quarterly report, Organigram complained of lower net revenue and margins due to the declining price of cannabis flower, as well as a higher cost of sales, THC inflation, and Health Canada no longer allowing the sale of “ingestible extracts” like the Edison Jolts.

Organigram also signed its first UK supply agreement with 4C Labs Ltd. to distribute medical cannabis to UK-based patients, along with its first German supply agreement with Sanity Group GmbH to distribute medical cannabis to Germany-based patients.

Organigram completed international shipments totalling $18.9 million in 2023, an increase of 25% over Fiscal 2022.

In November, British American Tobacco (BAT) announced that it would invest nearly $125 million into Organigram, more than doubling its equity position in the cannabis company from about 20% to 45%. The deal is still subject to shareholder approval.

As part of that partnership, Organigram and BAT are developing what they say are new technologies in the cannabis edible, vape, and beverage categories in addition to “new disruptive inhalation formats.” The launch of these new products will include gummies, which will feature “a new nano-emulsion technology.”

Organigram also invested in new vape technology in 2023 through a product purchase agreement with vaporization technology company Greentank, and reached an agreement with Phylos, a U.S. cannabis genetics company and provider of production-ready seeds, based in Portland, Oregon.

As part of the partnership, Phylos has been developing production-ready first-generation (“F1”) hybrid cannabis seeds for Organigram. The milestones achieved so far consist of delivery of a 1:1 THCV cultivar at 10%+ THCV potency; a 3:1 THCV cultivar at target 18% THCV (16% minimum); and four THC aroma specific cultivars (in either Berry, Citrus, or Gas).

The Moncton-based producer says it’s up-to-date on all its excise tax remittances, but notes that many other producers are not, something it says acts as a “source of alternative financing.” It also notes that THC inflation remains a significant challenge in the industry, saying it has seen the stated amount of THC on some products inflated by more than 50%. Organigram says it’s confident that efforts by Health Canada and provincial boards like the OCS will help address this issue.

This Works doesn’t work for Canopy any more, sells to UK company for a loss

Written by Sarah Clark on December 18, 2023. Posted in Business, Cannabis News, Producers.

In an effort to become more “asset-light”, Canopy says it has sold off its ownership in a skincare and wellness brand for a fraction of what it paid just a few years ago.

Canopy announced that it had completed the divestiture of its This Works skincare and wellness brand to Inspirit Capital, a London-based investment firm, early morning on Monday, December 18.

“We are resolutely focused on achieving North American cannabis market leadership, and this completed sale represents a further step to enable this through the transformation of Canopy Growth into a simplified, asset-light, cannabis-focused business,” said Canopy CEO David Klein in a press release on Monday.

“In addition to realizing the proceeds from this sale which will further strengthen our financial position, we’re pleased to have found a buyer that is committed to the continued development of the This Works brand.”

Canopy made headlines in 2019 when they initially purchased This Works for $73.8 million. At the time, the cannabis company said the deal was a “key aspect of a multi-faceted hemp and CBD strategy” that “currently includes thousands of acres of hemp production across several continents, hundreds of millions of dollars of capital investment into hemp-derived CBD production and processing, rapid expansion across the European Union and other key regions, and the introduction of new CBD-infused products and brands to the global beauty, wellness, and sleep solution space.”

Since that time, Canopy has significantly scaled back its approach to the cannabis market, seeking to focus on a handful of higher-end cannabis products rather than dominating in every possible category.

This Works is Headquartered in London, England, and offers a range of skincare and sleep solution products.

Earlier this year, Canopy announced that it would sell its flagship facility in a former Hershey factory in Smiths Falls, Ontario, back to Hershey Canada for $53 million. Canopy, then known as Tweed Marijuana, acquired the former chocolate factory in 2013 for $7 million.

A facility that Canopy built in PEI sat idle for years, unused as of a year ago. Canopy’s own documents show that in 2018, the company committed to paying more than $24 million over five years to a numbered company that owns the land. On January 5, 2023, in an email to CBC News, Canopy confirmed it continues to lease the land but said it wasn’t ready to discuss next steps.

Canopy recently announced a deal for share consolidation in an effort to ensure it maintains a listing on the TSX and NASDAQ.

According to the company’s recent financial reports, the gross margin for Canopy’s This Works segment was $2.9 million in the first quarter of fiscal 2024, compared to $2.6 million in the first quarter of fiscal 2023. The gross margin percentage was 48% of net revenue in the first quarter of fiscal 2024, consistent with 48% in the first quarter of fiscal 2023.

Revenue from This Works was $6 million in the first quarter of fiscal 2024, as compared to $5.5 million in the first quarter of fiscal 2023.

Eight Canadian cannabis labs team up to test accuracy of dried flower, pre-rolls, infused pre-rolls

Written by David Brown on December 18, 2023. Posted in Business, Cannabis News, Producers, Research.

A new research project looking at THC levels in different products on the Canadian market is once again highlighting the lack of reliably labelled dried cannabis flower.

The lead researcher involved in the project says this is a failure by Heath Canada to set and enforce reasonable variability limits on Cannabis Flower or pre-rolls, leading to a lack of credibility in the market domestically and internationally.

Rob O’Brien, CEO and CSO at Supra Research and Development, an analytical testing lab in Canada that includes cannabis testing in its repertoire, says he worked with seven other labs across Canada to sample an array of cannabis products and compile the results. O’Brien has shared similar results on the subject in the past.

The goals, says O’Brien, were to more effectively highlight the extent of the problem in Canada and prove that analytical testing labs can accurately test cannabis without much deviation between them.

While the issue of THC inflation is relatively well-known, one of the reasons some have suggested for a lack of enforcement of THC levels on dried flower is the level of deviation in results depending on the lab used. But what these results show, says O’Brien, is that different labs all testing the same or similar samples can still come up with results that are relatively close to each other.

*Summary Dried Flower Results*.
*Column one shows which labs tested the sample ID’d in column two.*
*Column three shows the actual THC result.*
*Column four shows the variation between labs that tested the sample.*
*Column five shows the THC on the label.*
*Column six shows the difference in THC levels measured in mg/g.*
*Column seven shows the deviation between label claim and secondary testing by percent.*

This is highlighted by the project’s findings, which showed not only the deviation between the posted THC levels on the label of a cannabis product but also the deviation in the results between those labs. Three to four labs would receive the same sample, and in most cases, their results came within the same range, showing that when these labs use the same methodology, they can arrive at relatively similar measurements.

“Clearly there have been suggestions that there are THC inflation problems in the Canadian and US marketplaces. And people have been trying to identify the source of that and fingers have been pointed in many directions, including the accuracy of labs in Canada,” says O’Brien.

“I think it’s undermining the whole industry in Canada and the US,” he adds. “I think it’s outrageous that these shenanigans are allowed to continue. Health Canada is partially responsible because they’re not enforcing reasonable limits. And this clearly shows that if they do set reasonable limits, Producers can be within 15% of label claim.”

How it worked

The research, conducted by eight analytical testing labs in Canada, tested 16 different brands of 3.5 g dried flower products available in several provincial markets, four different brands of pre-rolls (non-infused), and 15 different brands of infused pre-roll flower product.

Researchers used an allowable variance for the dried flower and pre-rolls of 25% and 15% for infused pre-rolls, similar to the allowable limit within federal cannabis regulations. Note: this means, for example, that a product labelled as having 30% THC could be over or under that number by 7.5 percentage points, or 23.5% THC or 37.5% THC.

More than half (nine) of the samples from the 3.5-gram dried flower SKUs were found to be more than 25% below the stated label claim, and two of those were more than 40% lower than the label claim.

Meanwhile, only one of the four brands of non-infused pre-rolls was outside the 25% allowable range, with one sample coming in just 2.1% lower than the label.

For the infused pre-rolls, only three samples were outside the 15% range, and none were outside the 25% range.

None of the dried flower or pre-roll samples were above the stated label claim, while two infused pre-rolls showed results slightly above the label claim.

While some may point to the issue being devious labs, the resulting research paper, which O’Brien shared with StratCann, speculates the issue may have more to do with sample bias by producers who are selecting top colas or other high-THC flowers as their representative sample instead of sampling the finished product after it’s packaged.

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The fact that there was greater THC inflation and label inconsistency in the dried flower samples from the research project highlights this issue more, O’Brien says. Since pre-rolls are more likely to be homogenized as part of the manufacturing process, there is less variation between the label claim and the actual products.

The issue is even more pronounced with infused pre-rolls, which are considered an extract under federal regulations and, therefore, subject to a strict 15% deviation allowance.

While a cannabis flower may have a certain level of THC at harvest or after drying and curing, the process of processing and packaging that flower results in a loss of Trichomes that significantly reduce the THC content, which is why he says these products should be tested after packaging rather than before.

“While we cannot pinpoint the origin of the discrepancies, we can speculate that the label claims >30% higher than the actual Total THC concentration in the finished product may be using artificially high COA’s from a harvest rather than testing products after being handled and processed into the finished form,” says the paper. “Active cannabinoids are compartmentalized in fragile trichome structures that can easily be dislodged during mechanical processing. Non-processed flowers may have a higher amount of cannabinoids than processed flowers.”

Still, the paper doesn’t entirely discount the possibility that some labs are also inflating numbers.

“Furthermore, there is also the probability that some labs are artificially generating high COA’s or that the producers are sending samples that are doctored. However, these possibilities can not be determined from this type of study.”

Three or four packages of each brand were obtained from cannabis stores in several provinces. These were then sent to a central lab, sorted, and randomly sent to the other labs involved in the study.

Although they’re not releasing the names of the specific brands they tested because they don’t want to harm any brand, O’Brien says the full data set will be shared with Health Canada and provincial cannabis distributors. The hope is that when producers with accurate label claims are contacted, they will permit the publication of their name to create positive news stories about this issue.

More information about these results, including all participating labs, is expected to be released at a future date.

Health Canada to begin testing of legal, illegal cannabis

July 13, 2023

Inflated THC levels undermine cannabis industry

April 13, 2023

OCS to begin temporary THC testing program in 2024

November 30, 2023

Week in Weed – December 16, 2023

Written by David Brown on December 16, 2023. Posted in Business, Cannabis News, Government, International.

This week, we shared the story of a Canadian company with a newly-approved EEG-based research model to better understand the effects of cannabis, and the news of the first regulated cannabis making its way to Dutch coffeeshops.

We also looked at a small Ontario community that has spent more than $800,000 fighting legal cannabis producers, did a deep dive into the OCS’s new annual report, and shared a profile on Living Cannabis’ micro operation in BC.

Lastly, we also shared some of the many jobs currently available in the cannabis industry.

In other cannabis news…

Herb ran an interesting piece comparing and contrasting Canada’s federal legalization and the patchwork State’s rights approach taken in the US. While Canada’s approach offers more stability and consistency, the US offers greater product innovation, says the author.

L’Éclaireur Progrès spoke with the owners of Quebec micro cultivator LaHoja Organique about the fierce competition in the cannabis industry and their current pivot from the Quebec market into Ontario.

Health Canada’s Forward Regulatory Plan: 2023-25 includes continuing to think about maybe considering amendments to the Cannabis Regulations (Flavours in Cannabis Extracts), their proposed Approach to the Regulation of Health Products Containing Cannabidiol (CBD) that would not require practitioner oversight and Streamlining Certain Regulatory Obligations.

Canopy Growth announced a one-for-ten share consolidation in an effort to regain compliance with the Nasdaq minimum bid price requirement. The post-consolidation shares are expected to start trading on the Toronto Stock Exchange and the Nasdaq at market open on Dec. 20, subject to final confirmation from the TSX and the Nasdaq.

The CBC reported that the CRA is claiming medical cannabis advocate Chris Enns didn’t report more than $2.5 million worth of sales at dispensaries he operated a decade ago. Enns says the claims are based on inaccurate police records. At the same time, the CRA alleges Enns inaccurately reported income from cannabis sales and the resulting benefits he received as a company shareholder. This spring, the CRA quietly set up a full-time “illicit income” program that includes 80 auditors across the country.

An investigation that arose from a double shooting in Vancouver in September led police to a grow op in East Van and one in Abbotsford. The BC government now wants to seize more than $7 million in property and cash as the proceeds of crime.

Politico shared some older news about the $167.6 million Veterans Affairs Canada spent on cannabis for medical purposes in 2022-2023. VAC has spent $600.6 million to reimburse veterans for cannabis since Canada legalized in 2018, although the program predates the legal non-medical regime.

Dr. Blake Pearson, along with Lambton College lead researcher Dr. Mikelle Campbell-Bryson, presented their paper “Exploring cannabinoid therapy as a safer alternative for dementia symptom management” at the Cannabis Science Conference in Providence, Rhode Island.

Continuing their series on cannabis, Nature looked at cannabis use and teens. James MacKillop, a clinical psychologist at McMaster University in Hamilton, says that while there was no initial spike in cannabis use among adolescents when the drug was legalized in Canada five years ago, there was a rise in use when illegal cannabis stores that are not licensed by the government began to open.

Greenhouse Canada looked at novelty soil amendments with Seaborn Organics’s Cannabis Indoor Cultivation Research Labs (Cannabunker) at the Daniel J. Patterson campus in Niagara-on-the-Lake.

Law enforcement

Calgary Police say they have identified all the suspects involved in a string of cannabis store robberies in the city over the past several weeks. Meanwhile, two men were also arrested on charges relating to another armed cannabis store robbery, this time in Gleichen, Alberta.

Revenue officers at the Dublin airport stopped and searched the baggage of a passenger who had disembarked from a flight from Toronto, Canada, discovering 14kg of cannabis, valuing it at about $30,000 per kg.

The high prices must be a motivation because in September, 185 kg of cannabis sent from Canada was intercepted by a dog named Maggie at the Dublin Airport as well, and a Canadian man was caught with cannabis worth €700k in Dublin airport in August.

OCS continues to grow, with nearly $1.5 billion in wholesale sales in 2022-23

Written by Staff on December 14, 2023. Posted in Business, Cannabis News, Government, Ontario, Retail.

The Ontario Cannabis Store helped facilitate nearly $1.5 billion in cannabis sales through the distribution of 315,000 kilograms of cannabis products across a network of more than 1,600 stores, as well as online sales, in its most recent annual report.

By provincial order, the agency was required to pay its net profits of $150 million from its cash balance into Ontario’s Consolidated Revenue Fund (“CRF”).

The report, covering the 2022-23 fiscal year ending March 31, 2023, shows the provincial cannabis distributor and online retail generated a net income of $234.2 million over the past year and revenue of $1,474.5 million, marking a growth of $293.7 million compared to $1,180.8 million in 2021–22.

The province captured nearly 60% of the cannabis market with its sales, a continued increase in the total share of the market.

Sales increases were assisted by establishing the OCS’ Flow-Through program, which, combined with the number of products held in stock in the distribution warehouse, grew to 2,950 SKUs, a 46.5% increase over the previous fiscal year.

*A product sold through the OCS Flow Through program sits at the OCS warehouse*

The total number of units sold through the OCS Flow Through was 1.4 million. The total number of LPs that the OCS partnered with as of March 31, 2023, was 239, which is an increase of 90 compared to 2021–22.

(Editor’s note: The above paragraph has been edited to note that the 1.4 million units sold were through Flow-Through.)

The number of stores in Ontario has continued to increase, even as store closures have also been picking up pace. Ontario added an additional 345 Authorized Cannabis Stores in the most recent fiscal year, growing to 1,661 stores across the province as of March 31, 2023. (The AGCO currently lists more than 1,700 stores as Authorized to Open.) Another 144 stores closed during this time period.

Online cannabis sales through OCS.ca decreased in the last fiscal year as the provincial agency says it has made efforts to improve its wholesale service levels to retailers and deprioritized large or material enhancements to the online consumer platform.

Dried flower sales through OCS.ca saw a significant decline, from 49.8% of all sales in 2021-22 to 37.6% in 2022-23. Sales of generally smaller SKUs like pre-rolls, oils, capsules, vapes and concentrates, edibles and beverages increased through the online platform.

The total revenue for the OCS sales from wholesale and online sales in 2022–23 reached $1,474.5 million, marking a growth of $293.7 million compared to $1,180.8 million in 2021–22.

Wholesale sales of vapes, pre-rolls and edibles showed growth in the most recent fiscal year, but cannabis flower still dominates with 42.7% of wholesale revenue sales in 2022-23. Combined with pre-rolls at 19.4% (non-infused), this accounts for 62.1% of total revenue share.

Vapes and concentrates represented the next largest share of revenues, with 26.2%, followed by edibles at 4.5%, oils and capsules at 3.4%, and beverages at 2.7%. Vapes and concentrates were up from 18.8% in the previous fiscal year.

The OCS will be lowering its margins on wholesale products in Q2 of 2023–24, which it expects will inject approximately $35 million into the marketplace and roughly $60 million by 2024-35 with even further planned reductions.

Currently, the fixed wholesale markup OCS charges on cannabis products ranges from 20-29%.

The total finance income for the OCS in 2022–23 reached $16.8 million, marking a growth of $14.7 million compared to $2.1 million in 2021–22.

*Ontario Cannabis Store Fixed Wholesale Mark-up Rates by Subcategory. Image via OCS.*

The most recent fiscal year was the most profitable year for the OCS so far, with a reported total comprehensive income of $234.2 million, compared to $184.4 million in 2021–22.

The OCS has used these profits to repay the loan provided by the Ontario Financing Authority. In 2022–23, $7.6 million in loan principal was repaid, and $1.8 million in interest was paid, for a total payment of $9.4 million. The balance of the loan as of March 31, 2023, was $59.7 million. It completed a total of $37.6 million in payments to various governments in 2022-23.

The federal government received $27.6 million in harmonized sales tax (HST) remittances from Ontario cannabis sales in 2022–23, an increase from $27.0 million in 2021–22. The Ontario provincial sales tax component of the HST was $17.0 million in 2022–23, compared to $16.6 million in 2021–22.

On or before September 29, 2023, the Ontario Cannabis Retail Corporation was required to pay into Ontario’s Consolidated Revenue Fund (“CRF”) its net profits in the amount of $150 million from its cash balance as of March 31, 2023.

Each year the OCS has four scheduled product calls, one in the spring, summer, fall, and winter. The next product call is January 2024 for the 2024 summer product call schedule

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Health Canada approves a novel EEG-driven research model to study non-therapeutic effects of cannabis

Written by Staff on December 13, 2023. Posted in Business, Cannabis News.

Hamilton, ON – December 13, 2023: Zentrela, Inc., the leading Canadian neurotechnology company, is proud to announce that Health Canada has authorized its novel EEG-based research model for Category 3 non-therapeutic cannabis effect studies, unlocking the ability to provide Canadian LPs with objective and regulatory-compliant product effect evidence.

While a Category 1 NTRC license allows for sensory testing, it is sometimes also used to informally collect reported cannabis effect information. However, this latter type of non-scientific data is not reliable nor compliant with Health Canada’s NTRC regulatory framework, therefore its value is limited. It is important to remember that Health Canada’s regulations stipulate that under the non-therapeutic research on cannabis (NTRC) framework, license holders should only study cannabis effects under Category 2 or 3 NTRC studies.

The Category 3 NTRC was created to enable Canadian cannabis companies to generate product effect evidence using scientific research instruments like EEG devices through interventional studies based on the full consumption of pre-commercialized products.

Zentrela’s unique EEG-driven research model for objectively quantifying the psychoactive and mood effects of cannabis products is the result of 7+ years of R&D to master the ability to combine proprietary portable EEG technology with Machine Learning to characterize cannabis effects accurately and affordably. Since 2021, Zentrela has been continuously refining its EEG-based research solution, generating more algorithms and standardizing its master research protocol to make it the most objective, fast-to-conduct, and replicable solution in the market.

“This is a game-changing event for the Canadian cannabis industry and Zentrela,” said company founder and CEO Israel Gasperin. “Before our offering, there didn’t exist a standardized, objective and quantifiable way of characterizing cannabis effects. Health Canada’s approval of our EEG-driven research methodology is making the application and activation for a Category 3 NTRC license very straightforward and affordable. Instead of investing in regulatory consulting fees to start an L3 NTRC application process from scratch, now LPs can work with us right away to unlock the business benefits of generating product effect evidence objectively and in compliance with the Cannabis Act and its regulations.”

Zentrela is awaiting from Health Canada’s Licensing and Security Division to finalize the review of the security aspects of their research facility to start receiving pre-commercialized cannabis products and conducting non-therapeutic cannabis effect research under the Category 3 NTRC license.

For further information, contact Roy Agostino at (416) 659-0678.

About Zentrela, Inc.

Zentrela, Inc., a trailblazer in the field of cannabis research, harnesses advanced EEG technology to objectively study the effects of cannabis on the human brain. Our commitment to scientific rigour, credibility, and innovation makes us a leader in providing actionable insights for the cannabis industry. Visit Zentrela’s website to learn more.

Content sponsored by: Zentrela Inc.

This press release is subject to verification. StratCann does not verify the information within the releases.

Week in Weed – December 9, 2023

Written by David Brown on December 9, 2023. Posted in Business, Cannabis News, Government, International.

This past week, we shared a new guidance document on intoxicating cannabinoids from Health Canada and looked at what some in the industry think of the new OCS THC testing program.

We also looked into new figures from Health Canada showing inventory levels declining slightly, and new numbers from CCX showing that wholesale cannabis prices also appear to be rebounding.

BZAM announced they were entering into an agreement to acquire Final Bell’s Canadian operation, which comes with some very interesting brands, including Jeeter Canada.

We looked at an interesting court case dealing with the appropriation of a cannabis store by a First Nations community on Vancouver Island, and we shared new information from Calgary Police on a string of cannabis store robberies in the city.

In other cannabis news:

The Nova Scotia Liquor Corporation (NSLC) says it will reinstate cannabis home delivery after some rural customers were cut off when the NSLC switched from Canada Post to a private courier company “to harmonize…home delivery programs for both beverage alcohol and cannabis.”

Kelowna, BC is planning on lowering its annual fees for cannabis retailers, from $9,500 to $650. “We’re doing an update to the cannabis licence bylaw, which is going to happen in January or February, but we’re holding off on formal renewals of the $10,000 cannabis licences – there’s 18 – until after we change the bylaw next year so that they’ll pay the same fee as a retail liquor store,” City of Kelowna Planning Director Ryan Smith said.

Charges against a Winnipeg man accused of handing out cannabis gummies on Halloween have been stayed. Sheldon Chochinov and his wife, Tammy Sigurdur, allegedly gave out THC candies to multiple children on October 31, 2022. Sigurdur previously pleaded guilty to charges of supplying cannabis to a young person and possessing cannabis that is not packed, labelled or stamped. Sigurdur is expected to return to court for a sentencing hearing in January.

Cannara Biotech Inc. announced its Q4 2023 report with net revenues of $18.3 million, net income of $4.6 million, and gross profits of $9.8 million. As of October 2023, Cannara has an 8.8% market share in Quebec, 3.2% in Ontario, 2.3% in Alberta, and 0.9% in BC. The company also increased production capacity by 50% in 2023.

Researchers with Nova Scotia Health spoke with CBC about a national study into the long-term effects of cannabis on young people.

More info came out this week on a story StratCann covered earlier this year involving a micro cultivator in Manitoba who was arrested in connection with drug trafficking and money laundering schemes that involved cryptocurrency, along with smuggling cannabis concentrate in and out of the country using barrels of honey and maple syrup, police say.

The Canada Border Services Agency (CBSA) says they intercepted 10,100 kg of cannabis in 2023.

International

4C Labs, located in the self-governing British Crown dependency of Guernsey, has a licence to grow on the island but intends to import the majority of its product from Canada.

According to new data shared by MJBiz, medical cannabis companies in Australia exported 1,510 kilograms of cannabis in 2022 and produced 24,900 kilograms, up from 16,700 kilograms in 2021.

The US DEA is now warning Georgia pharmacies to stop selling THC products. Georgia recently became the first US state to allow cannabis sales in pharmacies.

BZAM enters into agreement to acquire Final Bell’s Canadian operation

Written by Staff on December 6, 2023. Posted in Business, Cannabis News, International, Producers.

BZAM announced today that it has entered into a definitive share exchange agreement to acquire Final Bell Canada Inc. from Final Bell Holdings International Ltd, a hardware, packaging and brand development company serving the cannabis industry.

The deal will make BZAM the fifth-largest Canadian LP, including a production facility in Ontario.

Among other ventures, Final Bell has developed nicotine and cannabis vape hardware, co-founded Dosist, a cannabis vape company, in 2016, and operates a cannabis production facility in Ontario under WeedMD’s Starseed brand. Final Bell recently fully acquired Dosist.

The company also lists cannabis brands operating in Canada like Tweed, Spinach, Sherbinskis, Foray, Ace Valley, B40, Beurre Blanc, Kolab, Cookies, and others among its clients. Products from Jeeter Canada at a recent cannabis industry event in Ontario list Final Bell on the packaging. Jeeter Canada’s website also says “Proudly Brought to You by Final Bell Corp.”

Under the terms of the agreement, FBHI, the sole shareholder of FBC, will receive 90,000,000 common shares of BZAM at a deemed price of $0.15 per share, representing approximately one-third of the issued and outstanding shares of BZAM. The transaction is anticipated to occur on or about December 18, 2023, subject to customary closing conditions.

BZAM says it will also enter into a supply agreement in which FBHI’s wholly-owned subsidiary, 14^th Round Inc., will continue to provide child-resistant packaging, vaporization hardware, and pre-roll cones to BZAM.

“This Transaction combines BZAM’s cultivation, production, and sales infrastructure with the exceptional portfolio of international brands that Final Bell has brought to market in Canada. FBHI, together with Greg Boone and his team at FBC, have done an incredible job introducing the biggest names in cannabis to Canadian consumers and creating significant value in the process. We are pleased to bring this team and these brands to BZAM,” said Matt Milich, Chief Executive Officer of BZAM. “This combination also brings in FBHI as an invaluable strategic shareholder to the Company, which creates additional opportunities for long term growth and value creation.”⁽²⁾

“This combination places the combined entity as the 5^th largest Canadian L.P. on a proforma basis”⁽¹⁾⁽²⁾ said Robert Meyer, CEO of FBHI. “BZAM’s demonstrated prowess in the Canadian marketplace, coupled with our brand portfolio and packaging and hardware innovation are a recipe for continued growth with many competitive advantages.”⁽²⁾

“We are proud of the work we have done to bring many of the leading cannabis brands from California to Canada and I am excited to continue the work of developing those brands under the BZAM umbrella with the incredible resources BZAM brings to the table,” said Greg Boone, CEO of FBC.

As part of the Transaction, Greg Boone will join BZAM as President, and Jennifer Maccarone will join as VP of Operations. FBC’s Chief Legal Officer Christy Zhou will assume the same role at BZAM, and Lana MacKenzie will also take on a senior role within BZAM. Matt Milich will remain as CEO of BZAM. In addition, FBHI will be entitled to appoint a new member to BZAM’s board of directors.

After FBHI completed the acquisitions of 14th Round Inc. and Final Bell Canada Inc. in late 2022, Boone noted the company’s early success in the Canadian market.

“Final Bell’s success in Canada as a co-manufacturer and commercialization partner is reflected not only in how quickly we are climbing the LP rankings – specifically in Cannabis 2.0 products – but also in the innovative SKUs launched with our brand partners.”

14th Round is the company behind many of Final Bell’s vape brand partnerships.

Further to the transaction, the combined Company will be the Canadian home of several well-known cannabis brands – including Cookies, Sherbinskis, and Wyld.

Total unpackaged cannabis inventory, production space continue to decline

Written by Staff on December 5, 2023. Posted in Business, Cannabis News, Other.

The amount of unpackaged inventory cannabis producers are sitting on has continued to decline from a peak in late 2022, while approved indoor grow space has been slowly declining from a peak in early 2020.

Approved outdoor production space has also declined from a peak in late 2021. Unsurprisingly, the estimated number of people employed on federally licensed cannabis production sites has also been declining from a peak in late 2021.

Dried flower still dominates cannabis sales, but cannabis extracts and edibles continue to slowly eat away at that market share.

While the volume of unpackaged, dried cannabis flower licensed producers have in their vaults is still over one million kilograms, that amount has been somewhat declining in 2023. The peak volume held by these processors was 1.3 million kilograms in October 2022.

The most recent figures provided by Health Canada, through June 2023, show that figure sat at about 1.2 million, a decline of approximately 161,000 kilograms, or 13%.

While not a significant decline, it does show a trend of a long-standing cannabis surplus beginning to show signs of not only levelling out but even beginning to decline. This surplus of cannabis is a significant reason why prices have been dropping so significantly, often due to larger producers trying to offload large volumes from their vaults at cut-rate prices.

Unpackaged inventory of dried cannabis shows a similar decline, from a peak of 293,188 kilograms in October 2022 to 135,453 kilograms in June 2023. That number dropped even lower, to 110,290 in February of this year, a low not seen since January 2021.

Dried cannabis sales remain the most commonly sold product, with 53% of all medical and non-medical sales in packaged units, compared to 24% cannabis extracts and 22% cannabis edibles.

*Cannabis extracts packaged sales*, via Canada.ca

Cannabis edibles and extracts continue to eat into that market share dominated by dried flower. In October 2020, dried cannabis sales represented 68% of total sales, with 6,989,846 packaged units sold. At the time, edible cannabis sales represented 17% of total sales, while extracts were 15%.

By March 2022, dried cannabis sales represented 58% of total sales, edible cannabis sales represented 23% of total sales and cannabis extracts 19%.

*Edible cannabis packaged sales, via Canada.ca*

Edible cannabis packaged sales continue to increase year-over-year, with large spikes in December each year. There were 4.4 million packaged units of edible cannabis sold in June 2023, compared to 3.8 million in June 2022 (medical and non-medical).

Packaged sales of cannabis extracts (medical and non-medical) have also been increasing, from 3.3 million in June 2022 to 4.9 million in June 2023. Meanwhile, packaged inventory of cannabis extracts held by producers, as well as provincial distributors and retailers, appears to be settling at around eight to nine million in each category.

Sales of cannabis topicals, which are still a small fraction of the overall market, have also been increasing, with 76,000 packaged units sold in the medical and non-medical stream in June 2023, down from a previous peak in December 2022 of more than 81,000 units sold, and up from June 2022’s nearly 58,000 units sold (medical and non-medical).

However, the total inventory of topicals held by licensed producers, as well as provincial distributors and retailers, has been declining significantly, from a peak of 553,077 units in March 2022 to 333,438 units in June 2023.

The number of non-flowering cannabis plants in Canada’s legal, commercial industry continues to fluctuate seasonally, with spikes in inventory each May or June and declines later in the year. However, while the peak in May 2022 was 3.7 million plants, 3.5 million in June, 2021, and 3.2 million in June, 2020, the high listed amount for 2023 was just over 3 million.

While relatively low, overall, the number of cannabis plants sold in the medical and non-medical channels spiked in 2023 as more cannabis clones made their way into the non-medical “recreational” market. More than 10,000 cannabis plants were sold to medical and non-medical consumers in June 2023, compared to just under 3,000 in June 2022 (and fewer than 1,000 in May and July 2022, respectively).

The number of flowering cannabis plants has also declined, from a peak of 3.8 million in September 2022 to 2 million in June 2023.

The total amount of packaged inventory of seeds has also been declining, especially among provincial distributors and retailers, from a previous high of 136,767 packaged units in July 2021 to 59,699 in June 2023.

Sales of cannabis seeds continue to spike in the spring of each year, with 14,459 units sold in April 2022 and 14,784 sold in April 2023. The vast majority of these seeds were sold into the non-medical stream.

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