Business Archives

Nova Cannabis sees increasing revenue from data licensing, private label partnerships

Written by Staff on November 8, 2023. Posted in Alberta, Business, Cannabis News, Ontario, Retail, Saskatchewan.

Nova Cannabis Inc., a retail chain with 92 locations in three provinces, says it’s beginning to see consistent green on its spreadsheet through market stabilization, data licensing agreements, and a private label partnership with a cannabis producer.

Nova, which has locations in Alberta, Ontario, and Saskatchewan, primarily under its Value Buds and Firesale Cannabis banners, reported net earnings of $2.1 million for Q3 2023, compared to a loss of $1.5 million for the same period in 2022.

Nova estimates its market share was approximately 19.1% in Alberta for the third quarter of 2023. Stabilization, specifically in the Alberta retail market, helped the company report record gross margins and profits, with 60 Value Buds locations listed by the Alberta cannabis regulator.

In Ontario, a market with nearly 2,000 retail stores, it estimates it has about 3.5% of the market share, with about 35 locations either approved or in the approval process.

The company reported a record gross margin of $17.0 million (25.1% of revenue), a 52.8% increase from $11.1 million for the third quarter of 2022 (18.9% of revenue), and a 16% increase from the previous quarter from $14.6 million (22.8% of revenue).

Nova’s “data licensing program” continues to grow exponentially, with $4 million in revenue for the third quarter of 2023, compared to $1.4 million in the third quarter of 2022 and $2.7 million for the second quarter of 2023. Previously, the company expected its data licensing revenue to increase its gross margin by approximately two percentage points each quarter.

In late 2022, Nova and SNDL had a tentative agreement that would have seen SNDL hand over control of 26 cannabis stores it owned under the Spiritleaf and Superette banners located in Ontario and Alberta. SNDL would also get exclusive access to Nova’s intellectual property, such as sales data, from its Value Buds retail brand.

The two companies have been repeatedly extending the closing of that partnership due to what they say is a review by one provincial regulator. The most recent extension is to November 30, 2023.

SNDL became Nova’s majority shareholder when it acquired Alcanna in 2022, Nova’s largest shareholder at the time. Similarly, High Tide, another sizeable retail cannabis business in Canada with 156 Canna Cabana locations across the country, reported sales from its own “Cabanalytics business data and insights platform” increased to $6.5 million in the third fiscal quarter of 2023 from $5.5 million during the same period in 2022.

OGEN latest Alberta cannabis company to close

Written by Sarah Clark on November 7, 2023. Posted in Alberta, Business, Cannabis News, Government, Producers.

Another Alberta cannabis producer is shutting its doors. On November 3, Calgary-based OGEN Cannabis closed its facility, laying off 87 people as a result.

Darren Brisebois, President at OGEN, made the announcement in a post on Linkedin on November 7.

In June of this year, Atlas Growers in rural Alberta closed up shop and laid off 50 workers. In October, cannabis producer SNDL closed their Olds, Alberta facility. The Olds facility had once been the largest employer in the area, with about 400 employees in 2019.

Cannabis producers in Alberta say they are hamstrung by provincial fees and paperwork, and smaller producers say it’s often easier to sell their weed outside the province than in.

Applicants wanting to sell their cannabis in Alberta, for example, must pay the AGLC $3,000 for a process that can take five to six months, Jeff Karren, President of Joi Botanicals, a standard producer in Calgary, explained to StratCann earlier this year.

“We just went through our second round. The maximum licensing period before a registrant must resubmit due diligence info is 6 years, but for some reason, the AGLC decided that we needed to resubmit after about 4 years. You pay the $3,000 upfront, and if additional work is required, they might charge you more.”

In a recent online post in reference to OGEN closing, Karren also estimated the loss in tax revenues could be in the tens of millions.

“How much tax revenue will be lost in Alberta before changes are enacted?” Karren asks in his LinkedIn post.

Just three weeks ago, the company was hiring for a position in Calgary.

The AGLC even requires the full names and birthdays of all children—dependent or not, including step-children. (A PDF of the 61-page Cannabis Registration Representative application can be found here.)

“It’s the same level of scrutiny that a casino owner gets,” says Tim Mallett, CEO and master grower at Alberta Bud, a micro producer in Edmonton. “It’s painful, time-consuming, and expensive. We’ve been through it three times in two years.”

The province has been making some regulatory changes, even lowering some listing and licensing fees.

Alberta currently lists about 750 cannabis retailers, with over 200 producers and brands approved to sell in the province.

Cannabis companies across Canada have been closing due to an array of market pressures, federal and provincial paperwork, fees, and taxes.

There are currently 949 federal licences listed as active by Health Canada. Ninety-one of these are located in Alberta. Health Canada also lists recent licence revocations (on request of the licence holder), eight of which are producers in Alberta.

Featured image via OGEN Cannabis.

Global tobacco giant ups investment in Canadian cannabis producer Organigram

Written by Staff on November 6, 2023. Posted in Business, Cannabis News, International, New Brunswick, Producers.

British American Tobacco (BAT) announced today that it will invest nearly $125 million into New Brunswick’s Organigram, more than doubling its equity position in the cannabis company from about 20% to 45%.

The move still requires the approval of Organigram shareholders.

Since 2021, BAT, the British multinational that manufactures and sells cigarettes, tobacco, and other nicotine products, has made several minority investments in the cannabis space, including its 19.9% equity in Organigram in their “Beyond Nicotine” campaign.

In September 2022, BAT also secured a non-controlling minority stake in German cannabis company Sanity Group GmbH (Sanity Group).

Jupiter, the strategic investment pool, is expected to accelerate Organigram’s ambitious growth plans, enabling further geographic, technological, and product expansion.
Beena Goldenberg, CEO of Organigram

Organigram sells an array of cannabis products in Canada under brands like Edison Cannabis Co., SHRED, Big Bag O’ Buds, Holy Mountain, and others. Organigram’s most recent quarterly report said SHRED products, one of the more popular in Canada, have made nearly $190 million in retail sales in the previous 12 months.

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 that same 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.

Despite these concerns, Organigram’s recreational net revenue was $92.5 million for the nine months ended May 31, 2023, an increase of $8 million over the same prior-year period. International sales for the first nine months of fiscal 2023 also increased considerably, nearly doubling from $9.5 million in 2022 to $18.4 million.

In a press release, BAT says its increased investment in Organigram is due to the company’s performance and “careful financial governance” in an economic downturn.

Most of BAT’s investment will be used for Organigram to establish a “strategic investment pool, intended to be applied for emerging opportunities within the cannabis space to accelerate Organigram’s growth and to support geographic, technological and product expansion.”

Organigram says the majority of the $124.6 million investment will be used to create a strategic investment pool named Jupiter, focusing on “emerging cannabis opportunities,” including “geographic expansion”.

“We are excited to bring this transformative transaction to Organigram’s shareholders, reinforcing our commitment to delivering shareholder value,” says Beena Goldenberg, CEO of Organigram, in a press release.

“This investment bolsters an already strong balance sheet and solidifies our position as a leading cannabis company. In addition, this deepens the strategic partnership between Organigram and BAT, and we look forward to continuing to leverage BAT’s global capabilities and scientific expertise. Jupiter, the strategic investment pool, is expected to accelerate Organigram’s ambitious growth plans, enabling further geographic, technological, and product expansion.”

Court dismisses health claims associated with Organigram pesticide recalls

May 2, 2020

Organigram asks court to overrule Health Canada on edibles extract restrictions

April 24, 2023

Organigram blames lower sales on THC inflation and no longer being able to sell “ingestible extracts”

July 14, 2023

Week in Weed – November 4, 2023

Written by David Brown on November 4, 2023. Posted in Business, Cannabis News, Government, International, Producers, Retail.

This week at StratCann, we took an in-depth look at how many cannabis companies are drowning in paperwork and new research that suggests the effect of terpenes on cannabis aroma is overhyped.

Cannabis sales continue to grow across Canada, and BC’s most recent quarterly report tells a similar story, with consumers continuing to move from eighths to larger volume SKUs like 7, 14, and 28 grams.

BC’s Community Safety Unit has seized more than $38 million in illicit cannabis since 2019, and law enforcement in Ontario announced the seizure of thousands of plants at an alleged illicit grow.

Meanwhile, Health Canada still says cannabis intended to be consumed as food is not an extract, even as more products in this category appear and reappear on shelves.

In other cannabis news this past week…

A new online survey conducted by Research Co found that 64% of Canadians are in support of cannabis legalization. The survey also found that 53% of Canadians say they have never consumed cannabis in Canada. Of those who have used it, 4% say that all their cannabis products were purchased at a licensed retailer, while only 17% say they have never bought it from a licensed retailer.

The OPP published a five-year retrospective on legalization, referencing findings in the Minister of Health and the Minister of Mental Health and Addictions Expert Panel’s legislative review of the Cannabis Act.

The Calgary Herald spoke with Alberta cannabis retailers bemoaning provincial red tape and regulatory fees with comments from Brooks Pries of Strathmore’s The Garden Cannabis Co, Blaine Emelson of Bud Supply, with nine locations in the province, and Omar Khan of High Tide, which has 78 retail stores in Alberta under its Canna Cabana brand.

The article also included a comment from the office of Dale Nally, minister of Service Alberta and Red Tape Reduction, that said, “We want cannabis businesses to have the tools they need to succeed and grow, and we want Albertans to continue to be able to responsibly and safely enjoy the products and services they offer.”

Health Canada has also begun outreach to the industry on proposed guidance for microbial and chemical contaminant tolerance limits for cannabis products. The regulator is currently developing a guidance document to assist regulated parties in meeting this requirement. More info on this at StratCann soon.

Le Journal de Montreal reports that Uber Eats wants to deliver cannabis and related products for the SQDC based on a listing on the register of Quebec lobbyists. The article also mentions that the SQDC says its new warehouse will be operational in 2027.

Delta 9 Cannabis Inc. announced that it has been approved to supply recreational-use cannabis products to Cannabis NB for sale in New Brunswick. This is Delta 9’s ninth Canadian provincial and territorial supply approval after Manitoba, Saskatchewan, Alberta, British Columbia, Ontario, Newfoundland and Labrador, Yukon Territory, and the Northwest Territories.

Cronos has released two new THCV-infused products, Spinach FEELZ Full Tilt THCV vape and gummy, into provincial markets.

Christina Lake Cannabis Corp in BC released its Q3 2023 report, posting a gross profit of $4 million and $495,000 in losses after expenses, attributing the decline in gross margin to a significant drop in the price of wholesale distillate, even as sales increase.

BC’s Human Rights Tribunal dismissed a complaint from a former Koppert Canada Ltd consultant who said she was constructively dismissed from her job after being in a cannabis farm gave her a “contact high” and symptoms stemming from a disability. The tribunal ruled that she had no reasonable prospect of success.

BC-based Community Savings Credit Union CEO Mike Schilling spoke to Business in Vancouver about his lobbying efforts in Ottawa as part of the Canadian Cannabis Council’s (C3) recent Grass on the Hill lobbying event, held October 16-18.

The Time Colonist in Victoria, BC, published an opinion piece focussed on “troubling” concerns relating to cannabis-related hospitalizations and claiming that cannabis use “rivals alcohol consumption as a leading cause of road-related accidents and fatalities,” a rather dubious claim.

Some councillors in Aurora, Ontario, want to put a cap on the number of stores in the city, keeping it to no more than the thirteen currently operating in the small city, saying the costs for things like city bylaws and law enforcement are too high for the city to bear.

Town staff in Caledon, Ontario, have been asked to report back in early 2024 on the feasibility of permitting cannabis retail stores in the city.

The Supreme Court of Canada refused to hear an appeal from three BC men facing extradition to the US over accusations they had tried to smuggle cannabis into the United States in hollowed-out logs almost 20 years ago.

A group calling itself Selkirk Innovates, led by cannabis advocates Tracey Harvey and Sarah Campbell, is seeking funding to create a cannabis tourism sector in BC’s Kootenay region and Cowichan Valley under the REDIP Economic Diversification stream.

A Kamloops man who was caught with more than a kilogram of illegal cannabis packaged for sale by the eighth, along with 94 grams of shatter, was given six months on house arrest.

One hundred and eighty-five kilograms of cannabis sent from Canada was intercepted by a dog named Maggie at the Dublin Airport.

US Cannabis news

In Colorado, policymakers are considering banning licensed cannabis businesses such as retailers, growers, and extractors from participating in unlicensed cannabis activities such as ticketed or money-oriented cannabis dinners and food pairings, movie screenings, art exhibitions, and other events where pot consumption is allowed.

Sales, stores continue to increase in BC as prices continue to drop

Written by David Brown on November 3, 2023. Posted in British Columbia, Business, Cannabis News, Retail.

The number of stores and the amount of cannabis sold in BC has continued to increase while the price of cannabis products continues to drop.

Dried flower and pre-rolls combined still dominate sales, but inhalable extracts, especially infused pre-rolls and vape carts, continue to eat into their market share. Consumers are also continuing the shift to larger volume dried flower offerings, while 3.5 and 7-gram SKUs remain the most popular overall.

The BC LDB’s newest quarterly report for 2023, covering July, August, and September, shows a 40 percent year-over-year increase in wholesale grams, for a record of 33,879,347 grams and a 24 percent increase in wholesale sales for a total of $137,126,714.

The price of cannabis again dropped to its lowest ever, at $4.05 a gram for all cannabis product categories and $3.33 a gram for dried flower. There were 490 stores, an increase from 452 in the same quarter in 2022, and 483 at the end of the first quarter of 2023.

Following trends in previous quarters, single grams and eighths selling at more than $5 a gram saw significant declines in year-over-year sales as consumers continued to shift purchasing habits to higher-value and larger volume SKUs like 7, 14, 28, and (a handful of) 30 gram.

Reversing a trend in the previous quarter, though, consumers are showing an interest in paying more than $5 a gram in these larger volume SKUs. In Q1 2023, sales for 7 and 14 gram SKUs were down 46 percent, and 14 percent year-over-year, respectively, but were up 15 and 18 percent this quarter. This can relate to consumer preference or to product availability.

While eighths and 28-gram SKUs were still the most popular overall, the less expensive 7, 14, and 28-gram offerings saw the most significant increase in sales compared to Q1 2023 and, where applicable, Q2 2022. (Some SKUs were not available one year ago).

As in Q1 2023, inhalable extracts sales outpaced dried flower sales (excluding non-infused pre-rolls) at $46 million compared to $44 million. ($42 million and $41 million Q1). While flower sales year-over-year were up just under seven percent and four percent in units, inhalable extracts—dominated by vape pens and infused pre-rolls—grew nearly 58 percent in sales and 68 percent in units sold.

Cartridges and infused pre-rolls dominate the inhalable extracts category, with 48.5 percent and 38.4 percent of sales, while products like shatter, resin and rosin, and Hash were each under three percent of sales. Still, these latter categories saw significant year-over-year and quarterly growth as the product category became more competitive.

Pre-rolls (non-infused) came third in sales at $31.7 million, a 20 percent increase year-over-year and a 19 percent increase in units.

Sales of cannabis edibles and beverages came in far behind with $7.4 and $2.7 in sales, respectively. For edibles, this represented a 17 percent increase in sales year-over-year and a 24 percent increase in units sold. Beverages saw a 40 percent increase in both dollar sales and units sold.

Topical sales increased 26 percent year-over-year to $748,087 and 29 percent in units sold. Sales of cannabis seeds declined 25 percent to $12,929, a decrease of units sold compared to the same quarter last year of 24 percent.

Sales of ingestible extracts, which includes products Health Canada declared non-compliant earlier this year, saw declines of about one percent in sales and six percent in units sold. The category still had $4.3 million in sales. The decline was driven by a 73% year-over-year decline in the sale of the types of lozenges and other products Health Canada deemed non-compliant and an eight percent decrease in oils and tinctures, but was buoyed by a 29 percent increase in capsules and pills.

Overall, the province gained three retail stores since the previous quarter and 38 since the same quarter last year. The largest market in BC, the Greater Vancouver area, had 140 stores in this most recent quarter, up three from Q1 2023 and up from 113 in Q2 2022.

The second largest retail market, Vancouver Island, has 121 stores, a decrease from 123 in Q2 2022. The third largest region, the BC Interior, saw an increase in the number of retail cannabis stores, from 161 in Q2 2022 to 168 in the same quarter in 2023, and an increase of three stores from Q1 2023. The number of stores in Northern BC increased from 58 in Q2 2022 to 64 in the most current quarter, up from 61 in this year’s previous quarter.

*Figure prior to Q3 2022 were not reported in units sold*

Direct Delivery

BC’s direct delivery program, which launched in August 2022—allowing some small-scale cannabis growers located in the province to ship products directly to retailers without going through the LDB’s central distribution warehouse—saw 821,718 grams sold for a total of $3,777,539 in sales.

The amount of cannabis sold through the program—limited to small-scale BC producers and therefore a fraction of total provincial sales by design—continues to grow, although this could potentially be reaching a plateau as sales in the last two quarters were relatively steady.

While the program is popular among retailers and producers taking part, many of the small producers the program was built to assist say the baked in provincial fees make it challenging.

Despite the costs to sell into the program—which not only include added logistics to handle multiple deliveries, but still come with a 15% “proprietary fee” to the province—the cost per gram sold in the program continues to decline. This is good for consumers, but not good for producers or retailers who hope the program can act as a lifeline.

The average price per gram of cannabis sold in the program is just $4, while the average price of all cannabis products sold through the program is $4.60 a gram.

The amount of dried cannabis flower sold through direct delivery stayed about the same compared to Q1 2023 while edibles and beverages declined significantly and inhalable extracts grew.

Health Canada still says cannabis intended to be consumed as food is not an extract

Written by David Brown on November 2, 2023. Posted in Business, Cannabis News, Government, New Brunswick, Producers, Products.

Health Canada says it is currently in the “redetermination process” regarding its initial ruling on Edison Jolts from Organigram, following the recent announcement by the New Brunswick producer that it was re-releasing the products into several provincial markets.

In early January 2023, following the release of several “ingestible/edible extracts” by a handful of cannabis producers, Health Canada sent a notice to producers highlighting their concerns with these products. Companies had until May 31, 2023, to cease sales and distribution.

Organigram challenged this ruling in March, filing for a judicial review of Health Canada’s decision to require an end to sales of ingestible extracts that exceed the federal 10mg THC packaging limit.

The filing, posted March 31, 2023, as Organigram Inc. v. Minister of Health et al., falls under Section 18.1 Application for Judicial Review. Judicial review is a process by which the courts can ensure that the decisions of administrative bodies like Health Canada are fair, reasonable, and lawful.

In August, that application for judicial review of the ruling was approved. Organigram had also hoped to see Health Canada’s order quashed or set aside, but the court required Health Canada to determine that Edison Jolts lozenges are a cannabis extract and do not constitute edible cannabis under the Regulations.

While cannabis edibles are limited to 10mg THC per package, extracts are limited to 1000 mg THC per package.

In an email to StratCann, Health Canada maintains that it considers any product intended to be consumed as food cannot be considered an extract.

“Edible cannabis is cannabis that is intended to be consumed in the same way as food and is excluded from the definition of a cannabis extract,” wrote a media representative of the federal health authority.

“Health Canada is continuing to assess edibles and extracts in accordance with the promotion statement that we issued to federal licence holders in March of this year. The factors for determining whether a cannabis product is correctly classified remain the same.

“The department has identified a number of edible cannabis products marketed as cannabis extract products and is working with licence holders to resolve these issues. We continue to communicate with licence holders to make sure they understand the federal rules relating to edible cannabis and cannabis extracts.”

In late October, Organigram announced they were re-releasing their Edison Jolts into a handful of provincial markets, pending Health Canada’s new determination.

“Health Canada has acknowledged that it accepts the decision of the court, and that it considers its initial classification decision on JOLTS to be void. As such, pending the final redetermination by Health Canada, Organigram has reinstated the commercialization of JOLTS,” a representative with Organigram told StratCann via email.

“Organigram remains of the view that Edison JOLTS are properly classified as a cannabis extract.”

The products, the spokesperson says, are being sold in New Brunswick now, and Organigram expects Jolts to be in retail stores in Manitoba, Saskatchewan, and Ontario soon.

BC has seized more than $38 million in illicit cannabis since 2019

Written by David Brown on November 1, 2023. Posted in British Columbia, Business, Cannabis News, Government.

The BC Community Safety Unit has seized $3 million worth of cannabis so far this year, for a total of $38.18 million since it began enforcement actions in 2019.

BC’s Community Safety Unit (CSU) is the provincial agency charged with monitoring and enforcing the province’s retail cannabis rules and regulations. CSU investigators can conduct compliance and enforcement activities against unlicensed cannabis retailers and other illegal sellers across the province.

The agency began with a mandate of education in 2019, in many cases first visiting stores and informing them of provincial cannabis laws and regulations before moving on to issuing fines, seizing products and equipment, or shutting down unlicensed businesses.

The province also expanded their ability to better address illicit online stores at the end of 2022. The CSU has now opened 1,443 cases looking into illicit online stores, with 957 of them being disrupted.

It has undertaken four enforcement actions so far in 2023, for a total of 95 seizures since 2019. The most significant number of product seizures was in 2020, worth $13 million, following 227 educational visits in 2019.

There have been 230 stores that have closed as a result of those education visits, nine of them in 2023.

The number of seizures and correlating value has been declining since then, with $10 million worth of cannabis products seized in 2021, $7 million in 2022, and $3 million in the first ten months of 2023.

In Parliament earlier this year, BC Minister of Public Safety and Solicitor General Mike Farnworth said that the CSU has also conducted nine enforcement actions on First Nations reserves in the province, seizing about $12 million worth of products.

The province also issues fines to illicit cannabis stores if they refuse to close after several warnings and/or seizures. So far, the CSU has issued at least 58 notices of administrative monetary penalty with proposed penalties totalling approximately $39.9 million, with only about $1.45 million of these penalties already collected.

Under BC’s Cannabis Control and Licensing Act, there are three types of orders issued by the Director of the Community Safety Unit (CSU) with respect to the issuance of administrative monetary penalties (AMPs); Concession Orders, Compliance Orders, and Reconsideration Orders.

Administrative penalties are generally twice the value assigned to the products seized.

If the Director proposes to impose a monetary penalty for a contravention of the CCLA, the Director must serve the person with an NAMP. Unless the person signs a waiver and admits to the contravention (Concession Order), the monetary penalty (AMP) is an amount equal to two times the retail value of the cannabis that the person, in contravention of the Act, sold, possessed for the purpose of sale, or produced. If they do sign the waiver (Compliance Order), their penalty is equal to the retail value of the cannabis sold, possessed or produced.

BC CSU lists 4 dispensary fines worth $1.2 million, another 29 outstanding

August 25, 2021

BC Cannabis Secretariat rejects call for a temporary exemption for the Victoria Cannabis Buyers Club

May 14, 2020

BC says cannabis rules apply to First Nations, but are concerned enforcement could lead to court challenges

August 19, 2020

Cannabis sales continue to grow across Canada

Written by Staff on October 31, 2023. Posted in Business, Cannabis News, Manitoba, Retail.

Cannabis sales continue to climb in Canada, with more than $460 million sold by the 3,600+ cannabis retailers nationwide.

Total retail sales of cannabis in August 2023 were over $464.2 million, up from about $390 million in August 2022. From July to August, sales increased in every province except for Manitoba, which saw a slight decline to pre-March 2023 levels. (This is possibly due to lower data quality for the Keystone Province’s figures for August, which Statistics Canada rates at a lower quality than those figures available for previous months.)

Like many retail sectors, cannabis sales have dipped in the months following the Christmas shopping seasons over the last three years before building again on an ongoing, upward trend.

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 3,640 cannabis stores in Canada, excluding provincial online stores.

British Columbia: 508 public and private stores either open or “coming soon”
Alberta: 748
Saskatchewan: 176
Manitoba: 192, 110 of which are in Winnipeg
Ontario: 1,765 as authorized to open
Quebec: 98
New Brunswick: 25 public stores, plus six private stores and six farmgate stores for a total of 37
Nova Scotia: 49
PEI: 4
Newfoundland and Labrador: 49
Northwest Territories: 6 brick-and-mortar locations, plus 1 private online store
Nunavut: 1
Yukon: 6

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

February 1, 2022

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

December 17, 2020

Ontario cannabis market continues to expand as new stores are added

September 30, 2020

Cannabis companies are drowning in paperwork

Written by Tim Wilson on October 30, 2023. Posted in Business, Insight, Producers.

Every business has its fair share of paperwork, and in all sectors, complaints about the burden of regulation and reporting are common. Within Canada’s cannabis industry, however, the paperwork requirements are intense, with a significant burden on smaller cultivators and processors.

“Larger companies producing a more standardized product are able to streamline their data entry requirements,” says Kirk Tousaw, CEO of Great Gardener Farms. “They may have more paperwork in the aggregate, but they’ll also have more employee resources available. At small companies like ours – three total employees, including the two owners – it’s very hard to find extra time or person-power to do the work.”

The nature of the paperwork itself can be frustrating. In many instances, the requirements aren’t only time-consuming – they also seem illogical.

“Particularly onerous is the requirement that all inputs into the cultivation process be tracked,” says Tousaw. “This means that every time we add nutrients to our reservoirs, we’re required to create dozens of data points. This information is absolutely unnecessary to track, which makes spending time on it frustrating.”

Perhaps due to the fact that Canada’s legal cannabis industry is a relatively young sector, the government’s cautious approach has resulted in many redundancies. The bureaucracy associated with these requirements can, at times, seem absurd.

“The fact that Health Canada and the CRA require almost the same information in slightly different formats is ridiculous,” says Sarah Campbell from the Craft Cannabis Association of BC. “You’d think they could coordinate in some way to be more efficient for all involved.”

There are also differing paperwork challenges that are dependent on the number of strains grown, and the type of cultivator, with indoor and outdoor grows having unique burdens.

“If we grow one strain and one crop a year, the paperwork is quite easy, but if we grow three strains, it gets a bit more challenging,” says Katy Connelly, owner of Sea Dog Farm, a micro in Saanichton, BC. “The harvest paperwork is a bit of a pain because they want you to weigh every leaf that comes off the field, and every plant before it goes into the compost. As an outdoor grower, my plants are the size of a Christmas tree, so all this weighing is a bit ridiculous and time-consuming if it’s done ‘by the book’.”

Working for paper

The time required to do the paperwork can be less onerous than all the weighing and recording, which are necessary administrative steps before any form is filled out.

“It makes sense to report on the number and plants and the weight of the flower,” says Connelly. “However, weighing harvested plants or raking up all the fallen leaves so I can weigh them does absolutely nothing to ‘keep the public safe’. It is just a huge waste of my time. I think most people either make these numbers up, or weigh one and multiply.”

Connelly says that processors have their fair share of headaches, too.

“I have to count seeds and weigh plants, but my processor has to register every product at the provincial and federal levels, as well as deal with labelling and excise.”

Given that smaller companies have fewer resources to fill out all the paperwork, these added requirements for microprocessors can be extreme.

“Once you get into the world of extracts, and products created from extracts – such as topicals and edibles – the way that Health Canada and the CRA track things differs hugely, and staying on top of all the requirements for reporting becomes a nightmare,” says Sami Majadla, CEO of CertiCraft, a seed-to-sale compliance software solution. “Tiny microprocessors working with edibles and topicals probably have the worst burden, in my opinion.”

Making it right

The government could fix many of these problems by reducing or streamlining requirements and eliminating redundancies. Sadly, there is no set timeline for regulatory overhaul. The current review of the Cannabis Act is part of a much larger process unlikely to result in change any time soon.

That said, given that the legal cannabis market has made a significant dent in illicit activity and that the need for such rigorous reporting requirements is moot, for many now is the time to transition to a more rational approach.

“We should move toward treating cannabis more like, for example, wine in terms of reporting requirements,” says Tousaw from Great Gardener Farms. “Vineyards don’t have to track and report their fertilizer usage monthly. While valuable and age-restricted, their product isn’t treated as inherently criminogenic. Cannabis and those in the industry continue to be stigmatized with the perspective that this substance requires significant control and reporting burdens. It does not.”

It would seem inevitable that the paperwork requirements will change at some point. For many observers, a rational approach to the sheer inefficiency and nonsensical nature of today’s regimen could result in some easy fixes.

“First off, the CRA and Health Canada should completely harmonize their requirements,” says Majadla from CertiCraft. “Secondly, the actual amount of data being tracked can be greatly reduced. To share just one example: needing to keep records of all of your prunings that have been destroyed is such a waste of time. Who cares about leaves that have no value? Nobody benefits from tracking something like that.”

In a challenging domestic market with early-mover status – Canada was the first major industrialized country to legalize cannabis – the added administrative burden placed on industry, particularly small cultivators and processors, is significantly hindering a commercial sector that’s already struggling.

“If paperwork was the only thing troubling this industry, we would all be just fine,” says Connelly of Sea Dog Farms. “As it stands, paperwork is just one more straw added to the incredible challenge of trying to survive.”

Week in Weed – October 28, 2023

Written by Ryan Fink on October 28, 2023. Posted in Business, Cannabis News, International.

This week on Stratcann, we covered a BC company that is asking the province to use part of its share of excise tax revenues to aid struggling cannabis businesses. We also covered an ongoing string of grievances between cannabis producers and processors, and touched on the continuing issue of Canadian pot firms that are sitting on massive stockpiles of dried cannabis flower.

We also looked at new developments in the ongoing plight of some cannabis producers to use a perceived loophole in the regulations to market orally ingested cannabis products as ‘extracts’ to circumvent dosage and packaging limitations imposed on edible cannabis products by Health Canada.

Despite this being the case, on Friday, Organigram said it was making Jolts available again in several provinces.

Also, one year into new farmgate rules in BC, only a handful of producers are even exploring the idea due to what some say are an ill-conceived set of rules surrounding the program’s implementation.

Health Canada expects the volume of cannabis exports leaving Canada to continue to increase, and cannabis sales continue to increase in Nova Scotia.

Lastly, we ran a profile on a company looking to aid would-be Canadian cannabis exporters in obtaining their EU-GMP certification.

In other cannabis news this week…

Statistics Canada analyst Dieter Garriguet spoke with CBC about the state of cannabis research and knowledge five years into legalization, while New Zealand publication The BFD also published an opinion piece marking the five-year anniversary.

Politico made mention of George Smitherman, president and CEO of the Cannabis Council of Canada (C3), lamenting that he was unable to bring samples to the House finance committee where he appeared as a witness on Thursday.

A new poll shows that within Canada, Albertans and British Columbians are among the least likely to view the effects of legalization positively. At the same time, the territorial government in the Yukon announced that it is launching a five-year review of the Cannabis Control and Regulation Act there. CBC ran a piece asking Canadian children what they think of legalization five years in.

As large cannabis companies continue to suffer from the hubris of the early days of legalization, Sundial Cannabis announced the closure of its flagship production facility in Olds, Alberta, a rural community of about ten thousand people.

High Tide announced it was opening its 157th Canna Cabana branded retail cannabis location in Canada and the 78th in Alberta in a former Fire and Flower location in Calgary.

In BC, Pure Sunfarms says it’s launching its first infused one-gram blunt, while a few local media outlets covered ShuCanna’s grand opening of its farmgate store in Salmon Arm. (StratCann covered their soft launch earlier this year).

A resident of Caledon, a small municipality in Ontario, is asking the city to revisit its decision to not allow legal cannabis stores.

While cannabis has been legal for half a decade now, this doesn’t mean that the criminal element has been completely assimilated or wiped out, as evidenced by a recent police action in Montreal that yielded 140 kilograms of cannabis, 1.5 kilograms of powdered methamphetamine, and $40,000 in cash. However, sentences for cannabis-related activities are still receiving relatively lenient penalties.

The SQDC named former food services executive Suzanne Bergeron as its new president and CEO.

Aurora Cannabis announced that it has recently completed a confidential settlement with Willow Biosciences regarding patent infringement, where the latter is alleged to have used technology developed by former Aurora CSO Jonathan Page to biosynthesize cannabinoids. Aurora also announced that it will reveal its second-quarter earnings on November 9.

Head Topics Canada reported that a BC Credit union is lobbying the feds to make it easier for financial institutions to work with cannabis businesses.

Scientific research in cannabis continues to progress, as a new study looked at the efficacy of CBD as a treatment for epilepsy in dogs.

Also, researchers in Ontario found that geographic proximity to cannabis stores coincided with increased use of mental health services for psychotic disorders, and Italian researchers found that cannabis use is associated with an increased risk of cardiovascular complications.

Cannabis International

A group of researchers from the University of Bangkok, Thailand, found that CBD does not interfere with certain forms of cancer treatment, and a study out of California found that cannabis packaging that appeals to youth also appeals more to grown adults, emphasizing the importance of packaging requirements and warning labels.

Scientists also say they discovered cannabidiol, a compound in cannabis known as CBD, in a common Brazilian plant, opening potential new avenues to produce the increasingly popular substance.

Two European organizations say they have received the final approval from the Swiss Federal Office of Public Health (BAG) to conduct a cannabis pilot study in Basel-Landschaft (Baselland), following approval from the Ethics Committee Northwest and Central Switzerland (EKNZ) last year. The study, led by Prof. Dr. Michael Schaub, Scientific Director of the ISGF, will examine the regulated sale of cannabis for non-medical purposes.

Up to 3,950 healthy adults living in the canton of Basel-Landschaft will be able to participate in the study in the future. Unlike other Swiss projects, the dispensing of cannabis will not take place via pharmacies or clubs but via stores as a point of sale, initially in the municipality of Allschwil.

Leafie ran a piece looking at Canadian cannabis company TGOD’s products making their way to the UK.

Finally, a team of researchers from the University of Tennessee Institute of Agriculture, Arizona State University, and Simon Fraser University in Canada reviewed the literature on Aspergillus, Penicillium, Fusarium, Mucor, and other fungi that can infect cannabis and hemp plants and produce mycotoxins.

New concerns over possible “ingestible extracts” and cannabis lozenges

Written by David Brown on October 25, 2023. Posted in Business, Cannabis News, Government, Producers, Products.

Health Canada says it has again identified several edible cannabis products it deems as being incorrectly sold as cannabis extracts.

A spokesperson for Health Canada tells StratCann via email that the regulator is working with several cannabis producers to address the issue.

“Health Canada has identified edible cannabis products erroneously being classified and marketed as cannabis extract products. These non-compliant products do not meet the controls in the Cannabis Act and Cannabis Regulations, which serve to mitigate against public health and public safety risks associated with edible cannabis. These controls include, but are not limited to, a maximum limit of 10 mg of THC per container to help reduce the risk of accidental or overconsumption; limits on the use of certain ingredients; and requirements for preventive control plans to reduce the risk of food-borne illness.

“In cases of potential non-compliance, Health Canada’s preference is for regulated parties to voluntarily undertake actions to come into compliance.”
Health Canada notice

Health Canada is working with several licence holders to resolve any non-compliance.”

Earlier this year, Health Canada sent notice to several companies making similar so-called edible or ingestible extracts containing more than 10 mg THC per container that they would need to cease selling and distributing those products. Health Canada also warned the public about consuming these products.

Since that time, several other similar products have also been released on the market that advertise themselves as cannabis extracts rather than edibles, despite being intended for oral ingestion.

Cannabis producers selling these products maintain that these products were not, and are not edibles, but the federal regulator disagreed.

The federal health authority also issued an online document earlier this year providing clarity on the issue of the classification of edible cannabis. The document, in part, notes that a cannabis edible is defined as any article manufactured, sold or represented for use as food or drink for human beings, chewing gum, or any ingredient that may be mixed with food for any purpose.

“The OCS is re-engaging with all its cannabis extracts suppliers to remind them of their ongoing obligation to ensure that product complies with applicable laws, including the Cannabis Act and Regulations.”
OCS Spokesperson

“Licence holders should verify if their cannabis products are classified correctly. Licence holders are encouraged to review the definitions of, and requirements for, cannabis and cannabis products in the Guide on composition requirements for cannabis products and Packaging and labelling guide for cannabis products.”

One cannabis producer selling such products is challenging Health Canada’s ruling in court. Organigram had to stop selling its ingestible extract product and had its application for judicial review approved in August. Organigram and others who have made these products maintain that they are compliant with all applicable regulations. The court case is now pending.

In instances of non-compliance, the same media representative for Health Canada says it takes a gradual approach to encouraging compliance with its regulations, and points out that they do not formally approve products for sale. Instead, they highlight that it is the responsibility of the licence holder to ensure that their cannabis products are compliant with the Cannabis Act and its regulations.

“In cases of potential non-compliance, Health Canada’s preference is for regulated parties to voluntarily undertake actions to come into compliance. As outlined in Health Canada’s Compliance and Enforcement Policy for the Cannabis Act, the Act contains a number of enforcement tools that may be considered in determining the appropriate actions to prevent or address non-compliance based on a review of the situation and all relevant information, including the public health or public safety risk and the compliance history of the individual or corporation.

“These include measures ranging from compliance promotion and awareness, which are intended to educate and prevent non-compliance, up to measures intended to correct non-compliance or address a public health or safety risk, such as the issuance of a warning letter, suspension or cancellation of a federal licence, the issuance of a ministerial order, or the issuance of administrative monetary penalties.”

The Ontario Cannabis Store (OCS), which manages distribution and sales in the province, has recently sent a memo to relevant licence holders reminding them of their responsibility to ensure products they submit to the OCS are compliant with all applicable regulations.

A spokesperson with OCS expands on this, saying the provincial organization will continue to work with its suppliers to ensure all products sold into Ontario’s legal market remain compliant.

“In response to Health Canada’s compliance statement, OCS engaged with its suppliers in March 2023, reminding them of their obligations to comply with applicable law and requesting they identify any affected products. On May 31, 2023, OCS stopped replenishing and accepting deliveries of all products that suppliers identified to OCS as being affected by the compliance statement.

“The OCS is re-engaging with all its cannabis extracts suppliers to remind them of their ongoing obligation to ensure that product complies with applicable laws, including the Cannabis Act and Regulations, and requiring attestation as to whether they have heard from Health Canada about any product(s) that may be affected by the compliance statement.”

Few BC growers interested in farmgate a year after program launched

Written by David Brown on October 25, 2023. Posted in British Columbia, Business, Cannabis News, Government, New Brunswick, Ontario, Producers, Retail.

Nearly one year into the launch of BC’s cannabis farmgate program, some growers say the current cost to participate is too high for them.

The program, launched in late 2022, has only seen three companies apply so far—one in the interior, one on Vancouver Island, and one in the Greater Vancouver area or Sunshine Coast, these few out of more than 100 eligible growers in the province.

Only one of those has been licensed so far, ShuCanna in Salmon Arm, while another on Vancouver Island, the Victoria Cannabis Co, is in the final stages of licensing as it awaits final approval from the city. A third, identified by BC only as being in either the Vancouver region or Sunshine Coast, only recently applied and is still making its way through the approval process.

BC’s official name for a farmgate licence is a Producer Retail Store (PRS). The province previously licensed two other farmgate stores through special arrangements with two First Nations-owned cannabis producers, both approved in 2022, although these are not listed by the province as a PRS.

This low number of applicants indicates a policy failure, say some growers in the province. The licence category is impractical for their location or business model, especially with the high costs involved, including application fees and adhering to all the building and security requirements.

In addition to the nearly $10,000 in provincial application fees for the farmgate licence, Alannah Davis at Dabble Cannabis on Vancouver Island says another hurdle is the need to spend significantly more to build a full-time store that would adhere to provincial rules.

“We really want Farmgate,” says Davis. “So the low number of applications, in my opinion, is not indicative of the number of farmers wanting to sell directly to customers. That’s the dream.
Alannah Davis, Dabble Cannabis Co.

Dabble Cannabis is a federally licensed cannabis cultivator and processor with its own highly secured storage areas, something she says should more than satisfy provincial concerns around security rather than building a new store.

While the provincial regulations require a Farmgate store to essentially operate as a full-time retail store, she sees the model making more sense on a seasonal and case-by-case basis.

Instead of running a full-time retail cannabis store on her farm, Davis wants the province to allow her to get a more scaled-down licence that would enable her to sell products to visitors at her farm.

“We really want Farmgate,” says Davis. “So the low number of applications, in my opinion, is not indicative of the number of farmers wanting to sell directly to customers. That’s the dream.

“We definitely want to, but the way it is now, it has the same requirements as a cannabis retail establishment, which means that the cost of creating an entirely new full-fledged retail environment, at this point in time, I don’t believe we’ll see a return on the investment that is required.”

“The cost to get there is too prohibitive right now,” she continues. “I want an interim fulfilment step, either via mail or in-person click-and-collect, using my existing infrastructure. Then that allows for any producer with a secure storage area to complete a transaction online and deliver it to that person. It is really an over-engineering of the policy to prohibit producers from selling direct to customers.”

“People love the product, they keep coming back. They love how fresh it is. But now it’s a matter of letting more people know we are here. There’s so many restrictions on advertising that it’s hard to get the message out.”
Terry Robinson, ShuCanna

ShuCanna’s farmgate store located at 2321 Trans-Canada Hwy, Salmon Arm.

Katy Connelly, the co-owner of Seadog Farm, another outdoor cannabis grower on Vancouver Island, echoes Davis’ concerns, especially regarding the costs of building a store.

If there were a more affordable and streamlined program, she says she might consider taking part—her business already operates a small farmgate stand for other products from her farm, such as fresh seasonal produce. But as it stands, the process is too costly and onerous. Instead, she says she would rather focus on good relationships with those who already have retail.

“I would need three licences, and each licence is $2,500 a year. I would have to report on each of these licences,” she says. “I would also need at least a million in excise bonds and a special business licence from the BC government. I would have to build a store to sell cannabis from; I would have to hire an employee to sell the cannabis. I only have one thing to sell; I don’t have a huge storefront.”

“It’s not worth the paperwork, and there’s a system already in place to sell my product,” adds Connelly. “There are processors who will process my cannabis into pre-rolls, so why would I want to do that myself? And there are stores that are looking for products and enthusiastic about selling our product. So why would I not sell through them?

Connelly says she’s explained these issues to the government and does think they are hearing and understanding them but hasn’t seen any policy changes yet. Instead, she thinks they are listening to those who want a system that won’t ever be viable for a regulated product like cannabis.

“I think the people who are advocating for Farmgate want to sell like they used to sell in the old days and not have to do all the paperwork and insurance and all of that. They just want to put their cannabis in jars and sell like they used to, but that is not the way of the world.”

Back at Dabble, Davis says the ideal model is something more resembling the seasonal tourism of wineries.

“It really comes down to an ROI and the upfront cost. The running of the entire retail operation has tons of costs associated with getting it up and operational. “

Like Connelly, she has engaged with the government’s policymakers on the issue but has been told their focus now is on event licensing and consumption spaces, not refining Farmgate. While these could tie into her vision of Farmgate, until the province makes it more viable and practical for smaller growers like herself, she says she expects there won’t be more applying.

“Three licence holders out of a hundred plus, that’s an obvious failure in the policy, and I think that given the taxpayer funds already spent on this program, I think it is their responsibility to take the feedback of those who actually want to do it and work together to make the changes to make it attractive for us. Otherwise, who is this for? It is a failure. It was designed for farms like us, and if we don’t want to do it, who will?

Sugar Cane Cannabis’s farmgate store in Williams Lake, which includes an in-store window into their grow room. *Image via William’s Lake First Nation.*

BC’s first official farmgate store licensed in BC, ShuCanna, located on the Trans Canada Highway in Salmon Arm, opened recently. Terry Robinson, owner of the facility, says he was eager to apply as soon as BC announced its licensing program in late 2022. While it was a lengthy and pricy process, including the nearly $10,000 in provincial fees—not to mention municipal licensing fees and the cost of renovating and then stocking and staffing the store—Robinson says it was fairly easy.

The challenge he says he faces now is getting the word out about their store. ShuCanna currently carries their own dried flower and pre-rolls, as well as an array of products from the LDB, such as concentrates vape pens, accessories, and more.

“People love the product; they keep coming back,” says Robinson. “They love how fresh it is. But now it’s a matter of letting more people know we are here. There are so many restrictions on advertising that it’s hard to get the message out.”

Although their “soft launch” was in late August, ShuCanna’s grand opening will be Friday, October 27.

Cannabis Farmgate across Canada

Ontario and New Brunswick are the only other provinces with any formal Farmgate program in place, both launched in 2021. Five locations are currently open in Ontario and six in New Brunswick.

In Ontario, Thrive Cannabis was the first to be licensed, followed by Kingston Cannabis, Level Up, Royal Cannabis Supply Company, and Station House Cannabis Co.

New Brunswick’s current farmgate stores are Crystal Cure, Eco Canadian Organic, Sana’a, Hidden Harvest (Canada’s first and only farmgate nursery), Stewart Farms, and Green Herb Farms.

Medz Cannabis and Thrive Cannabis receive first cannabis “farmgate” licences in Ontario

April 21, 2021

ShuCanna receives cannabis farmgate store in Salmon Arm

August 15, 2023

Victoria Cannabis Co moves one step closer to their cannabis farmgate licence

September 15, 2023

Data presented by Health Canada indicate cannabis exports may continue growing

Written by Staff on October 25, 2023. Posted in Business, Cannabis News, Government, International, Producers, Products.

Data presented by Health Canada indicate that cannabis exports may continue to increase significantly, with more than a thousand applications already submitted as of September 12, 2023.

The federal regulator has already 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.

The top countries for Canadian companies to export cannabis to are, in order, Australia, Germany, Israel, Argentina, the UK, and the US.

Canada’s Cannabis Regulations allow for the export of cannabis to countries with a recognized legal medical cannabis framework. Currently, exports are only allowed to countries with a medical cannabis framework, often helping to address supply gaps in various countries that have recently legalized.

Canada also allows imports of cannabis on a very limited basis, such as importing starting materials (e.g., seeds, plants) for a new licence holder, or for small quantities of cannabis for research purposes.

Canadian licensed producers have been increasingly looking to overseas markets to address challenges related to the supply glut domestically.

As of March 2023, the most recent data from Statistics Canada shows that 125,981.76 kg of dried cannabis had been permitted to be exported from Canada, and 98,260.18 litres of cannabis oil. Only 28.05 kilograms of dried cannabis and 65.88 litres of oil were imported into Canada.

Canadian cannabis companies increasingly exploring export market

June 14, 2023

Canadian exports—Global medical cannabis markets

October 24, 2023

BC company ships 20 kg of cannabis to Jamaica

March 8, 2023

Cannabis sales continue to increase in Nova Scotia

Written by Staff on October 24, 2023. Posted in Business, Cannabis News, Nova Scotia, Retail.

Nova Scotia saw an 8.7 percent increase in cannabis sales in its second quarter of 2023, to $31.4 million.

Retail customer transactions for cannabis also increased by 13.8 percent, while the average dollar value of each transaction decreased by 4.4 percent to $37.04. The average price per gram for cannabis also decreased by 3.5 percent to $6.03, one of the lowest average prices in Canada.

Sales were up from the previous quarter’s total of $29.1 million.

As in the previous quarter, growth in cannabis sales was led by a significant increase in sales of local cannabis products, for a total of $10.3 million in Q2. This brings the sale of locally-grown and produced cannabis products in Nova Scotia to nearly one-third of all cannabis sales.

The same time period saw alcohol sales increase by only 0.1 percent, although the total sales still significantly surpassed cannabis, at $210.7 million.

Sales increases for cannabis are potentially related to the opening of a new retail cannabis store in Halifax by adding cannabis to an existing liquor store location on Young Street. Nova Scotia is one of the few provinces that allows the co-location of cannabis and alcohol.

“Over the past five years, we have worked hard to increase the opportunity for our customers to access cannabis safely,” explains Greg Hughes, President & CEO of the Nova Scotia Liquor Corporation (NSLC). “We started with 12 cannabis locations, and now we’re up to 49 stores across the province.”

The NSLC released their year-end annual report earlier this year, with more than $100 million worth of cannabis sold.

Canadian exports—Global medical cannabis markets

Written by Contributor on October 24, 2023. Posted in Business, Cannabis News, International, Producers.

Become one of the only privately held EU–GMP facilities in Canada.

Did you know that the 23 registered EU-GMP Canadian cannabis facilities are all owned by public companies (data sourced from “EudraGMDP” European Medicines Agency)? There are currently no privately owned Canadian companies with spare capacity available for your use to export product.

Canadian exports surged in the 2022-23 fiscal year when Canada exported CAD$160m, a 50% increase from 2021-2022. It is estimated that the world cannabis market will reach $62B in 2026, comprised of around 50% in the US. If/when federal prohibition is removed in the US, American exports will dwarf Canadian exports.

With Canadian exports surging due to international recognition of consistent quality, it’s a great time for potential Canadian exporters to seize the moment.

The most significant advantages of exports are increased gross margins (2.5x) over domestic prices, with insured receivables (Export Development Canada), and no payment delays or holdbacks experienced with provincial liquor and cannabis regulation branches.

Australia and other importing countries are increasingly leaning towards stricter import regulatory criteria similar to or the same as the EU. This creates an opportunity to expand beyond the domestic market, unlock exciting export opportunities in international cannabis markets, and become one of the first private EU-GMP cannabis facilities in Canada.

However, in the burgeoning export markets, exercise caveat emptor—buyer beware—in purchasing GMP certification. Prices range from CAD$200k to CAD$600k with different lag times and significant upfront fees.

Dr. Jaap Koster, CEO of Pharmaceutical Consultancy Services (PCS) BV

Embark on a journey with Pharmaceutical Consultancy Services (PCS)—the EU-recommended service provider based in the Netherlands—to attain GACP and EU-GMP* certifications. As a pharmaceutical consultancy firm, PCS was the first firm, in cooperation with the Dutch inspectorate, to bring a cannabis facility to GMP level. (*Please note that the here-mentioned “EU-GMP certification” is proof of compliance level. A formal EU-GMP certificate can only be provided by a governmental institute).

The PCS team—headed by Dr. Jaap Koster, educated, trained, and experienced in pharmaceutical manufacturing—has also assisted customers in reaching their GACP/GMP or GMP objectives. PCS has performed over 2,000 GMP audits globally for small and large companies, mainly as lead auditors.

By capitalizing on this window of opportunity, your business could command higher prices for your products in the global market. Additionally, with the receivables insured by the Canadian federal government, you would be well-equipped to navigate the challenges that come with international trade. The advantage of working with PCS is that it offers a reasonable payment plan. In addition, for the first three Canadian client projects, there is a 40% discount on the PCS listed price for GACP, EU-GMP certification. This certification will also cover other countries’ principle GACP/GMP requirements for the same price with the same payment plan.

PCS works in conjunction with Nigel Boast (BSc., LLB MBA), principal of Growth West Finance in BC, who will facilitate the onboarding and, if required, will assist with funding facilitation for consulting fees, and also the facility retrofit (provided applicant qualifies for such funding). Although PCS does not assist in product export, Growth West Finance will also, if appropriate, assist the Client in export marketing plan(s) separate to the GMP certification process upon request.

Unlock the world of export opportunities, find out if your facility will qualify for GMP certification, and take advantage of early price discounting (40% of regular price).

Contact Nigel Boast, principal of Growth West Finance Ltd. in Canada for an appointment, or Dr. Jaap Koster principal of PCS in the Netherlands.

Sponsored Content by: Pharmaceutical Consultancy Services (PCS)

BC cannabis company asking the provincial government for tax money back

Written by David Brown on October 22, 2023. Posted in British Columbia, Business, Cannabis News, Government, Producers.

Carleen Roth, the COO at CannGroup, a cannabis processor in north Okanagan, is launching a petition calling on the provincial government to provide relief to cannabis growers and processors struggling to survive.

CannGroup, she says, paid more than $1 million in excise taxes last year, noting that most of that—three-quarters of every dollar—goes back to the provincial governments, including BC.

Not only are they taxed at a high rate on any cannabis products they sell, but they also face steep increases in their property taxes (from $1,200 a year to $49,000) and have even had to refinance their mortgage to a high-interest private lender because of their connection to the legal, regulated industry.

“We just want to run a business. If we can’t survive, then the government doesn’t get anything from us.”
Carleen Roth, CannGroup

With the BC government bringing in more than $225 million in their share of federal excise taxes since legalization (as of September 1, 2023), she says she would like to see the province use a portion of that revenue to help the local cannabis industry which the province says it likes to support.

“I’d love it if they could even take ten percent, 26 million from the last three years and grant that to producers to assist with their business development. That would help.”

“Some things they could do is they could rebate some of the tax to us so we can buy our packaging, machinery and materials,” she adds. “That’s something they do for other industries. They could give us low-interest loans to purchase equipment or hire people. They do that for farmers. They could treat us like farmers, which we are, or like other similar industries.”

“We’re not asking for much,” continues Roth. “We just want to run a business. If we can’t survive, then the government doesn’t get anything from us.”

In addition to the federal excise tax, which amounts to $1 for every gram sold (where wholesale prices can be as low as $1-3 a gram or less) and typically $8 per vape pen or gram of concentrate, she notes that producers operating in BC have seen their property taxes increase several hundred or even thousands, plus the BC government takes an additional 15 percent fee for any products sold into the provincial system, even if producers deliver it directly to retailers themselves.

Roth says her hope with the petition is to try and rally more producers in the province to lobby not only the federal government to address the issue of the federal excise tax but also her own provincial government to acknowledge how much they are receiving from that tax.

“We’re just a small company, and we’re paying more than a million dollars a year in taxes to the government. This can’t continue, or we’re going to see a lot of businesses fail. And then no one wins, and the government loses out on all that money, forever.”

The petition can be found here.

Week in Weed – October 21, 2023

Written by David Brown on October 21, 2023. Posted in Business, Cannabis News, Government.

In the past week, StratCann shared the story of a Manitoba court upholding the province’s ban on growing cannabis at home, and new data emerged showing legal cannabis is now more than 70% of the cannabis market in Canada. Lori Stickles, President & CEO of Cannabis NB shared with us her thoughts on the evolution of legalization in New Brunswick, while the Cannabis Council of Canada called for regulatory changes on the fifth anniversary of legalization.

A cannabis-themed restaurant opened in Edmonton, Health Canada announced changes to sale authorization of cannabis products to processing licences, New Brunswick producer Crystal Cure pivoted to a micro licence, and the BC gov is providing funding for a cannabis testing research project.

StratCann also held our fourth Growing Relationships networking event on October 16, this time in Winnipeg. Martin Cash of the Winnipeg Free Press came out and spoke with attendees about the event, including Graham Taylor of Lineage Distribution, Sharon Clark, of Big Buds Cannabis Sales and the new Retailer Cannabis Council of Manitoba, and Delta9’s John Arbuthnot.

With the fifth anniversary of legalization, there was, of course, an avalanche of media coverage, mostly providing the typical, superficial overview we’ve come to expect on cannabis from mainstream news outlets, equating the decline of a handful of large pubcos with the state of the entire industry. We’ve skipped some of those this week to make sure we have room for some of the more informative and interesting coverage below.

CTV ran a 5-year retrospective with comments from several researchers like Robert Schwartz, a professor at the University of Toronto’s Dalla Lana School of Public Health, and Dr. M-J Milloy, a research scientist at the British Columbia Centre on Substance Use and an assistant professor in the University of British Columbia’s medical department.

Three researchers in Quebec took an in-depth look at the SQDC, cannabis regulations, and policies in La Belle Province, while a survey showed that the number of those who admit to using cannabis since legalization has increased, from about 17% to about 24%.

Le Devoir says that the sky has not fallen in the five years since Canada legalized the weed.

Radio Canada interviewed Cannabis NB’s Lori Stickels, who says the province is looking at in-store consumption and samples

Researchers Daniel Bear and Joshua Meisel compared legalization in Canada and California.

Global News ran their own 5-year retrospective, speaking with UBC’s Zach Walsh and StratCann’s own David Brown (that’s me!),

Global News also spoke with Jennawae Cavion at Calyx and Trichomes, and Xavier Cyr, who is the manager at Inspired Cannabis in Ontario.

Food in Canada explored the potential for innovation in cannabis edibles.

Also, a Canadian comic book creator has priority usage of a “Captain Cannabis” mark, the US Federal Circuit ruled Thursday, concluding that the Trademark Trial and Appeal Board hadn’t abused its discretion in ruling in the creator’s favour.

SNDL Inc. will be consolidating all cultivation activities at its Atholville, New Brunswick Facility following the centralization of SNDL’s manufacturing, processing and production operations to Kelowna, British Columbia.

CBC ran an interesting, in-depth piece on the issue of jurisdictional authority for Indigenous–owned cannabis businesses, speaking with Cecil (Junior) Shawana of Northern Superior Cannabis in Michipicoten First Nation, Curtis Avery of Kana Leaf in Nipissing First Nation, Matthew Esquimaux, from Buddies Smoke Shop on Manitoulin Island, Paul Corbiere of Creekside Cannabis in Mississauga First Nation, and lawyer Michael Swinwood.

CBC Radio’s Front Burner did an interview with MJBiz’s Solomon Israel.

McMaster University shared a research article showing that legalization didn’t lead to a significant rise in cannabis use among young adults.

High Tide’s Omar Khan wrote an opinion piece calling on the Liberal government to take more ownership for legalization.

Rolling Stone ran a piece on cannabis beverages, inducing a look at the Canadian market.

Global News looked at five years of legalization in Saskatchewan, speaking with the owner of Living Skies Cannabis, with news outlet CKOM adding to the story, as well.

Software company Elevated Signals is making inroads into Australia’s cannabis market.

STORZ & BICKEL GmbH, a subsidiary of Canopy Growth, announced the launch of their new dry herb vape, the VENTY. And finally, Western Wheel spoke with Dale Nally, Minister of Service Alberta. Red Tape Reduction, and several cannabis retailers and marketers about the state of the industry in Alberta.

BC providing funding for cannabis testing research project

Written by Sarah Clark on October 20, 2023. Posted in British Columbia, Business, Cannabis News, Government, Producers, Research.

The BC government is providing funding to support the creation of a tool to monitor THC and CBD in commercial cannabis.

To the tune of $77,411, the funding comes from the provincial government’s BC Knowledge Development Fund (BCKDF), part of $2.5 million allocated to support infrastructure for 16 research projects at five universities in BC.

Thompson Rivers University in Kamloops is the recipient of the grant related to cannabis research for Capillary Electrophoresis for Characterization of Pharmacologically Relevant Compounds in the Cannabinoid Industry, led by researcher Kingsley Donkor.

StratCann spoke with Donkor about the project, which he says is about providing another tool for the industry to test levels of cannabinoids and terpenes. While the industry generally uses High Performance Liquid Chromatography (HPLC), Donkor says capillary electrophoresis offers some benefits, such as a high level of accuracy with smaller sample sizes than HPLC.

A recent announcement from the BC government explains the project will provide an analytical tool that regulatory agencies and cannabis companies can use to monitor the content constituents “in commercial and advanced cannabis formulations” using specialized Capillary Electrophoresis methods.

Shannon Wagner, Vice President of Research at Thompson Rivers University, says the goal of the research is to help create a better-regulated cannabis industry.

“Thompson Rivers University is proud to lead the way in cannabis research thanks to the support of provincial government funding,” says Wagner. “Our groundbreaking Capillary Electrophoresis project promises safer and more responsible cannabis use in B.C. by providing regulatory agencies and companies with precise tools to monitor cannabinoid content. Together, we’re shaping a safer and more informed cannabis industry.”

Federal and provincial governments have been looking more into the issue of cannabis testing, especially with concerns about the accuracy of product labels in the legal and illegal markets.

Several provinces have released testing results of illicit products shared via law enforcement actions, and more recently, provincial governments have begun looking at the THC testing of legal, off-the-shelf products.

In 2022, Ontario shared a study that showed illicit edibles have significantly less THC than advertised and high levels of pesticides. New Brunswick and British Columbia have also released similar testing results from unregulated products.

Health Canada announces changes to sale authorization of cannabis products to processing licences

Written by Staff on October 19, 2023. Posted in Business, Cannabis News, Government, Micro, Producers.

Health Canada announced changes to the process of adding sale authorization of cannabis products to processing licences.

As of October 1, 2023, the federal health agency will 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.

While Health Canada made changes in 2022 to begin granting dried fresh sales licences to all processors, the application process for these sales licence amendments for extract, edible, and topical are still required to be filed through the CTLS.

However, the newly implemented changes do mean that processors will no longer need to request changes to inner and outer labels, no longer need to provide photos of the entire lot, or provide completed packaging records, a master list of SOPs, evidence that packaging meets the child resistance requirements, or proof that each lot or batch has been tested using validated test methods including evidence that test methods have been validated for the appropriate class of cannabis, such as method validation reports.

Despite no longer needing to provide this information as part of the authorized activities change request, processors will still need to adhere to these requirements, which can be verified by Health Canada inspection. Inspections will be organized by using a risk-based approach.

Health Canada says they will update the manage your cannabis licence webpage to reflect these changes.

The federal regulator will also no longer provide an in-person compliance promotion session to processors seeking a sales licence, replacing it with compliance promotion material that will be accessible online.

Licence holders will still be required to submit their Notification of New Cannabis Product (NNCP) 60 days prior to selling extract, edible and topical cannabis products to provincially and territorially authorized retailers and sale for medical purposes licence holders once their licence has been amended.

More information is available here and in the guidance document Overview: Preventive control plan for cannabis extracts and edible cannabis.

Cannabis Council of Canada calls for regulatory changes on fifth anniversary of legalization

Written by Contributor on October 17, 2023. Posted in Business, Cannabis News, Government, Producers.

The Cannabis Council of Canada (C3) is calling the cannabis community to Ottawa to commemorate the fifth anniversary of cannabis legalization in Canada and appeal to the Government of Canada to fulfill the promise of legalization by responding to the mounting evidence of challenges faced by the nascent industry.

A recent C3 survey of Licensed Producers (LPs) from coast to coast underscored the urgent need for government reforms to rejuvenate the sector, ensuring its continued growth and contribution to the Cannabis Act’s public policy objectives. The survey, compiling responses from 122 LPs across the country, identified the major financial challenges facing the Canadian cannabis industry:

71% of respondents reported a surge in excise tax payments from 2021 to 2022, reflecting the adverse financial impact of escalating excise taxes due to price compression and burdensome regulatory fees.
83% of LPs reported negative net income in 2022. This significant increase in the excise tax burden has placed an unsustainable strain on LPs, impeding their capacity to invest in growth and innovation.

C3’s Key Recommendations to Government:

The Cannabis Council of Canada, recognizing the importance of the cannabis sector’s contributions to the success of the Cannabis Act, has released a position paper outlining three urgent recommendations:

Reform the Excise Duty Framework: C3 advocates for a fairer taxation system, proposing the reduction of excise tax to a fixed rate of 10% of sales and structural changes to the operation of the program that are costly and inefficient. These changes would ensure that the diverse cannabis industry is sustainable and can compete with the illicit cannabis industry.
Eliminate Excessive Regulatory Fees: Overbearing regulatory fees, which do not exist in other sectors such as alcohol and tobacco, have hampered the growth and profitability of LPs. C3 urges the government to eliminate these unfair fees.
Reform the Edibles Product Category: C3 calls for an increase in the allowable THC limit in edibles to 100 mg, aligning regulations with consumer protection and winning this category back from the illicit market.

“After five years of legalization, the regulated cannabis industry is struggling due to high taxes, excessive regulation, and unbridled competition from the illicit market. To fulfill the potential of legalization, the sector needs reform urgently. We’ve identified the top areas the government can change today to allow us to collectively grow the pie,” said George Smitherman, President & CEO of the Cannabis Council of Canada.

“Growing the pie means more revenue for the cannabis sector and governments, and it means extending the protection of the regulated sector to more Canadian cannabis consumers.”

Mike Schilling, President & CEO of Community Savings, stressed the economic benefits that a thriving cannabis sector can bring to Canada. He stated, “A revitalized cannabis industry can serve as a valuable source of tax revenue and employment opportunities, especially in challenging economic times. Between 2018 and 2021, the legal cannabis industry generated $11B in sales, $29B in investments, 98,000 jobs, and added $43.5B to Canada’s GDP. It’s time for the government to support the economic potential of Canada’s nascent cannabis industry.”

On this landmark fifth anniversary of cannabis legalization in Canada, the Cannabis Council of Canada urges the government to take action promptly to implement these critical reforms and support an industry that has the potential to contribute significantly to the Canadian economy. The cannabis sector stands at a crossroads, and the government’s support is pivotal in ensuring its success.

Visit cannabis-council.ca for more information and access to the full position paper and survey results.

Five years of Cannabis NB: Reflecting on the journey and envisioning the future

Written by Contributor on October 17, 2023. Posted in Business, Cannabis News, Government, New Brunswick, Retail.

On October 17, Cannabis NB celebrates its five-year anniversary and five years of cannabis legalization in Canada. This is a pretty big milestone for our new industry, and it’s almost hard to believe we’re here already. The day has us reflecting on what this milestone means to our customers, how far the business has come, and the successes we’ve had. It also has us looking forward to what is sure to be an exciting future.

There was a lot of anticipation for cannabis legalization in 2018. The Provincial Government made Cannabis NB responsible for legal cannabis distribution in New Brunswick, and the team was tasked with a unique challenge: open an entire network of stores across an entire province, operated by a brand new team, in a brand new industry. There was no precedent for this, but the challenge was accepted and the team set out to have an e-commerce website and the first 20 stores ready to open their doors on October 17, 2018.

A lot of assumptions had to be made about product, customers, and operations. We knew there would be challenges and flexibility would be key. The lead-up to legalization was fast, with lots to do, but in the end we were ready to take our first online order at midnight on October 17, and our brand new, highly trained team was ready to open 20 store doors across the province that morning in sync, and welcome customers of every type for their first legal cannabis retail experience. That first day was filled with excitement, learning, and connections.

As with any new business in a newly legal industry, challenges were to be expected. Across the country, Cannabis retailers faced supply issues, illicit market confusion, and diverse customer needs. The first year of legalization was very much focused on learning and stabilizing the new business. Despite the challenges, the CNB team continued to focus on providing customer service and education and shifting consumers to the legal market.

Despite a rocky start, by December 2019, very early in its operations, CNB became profitable, and shortly afterwards, in February 2022, it returned all the money used for its startup and began delivering net income back to the Province of New Brunswick.

Celebrating Success

After spending the first few years strengthening the foundation of the business, CNB advanced its model evolution strategy.

This began in 2021 with the launch of our FarmGate program, allowing licensed producers based in New Brunswick to sell their products at their own retail stores on-site at their facilities. In 2022, we expanded our store network, opening new formats and more streamlined stores in underserviced areas of the province.

In the current phase of its model evolution, Cannabis NB launched a private retail channel. These stores are owned and operated under private retailers’ own brands. They are legal and licensed to sell cannabis in New Brunswick, and offer a full portfolio of legal, regulated products across all categories, sourced from Cannabis NB.

We now boast 25 corporate stores, 5 Farmgate partners, and 9 private retail partners (6 open) with a goal of improving visibility and access to safe legal products. We employ over 230 New Brunswickers across the province.

Additionally, over the past five years, CNB has been an industry leader when it comes to cannabis innovation. We have been lucky to drive several firsts like:

Being recognized by the Retail Council of Canada for our training program with an Excellence in
Retail Award nomination
Having the first on-site pop-up shop at a cannabis conference – the World Cannabis Congress
Hosting Cannabis East, the first public-facing education event with suppliers and on-site sales
And opening a seasonal pop-up at a cruise terminal container village in Saint John

Through its growth and innovation, CNB has focused on promoting safe practices around cannabis consumption, with the core focus of its retail model being youth protection, reducing the illicit market, education, and safety.

Looking to the Future

We hope to continue evolving our model by continuing to expand our private retail channel. We want to provide increased opportunities for private sector participation in the legal cannabis market in NB. We also plan to pursue all available avenues for providing consumers with safe, responsible, on-site consumption opportunities that increase legal access and meet the needs of customers.

As Cannabis NB continues to evolve, it remains committed to ensuring the thriving cannabis industry
that develops in New Brunswick is safe and responsible, all while providing the best possible experience
for our customers every time.

Cannabis NB’s five-year milestone is a huge accomplishment, and I am so proud of the people who have
been a part of this journey. I want to thank the incredible CNB team, our partners, and our customers.
We would not be celebrating the success of the past five years if it weren’t for their dedication and
support.

Here’s to the next five years!

~By Lori Stickles, President & CEO of Cannabis NB

Five years into legalization, cannabis industry reaches saturation point as legal weed takes more than 70% market share

Written by Staff on October 16, 2023. Posted in Business, Cannabis News, Government.

Five years into legalizing cannabis in Canada, the industry appears to be beginning to reach a saturation point.

New statistics shared by the Government of Canada show that the number of cannabis stores in Canada is beginning to stabilize at about 3,300 locations across the country.

Overall, Canada’s cannabis sector grew significantly from October 2018 to December 2022 but showed signs of decline in 2023. The GDP for the cannabis sector in Canada in late 2018, at the beginning of legalization, was around $6.4 billion. That number appears to have reached a high-water mark at around $11.6 billion by the end of 2022, before declining to $10.8 billion by June 2023.

Despite this growth, overall cannabis use in Canada appears to have only increased slightly compared to ongoing trends prior to legalization. From 2018-2020, cannabis use rates in most provinces saw little to no increase in reported rates of cannabis use, and use among 15-to 17-year-olds has not increased with legalization. Cannabis use is most common among 18-to 24-year-olds, followed by those 25 to 44.

The number of Canadians accessing cannabis legally has also continued to increase. By the first half of 2023, more than 70 percent of the non-medical cannabis consumed in Canada came from a legal source. This is up significantly from the 22 percent who reported doing so at the beginning of legalization in late 2018.

Unsurprisingly, the number of cannabis-related drug offences declined significantly following legalization. Although cannabis is now legal to buy, possess, consume and, in most provinces, grow, possession limits are still enforced, as are criminal laws around production and distribution.

While most (81 percent) of the cannabis-related charges in Canada prior to legalization were for possession, as of 2022, most (67 percent) were for illegal import or export. Cannabis possession charges were just 12 percent of all cannabis charges.

Week in Weed – October 14, 2023

Written by David Brown on October 14, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Government, International, Manitoba, Ontario, Quebec, Research, Yukon.

This week’s big news was, of course, the release of the What We Heard Report on the ongoing legislative review of the Cannabis Act, and StratCann’s David Brown shared his thoughts on how the Cannabis Act review will not save your business.

In Alberta, AGLC announced several rule changes for cannabis producers and retailers, and in BC, a First Nation-owned cannabis retailer recently opened a new “sovereign” edibles store next to their provincially licensed cannabis store and federally licensed production facility. Aly Benson also shared a piece with StratCann asking if Manitoba’s new Indigenous premier could mean changes to the province’s strict cannabis laws, while researchers in Canada and the US shared their work on using smartphones to detect cannabis impairment.

Also, Tether’s Holiday Showcase takes place at Millworks Creative Studios in Dundas, ON, on November 1.

In other cannabis news this past week…

Several major media outlets also covered the What We Heard Report, including the Canadian Press, which ran a story on the five-year anniversary of legalization, with a focus on the winding down of the stock market bubble, with comments from Abi Roach, Vivien Azer, a managing director and senior research analyst at TD Cowen, and Canopy CEO David Klein.

CTV carried a similar story on the persistence of stigma with comments from Kate Grimmell from Greentown Cannabis in Ontario.

The Canadian Medical Association Journal also released a report on the five-year anniversary of cannabis legalization. The key takeaways are that cannabis use and its associated harms have remained steady or slightly increased (but more data is required), and there have been substantial reductions in criminal arrests and charges related to cannabis use.

CBC ran an in-depth piece on this report, featuring interviews with several of the researchers involved.

Researchers from the University of Quebec at Trois-Rivières (UQTR) are launching a survey with the goal of “a better portrait of cannabis consumption among parents” of children under 12 years old. This would be one of the first studies of its kind to be carried out in Quebec.

A would-be Whitehorse cannabis shop has again lost its bid to get a retail licence—this time, in front of the courts. Community Cannabis Inc. applied for the licence last year after signing a lease and beginning renovations at a space on Second Avenue in downtown Whitehorse. The board held a public hearing on the application before denying it in February.

Some residents in Drummondville, Quebec, have launched a petition complaining about what they say is the smell of cannabis from nearby indoor and outdoor producer Canna-Culture.

Radio Canada ran a story on Quebec producer Sumo, whose first batch of products will be available in the SQDC in November.

Joi Botanicals and Freedom Cannabis announced that Freedom will be taking on processing and distribution for Joi.

Greenway Greenhouse Cannabis Corporation announced it was engaging cannabis distributor Green Hedge to act as an outside sales force, providing coverage to licensed cannabis retailers and provincial wholesalers across Canada.

Eurofins CDMO Alphora Inc. announced that it had received its Health Canada Cannabis Drug License for its Oakville, Ontario operations in September 2023. This complements the Institutional Research License obtained through Health Canada in June 2021 for its Mississauga development site, and a Standard Processing License obtained for the Oakville manufacturing operation in May 2022.

The Laval Police Department in Quebec carried out three searches and three arrests on October 3 in connection with the production, processing, distribution and sale of cannabis, seizing 1,453 plants as well as dried cannabis.

BC First Nation utilizing new “sovereign” edibles store next to their own provincially-licensed retail store

Written by David Brown on October 10, 2023. Posted in British Columbia, Business, Cannabis News, Government, Producers, Retail.

A First Nations-owned cannabis producer and retailer is now taking what they say is a “hybrid approach” to cannabis sales on their reserve lands.

Williams Lake First Nation (WLFN) is the signatory of the first government-to-government agreement with the Province of British Columbia under section 119 of BC’s Cannabis Control and Licensing Act and owns and operates cannabis retailer Unity Cannabis as well as the cannabis producer and brand Sugar Cane Cannabis on WLFN reserve land on a large lot just south of downtown Williams Lake. The two businesses share a large parking lot.

The First Nation also recently opened a new retail store in that same parking lot that sells edibles that are otherwise not available through the BC LDB’s supply chains. Kirk Dressler, the Director of Legal and Corporate Services with the Williams Lake First Nation and the CEO of Unity Cannabis and Sugar Cane Cannabis, says the new “hybrid” retail model is one born of both economic necessity, and as a response to a recent BC court ruling.

According to Dressler, the new store will initially carry a limited selection of edibles that have demand in the WLFN community and in other indigenous communities. He also decries the amount of plastics and other packaging required for edibles under federal regulations, saying that the products sold at the WLFN sovereign store seek to address the issue.

From an economic standpoint, Dressler says both Sugar Cane and Unity Cannabis are facing challenges, with slim profit margins and increasing price compression, making it difficult to compete. WLFN has engaged the province on the issue multiple times to address the issue, and to push the government on the Cannabis-related commitments in its DRIPA Action Plan, but Dressler says the response from the government has not been satisfactory.

Since the province has in the past said they are not seeking to actively enforce their own provincial retail rules on First Nations land, WLFN is utilizing this new “hybrid” retail space to exercise what they say is their sovereign right to sell cannabis on their own land without provincial oversight.

“WLFN is in a position where it might be one of those that is forced to exit [the industry],” Dressler explains. “That is not acceptable. We’ve invited the province to look at fair and reasonable solutions. The province has refused to collaborate in any meaningful way, despite the fact the province has an obligation under DRIPA to do so and has agreed that it must do so. We’ve advised them that this leaves us with no option but to contemplate what steps we can take to utilize our jurisdiction to make our operation more viable. The province has nodded their head and acknowledged that that seems to be a reasonable response. That’s the inference we’ve drawn. So, we are in fact proceeding to do so.”

He says WLFN is taking steps to ensure they are still adhering to the rules of their Section 119 agreement, and the Unity Cannabis and Sugar Cane Cannabis operations are entirely unaffected by the establishment of the new store.

“What we are contemplating at this point is a hybrid system that would continue to respect the commitments we have in our 119 agreement, but it would also allow Williams Lake First Nation to utilize its jurisdiction to develop a cannabis-related enterprise that might generate revenue sufficient to sustain our global cannabis operation.”

The store bills itself as an “edibles store” and promises the “cheapest edibles in town.” Dressler says all products sold within the store will come with COAs.

Week in Weed – October 7, 2023

Written by David Brown on October 7, 2023. Posted in Business, Cannabis News, Government, International.

In the past week at StratCann, we covered the AGLC reducing their SKU listing fee for cannabis producers, the newest compliance and enforcement report from Health Canada, and two different product recalls.

We explored the amount of regulations that impose administrative burdens on cannabis businesses and reviewed the launch of a new cannabis monograph in Europe and what it means for the Canadian industry.

Also, an advisory group appointed as the receiver of Wabi Sabi Brands in Alberta commenced a Sales Process, and StratCann’s Tim Wilson looked into the trend of over-hyped weed.

In other news…

Grow Up’s second Victoria trade show received some media coverage, with local media speaking to Grow Up’s Randy Rowe, Marshall Anselmo of Nature’s Gate (a micro on the island), Terra Maibach of cannabis store Violet Wild Cannabis Co, and Paul Dhillon from Adastra. (Oh, and StratCann won Grow Up’s award for Online Cannabis News Source. Thanks to everyone who voted for us!)

The Municipality of Powassan, ON, has finally decided to let cannabis stores operate in its community of 3,200 people. The town council recently voted 4-1 to allow the cannabis outlets into town, a reversal of the 2018 vote when council members voted 3-2 to block their entry.

The OCS launched its educational campaign, Trailblazers, featuring licensed producers and authorized retailers. Trailblazers runs in two flights, beginning in October and again in February 2024, and includes placements across broadcast, social, and digital out-of-home channels.

The first featured Trailblazers are Andrew Ross – Ministry of Sativa, Raju Saini – Piffingtons, Niko Sosiak – Cannara BioTech, and Chris and Marty Johnston – Lune Rise Farms.

‘The locals blame the feds, the feds blame the locals. It’s just kickball, said neighbour Bill Wallace regarding a dispute over the warm smell of colitas at Carmel Cannabis in Ontario.

A retired RCMP officer has won a third Human Rights Tribunal complaint against a bar in BC that refused to serve him because he rolled a joint inside the establishment. Robin Hayes was previously awarded $1,500 in 2021 and $2,500 in 2022, and now $10,000.

Canopy completed the previously announced sale of its Hershey Drive facility in Smiths Falls, Ontario, to Hershey Canada Inc., receiving about $53 million in cash.

Politico and other media outlets covered a recent study showing an increase in ER visits related in Canada to cannabis use, which concludes that the launch of products like concentrates and edibles were the main factor. The study correlates an increase in these visits beginning in January 2020, which became legal in October 2019. However, the researchers seem unaware that these products were not widespread until much later.

Tilray’s Q1 2024 financial results showed adjusted gross profits from cannabis sales were over USD$24 million in the three months ending August 31, 2023, down from just under $30 million in the same quarter in 2022.

Tilray says it is #1 in cannabis flower, oils, concentrates and THC Beverages, #2 in pre-rolls, #4 in vape, and in the top 10 in all other categories in Canada.

International

MJBiz reports that Australia’s medical cannabis program has been growing significantly in the last six months. Medical cannabis approvals through an Authorised Prescriber (AP) reached approximately 304,000 in the first half of 2023, up more than 120% over the same period last year when there were 137,000 AP approvals. This is due in part to the increasing number of authorized prescribers.

Law Enforcement

The Sûreté du Québec (SQ) recently carried out an operation to dismantle a production site in Pierreville in Center-du-Québec, where 5,900 plants placed in a field were seized.

Nosy neighbours lead to police in Quebec seizing ten cannabis plants, with a 58-year-old man facing possible charges, reports Noovo.

Cannabis regulations add to overall administrative burden in Canada

Written by David Brown on October 5, 2023. Posted in Business, Cannabis News, Government.

The number of regulations that impose administrative burdens on cannabis businesses increased in 2023 after remaining steady for several years.

As part of an annual report from Health Canada, the Administrative Burden Baseline, the government tracks all federal regulations that are administered by Health Canada and imposes an administrative burden on all types of businesses.

The total amount of these regulations (21,034) increased by about 2 percent from 2022, while the total affecting cannabis increased by about 1.5 percent. Cannabis is included in about 12 percent of all these types of Health Canada regulations.

From 2020 to 2022, there were 3,406 of these regulations identified as relating to cannabis, increasing to 3,460 in 2023. The majority of these (2,577) were within the Cannabis Tracking System Order, which actually decreased slightly from 2022 (2,580).

The total amount of these types of federal regulations jumped from 16,495 in 2019 to 20,058 in 2020, largely due to the legalization and regulation of new classes of cannabis products like extracts, edibles, and topicals, as well as the addition of new reporting requirements as part of the Cannabis Tracking System Order.

An overall increase in regulations was attributed to new cannabis regulations in 2019.

In 2019 there were 1,342 cannabis regulations counted under the Administrative Burden Baseline count. In 2018, there were just 496 related cannabis regulations under the Access to Cannabis for Medical Purposes Regulations (ACMPR). This was a decrease from the 895 in 2014 under the MMPR and Industrial Hemp Regulations.

The regulatory burdens identified for hemp regulations was 202 from 2014-2018, and decreased to 70 in 2019, where it has remained.

As a comparison, Parts G and J of the Food and Drug Regulations, which relates to the Controlled Drugs and Substances Act, has 2,197 such regulations identified in 2023; Food and Drug Regulations under the Food and Drugs Act account for 4,208 such regulations; Natural Health Products Regulations account for 1,620; and the Tobacco and Vaping Products Act accounts for 2,116.

Wabi Sabi Brands Ltd. engaged in a Sales Process

Written by Contributor on October 5, 2023. Posted in Alberta, Business, Cannabis News.

SOLICITATION FOR OFFERS

On September 22, 2023, Harris & Partners Advisory was appointed as the receiver (the “Receiver”) of all the assets, undertaking and properties of Wabi Sabi Brands Ltd. (“Wabi Sabi”) pursuant to an appointment of the secured creditors.

Wabi Sabi operated a premier, artisanal, chocolate cannabis edibles production facility in Calgary, AB. The facility boasts several pieces of manufacturing equipment of recent age and in very good condition, including a complete processing line, x-ray machine, lab and packaging and labelling equipment.

On October 3, 2023, 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/wabisabi.

Interested parties who wish to pursue a potential acquisition are required to execute a Confidentiality Agreement to receive access to the data room.

Per the Sales Process, bids must be submitted by no later than 12:00 pm (Calgary Time) on October 27, 2023.

Jill Strueby
Senior Vice-President
403-800-1574
[email protected]

Adam Fisher
Senior Vice-President
403-318-2307
[email protected]

Compliance and enforcement efforts continue to increase, especially for personal and designated growers

Written by David Brown on October 3, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Government, Ontario, Quebec.

Health Canada increased the number of inspections it conducted in the most recent fiscal year compared to the year prior, especially of personal and designated medical cannabis growers.

According to the newest annual report covering April 1, 2022, to March 31, 2023, Health Canada’s regulatory branch conducted 662 inspection activities of regulated parties under the Cannabis Act and its regulations. Included were 170 registered personal and designated production of cannabis for medical purposes inspections.

This number increased from 549 inspections in 2021-2022, which included 89 inspections of personal and designated cannabis growers. In-person inspections were mostly paused from 2020-2021 due to pandemic-related closures.

The increase in inspection of those with licenses to grow cannabis for medical purposes, either for themselves or as a designated grower for others, is part of Health Canada’s efforts to reduce what it refers to as “misuse” of the medical cannabis program, while still maintaining access to the medical program for those who need it.

In addition to inspections of these personal and designated growers, Health Canada’s inspectors also conduct compliance verifications with federally licensed commercial cannabis producers. Of the 492 inspections conducted of commercial licence holders, Health Canada issued 15 non-compliant inspection reports, 163 major observations, and 358 minor observations. Sampling was conducted in five of these inspections.

Of the 15 non-compliant reports, Health Canada issued two formal warning letters, one partial licence suspension, along with product seizure and detention.

Issues that resulted in a non-compliant rating included conducting unauthorized activities with cannabis, insufficient record keeping, lack of appropriate inventory control and oversight, unsatisfactory cannabis packaging or labelling, insufficient security measures in place, and non-compliance related to good production practices (GPP).

The majority of inspections (286) were regularly scheduled inspections. Another 115 were compliance verifications, 31 were concerning sales, and 18 were targeted inspections. There were also 42 inspections related to industrial hemp licence holders.

A regular inspection is conducted as part of Health Canada’s normal activities. A targeted inspection looks at specific issues with the licence holder, and a sales inspection relates to the sale of product a licence holder is not authorized to sell.

Of those inspections of hemp licence holders, only one instance of non-compliance was reported, relating to “insufficient record keeping and the licence holder not meeting the conditions of their industrial hemp licence.”

In addition to these types of inspections, Health Canada also takes measures to ensure cannabis licence holders are following the promotional prohibitions under the Cannabis Act.

In the most recent year, Health Canada conducted 353 compliance activities related to promotions, which led to 93 actions, either compliance or promotional emails, letters, or calls, highlighting the agency’s guidance-based approach towards compliance.

Personal and Designated Grows

The significant increase in inspections was of the personal and designated medical grows, expanding by 40 percent compared to the previous year. Of the 170 completed inspections, 78 resulted in no observations, and 92 resulted in at least one for a total of 165 observations.

The inspections resulted in Health Canada revoking or refusing 16 of these registrations, with “additional actions” currently ongoing or under consideration at the time of publication.

Most of the licence holders inspected in the past year were in Ontario or BC (115, 29), but a handful were also in Alberta (5), Manitoba (10), and Quebec (11). In the previous year, Quebec saw the majority of these kinds of inspections.

In addition to these inspections, Health Canada continues to communicate with municipalities and law enforcement and share information with provincial and territorial health professional licensing authorities (such as provincial colleges of physicians) in instances of potential abuse by medical professionals authorizing access to the medical program such as authorizing a large quantity of cannabis.

The average daily amount authorized by health care practitioners for individuals registered to access cannabis for medical purposes from federally licensed sellers in Canada is just over two grams a day. Still, some have been authorizing more than 100 grams a day. The average daily amount authorized by health care practitioners for individuals registered with Health Canada for personal or designated production was 35.5 grams per day.

According to Health Canada’s most recent figures as of March 2023, the number of individuals registered for personal and designated cultivation of cannabis for their own medical purposes decreased 6 percent from 20,448 in December 2022 to 19,076 in March 2023, mainly from BC, Ontario, and Quebec.

In 2018, there were just under 26,000 active personal/designated production registrations. That number grew to more than 47,000 by September 2021 before rapidly dropping to just over 19,000 as of March 2023.

Law Enforcement and Politics

Police in Quebec recently shared information on a string of busts they had conducted on licence holders they say are using the designation to feed into large-scale distribution and trafficking activities outside the scope of the licence.

Personal and medical authorization sites have been under increased scrutiny in the past few years from several municipalities and many Conservative MPs, especially in Ontario, where the OPP says criminal enterprises are exploiting the Health Canada medical, personal and designated cannabis production regime.

A southern Ontario county says they are the first in Canada to take steps to manage personal and designated medical grow licences through local zoning bylaws. In 2022, munis in Alberta called for limits on medical cannabis grows in residential areas.

The amount of these inspections conducted by Health Canada has been growing annually. While there were 170 inspections in the most recent year and 89 the year prior between April 1, 2019, and March 31, 2020, Health Canada conducted 82 inspections associated with 82 personal or designated registrations. In 2019, there were only nine inspections related to such registrations.

AGLC reduces SKU listing fee listing for cannabis producers

Written by David Brown on October 1, 2023. Posted in Alberta, Business, Cannabis News, Government, Producers.

Beginning October 1, Alberta Gaming, Liquor and Cannabis (AGLC) is reducing the SKU listing fee for cannabis producers.

Previously $1,500, the reduced fee to list a new SKU to sell into the Alberta market is now $250.

The changes were shared with producers on September 29 as part of an ongoing effort by what ALGC says is its focus on “removing legislative barriers and red tape that impede producers and retailers, and support business.”

Terri Blooms, CEO of Almanac Grow Corp, an Alberta-based producer that sells under the Plaid Trout brand, says this change is a good start, but the AGLC needs to do more to help a struggling industry, including lowering more province-level taxes applied to cannabis in Alberta.

“This 83 percent reduction in listing fees is a good start. It’s a shame so many Alberta-based licence holders are struggling in their home province. Hopefully, this is just the start of changes. We’re hopeful direct delivery is next, and, critically, they’ve got to reconsider the 16.8 percent additional tax applied on top of the federal excise tax. It’s unsustainable, and in business-friendly Alberta, it’s not right that the provincial government collects more revenue per gram than the grower.”

Alberta has implemented several regulatory changes for cannabis producers and retailers recently, including allowing retailers to accept samples from producers. They also caused some confusion in the industry recently by temporarily halting sales of some products containing CBN, a decision they later reversed.

It’s better that producers only have to pay AGLC $250 to list a new product instead of $1,500. But that fee is irrelevant if AGLC won’t let you list a new SKU. It would be better if producers were permitted to offer whatever products they like, and were paid on a consignment basis once those products are purchased by retailers.”

Tim Mallett, the CEO and master grower at Alberta Bud and a board member with the Alberta Cannabis Micro Licence Association (ACMLA), says the lower charge will help, but he still has concerns with challenges on selling into the centrally-planned Alberta market, calling it “too little, too late.”

“It’s better that producers only have to pay AGLC $250 to list a new product instead of $1,500. But that fee is irrelevant if AGLC won’t let you list a new SKU. It would be better if producers were permitted to offer whatever products they like and were paid on a consignment basis once those products are purchased by retailers.”

Alberta currently lists about 750 cannabis retailers, with more than 200 producers and brands approved to sell in the province.

AGLC reverses decision on including CBN, THCV in THC total

September 18, 2023

Alberta cannabis producers are having trouble selling locally

May 1, 2023

Alberta has collected more than $176,000 in cannabis fines since 2018

September 14, 2022

Week in Weed – September 30, 2023

Written by David Brown on September 30, 2023. Posted in Business, Cannabis News, Government, International.

This past week, we covered BC allowing cannabis retailers to receive cannabis samples from producers, a new paper looking at cannabis use among young Canadians before and after legalization, and the story of a Quebec police officer under investigation following alleged perjury in a medical cannabis case.

We also shared Labstat’s four ways to solve the potency inflation problem and published a profile on seed-to-sale solution provider CertiCraft.

In other news this past week:

Cannabis Now shared highlights from the recent Haul, err, Hall of Flowers in Ontario.

Pubcos:

Heritage Cannabis shared its Q3 2023 report with net revenue of just $8.1 million and a comprehensive loss of just over $1 million.

Auxly Cannabis Group announced that it received an interim extension of the maturity date of the amended and restated credit facility between its wholly-owned subsidiary Auxly Leamington Inc. and a syndicate of lenders, led by the Bank of Montreal as administrative agent, until November 30, 2023.

Greenway Cannabis announced two new SKUs accepted by the OCS through the Winter 2023-2024 product call: a 7g package of Berry Sunset and their MillRite branded 2×0.5g pre-rolls of Lavender Haze.

Tilray announced its new ‘Let ‘Er Rip’ campaign, with four new dried flower SKUs and two Crumble Cones pre-rolls.

SNDL and Nova Cannabis are still waiting on one provincial regulator to finish reviewing their plan for a strategic partnership. SNDL and Nova anticipate that the transaction will close on or before October 30, 2023, subject to receipt of regulatory approval. But the closing date has been delayed several times for the same reason.

Aurora Cannabis says it will raise $33.8 million in share offering to Canaccord Genuity for 46,250,000 company shares at a price of 73 cents per share.

Research

A study from the University of Calgary found that people with a cannabis use disorder (CUD) are at greater risk of experiencing a heart attack, stroke, or other cardiovascular event than those without the condition.

The overall prevalence of documented CUD was 0.8% and is defined as a problematic pattern of cannabis use leading to clinically significant impairment or distress, including an unsuccessful desire to quit, often consuming more cannabis than intended, and spending a great deal of time seeking, using, and recovering from cannabis.

Approximately 2.4 percent and 1.5 percent of participants in the CUD and unexposed groups experienced an adverse cardiovascular disease event. The study says it cannot causally attribute the elevated risk to CUD.

Also, the Globe and Mail covered the groundbreaking news that cannabis labels inflate THC potency contained in products, with comments from Borna Zlamalik from OrganiGram, Rob O’Brien from Supra Research, John Slaughter from High North, Gord Nichol from North 40, and Miguel Martin from Aurora Cannabis.

Law Enforcement

A Manitoba woman who was arrested last November for allegedly handing out THC-infused candies on Halloween has now pleaded guilty to one charge of supplying cannabis to a young person and one charge of possessing cannabis that is not packed, labelled, and stamped, both being offences under the Liquor, Gaming and Cannabis Control Act.

Following an investigation that lasted more than two and a half years, the Sûreté du Québec seized more than 56,000 cannabis plants for which the alleged illegal producers had 88 registration certificates for personal production for medical purposes issued by Health Canada.

Reports LaPress: “In summary, this investigation demonstrates that a group of individuals are at the head of a criminal cell that fraudulently uses certificates to produce illicit cannabis on a large scale. Several people are used as nominees to obtain registration certificates from Health Canada.

Le Canada Francais shared additional info on these raids.

Police in Quebec also announced the seizure of tens of thousands of plants and 2.5 tons of dried cannabis in a series of raids, while police in New Brunswick raided a store seizing cannabis products.

Nova Scotia RCMP and US Homeland Security Investigations announced the disruption of an international drug ring that included a large quantity of cocaine and cannabis. The network, considered one of the more sophisticated drug trafficking networks within Atlantic Canada, was facilitating the movement of imported cocaine throughout Ontario and the Atlantic provinces.

International Cannabis

The US Senate Committee on Banking, Housing and Urban Affairs held a “markup” on the SAFER Banking Act. The bill passed, and it now goes to the Senate and the House for more debate, amendment, and votes before hopefully proceeding to President Biden’s desk. SAFER is the new version of SAFE, seeking to address banking limitations for cannabis businesses in the US.

Cannabis producers can now provide samples to cannabis stores in BC

Written by David Brown on September 25, 2023. Posted in British Columbia, Business, Cannabis News, Government, Producers, Retail.

The BC Liquor and Cannabis Regulation Branch (LCRB) has updated its regulations to allow cannabis retail store licensees and their employees to accept samples from a federal licence holder.

These changes will apply to Cannabis Retail Stores (CRS) and Producer Retail Stores (PRS ie farmgate).

A sample can not be used for any type of inducement. The LCRB has no limit on the size of a cannabis sample, but notes that samples are expected to be “of reasonable size and quantity and should have little retail value”. The retailer must provide a “nominal fee” for the sample.

A representative with BCs Ministry of Public Safety and Solicitor General says that while a the nominal fee/value is not defined in legislation or regulation, the amount can be negotiated between the licensees. An example of a nominal fee could be $2, says the representative.

Although retailers are not allowed to supply cannabis samples to other cannabis licensees, the LCRB says they are exploring this possibility in the future, along with allowing all marketing licensees to accept and provide samples to other licensees.

The change is based on industry feedback. Earlier this year, BC confirmed they were engaging industry on the issue.

Randy Rowe, the owner of the Grow Up industry conference, taking place October 1-3 in Victoria BC, says he was one who worked closely with the BC government to push for these changes. Grow Up’s Victoria event has been structured to allow for samples, which will be carefully tracked.

“This is a game changer for brands in BC,” says Rowe. “Being able to get in front of retailers gives producers a stronger opportunity to educate retailers on their product. For cannabis events like ours, this gives us the opportunity to bring a large number of retailers and brands together to be able to provide samples.”

CRS and PRS licensees will be required to keep records relating to cannabis samples that contain the following information (handbook section 3.4.17):

a) the unique excise tax identifier from the original packaging of the cannabis sample;

b) the date the licensee received the cannabis sample;

c) the federal licence holder and name of the representative that provided the cannabis sample;

d) the nominal purchase amount that the licensee paid for the cannabis sample; and

e) the amount or quantity of cannabis sample received.

Some other provinces allowed such samples from the beginning of legalization, like Ontario and Saskatchewan, while Alberta recently began allowing them this past March.

Earlier this year, a spokesperson for the Cannabis Cultivators of BC, representing a handful of producers, told Stratcann that its members would love to see the province create an accessible cannabis sampling program. This would allow producers to inform retailers of what is already on the market and what is coming soon.

“Allowing cannabis sampling gives retailers the ability to touch, see, and feel the products they plan on bringing into their stores, increasing transparency in the process and instilling confidence in what they recommend to their consumers.

“Items for consideration could include making sampling available for products prior to provincial launch by BCLDB and allowing producers to distribute samples directly from their own facilities: aspects which would help our sector improve speed, remove administrative burden, and remain responsive to changing consumer and retailer needs.”

Jaclynn Pehota, the executive director of the Retail Cannabis Council of BC (RCCBC), told StratCann her organization has been lobbying the BC government to make such changes, as well.

“Product sampling is critical to making informed wholesale purchasing decisions for licensed retailers. Sampling is also an important sales tool for producers,” Pehota tells StratCann. “RCCBC made a formal recommendation in April 2023 that representative samples of any cannabis product in the market should be allowed on a B2B basis in BC.”

Week in Weed – September 23, 2023

Written by David Brown on September 23, 2023. Posted in Business, Cannabis News, Government, International.

It has been another very busy week in cannabis news here at StratCann. We covered a new research paper looking at a cannabis consumption space in Victoria, BC; we broke the story of the AGLC reversing its decision on including CBN and THCV in THC totals; and shared the story of a BC court rejecting some retailers’ lawsuit calling for enforcement against cannabis stores on First Nations land.

We also looked at BZAM’s announcement of cuts to more than 90 personnel, news of a cannabis software company that received $1 million from the Government of Canada, and new figures from Stats Canada looking at consumption levels in 2022.

We also looked at two resolutions at UBCM, one of which passed, calling on the BC government to share cannabis excise tax revenue with munis. The OCS issued two product recalls this week for inaccurate labels, and BC launched a new data report for cannabis producers.

We also ran a profile on BC’s Life Cycle Botanics, a full-service cannabis nursery located on Vancouver Island, and shared CannStandard’s dried flower price outline for August.

In other cannabis news this past week:

Health Canada invites current and prospective cannabis licence holders and other interested parties from Black and other racialized communities to participate in a Q&A session on cannabis licensing, compliance and inspections, scheduled for September 28, 2023.

The Delta Optimist covered a recent update from Delta, BC Council on Metro Vancouver’s ongoing efforts to regulate cannabis-related VOCs.

The Victoria Cannabis Co. received more coverage this week for its farmgate application. The micro producer hopes to have their Producer Retail Store licence soon and to be open in the coming months.

Vernon, BC, residents continue to complain about odours from a local cannabis facility.

Grodan and F1SeedTech say they have joined forces to conduct cannabis cultivation research at CRIC Labs in Montreal. These new trials will build upon a study conducted at Wageningen University & Research (WUR) in the Netherlands.

Financial services platform Square has entered Canada’s cannabis market in partnership with Jane Technologies, an online ordering platform service for cannabis retailers.

MediPharm Labs announced it has executed a supplementary agreement to its Asset Purchase Agreement with 1193269 B.C. Ltd. (o/a Shelter Cannabis) for the Shelter Cannabis Brands IP portfolio. This IP has been focused on Wildlife Cannabis domestic dry flower and pre-roll products that are manufactured and distributed via the MediPharm sites.

The Six Nations Cannabis Commission is calling out banks for refusing to provide bank accounts to Six Nations cannabis retailers after one of their member stores was robbed this week. They say this is a result of Ontario not recognizing Six Nations law.

A story out of Ontario discusses a court case involving a man stabbed outside an illegal cannabis store in Brantford on the afternoon of January 27, 2023.

Canada Border Services seized 165 kg of suspected cannabis at the Port of Halifax destined for the Caribbean.

One we missed last week, NORML Canada, covered a new survey showing that many Canadian nurses don’t receive training on the use of medical cannabis.

International cannabis news

In the first quarter of 2023, insurance reimbursements for medical cannabinoid products in Germany reached approximately 50.9 million euros. Dried-flower accounted for 21.1 million euros, while finished pharmaceutical products like Sativex and Epidolex recorded sales of 13.1 million euros. During the same quarter, Canada’s regulated cannabis market registered medical cannabis sales worth $98 million, reports Cannabis.net.

A story in the Japan Times looks at a trend of cannabis use among young people and the evolving attitudes towards cannabis in Japan.

Marijuana Moment’s Kyle Jaeger shared how Republican senators in the US will soon be introducing new legislation to prevent cannabis from being federally legalized by the US FDA without congressional approval. At the same time, a Democrat in the US House of Representatives reintroduced a bill to federally legalize, tax and regulate marijuana, with provisions to expunge prior cannabis convictions.

BC launches new data report for cannabis producers

Written by David Brown on September 21, 2023. Posted in British Columbia, Business, Cannabis News, Government, Producers, Retail.

The BC LDB will soon launch a new data report that they say will help provide licensed producers with better insight into which retailers are purchasing their products.

The report comes based on feedback from many producers in the industry who need such insight to better understand where to focus their efforts and engagement with retailers, as well as potentially address so-called “data deals” between some retailers and producers.

In a memo sent out to stakeholders, the LDB explains that the BC Cannabis Wholesale Customer Distribution Report “will provide LPs with a list of the retailers that are purchasing their products and the number of cases purchased by each retailer, by SKU, over a four-week period.”

Beginning October 2, 2023, the report will automatically be included in LPs’ report portfolios. This report will be free for the first year. After that, the province will review the program to decide what fee structure will be needed.

“I have a feeling this will lead to more reps coming to my door. But my big concern is if you’re making money off this, we should be getting our share because it’s our data. And I would prefer it was anonymous and it was telling them which regions.”
Mike Babins, Evergreen Cannabis

The report will only include purchasing data for an LP’s product, not any other producers or any other data related to retailers’ sales.

The report will include the business name and address of each retailer that purchased their product, the LDB SKU number and product name of each product purchased, and the number of cases purchased by each retailer, by SKU.

Two BC cannabis producers tell StratCann the news is welcome and needed, although one retailer says they aren’t too excited by the idea of the LDB sharing their data with producers.

Sean Curly, the director of sales at FN Canna/All Nations, says he’s excited by the news, and that this can save struggling producers money while also allowing them to better identify which stores are most familiar with their products.

“One of the foundations of our business is around connection,” says Curly. “We strive to create connections with all our partners, including our partner retailers. So this is a huge step forward to be able to now connect directly with those retailers that support us.”

He says it can also help address so-called “data programs” or “data deals” where producers pay retailers for similar data.

“If other provinces can come to the plate and deliver a service like this, I think that can help get rid of those kinds of deals. The more the government can provide transparency and allow LPs to connect directly with retailers is only going to support this industry and help create a healthy, vibrant industry.”

Mike Babins, the owner of Evergreen Cannabis in Vancouver, says he supports the idea behind the report and thinks it could address the “data deals”. However, he’s not too excited by the idea of his sales data being provided and potentially sold to LPs.

“On the one hand, I think I should be the one who should be sharing the info with them,” says Babins. “On the other hand, if I were one of those doing data deals, it would hurt me, I suppose. But I’m not doing that because I think that’s not appropriate to do.

“I have a feeling this will lead to more reps coming to my door. But my big concern is if you’re making money off this, we should be getting our share because it’s our data. And I would prefer it was anonymous and it was telling them which regions.”

Janeen Davis, VP of sales at Joint Venture Craft Cannabis, echoes the concerns about “data deals” and the hope that this report will help combat them.

“Data deals have hit BC now, and the unfortunate writing is on the wall that certain retailers would not stock supplier’s products unless they were paid for data. With the BC LDB and BC government coming out with this level of transparency, it will prove that many retailer data deals are simply disguised slotting fees which most suppliers cannot afford. I am proud to see BC LDB lead the charge to create a sustainable industry for suppliers as well as retailers.

Updated: OCS issues recall for two cannabis products for incorrect THC

Written by Staff on September 21, 2023. Posted in Business, Cannabis News, Producers, Products.

The Ontario Cannabis Store (OCS) has issued a recall for two cannabis products this week for incorrect THC values.

Editor’s note: This article was updated on September 25 to include Health Canada’s own recall notice for these products, including a recall notice for one product in Nova Scotia.

The first recall, posted September 19, is for Nugz Reefers—Lemon Linx Reefers prerolls from Cannara Biotech Inc. The second, posted September 21, is for Banana Mints, 3.5g dried flower from EastCann.

A representative with the OCS says the Licensed Producers initiated both of these voluntary recalls as the products were labeled with incorrect THC values.

Update: Health Canada has now issued a recall notice for this product as of September 25. The notice notes that 1152 units of recalled product were sold.

While the first recall was for THC levels incorrectly listed as too high, the second was for the labelled THC levels lower than the COA.

The Lemon Linx Reefers are 0.3 grams each and come in a ten-pack. They were packaged on August 31, 2023. The Lot Number is 3423004P1.

Although the Lemon Linx Reefers prerolls are not currently listed on the OCS website, a cached version of the listing advertiser the product having 205.00 – 270.00 mg/g THC (20.50 – 27.00 percent).

The labels incorrectly listed the THC values as THC 240.1 mg/g and Total THC 349.0 mg/g.

The correct THC Values are THC 22.9 mg/g and Total THC 209.3 mg/g.

The Banana Mints from Prime Pot Inc (dba as EastCann) was incorrectly labelled with a lower Total THC value in comparison to Total THC value on the Certificate of Analysis.

The OCS currently lists the product as having from 30 percent to 38.5 percent THC.

Update: Health Canada has now issued a recall for this product as of September 25. The recall is for lot number DB2023-1 with a packaging date of August 30, 2023, and another under the same lot number that was packaged on September 7. Health Canada’s recall includes products in Ontario and Nova Scotia.

The printed value on the label for the Banana Mints packaged on August 30 was Total THC: 304.01 mg/g and should have been Total THC: 362.96 mg/g. The label on the product packaged on September 7 was Total THC: 295.57 mg/g while it should have been Total THC: 362.96 mg/g. 886 units of recalled product were sold.

Aurora issues voluntary recall of 2 lots of live resin due to labelling error

February 26, 2021

Canadian cannabis company recalls 100,000 disposable vape pens made in China

January 22, 2021

Cannabis recalled for labelling error, THC higher than on package

June 12, 2023

Cities in BC still asking for their share of cannabis tax

Written by Staff on September 20, 2023. Posted in British Columbia, Business, Cannabis News, Government.

Cities in BC’s Lower Mainland are asking for what they say is their share of cannabis excise tax revenue from the province.

In a resolution to be considered at this week’s annual Union of BC Municipalities (UBCM) convention, the government of Port Moody, with support from the Lower Mainland Local Government Association, is calling on the provincial government to share up to half of its portion of the federal excise tax.

The resolution could be considered this week at the convention in Vancouver, held from September 18-22.

The Federal government provides 75 percent of the excise tax it collects when cannabis producers sell into a provincial market or through the medical market. The federal tax is collected at a rate of $1/gram or 10 percent of a producer’s selling price, whichever is higher. The federal portion of cannabis excise tax revenue is capped at $100 million a year.

Under an agreement first signed prior to legalization, provinces successfully argued they would need to deal with the bulk of enforcement and regulations when it came to cannabis, especially municipalities, and should, therefore, get a large portion of the federal tax. But munis in several provinces, including BC, say they have not received that tax money.

A representative with BC’s Ministry of Finance explains that the excise tax is remitted to the federal government by a licensed cannabis producer and is then distributed back to provinces from the federal government. This cannabis excise tax revenue then goes into the province’s Consolidated Revenue Fund for programs like health care, education, and child care.

As of September 1, 2023, BC has received $226.99 million in federal excise duty payments on cannabis since March 1, 2019: $6.42 million in 2019, $24.84 million in 2020, $51.34 million in 2021, $70.83 million in 2022, and $73.57 million so far in 2023.

In 2020, the Union of BC Municipalities (UBCM) said a survey of their membership showed $11.5 million per year in local government incremental costs for the three years following cannabis legalization.

Earlier this year, a representative with BC’s Ministry of Finance said the agency had not provided any of this tax revenue, but they are in talks on the subject with the UBCM as part of a long-term plan.

“In general, provincial taxes, including PST, revenue flow into the Province’s consolidated revenue fund to provide the programs and services people rely on, such as health care and education,” notes the Ministry representative. “To date, the BC government has not provided any excise tax revenue to local governments.

“We’re currently working with the Union of BC Municipalities on a review of local government finance systems in BC, including signing an MOU in 2022 laying out that we’ll work together over the next few years. Cannabis revenue sharing is one of the items we will be looking at over the longer term. As the cannabis market continues to mature, we are working cooperatively with UBCM through this process to promote local governments’ financial resiliency.”

Although the resolution notes that several other provinces, such as Ontario, Quebec, and Alberta, have shared this revenue with their municipalities, the BC government has never made a commitment to do so.

The resolution reads:

“Whereas the Canadian federal government has clearly stated its expectation that provincial cannabis tax revenue be shared with local governments and such revenues are currently being shared between the provinces and local governments in Ontario, Quebec, and Alberta, but not in British Columbia; And whereas the sharing of cannabis tax revenue will provide much needed funding for local governments: Therefore be it resolved that UBCM ask the Province to share up to 50 percent of provincial revenues generated from the production and sale of cannabis products with BC local governments.” ~NR31 Provincial Cannabis Tax Sharing with Local Governments Port Moody

UBCM raised the issue in 2016, 2017, 2018, 2019, 2020, and 2022, as well.

Cities in other provinces have raised similar concerns about what they say is their share of the federal excise tax from cannabis. Earlier this year, municipalities in New Brunswick were asking for 25 percent. In 2021, the Association of Manitoba Municipalities released a position paper that called on the province to share 25 percent of its cannabis tax revenue with its municipalities. More recently, the provincial government in Manitoba said there were few “societal costs” with legalization.

The same issues were raised in the association’s pre-budget plan. The report notes that the Federation of Canadian Municipalities (FCM) says that municipal administration and local policing costs related to legalization will total $3-4.75 million per 500,000 residents, representing a range of approximately $210-335 million per year in costs incurred by municipalities across Canada.

“According to the Federation of Canadian Municipalities (FCM), municipal administration and local policing costs linked to cannabis legalization will total $3-4.75 million per 500,000 residents on an annual basis,” wrote the AMM in an email to StratCann at the time. “Since these costs should not be downloaded to municipalities, it is imperative that municipalities be included as meaningful participants in revenue-sharing conversations. We continue to urge the federal and provincial governments to co-develop a revenue-sharing model that respects municipal authority.”

Additional resolution

A second resolution, NR30, the Cannabis Control and Licensing Act, was brought forward by the Okanagan-Similkameen regional district. It calls for a change to the provincial Cannabis Control and Licensing Act (CCLA) that would allow cities and Indigenous governments to opt out of giving the province feedback on a retail licence application. Currently, the provincial licensing process requires input from a city before a licence can be issued.

Both resolutions could be voted on this week and are among 205 to potentially be debated, pending time. You can read about other cannabis-related resolutions at UBCM 2023 here.

NB Munis want to know where their share of cannabis tax revenues went

May 24, 2023

BC has brought in more than $157 million in cannabis excise tax since legalization

January 31, 2023

Manitoba munis, others calling for their share of provincial cannabis excise taxes

March 16, 2021

Cannabis software company receives $1 million from Government of Canada

Written by Sarah Clark on September 19, 2023. Posted in Business, Cannabis News, Government, International, Ontario.

GrowerIQ, a seed-to-sale software company for cannabis producers, has now secured just over one million dollars in funding from the federal government.

In a press release today, the Ontario-based company announced the completion of its latest funding round, securing CAD $1,080,000. GrowerIQ says the funding, which comes through the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), will be used to improve its cannabis tracking system.

The announcement comes following the recent news of Barbados selecting GrowerIQ as the exclusive cannabis tracking partner for the country.

Andrew Wilson, CEO of GrowerIQ, says the funding round will help the company continue to grow as not only a Canadian brand but a global one.

“We are thrilled to have secured this funding to accelerate our mission of transforming the cannabis industry,” said Andrew Wilson, CEO of GrowerIQ. “This investment will allow us to further develop our cutting-edge technology and expand our global footprint. We are committed to providing cannabis producers with the tools they need to succeed in an increasingly competitive market.”

“Our goal is to bring together all systems, processes, advisors, and capabilities into one place, to help simplify what can easily spiral into something very complex,” Wilson previously told StratCann about his approach to the service. “We built the seed-to-sale platform from the perspective of the grower, and coded those insights right into the system’s process flows. So, users of GrowerIQ benefit from those decades of agricultural experience just by using the system.”

Reported cannabis use in Canada not increasing with legalization

Written by David Brown on September 19, 2023. Posted in Business, Cannabis News, Government, Research.

The number of Canadians who reported ever smoking or vaping cannabis did not increase from 2021 to 2022, according to new figures from the federal government.

The figures are part of new survey results released by Health Canada’s Canadian Tobacco and Nicotine Survey (CTNS) 2022. The survey measures the prevalence of cigarette smoking, vaping, cannabis, and alcohol use among Canadians aged 15 years and older and is conducted by Statistics Canada on behalf of Health Canada. The data this year also includes figures on cannabis edibles.

The results are based on responses to an electronic questionnaire or a telephone follow-up interview from 12,133 respondents across all 10 provinces, which represents a weighted total of 32 million Canadian residents aged 15 years and older.

While about 40 percent of Canadians aged 15 and older reported ever smoking cannabis in 2022, only around 10 percent reported doing so in the past 30 days. Just over 12 percent reported ever vaping cannabis, while those who reported vaping cannabis in the past 30 days were about five percent. All of these figures are similar to those reported in 2021.

About six percent of Canadians aged 15 and older reported consuming cannabis edibles in the past thirty days.

Just over three percent of Canadians aged 15 and up reported daily smoking of cannabis in 2022, down from four percent in 2021. One percent of Canadians over the age of 14 reported vaping cannabis on a daily basis, unchanged from the previous year. Fewer than 1 percent of this same group reported consuming cannabis edibles on a daily basis.

Demographics

Those Canadians with less than a high school education were less likely to report using cannabis in the past 30 days (including those still in school), while those with secondary education but no post-secondary education were the most likely to consume in any of the three reported forms.

Those who identified as visible minorities reported lower levels of smoking, vaping, or eating cannabis in the past 30 days, but the reported use of vaping and smoking cannabis was higher among those Canadians who identify as Indigenous than those who did not. Consumption of edibles was not higher amongst those identifying as Indigenous.

Those Canadians aged 15 and up who identified as lesbian, gay, bisexual, or another sexual orientation that is not heterosexual (LGB+) were more likely to report smoking, vaping, and consumption of cannabis edibles in the past 30 days.

In general, Canadians over the age of 14 years who reported using cannabis were more likely to be those who reported their “general health” and “mental health” as “fair” or “poor” compared to those who rated it as excellent, very good, or good.

Those Canadians with a disability were also more likely to report cannabis use than those that did not report a disability.

Cannabis Act review to focus on progress, impact of legalization in Canada

September 22, 2022

Cannabis consumers in Canada more likely to be younger, female compared to the US

April 5, 2023

Stats Canada releases new report on cannabis cultivation at home

September 15, 2022

BZAM cuts more than 90 personnel as company refocusses to two production sites

Written by Staff on September 19, 2023. Posted in British Columbia, Business, Cannabis News, Ontario, Producers.

BZAM, a Canadian licensed producer behind several successful brands, has let more than 90 personnel go as part of a corporate restructuring and the recent sale of several facilities in BC.

The company also says it is “focusing the scope of activities” at its Pitt Meadows, BC facility and “concentrating other activities at its Ancaster, ON facility” as part of its final phase to “unlock company-wide synergies” following its merger with Ontario-based The Green Organic Dutchman (TGOD) in 2022. TGOD’s (now BZAM) greenhouse is located in located in Ancaster, near Hamilton.

At the time, the merger was touted as a way to emphasize TGOD’s market strength in Quebec and Ontario with BZAM’s strong presence in western Canada. A representative with BZAM confirmed with StratCann via email that the layoffs occurred Monday, September 18.

BZAM’s Pitt Meadows facility was said at the time to provide TGOD with low-cost THC distillate and extraction capabilities.

In their most recent quarterly report in August, BZAM said it had recently sold its facilities in Midway, BC and Maple Ridge, BC and referenced a focus in 2023 on “streamlining” operations. The report also referred to the recent divestment in their Puslinch, ON facility and Edmonton, AB facility. BZAM had previously purchased a hotel in Midway to house its employees at the outdoor farm near the US border.

However, the same quarterly report referred to the Pitt Meadows facility as one of its two “core” facilities, the other being the one in Ancaster, ON acquired through the merger with TGOD.

BZAM’s plan included getting rid of what it called “redundant facilities” and focusing production activities on its remaining sites, as well as reducing “selling, general, and administrative expenses,” which it noted include reducing its headcount “by more than 90 additional personnel.”

BZAM recently posted several job listings for its Pitt Meadows and Hamilton (Ancaster) sites.

Cannabis consumption space provides examples for BC government

Written by Sarah Clark on September 18, 2023. Posted in British Columbia, Business, Cannabis News, Government, Research.

The BC government should take lessons from one of the province’s only indoor cannabis consumption spaces, says a new research paper.

An indoor consumption lounge inside one of Canada’s oldest compassion clubs offered members a chance to consume cannabis in a safe space, with the club itself serving as an example of a community-based model of cultivation, distribution, and consumption, says the study.

The study was recently posted in the peer-reviewed journal, Contemporary Drug Problems, which publishes research on alcohol and other psychoactive drugs, licit and illicit. The authors present a case study of the Victoria Cannabis Buyers Club (VCBC) and its consumption space, affectionately called “The Box”.

The Box was a small room inside the VCBC’s former location that was used as a cannabis consumption space by many of the club’s members. The Box closed in February 2023 when the VCBC was forced to move locations due to enforcement from the province, but the research paper argues it can serve as an example for the province as it continues to look at cannabis consumption spaces.

With research beginning in 2021, The Box was at the time closed due to pandemic-related restrictions, but information was collected through a survey sent out to members. The survey was open between January and March 2022 and was completed by 104 respondents. Although the club says they have 8,000 members, the number of current, active members is not provided.

Survey results showed members used The Box for an array of reasons, from socializing to learning more about cannabis. Respondents reported using The Box as often as several times a day to one or two times a month. Many reported using the space because of a lack of space to consume at home, with smoking being the most common mode of consumption.

The BC government can learn from this model, concludes the research paper, especially given that the government is currently looking at rules for consumption spaces. Although those potential rules will specifically exclude indoor smoking and vaping, the usefulness of these spaces for those using cannabis for therapeutic purposes needs to be taken into account, it says.

BC releases What We Heard report on cannabis consumption spaces

January 10, 2023

BC Cannabis Secretariat rejects call for a temporary exemption for the Victoria Cannabis Buyers Club

May 14, 2020

Vancouver Island’s VCBC again raided by BC’s Community Safety Unit

July 15, 2020

Week in Weed – September 16, 2023

Written by David Brown on September 16, 2023. Posted in Business, Cannabis News, Government, International.

This week at StratCann, we shared our correspondence with Health Canada, showing 28 targeted inspections and three compliance verifications so far this year to verify THC levels, as well as a break-in at Tricanna’s BC facility and Seed & Stone receiving approval from the city of Pitt Meadows for the first retail store in the city, expected to open next year.

We also shared the story of the Conservative Party of Canada rejecting a proposal to make the removal of medical cannabis a party platform, and the Manitoba Liberals calling for greater enforcement against the illicit cannabis market, covered BC cannabis retailer TruGreen working towards a community consumption space, and covered that the Victoria Cannabis Co is moving one step closer to their cannabis farmgate licence.

Last but not least, STU Farms, a cannabis facility in Arthur, Ontario, is looking for a buyer, and High Tide announced a new consumer-facing digital magazine to expand their sometimes controversial Cabanalytics data program.

Events

There were two prominent cannabis industry events this week: the Elevate Cannabis Expo from September 12–15 at the Mirage Banquet Hotel in Toronto, and the Montreal Cannabis Expo at the Palais des congrès, from September 13–14.

Hall of Flowers is coming to the Enercare Centre in Toronto on September 19 and 20.

And, of course, StratCann’s Growing Relationships event series will be in Winnipeg on October 16.

Cannabis Education

OCS launched a new “social impact platform,” Good All Around,” to help people learn about how they are driving positive change and exploring their OCS’s social responsibility work.

Jenna Valleriani, Senior Manager, shared that Social Responsibility for the Ontario Cannabis Store, “I’m grateful to be a part of building something new that will help demonstrate transparency and accountability to Ontarians around how we are driving positive change, establishing meaningful partnerships, and promoting cannabis literacy across the province.”

A free public information session about medical cannabis is happening on Saturday, September 16, at the WISH Centre in Chatham, Ontario. The Unifor Local 127 Retirees chapter organized the event to talk about removing the stigma from medical cannabis use.

Speakers include Tina Lively, a clinical pharmacist with Thamesview Family Health Team, and scientist and educator Abhishek Chattopadhyay of Chatham-based AgMedica Bioscience, Inc.

Business

Custom Cannabis Inc., an Alberta-based cannabis company, was adjudged bankrupt on August 31, 2023, on application by Connect First Credit Union Ltd. Connect First is owed over $12 million.

Custom Cannabis is a 65,000 sq ft facility on 4.5 acres in Claresholm, Alberta, about an hour south of Calgary. The company received their cultivation licence in 2019.

High Tide shared its Q3 2023 financials, with a gross profit of $34.6 million compared to $25.8 million during the same period in 2022. Net loss was $3.6 million, compared to $2.7 million during the same period in 2022.

Sales from High Tides Cabanalytics “business data and insights platform” increased to $6.5 million from $5.5 million during the same period in 2022. High Tide is the largest Canadian non-franchised brick-and-mortar cannabis retailer, with 156 Canna Cabana locations operating nationwide and a loyalty base exceeding 1.1 million Cabana Club members. Its stated long-term goal is 250 locations across Canada.

Avtar Singh Dhillon, a former B.C. doctor turned cannabis stock promoter, has admitted to the US Securities and Exchange Commission (SEC) that he participated in a massive billion-dollar stock fraud scheme partly orchestrated from Vancouver. Dhillon directed Vancouver-based Emerald Health Therapeutics, a medical cannabis producer, and had served as a board chair with the Cannabis Council of Canada (C3).

Nextleaf Solutions’ Board of Directors announced the departure of Paul Pedersen from his role as CEO and President, effective September 8, 2023. Pedersen had been Nextleaf’s CEO and President since inception and remains on the Board of Directors. Nextleaf welcomes Emma Andrews to the role of Interim CEO.

The SQDC’s total sales between March 26 and June 17, 2023 reached $142.6 million, compared to $139 million during the first quarter of the previous fiscal year. there were 25,675 kg of cannabis sold legally during this quarter. The branch network sold 23,961 kg of cannabis, for a total amount of $133.5 million.

Fire & Flower completed its sale to FIKA Cannabis. Retail chain Fika had previously won an auction to purchase Fire & Flower. Fika currently lists 19 locations in Ontario. Fire and Flower lists 79 locations across Canada.

Pelham Today ran a story on Tilray closing the RedeCann facility on Foss Road. Residents and politicians say the loss of jobs is unfortunate but point to ongoing odour complaints from the community as now being rectified.

Residents in Middleton, BC, are again complaining about odours coming from a cannabis production facility operated by Avant Brands (Formerly GTEC), a parent company behind cannabis brands like BLK MKT and Tenzo. These are ongoing complaints, with Avante saying they had previously “been able to satisfactorily address all inquiries from the City of Vernon and Health Canada concerning odour at the facility.”

In this most recent complaint, one city councillor says she can attest to the aroma, while another mistakenly referred to the BC government as a relevant regulatory authority. The licensing authority, in this case, is Health Canada.

International

The Australian Greens’ legalization bill, introduced in parliament in August, was referred to the Senate Legal and Constitutional Affairs Legislation Committee on September 14. A report is due from the committee by May 31, 2024.

Rolling Stone did a writeup on the cannabis industry’s “transformative phase” as countries worldwide embrace the medicinal and adult-use potential of the plant.

Reuters had a sober analysis of what rescheduling to Schedule III would mean for the cannabis industry. It’s not known when, if ever, the DEA will respond to the HHS recommendation reported by Bloomberg in August.

Dentons also provided some analysis of some ongoing issues in the US cannabis market.

A bill allowing “Amsterdam-style cannabis cafés” to open in California cities has been approved by both chambers of the state Legislature and only needs the governor’s signature to be turned into law. If signed, it will come into effect on Jan. 1, 2024, and the “cafés” would only be allowed in cities and counties that approve them.

The legislation would authorize cannabis stores to sell food and non-alcoholic drinks and provide live music or other performances on the premises.

A German Government plan for the “controlled legalization” of cannabis that could come into force next year has met with opposition from a range of groups, including the German Medical Association, judicial and law enforcement officials, as well as those who favour decriminalization but say it is too bureaucratic, reports The Lancet.

Klaus Reinhardt, President of the German Medical Association, says the proposed age of access of 18 is too low and that the judicial and regulatory bodies in Germany are “hopelessly overburdened” and would be unable to handle enforcing cannabis regulations. These echo similar concerns previously posed in Canada that are yet to come to fruition.

Law enforcement

Galen Simmons at the Beacon Herald covered a recent meeting with the Stratford Police Board on September 13, with local police saying they won’t be focussing on a local unlicensed dispensary.

Indigenous-owned retail store Organic Solutions operates within Stratford city limits in a mixed industrial and residential neighbourhood. Despite the store not being licensed by the city or the province, Stratford police Inspector Mark Taylor told the board that there had been no further discussion of enforcement with either the Crown or local bylaw office.

After conversations with the chief, Chair Tim Doherty said that the board was satisfied with the “status quo” while waiting for further direction. “I don’t think there needs to be any extra attention paid to this particular business. We’ll carry on as we have in the past,” Doherty said.

The BC Supreme Court has ordered the extradition of a BC man to the US to face charges as part of an investigation alleging a drug ring moving cocaine and cannabis between the US and Canada.

The Attorney General of Canada said the record of the case submitted by the US is sufficient to show that Ellingson furthered that conspiracy by recruiting pilots to traffic cannabis and cocaine, arranging meetings to coordinate conspiracy efforts, and arranging for encrypted communications for the smuggling group to avoid legal detection in the early 2000s.

The Sûreté du Québec and the Royal Canadian Mounted Police (RCMP) carried out operations on September 14 to dismantle outdoor production sites for illegal cannabis in several regions of Quebec. Police say these seizures of plants will be added to the provisional results of operations that began last June. During this season, thousands of illegal cannabis plants have been seized throughout Quebec, tickets relating to the Cannabis Control Act have been issued, and arrests have been made under the Cannabis Act.

Sorel Tracy Magazine ran images from one of the raids where 600 plants were seized and hauled away via helicopter.

On September 8, a Vancouver Provincial Court judge sentenced a Port Coquitlam man to a one-year conditional sentence for selling marijuana products to Vancouver police who were posing as teens. Al Karim Khaki, 62, operated Planet Rock, a marijuana accessories shop in the 1000-block of Granville Street in Vancouver.

And finally, Police in Ontario seized thousands of cannabis plants from an illegal facility.

Cumberland cannabis retailer working towards community consumption space

Written by Contributor on September 15, 2023. Posted in British Columbia, Business, Cannabis News.

Nestled in the heart of Cumberland, BC, Trugreen Cannabis is pioneering a project that promises to transform the landscape of cannabis consumption spaces. Under the visionary leadership of Michael Arneja, President of Trugreen Cannabis, this endeavour is set to establish one of British Columbia’s first outdoor cannabis consumption lounges.

This ambitious project first took root with a series of pop-up spaces adjacent to Trugreen Cannabis, serving as a summer pilot project. The goal was to gather insights and pave the way for a more permanent and official community space, slated to be unveiled by the end of 2024 under the moniker “CUB,” short for the Community Urban Bazaar.

Arneja’s vision extends beyond the mere creation of a cannabis consumption area: it seeks 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.

*An artist rendering of the future Community Urban Bazaar*

The space, occupying an adjoining lot next to Trugreen, was initially conceived as an “incubator” for local entrepreneurs. However, the overwhelming interest from existing businesses in the area has led to the expectation that CUB will soon house a bakery, coffee shop, fish and chips establishment, and serve as a venue for community activities like yoga and live music.

Guiding this unique endeavour alongside Arneja is Max Oudendag, who has been instrumental in curating a space that seamlessly combines family-friendly community activities with responsible cannabis consumption. Their mission is clear: prioritize being kid and family-friendly while establishing a legal and community-accepted 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 emphasizes.

Their dedication has not gone unnoticed. The project is on a “shortlist” to become one of the first legal consumption spaces in British Columbia. Earlier this year, British Columbia released a “What We Heard” report, soliciting input on the nature of cannabis consumption spaces in the province. This feedback will significantly influence provincial decisions regarding the allowance and regulation of such spaces.

British Columbia’s stance on indoor smoking and vaping restrictions has made outdoor consumption spaces like the one in Cumberland an attractive option. Arneja recognizes that the ability to promote and formally consume cannabis in an outdoor setting is vital for the success of their venture.

“We still have a lot of work to do, but we hope to be the first, if not one of the first, community consumption spaces of this kind in British Columbia.”

As the journey unfolds, Cumberland’s cannabis culture landscape is set for a remarkable transformation. Trugreen Cannabis and the Community Urban Bazaar aim to redefine how cannabis is perceived and enjoyed, all while fostering a vibrant and inclusive community hub. In this pioneering project, British Columbia may find a blueprint for responsible and community-driven cannabis consumption.

~Michael Arneja

For inquiries and further information, please contact Michael Arneja at [email protected] or 250-400-0420, and @cub.space on Instagram.

Join the movement and witness the evolution of cannabis culture in Cumberland, BC.

Is there a future for cannabis consumption lounges?

January 24, 2023

BC releases What We Heard report on cannabis consumption spaces

January 10, 2023

Lit Research provides space for sensory testing of cannabis products in downtown Toronto

June 26, 2023

High Tide announces new consumer-facing digital magazine

Written by Staff on September 14, 2023. Posted in Alberta, Business, Cannabis News, Retail.

The owner of a chain of cannabis stores across Canada is launching a new consumer-facing digital magazine.

High Tide, the owner of the Canna Cabana chain of retail stores, is launching Cabanalytics Consumer Insights, which they say will be an extension of their Cabanalytics “business data and insights platform”.

Canna Cabana currently has 156 locations across Canada, making High Tide the largest retailer in the country.

Beginning September 14, and continuing monthly, the company says in a press release that over 1.1 million ELITE and Cabana Club members will receive the free digital publication, covering topics such as the best-selling cannabis products and accessories and reports on consumer behaviour.

Over time, the company plans to expand their distribution into other markets like the US.

“Innovation is a key part of High Tide’s DNA, which led to the launch of our unique discount club model two years ago and our paid membership tier ELITE almost a year ago,” said Raj Grover, President and CEO of High Tide in a press release while acknowledging the program’s success is subject to provincial and federal regulations. “Today, I’m thrilled to announce the launch of Cabanalytics Consumer Insights, an extension of our highly successful Cabanalytics business data and insights platform.”

Grover adds that the company aims to monetize the platform by utilizing a captive audience of consumers, and he hopes to expand its coverage to include topics such as data on hydroponics, cannabis seeds, and growing equipment.

High Tide’s third-quarter results will be published on September 14. Cabanalytics data sales were $6.4 million in the second fiscal quarter of 2023, compared to $5.1 million for the same quarter last year and $6.6 million in the first fiscal quarter of 2023. Gross profits in Q2 2023 for High Tide were $31.6 million.

STU Farms investment opportunity

Written by Contributor on September 13, 2023. Posted in Business, Cannabis News.

Why build something from scratch when you can buy this turn-key experience? Discover an exciting business purchase opportunity within the cannabis industry. This investment offers substantial profit potential and a bright future. Seize this chance for success today!

Welcome to STU FARMS, your gateway to pioneering cannabis cultivation solutions with a focus on profitability and efficiency.

We invite you to delve into a tour of our state-of-the-art facility, located in Arthur, Ontario, tailored to meet the needs of your business.

A Commitment to Your Business’s Success: STU FARMS is designed to elevate your business’s cannabis cultivation operations. Our modern, environmentally conscious design signifies a commitment to sustainable practices, aligning your brand with responsible and ethical cultivation.
Advanced Grow Rooms for Your Business: Within our facility, you’ll find four cutting-edge grow rooms, each meticulously designed to cater to different growth stages. Precise climate control, customized lighting replicating natural sunlight, and automated nutrient systems ensure consistent, high-quality yields, optimizing your production process.
Beginning with Propagation: Your business starts with our dedicated propagation room, where young plants are expertly nurtured from seeds or cuttings. This controlled environment fosters robust germination and early-stage growth, setting a strong foundation for your crop.
Unparalleled Flowering Potential: The heart of STU FARMS lies in our three larger grow rooms, fine-tuned for the flowering phase. Tailored light schedules and CO2 augmentation stimulate substantial flower growth, resulting in amplified harvests and potency – precisely what your business needs to thrive.
Efficiency at Every Step: In our processing area, your harvested plants undergo precise trimming, drying, curing, and packaging, all optimized for quality and efficiency. With cutting-edge machinery and a skilled team, you can trust in the consistency and excellence of your cannabis products.
Smart Storage Solutions for Business: Efficient storage is vital for minimizing overhead costs. Our facility includes secure, climate-controlled storage spaces for harvested cannabis products, packaging materials, and equipment, ensuring your inventory stays fresh and ready for market.
Maximizing Business Profit Through Innovation: At STU FARMS, we’re synonymous with efficiency and cost reduction. We harness renewable energy sources, employ automated systems, and utilize finely tuned cultivation techniques to minimize operational expenses. Our advanced monitoring and data analysis capabilities enable you to optimize yields and profitability continually.

STU FARMS represents the pinnacle of cannabis cultivation, offering a strategic partnership that merges cutting-edge technology with expert horticultural practices to enhance your business’s profitability. Your purchase of STU FARMS is not just an investment; it’s a strategic move toward increased productivity and success in the cannabis industry. Explore our tailored solutions for your business needs and experience the difference today!

For information and enquiries, contact Alroy Brouwer, Broker Realty Executives On The Bay Inc., Brokerage at 705-220-8758 or [email protected].

Content sponsored by: Alroy Brouwer, Broker Realty Executives On The Bay Inc.

Week in Weed – September 9, 2023

Written by David Brown on September 9, 2023. Posted in Business, Cannabis News, Government, International.

This week in weed, StratCann looked at the RCMP considering changes to their cannabis policy for some employees, the trend of large amounts of illicit Canadian cannabis finding its way to foreign shores, the Victoria Cannabis Co. seeking support for their farmgate application, and a cannabis producer and nursery teaming up to bring polyploid cultivars to the Maritimes.

We also looked into a story of two unlicensed cannabis stores raided in New Brunswick and ran a profile on Harrison Jordan and his Substance Law legal practice.

In other cannabis news in Canada and around the world…

On Friday morning, demonstrators gathered outside the Manitoba Legislative Building to protest the provincial law banning home cultivation of cannabis, organized by Jesse Lavoie and Toba Grown. The rally preceded a hearing at the Winnipeg courthouse where final arguments were heard in a lawsuit arguing Manitobans’ right to home-grown cannabis.

Lavoie says he expects a decision in the case soon.

“We are confident that the Court will understand that Manitoba’s prohibition is actually criminal law in nature because it allows for significant penalties such as imprisonment for up to one year, whereas Quebec’s law imposes only a very small fine,” said Kirk Tousaw, one of TobaGrown’s lawyer’s, in a press release.

“This law was unconstitutional when it was drafted, and it is unconstitutional now given the significant differences between the law as written in Quebec and the law as written in Manitoba,” said Jack Lloyd, another of TobaGrown’s lawyers. “It is clear the Murray-Hall (Quebec) decision does not bind the Manitoba courts given the significant differences between the two laws.”

A study looking at cannabis-involved traffic injury emergency department visits after cannabis legalization and commercialization is making the rounds this week in the media, with even US outlets like CNN picking it up. The study looks at traffic injury emergency visits after cannabis legalization in Ontario.

The cross-sectional study says that, initially, legalization was not associated with increased cannabis involvement during traffic injury emergency department visits, but “market commercialization” from March 2020–December 2021 was.

A “cannabis-involved” incident is one that cannabis is associated with but is not necessarily the cause of the incident. However, cannabis-involved traffic injury ED visits were, on average, far more severe than injury ED visits not involving cannabis, with higher rates of hospital and ICU admission. Almost half of the cannabis-involved traffic injury ED visits also had documented alcohol involvement. Cannabis-involved traffic injury ED visits increased while alcohol-involved traffic injury ED visits decreased over time during the study.

Another new study looks at blood and urinary metal levels among cannabis users, finding lead and cadmium in their bodies. In this representative study, researchers found higher levels of cadmium and lead in blood and urine among participants reporting exclusive cannabis use when compared with participants who used neither cannabis or tobacco.

According to Statistics Canada, alcohol sales are dropping in Canada, while cannabis sales are up, writes Sylvain Charlebois. This raises questions about whether Canadians are substituting alcohol with cannabis, the author says.

Hub International Limited (Hub), a global insurance brokerage and financial services firm, announced that it has acquired GJJK Inc. GJJK is located in Mississauga, ON and provides commercial and personal insurance to clients and specializes in the cannabis industry.

A Canadian psychotropics company, Lucy Scientific, is acquiring the American cannabis media brand High Times’ intellectual property. Also included in this deal are existing licensing agreements for the brand High Times and the Cannabis Cup. The deal involves share transfers and semi-annual payments for the next five years. High Times was founded in 1977.

Aurora Cannabis announced the launch of Honour, a new cannabis cultivar designed “for veterans, by veterans,” and the second offering from Aurora’s Strain for Heroes portfolio. Five percent of net profits from the sale of Strain for Heroes products will be used to support veteran organizations across Canada. Honour is available under the MedReleaf brand and was developed in Aurora’s Comox facility (Occo).

Aurora also announced that it is expanding its hemp-derived CBD portfolio into Brazil. In partnership with Herbarium, a Brazilian company in herbal medicine, Aurora will launch the company’s full-spectrum, single-source 3 percent CBD oil under the Herbarium brand, available under the direction of medical doctors. The CBD oil is produced at Aurora’s production facility in Uruguay.

Heritage Cannabis announced that products from its Pura Vida brand have been approved for listing by Société québécoise du cannabis (SQDC) for retail and online distribution in the province. “When it comes to sales, Québec is the fourth largest market in Canada, and this was an important market for us to directly address,” said David Schwede, CEO of Heritage.

Ghost Drops announced a strategic partnership with Tokyo Smoke. Twenty selected Tokyo Smoke stores across Ontario will feature Ghost Drops-branded installations featuring Ghost Drops products and merchandise.

The press release also says that Ghost Drops launched several products on the Ontario Cannabis Store’s (OCS) Flow-Through platform late last year, allowing the brand to offer new strains each week.

A report from MJBiz shows that Australia and Israel were the largest markets for medical cannabis exports from Canada in 2022. In the April 2022–March 2023 fiscal year, Canada’s exports of medical marijuana flower were 59,986 kg, a 48 percent increase over 2021’s 40,640 kg.

Nearly 80 percent (47,332 kg) went to Australia and Israel. According to Health Canada data, Germany was third, accounting for 9,560 kilograms, or approximately 16% of the total.

The data also highlights that while exports are a current hot topic, they are still only a small portion of the total market. At the end of the 2022 fiscal year, Canada had nearly 1.3 million kilograms of cannabis in unpackaged inventory and another 92,590 kg in packaged inventory with licensed producers. Distributors and retailers had another 55,935 kg of cannabis in inventory. Overseas markets are also not likely to rely on Canada for imports long-term, as the countries develop their own domestic supply.

International

The Conversation ran an interesting article on cannabis legalization and policy in the Australian Capital Territory, including a study that explores the experiences of cannabis growers in the ACT and the limitations of home grow rules. “Our research provides important lessons for policymakers across the nation who are considering whether to allow home-growing as a legal source of cannabis supply,” writes the author.

A lawyer in Costa Rica argues that the Central American country would benefit from following Canada’s lead in legalizing recreational cannabis.

Police in Taiwan say they have arrested a Canadian national for growing cannabis, seizing four plants and 472 grams of dried cannabis. The individual, identified only by his surname, Chen (陳), arrived in Taiwan earlier this year to work as a foreign language teacher.

Victoria cannabis grower seeks support for farmgate application

Written by David Brown on September 7, 2023. Posted in British Columbia, Business, Cannabis News, Government, Micro, Producers.

A cannabis producer in Victoria, BC, is trying to generate support for its application with the city for a cannabis farmgate licence.

The Victoria Cannabis Company (VCC), located at 340 Mary Street in Victoria West, has filed an application with the province for its producer retail store licence, also called a cannabis farmgate licence, but still needs municipal approval for the location. If approved, the application will go back to the province for final approval.

The province began accepting applications for producer retail stores (PRS) in November 2022. The program allows micro cultivators, standard cultivators, and nurseries to sell their own products in a retail cannabis store at their own production facilities or sites, as well as an array of products from other producers.

Only two producers have applied so far, with the first, ShuCanna located in Salmon Arm, receiving their licence in August 2023. The province charges an application fee of $7,500, plus a first-year licensing fee of $1,500 and an annual renewal fee of $1,500.

“We are not located in an industrial park on the outskirts of town. Our store is just minutes from the sea wall in Lime Bay and has the potential to become a tourist destination.”
Kyp Rowe, VCC President

The VCC’s farmgate application comes before Victoria City Council on September 14, they have posted a petition to show community support for their application.

“By signing below, the undersigned provides support for the proposal and, specifically, encourages Council to approve the retail sales of cannabis via the farmgate proposed for 340 Mary Street,” reads the petition, in part.

Kyp Rowe, president of VCC, tells StratCann their goal is to create a dynamic storefront that can show off not only their own unique cannabis products from cannabis grown on-site, but also other small craft producers in BC. VCC’s location is near the E&N Rail Trail, a popular bike path.

“We are very excited at the opportunity to be among the first potential Production Retail Store locations in British Columbia,” says Rowe. “What sets us apart from other locations is the amount of frontage traffic we have in Vic West. We are not located in an industrial park on the outskirts of town. Our store is just minutes from the sea wall in Lime Bay and has the potential to become a tourist destination.

“Our goal will be to focus on British Columbia producers as well as featuring our own flower grown and packaged on-site. Now, more than ever, small provincial craft producers need an opportunity at the retail level to showcase their products. With all of the pay-to-play for shelf space and the discount retail chains, more and more small producers are getting edged out by large corporations. We want to be able to tell BC’s rich craft cannabis story, and we feel this new farmgate store will give us this opportunity.”

The rezoning application for VCC was first heard by council in May 2023 and passed first and second reading on August 3. The September 14 meeting is a public hearing, after which the application will go to third and final reading. The application says the majority of products the store will carry, if licensed, would be produced on-site. A previous council meeting referenced concern about competition from a nearby cannabis retailer.

Two other provinces, Ontario and New Brunswick, also have cannabis farmgate licenses, with a handful of stores licenced in each province.

BC’s cannabis Direct Delivery program is growing, but fees still too high

May 29, 2023

BC cannabis producers prepare for farmgate, but questions remain

January 12, 2022

In Ontario, Farmgate Brings Opportunity for Brand Engagement

August 24, 2020

Week in Weed – September 2, 2023

Written by David Brown on September 2, 2023. Posted in Business, Cannabis News, Government, International, Producers, Research, Retail.

This week, we covered Atlantic Cultivation’s purchase of the Tantalus brand and products, looked at the case for government to help fund cannabis emissions testing, and the story of a Vancouver cannabis store that avoided penalties after an employee sold cannabis to a minor. We profiled Substance Law which offers services for cannabis clients across Canada, focusing on the Ontario retail cannabis market.

We also ran a reminder that some of Health Canada’s COVID-19-related “flexibilities” expire September 30, took a look at a recent seizure of illicit cannabis in the Netherlands that was en route from Canada to Germany, and a new program for budtenders from Canadian cannabis recruitment company CanMar.

Police also shut down an illicit cannabis store in Mississauga, with the city using large concrete blocks to seal up the store.

In other cannabis news this past week,

The US Department of Health and Human Services (HHS) recommended that cannabis be moved from a Schedule I to a Schedule III listing. While the decision is with the US DEA, many are hopeful it will come to fruition, although the DEA rejected a call to do so in 2016. The recommendation from HHS came at the request of Biden to look into the issue (archived link to WaPo article).

The greenhouse in Niagara-on-the-Lake that Tweed once occupied appears to have been sold, reports Thorold Today. Canopy closed the location in 2021, and it had previously been listed online for $32 million.

An online website that lists property transfers shows the greenhouse sold for $21,800,000 in May to a company that grows mushrooms, but neither the realtor nor Canopy Growth responded to calls or emails from local media to confirm.

MJBiz shared a report that says cannabis exports from Canada increased in the 2022-23 fiscal year, with $160 million shipped overseas—a 50 percent increase compared to 2021-22’s $107 million.

On that note, Decibel Cannabis announced that it had entered into a supply agreement to provide dried medical cannabis flower to 4C LABS, a healthcare, technology, and pharmaceutical company in the United Kingdom and Channel Islands. The three-year agreement is expected to see its first shipment by year’s end, with minimum purchase commitments and exclusivity over certain genetics and the QWEST brand in the UK.

Entourage Health announced its financial results for the three and six months ended June 30, 2023. The Company reported second quarter total revenue of $13.37 million, and net revenue of $10.17 million and a loss of $9.6 million. Entourage offers six cannabis brands on its medical platform: Color Cannabis, Saturday, Starseed, Syndicate, Royal City, and Mary’s Medicinals.

MTL Cannabis Corp. also posted a net revenue of $12,763,787 and gross profit of $3,274,781 for their Q1 2024 results.

MTL is the parent company of Montréal Medical Cannabis Inc., an LP in Quebec, Abba Medix Corp., an LP in Ontario, IsoCanMed Inc., an LP in Québec, and Canada House Clinics Inc., with clinics across Canada that work directly with primary care teams to provide specialized cannabinoid therapy services to patients.

Research and other International Cannabis News

MediPharm Labs’ subsidiary Harvest Medicine published a study in the American Journal of Endocannabinoid Medicine on medical cannabis’ impacts on anxiety and depression outcomes in fibromyalgia patients, in which 75 percent of patients saw a significant decrease in their self-reported illness severity. The study also reported reductions in depression and anxiety scores. Details on the study can be viewed on the American Journal of Endocannabinoids Website.

Mamedica, a medical cannabis clinic in the UK, says it will be launching its own branded cannabis products there soon, supplied by BC licensed producer Miracle Valley.

“We are delighted to announce that our partnership with Miracle Valley has cleared UK customs and marks the launch of our first own-branded strains of Canadian THC-dominant cannabis to the UK market,” said Mamedica CEO and founder Jon Robson in a press release.

Researchers at the University of Auckland in New Zealand say they have found a sustainable solution to help tackle the medicinal cannabis industry’s waste problem. In collaboration with medical cannabis producer Greenlab and support from the New Zealand government, the researchers are developing processes that will help protect the environment by transforming cannabis waste into valuable resources such as biofertilizer.

Greenlab sells white label cannabis products by Canada’s Valens Company and Mile High Labs UK, and also sells products in Australia and lists Valens and Canadian-based MediPharm Labs as “Extraction Affiliates” on their website. The company also signed an R&D agreement in 2021 with a Canadian cannabis company Purple Farm Genetics to develop unique cultivars through breeding.

Reminder: Some of Health Canada’s COVID-19-related “flexibilities” expire Sept 30

Written by Staff on August 31, 2023. Posted in Business, Cannabis News, Government.

Health Canada is reminding federal cannabis licence holders that some of its COVID-related “flexibilities” will end on September 30, while others will continue.

The federal health regulator originally sent a memo out in May of this year, informing licence holders it would be extending certain administration and enforcement adjustments beyond the previously set September 30, 2023 cut-off.

The federal health authority has previously extended some of these “flexibilities” on several occasions. These had originally been put in place early on in the pandemic to give licence holders more options for compliance given some COVID-19 related limitations.

The flexibilities that will remain in place beyond the September 30, 2023 deadline include:

1. Allowing licence holders to submit additional security clearance applications to fill key positions (responsible person, head of security, master grower, quality assurance person, and their alternates), provided that a rationale for the additional clearance is provided.

2. Activities that do not require physical possession of cannabis can be conducted off-site by licence holders, provided that all requirements of the Cannabis Act and its regulations are complied with, and records are kept and made available to Health Canada upon request. Specifically, the activities that can be conducted off-site are:

Quality Assurance

Investigating complaints received in respect of the quality of the cannabis, provided that a complete investigation can be conducted off-site.
Batch record approval by the quality assurance person from a remote location, provided the quality of the cannabis can be adequately assessed without physical possession of cannabis before it is made available.

Facilitating Sale of Cannabis

Answering phone calls
Registering medical patients
Helping individuals to navigate a website
Providing product information
Taking orders
Fulfilling recordkeeping and reporting requirements
Entering data and information to comply with monthly reporting requirements for the cannabis tracking system

3. Witnessing the on-site destruction of cannabis by licence holders can be done virtually (using a camera or another device), provided that a copy of the video is retained and is included in the destruction records required to be maintained under the Cannabis Regulations.

4. Permitting holders of an import or export permit to use different ports of entry/exit than those indicated on their permits, provided that all other requirements of the permit are respected.

5. In situations in which a security clearance holder is required to accompany cannabis for off-site antimicrobial treatment or destruction, permitting the security clearance holder to not enter an off-site facility that is authorized, as per the Cannabis Regulations, to possess and produce cannabis. This is permitted so long as the security clearance holder otherwise accompanies the cannabis before it enters and, if applicable, after it exits the off-site facility.

6. Permitting a packaging date on cannabis products that is plus/minus 4 days of the printed packaging date on the label, provided records of the actual packaging date are kept alongside other required packaging and labelling records as stated in Cannabis Regulations paragraphs 224(2)(b) and 225(2)(b), in the event of recalls. For more information on Packaging and Labelling requirements please consult the Packaging and Labelling Guide.

Health Canada also notes that licence holders will be given “ample advance notice” in regard to administration and enforcement of these provision changes.

Measures that WILL end September 30, 2023

Previously, Health Canada had allowed medical cannabis producers to accept verbal attestations from patients when filling out their registration application to become a client for medical purposes, rather than requiring patients to provide a signature when they are not able to do so. This allowance will not be extended beyond the September 30, 2023 date.

Health Canada also reminds stakeholders of their ongoing public consultation on potential amendments to the Cannabis Regulations, which is open until May 24, 2023.

Health Canada is seeking feedback on potential amendments to the Cannabis Regulations around licensing, security measures, production, packaging and labelling requirements, and record-keeping for licence holders.

In addition, in a 60-day notice of intent published on Friday, March 24, the federal health authority that oversees the cannabis file said it’s considering potential amendments to the Canadian Cannabis Regulations that would seek to streamline and clarify existing requirements, eliminate inefficiencies in the regulations, and reduce administrative and regulatory burdens where possible. Some of these potential amendments relate to some of the pandemic flexibilities.

The notice also points out that this proposal is separate from the current legislative review of the Cannabis Act, which is primarily focused on the societal impacts of cannabis legalization rather than a regulatory review.

Vancouver cannabis store avoids penalties after employee sells cannabis to minor

Written by David Brown on August 31, 2023. Posted in British Columbia, Business, Cannabis News, Other, Retail.

A cannabis retailer in BC has avoided penalties after an employee sold edibles to a minor in a sting operation.

A court has found that the company was not responsible for an employee failing to check the ID of a customer due to 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.

Here is the sequence of events: On March 26 of this year, as part of an inspection, two BC Liquor and Cannabis Inspectors entered a cannabis store in Vancouver, including one “minor agent” who was only 18 years old. The age of legal access to cannabis in BC is 19.

The “minor agent” then asked the employee if she could purchase edibles. The employee then directed the inspector to a display where the 18-year-old inspector selected what court records described as a package of Real Fruit Raspberry Chews containing THC 5mg per unit.

Although the staff member advised the minor agent of a 15 percent discount, they did not ask the minor agent what her age was, nor did the employee ask for any identification from the underage agent.

Once the two inspectors left the store with the purchased edibles, a third inspector entered the store, informed the staff member that he had sold cannabis to a minor, and asked for their Selling It Right certificate, which the staff member provided.

Two days later, on March 28, an inspector issued an electronic notice of non-compliance, which led to the issuance of a Notice of Enforcement Action (NOEA) dated April 4, 2023.

In court, the same inspector confirmed that the Licensee, Eggs Canna, had no history of non-compliance and that the contravention alleged in the NOEA was a first offence within a twelve-month period. Because of this, the Liquor and Cannabis Regulation Branch fine would be the lowest penalty as set out in Schedule 2 of the Regulation for a contravention of this nature, either $7,000 or a seven-day licence suspension.

Eggs Canna opted, if found responsible, for a seven-day suspension.

However, the court found that the owners of Eggs Canna had taken the necessary steps to train their employees to check for IDs as part of a three-day “New Hire Orientation” training program. Eggs Canna’s regional manager also confirmed that the employee who sold cannabis to a minor had been fired following the incident. Eggs Canna also had a policy in place at the time requiring employees to ask for the ID of anyone who appeared to be under the age of 40, and the store’s point of sale system included prompts to ask for ID.

Although the Liquor and Cannabis Regulation Branch argued that Eggs Canna was liable for the employee’s noncompliance, the court ruled otherwise, finding the store had a “strict culture of compliance prohibiting the sale of cannabis to minors.”

The representative for Eggs Canna told the court that she would like to see BC’s regulatory branch more willing to work with industry in a more collaborative manner, using discretion, and not penalizing operators “for missteps as the regulatory framework evolves.”

Eggs Canna has three locations, two in Vancouver and one in Kelowna, and is a legacy-era cannabis retailer.

Featured image of the interior of an Eggs Canna location.

Atlantic Cultivation purchases Tantalus brand, products

Written by David Brown on August 28, 2023. Posted in British Columbia, Business, Cannabis News, Government, Newfoundland and Labrador, Producers.

A cannabis producer in Newfoundland has completed a purchase of cannabis from a BC producer as it deals with restructuring.

Atlantic Cultivation in St. John’s, Newfoundland, a cannabis producer that also operates retail stores in Newfoundland, recently completed a purchase of cannabis from Tantalus Labs, located in British Columbia, as well as control of the Tantalus brand.

The sale includes the transfer of 70,853 units of packaged and unstamped inventory, including dried flower, pre-rolls, and infused pre-rolls, and 33,919 units of seeds, as well as some equipment like trimming machines and fans.

Tantalus products will soon be available in Atlantic Cultivation’s retail stores in Newfoundland and Labrador.

“This acquisition is founded upon our shared values, reflecting our unwavering commitment,” said Chris Crosbie, the founder and COO of Atlantic Cultivation, in a press release. He went on to say that the deal reflects the two companies’ shared values. “We persist in our mission to elevate cannabis quality and ensure its widespread accessibility.”

The move was part of a sale approved by the court following Tantalus Labs’ recent announcement that it had given notice to its creditors and would be pursuing bankruptcy.

Outside Tantalus Labs in Maple Ridge, BC

A court ruled in July that the sale could happen despite efforts by the CRA to destroy the products, as its excise licence was set to expire on July 10, 2023. Any sales of products would require an excise licence.

CRA told the court that on June 12, 2023, Tantalus had agreed to terms that would include seven monthly payments of $35,000 to begin June 30, in addition to its 11 ongoing payments for monthly excise taxes due, all pending notice of intent from Tantalus.

According to court records, the CRA agreement with Tantalus also stated that if the payments were not made on the agreed timeline, the CRA “may have to take legal action without further notice, including garnishing income, directing the sheriff to seize and sell assets, and use any other legal means to collect the amount due.”

Tantalus’ creditor, Sungrown Mortgage Corporation, had threatened to enforce its security against the property where Tantalus operates unless the latter agreed to several key points, including recognizing a debt of over $5.5 million owed to Sungrown as of June 28, 2023. Total debts for Tantalus were listed as over $14 million, including more than $4 million to the CRA. Tantalus’ total debts were listed as $14,023,083.82.

The property, including the 69,000 sq ft greenhouse with 38,000 sq/ft of growing space and a five-bedroom home, is currently listed for $5.56 million.

Tantalus said rushing the sale of its inventory of cannabis would force it to accept a lower price than if its excise licence was extended to allow it to pursue a more profitable deal.

Tantalus told the court it had approximately 345 kilograms of packaged inventory ready for sale, and 865 kilograms of bulk unpackaged cannabis inventory (trimmed and dried). The most recent court filings show that the remaining cannabis inventory as of July 25, 2023, consisted of 70,853 units of packaged and unstamped inventory, including dried flower, pre-rolls and infused pre-rolls, and 33,919 units of seeds.

A July filing shows Tantalus sold approximately 1,300 kilograms of bulk unpackaged cannabis inventory (trimmed and dried) to Atlantic. The sale proceeds were received on July 24, 2023, which court filings show to be for at least $1 million.

Public Documents available here.

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

June 28, 2023

2023’s tough year in cannabis

April 3, 2023

Paying the price in the cannabis supply chain

May 10, 2022

Week in Weed – August 26, 2023

Written by David Brown on August 26, 2023. Posted in Business, Cannabis News, Government.

At StratCann this week, we continued to cover the rather curious claims made by the AGLC in regard to their ruling that CBN is a minor intoxicating cannabinoid, we looked at a new Health Canada report on regulatory fees, how paperwork and security requirements are challenging for small producers, and new figures showing Canadian retail cannabis sales passed $420m in June 2023.

We also looked at the BC LBD’s latest quarterly report for cannabis sales, UBC launching a new Biology of Cannabis course, a new study once again showing high levels of pesticides in samples from the illicit market, and reports of three fires started at Canna Cabana locations in Ontario.

We also shared our feature on the new Elevate Cannabis Industry Expo in Toronto, September 12-15, an in-depth look at Cannabis taxation’s multiplier effect in our newest deep-dive, and Nova Scotia’s focus on supporting local growers.

In other cannabis news:

Health Canada is reminding licence holders of an online course: Cannabis Act and Regulations – Understanding Compliance and Enforcement. This self-paced course helps federal cannabis licence holders understand their obligations under the Cannabis Act and the Cannabis Regulations.

Health Canada’s quarterly financial report for the quarter ended June 30, 2023 shows increases in authorities available for spending in fiscal year 2023-24 were $6,975 million at the end of the first quarter as compared with $5,687 million at the end of the first quarter of 2022-23. This includes $131.1 million in funding for the renewal of the federal framework for the legalization and regulation of cannabis in Canada.

In an interview with Radio Canada, clinical psychologist Julia Santo says the legalization of cannabis has complicated, but also simplified, the exercise of her profession.

Village Farms announced the appointment of Orville Bovenschen as President of Pure Sunfarms effective immediately. Mandesh Dosanjh has stepped down from his role at Pure Sunfarms and will move into a strategic advisory position for a transitional 90-day period. Bovenschen joined Village Farms as VP of European Business Development and Operations and was later named COO of Pure Sunfarms. He also formerly held several senior roles in cannabis, during which, among other things, he oversaw innovation and new product launches.

BZAM announced its financial and operating results for the three and six months ended June 30, 2023 (“Q2 2023”). Quarterly gross revenues were $30 million during Q2 2023, up 89 percent from Q2 2022, and quarterly net revenues were $19.3 million, up 66% from the previous year.

Loss from operations for the quarter was $12.1M compared to $11.7M in Q1 2023. BZAM says the increase in loss was driven by lower gross profit, and partially offset by the decrease in SG&A quarter-over-quarter.

The company has sold its Midway, BC facility (completed August 4, 2023), expects the Maple Ridge, BC facility sale to be completed in September 2023, and has achieved EU-GMP certification for its Ancaster, ON facility.

New products:

Organigram announced it is launching new THCV gummies, CBG infused pre-rolls, and a high-potency 1×0.5g pre-roll under its Trailblazers brand.

Canopy announced several new pre rolls.

SNDL and Nova have again extended their date for the closing of their previously announced strategic partnership due to the continued review of the deal by a province. The two companies have previously had to push back the date for the same reason.

Lastly, AgriCann, which operates Craft Nurseries Canada Ltd., announced it will now be offering products through BC’s Direct Delivery program.

Cannabis sales continue to increase in Nova Scotia, with local products now more than 30% of sales

Written by Staff on August 25, 2023. Posted in Business, Cannabis News, Government, Nova Scotia.

Nova Scotia sold $29.1 million worth of cannabis in its first quarter of 2023, from April 1, 2023-July 2, 2023.

This represents a 6.7 percent increase in cannabis sales compared to the same period last year.

Nova Scotia cannabis sales led growth in local products sold through the Nova Scotia Liquor Corporation (NSLC), with a 22.2% increase in sales to $9.5 million.

Nova Scotia cannabis accounted for 32.6 percent of all cannabis sales in the province, which NSLC says is the largest seen to date. The province has said in the past that it is focussing on partnering with local cannabis producers to help fight the illicit market.

The price of cannabis sold in the province also continues to decline.

“This quarter, the average price of cannabis per gram was further reduced 2.1 percent to $6.02, compared to last year, as we work to impact illicit sales in the province,” said NSLC president and CEO Greg Hughes.

The average price per gram in Nova Scotia was $6.94 in their fiscal year-end report for 2021-2022.

The NSLC manages the sale of beverage alcohol and cannabis in Nova Scotia, with all of its profits going to help fund public services.

The NSLC released their year-end annual report earlier this year, with more than $100 million worth of cannabis sold.

Nova Scotia lists 49 authorized cannabis stores.

Canadian retail cannabis sales passed $420m in June 2023

August 23, 2023

Local products, more stores help increase cannabis sales in Nova Scotia

August 24, 2022

More than $100 million of cannabis sold in Nova Scotia last year

June 13, 2023

Elevate Cannabis Industry Expo is in Toronto, September 12-15

Written by Staff on August 24, 2023. Posted in Business, Cannabis News, Events, Ontario, Retail.

Elevate Cannabis Industry Expo is the first cannabis conference brought to you by Canadian retailers, delivering four full days of immersive training and education, a trade show floor, and plenty of networking mixers to build and strengthen the community.

The event takes place September 12-15 at the Mirage Banquet Hotel in Toronto.

Acknowledging the challenges that retailers, budtenders, and licensed producers are currently navigating, “the intent of this event is to bring transparency and collaboration to the forefront of our industry,” says Jazz Samra, Owner and Founder of VIP Media Group and Sativa Bliss Cannabis Boutique.

“We are providing a safe space to be vulnerable, ask questions and gain insight into some best practices from successful members of our industry, while surrounded by like-minded people – this is an invaluable opportunity to connect, elevate and grow, together.”

Samra says he decided to launch his own industry conference after feeling like other events weren’t quite meeting the industry’s needs from his perspective as a retailer.

“Some of the events I’ve attended have been so disappointing. They are totally disconnected from the needs of the industry. Conferences like this are the best way to bring the industry together and create opportunities. We need more education; we need more training. So I wanted to make a conference that is heavily focussed on education, with three days for education and training, and one day for the trade show.”

The conference’s theme is “We rise by lifting others,” and Samra says his mission is to empower retailers, budtenders, and LPs to elevate their businesses and thrive in the current and future climate. The event is designed to foster a collaborative environment, focusing on education, training, and inclusion to build a robust, cohesive, thriving industry here in Canada.

“We called it Elevate because we want to elevate the industry and create our own ecosystem where we’re supporting each other and keeping our money within the industry,” Samra adds. We’re from this industry and contributing to this industry, and this is how we all succeed, by elevating others.”

With a variety of registration options to choose from, the Elevate Expo includes:

Day 1: Store Managers/Owners Training Day
Day 2: Budtender Training Day (hosted by CanMar)
Day 3: Licensed Producers & Brand Rep Training
Day 4: Industry Trade Show + Additional Social Networking

For more information and registration, please visit elevatecannabisexpo.com.

BC cannabis sales increase as prices continue to drop

Written by Staff on August 23, 2023. Posted in British Columbia, Business, Cannabis News.

Cannabis sales continue to increase as prices continue to drop in BC, according to a new wholesale quarterly report for April, May, and June, 2023.

Sales of smaller SKU dried flower, such as 1-gram and 3.5-grams, declined overall, while larger formats, such as 7-gram, 14-gram, 28-gram, and 30-gram, increased. Sales of cannabis extracts, including the increasingly popular infused pre-roll category, saw the most significant year-over-year increase of 76.4 percent in total units sold and a 51.5% increase in year-over-year sales.

The BC LDB, which oversees wholesale cannabis sales and distribution in the province, saw more than thirty thousand kilograms of wholesale cannabis sales (30,655,160 grams), a more than 32 percent increase from the same period last year. Wholesale increased by nearly 16 percent to more than $127 million, while the number of stores in BC increased from 442 in the same period in 2022 to 487 at the end of June 2023.

The average price of cannabis also continued to decline in the province to a new low of $4.14, while the average cost of dried cannabis dropped to $3.40 a gram.

Total dollar sales of 1-gram, 3.5-gram, 7-gram, 14-gram, and 28-gram offerings of dried flower priced at more than $5 a gram all declined significantly compared to the same period last year. Eighths selling for $5 a gram or less increased, as did 7-gram and 14-gram SKUs. The 28-gram offerings priced at $3 a gram or less increased while all other prices declined.

Dollar sales of beverages increased by just over 20% year-over-year, while edibles sales increased by just 0.3 percent. Overall, dried flower sales were down 4.4 percent, and ingestible extracts like cannabis oils and capsules, driven by high sales of now-discontinued products like Jolts and Glitches, were up by 5.6 percent.

Inhalable extracts like vape pens, shatter, hash, and rosins, as well as infused pre-rolls, increased by a whopping 56.5 percent, pre rolls sales increased by 14.2 percent, while seeds sales dropped by 7.1 percent and sales of cannabis topicals decreased by 11.1 percent.

BC’s direct delivery program, which launched in August 2022—allowing some small-scale cannabis growers located in the province to ship products directly to retailers without going through the LDB’s central distribution warehouse—saw 779,775 grams sold for a total of $3,665,299 in sales.

The average price per gram sold through the direct delivery program was $4.70, or $4.02 for flower.

Canadian retail cannabis sales passed $420m in June 2023

Written by Staff on August 23, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Retail, Saskatchewan, Yukon.

Cannabis sales in Canada passed the 420 million mark again in June, following a slight decline after the Christmas shopping season.

Total retail sales of cannabis in June 2023 were over $426 million, up from $415 million in the previous month and a peak of $425 million in December 2022.

Like sales in many retail sectors, cannabis sales have dipped in the months following the Christmas shopping seasons over the last three years, before again building on an ongoing, upward trend.

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.

BC: 506 public and private stores as either open or “coming soon”
Alberta: 746
Saskatchewan: 177
Manitoba: 189, 109 of which are in Winnipeg
Ontario: 1,748 as authorized to open
Quebec: 98
New Brunswick: 25 public stores, plus six private stores and six farmgate stores
Nova Scotia: 49
PEI: 4
Newfoundland and Labrador: 45
Yukon: 6 cannabis stores
Nunavut: 1 licensed store
Northwest Territories: 6 brick-and-mortar locations, plus one online store

Regulatory fees, paperwork, security requirements more challenging for small producers

Written by David Brown on August 21, 2023. Posted in Business, Cannabis News, Government.

A new review of Health Canada’s cost recovery program for cannabis licence holders found the organization recovered less than half of the cost of administration of the cannabis licensing program in the first four years of legalization.

While Health Canada brought in just over $160 million in fees from 2018-2022, the cost of managing application screening fees, security screening fees, import/export fees, and annual regulatory fees was more than $430 million.

The review, shared this week by Health Canada, looked at the effectiveness of the cost recovery program. The program was a recommendation from the federal cannabis legalization and regulation task force and is common in other industries in Canada.

The review also notes that micro licence holders say they are more negatively impacted by regulatory fees, security requirements, and paperwork compared to larger standard licence holders.

The program has been increasing its ability to cover costs each year since legalization, with only 4.5 percent recovered in the first year of legalization, then jumping up to 45.8 percent in the second year, 26.5 percent in the third year, and 65.8 percent in the fourth.

Excluding 2018-2019 because it was only a partial fiscal year for the legal cannabis market, the Government’s cost recovery rate from 2019-2020 to 2021-2022 was 46.2 percent of total cannabis regulatory program costs.

Application screening fees brought in about $2.5 million, security screening fees more than $11 million, import/export fees were about $1.8 million, and the annual regulatory fees were nearly $145 million.

As of April 1, 2022, the application screening fee for standard cultivation, standard processing, and sale for medical purposes classes of licence applications was $3,527. The fee was discounted to $1,765 for micro-cultivation, micro-processing and nursery classes of licence applications.

As of April 1, 2022, the security clearance application fee was $1,781 for all relevant licence holders, which includes cultivation, processing, nursery and sales for medical purposes licences which are subject to fees. Industrial hemp licences, research and analytical testing licences, and manufacturers or importers of health products containing cannabis, do not pay fees.

As of April 1, 2022, the import/export permit fee was $658 for all relevant licence holders.

For the annual regulatory fee, standard cultivation, standard processing and sale for medical purposes classes of licences are subject to a rate of 2.3 percent of cannabis revenue or $23,000, whichever is higher.

For micro-cultivation, micro-processing and nursery licence holders, the rate is 1 percent of cannabis revenue up to $1 million (and 2.3 percent on any revenue over $1 million), or $2,500, whichever is higher. The ARF rate for micro and nursery class licences is discounted between $13,000 and $20,500 per year compared to the ARF rate for standard class licences.

The goal of the annual regulatory fee is to recover the total costs of administering the federal cannabis regulatory program, which is not covered by transactional fees.

In their survey about the cost recovery program, Health Canada sent out 642 questionnaires to licence holders between August 2021 and March 2022. They received 72 responses. Two responses were from nurseries, 27 were from micros, and 42 were from standard licence holders.

The report found that the regulatory fees, compliance, and federal excise taxes have a greater impact on smaller producers like micro licence holders, given the economies of scale.

Micros were more likely to report spending more than 10 percent of their costs on security requirements compared to standard licence holders, despite having fewer security requirements than standards.

The same was true for record-keeping, with more than one-quarter of micros (26.9 percent) reporting spending more than 10 percent of their total costs on the record-keeping and reporting, compared to only 13.5 percent of standard licence holders.

Analytical testing was another area where micros reported spending a more significant portion of their total costs compared to standard licence holders, with 28 percent of micro licence holders spending more than 10 percent of their total costs compared to just 5.1 percent for standard licence holders.

(Note: Due to the small respondent size of nursery licence holders, Health Canada has used the term “micro” to represent micro and nursery licence holders.)

Timelines for security clearances, which go through RCMP and have long been a sticking point for applicants, continue to be a problem as well, said survey respondents.

Licence holders said these fees were another barrier to profitability, although they were only a small portion of total operating costs. While one-fifth (20.5 percent) of standard licence holders said these fees represented over 10 percent of their total operating costs, almost twice as many micros (37.5 percent) reported the same.

Most respondents to the survey (63.9 percent) said the application screening fee was reasonably priced given the service provided, while 60 percent said the same for the import and export fee. Just under half (47.7 percent) said the services provided for the security screening fee were worth the cost, while only 41.8 percent said the annual regulatory fee was.

Although not specifically within the regulatory fee scheme, the survey also asked licensed holders about excise duties on cannabis products.

Just over half (54 percent) said the federal excise tax (which generally works out to $1 per gram of dried cannabis and $0.01 per mg of THC on extracts, edibles and topicals) represents less than 1 percent of their total costs. Another 30 percent said it represents more than 10 percent of their total operating costs. The report also notes that these fees are applied to all cannabis producers, regardless of their profitability. Newer producers may sell cannabis, but it can take several years to see any revenue from those sales.

Three-quarters of cannabis excise taxes go to the province, while Ottawa keeps one-quarter.

The cannabis excise tax is applied when producers sell cannabis into a provincial market or through the medical program. Cannabis producers have long expressed frustration with the high level of taxes on cannabis, which can be upwards of 30 percent of sales revenue for producers. Currently, wholesale prices for dried cannabis flower in Canada can range from less than $1 per gram to around $4 or $5.

Another issue, according to survey respondents, is getting into most provincial markets, arguing that provincial cannabis boards are favouring low-cost, high-THC products. Issues such as payment schedules, recall insurance, and return policies were also commonly noted challenges here, as was access to capital.

Health Canada says this review, along with the current legislative review of the Cannabis Act, will help inform the government as to the progress of legalization as it enters its fifth year.

AGLC says CBN policy based on federal guidelines, while Health Canada, provinces say otherwise

Written by David Brown on August 21, 2023. Posted in Alberta, Business, Cannabis News, Government, Producers, Products.

While Alberta’s AGLC maintains it has considered CBN within the THC limits on cannabis products like edibles, concentrates, or topicals, based on guidance from Health Canada, four other provincial cannabis agencies say they have received no such guidance.

A representative with Health Canada does confirm it is currently considering the development of a guidance document for licence holders concerning what it considers intoxicating cannabinoids other than delta-9-THC. They have not made any changes to the federal regulations at this time.

The information comes in the wake of Alberta’s provincial distributor, the AGLC, reportedly telling some cannabis producers that it was including CBN within the federal 10mg THC limit for edibles. The AGLC says this was based on guidance from Health Canada, but points to a guidance document Health Canada published earlier this year that made no reference to CBN, only delta-8-THC and delta-10-THC.

While the AGLC tells StratCann that the regulatory change came into effect in February of this year, representatives from four other provincial cannabis agencies—New Brunswick’s Cannabis NB, BC’s LDB, Ontario’s OCS, and Quebec’s SQDC—tell StratCann that they have not received any guidance or directive from Health Canada regarding minor cannabinoids in general, nor CBN specifically.

Cannabis NB:

“No, Health Canada has not provided guidance to Cannabis NB in regard to minor cannabinoids. Cannabis NB will continue to sell products that meet Health Canada guidelines and regulations,” writes Angela Bosse, a communications specialist with Cannabis NB.

BC LDB:

“The BC Liquor Distribution Branch (LDB) has not received any recent direction from Health Canada regarding minor cannabinoids and the THC limit for edibles,” says Kate Bliney, a communications officer with the LDB, who also notes that in December 2022, the LDB advised licensed producers that it would not be registering or replenishing any products that contain delta-8-THC.

“At this time, the LDB has not issued any directives regarding other minor cannabinoids,” she adds.

The SQDC:

“The SQDC has not received any regulatory change or directive on regulatory application regarding minor cannabinoids,” writes Fabrice Giguère, communications advisor and spokesman for the SQDC, in an email to StratCann.

“We currently don’t have a policy on the matter. We have no reason to believe that any of our suppliers’ edible products are not compliant with both the federal and provincial regulations relating to the limit of THC. Hence, we’re not planning on delisting or removing any edible products.”

“In Québec, the maximum THC content allowed for ready-to-eat products is set at 10mg per package and 5mg per distinguishable unit contained within the package. As for ready-to-drink products, the maximum THC content allowed is set at 5mg per distinct unit.”

The OCS:

“The OCS is unaware of any formal guidance provided by Health Canada to Licensed Producers (LPs) of cannabis relating to suggested limits on intoxicating cannabinoids,” Daffyd Roderick, Senior Director, Communications and Social Responsibility at the OCS. “Should Health Canada issue formal guidance, the OCS will work with its LPs to understand the impacts and to support their compliance, as appropriate.”

While the AGLC told StratCann via email last week that the Ontario Cannabis Store also implemented the same requirements in regard to CBN based on Health Canada’s recommendations earlier this year, the OCS notes the only change they made was in reference to delta8-THC, not CBN or any other minor cannabinoids.

“In December 2022, OCS made a proactive decision to begin limiting the sale of products containing delta-8 THC in response to health and safety concerns raised in the United States. At that time, the OCS communicated with both LPs and licensed cannabis retailers to notify them of this change, which was made out of an abundance of caution while the industry waited for formal guidance and direction from Health Canada on whether amendments are required to the Cannabis Act and its Regulations to address intoxicating cannabinoids and other synthetic derivatives not explicitly captured within the framework.

“OCS remains committed to enabling a vibrant cannabis marketplace that offers adult consumers access to innovative, legal cannabis products, transitioning consumers away from unregulated sources and promoting social responsibility in connection with cannabis. Clear and specific regulatory guidance from Health Canada on the matter of intoxicating cannabinoids is critical to achieving these objectives.”

While the AGLC claims the change came into effect in February 2023, several producers tell StratCann that the AGLC continued to accept orders of products that contained CBN and fell outside of the province’s interpretation of these products by having more than 10mg THC, with CBN included in that total.

AGLC points to a document they sent out in February as being the notice in question, but that document referred only to delta-8-THC and delta-10-THC, not CBN or any other minor cannabinoids.

The AGLC also says the policy applies to any cannabis product “containing any combination of natural or synthetic intoxicating cannabinoids that exceed the THC limits set out for edibles and extract products in the Cannabis Regulations (10mg & 1000mg, respectively, per retail pack), including products with CBN.”

The 1,000mg THC limit would apply to concentrates and topicals.

*From an AGLC memo sent to producers and retailers on February 15, 2023*

The Alberta cannabis agency also maintains that this rule about CBN was communicated to all LPs on Feb 15, 2023, when it says it requested LPs contact their respective AGLC category management specialists if they had any available products that were impacted by this policy.

“It recently came to our attention that there are certain SKUs which remain non-compliant with this requirement and so we have begun notifying affected LPs,” an AGLC comms person tells StratCann via email.

The AGLC says the list of cannabinoids it considers intoxicating is still changing and more could be added to the list in the future, which it says it is doing based on guidance from Health Canada.

“The cannabis plants make over 100 different minor/rare phytocannabinoids and there are also synthetic intoxicating cannabinoids created in lab,” continues AGLC’s communications team in an email to StratCann. “As such, the category of novel and minor intoxicating cannabinoids is still evolving. AGLC does not determine if a cannabinoid is intoxicating but instead follows guidance provided by Health Canada.

“The following are a few examples of intoxicating cannabinoids:

Natural: delta-8-tetrahydrocannabinol (delta-8-THC), delta-10-tetrahydrocannabinol (delta-10-THC), cannabinol (CBN), tetrahydrocannabivarin (THCV), hexahydrocannabinol (HHC) etc.
Synthetic cannabinoid derivatives (currently not allowed in Alberta): – tetrahydrocannabiphorol (THCP), tetrahydrocannabutol (THCB), tetrahydrocannabinol-O-acetate (THC-O) etc.

“As AGLC receives Health Canada guidance, it will continue to work with stakeholders to ensure LPs are aware of potential changes.”

A representative with Zelca, who was told by their category manager that one of their products was being immediately delisted, now says the AGLC has somewhat walked back their initial claim and will allow the sale of the in-stock Zelca product in question but will not be filling future orders.

Part of the confusion appears to be the inclusion of CBN as a “minor intoxicating cannabinoid” (MIC). While internal messaging shared with StratCann shows Health Canada is currently considering cannabinol (CBN) as a MIC, along with delta-8-THC, delta-10-THC, delta-6a-10a-THC, THC-O, HHC, THCV, THCP, and THCB, there is nothing official from Health Canada on the subject. However, the federal regulator has not issued any official regulator changes or guidelines regarding CBN to the provinces.

“Health Canada is also currently considering the development of a guidance document that would help licence holders understand the application of the Cannabis Act and its regulations on intoxicating cannabinoids other than delta-9-THC,” Anna Maddison, senior media relations advisor with Health Canada, tells StratCann via email.

“As with other topics and issues, Health Canada has regular discussions with licence holders and industry associations such as the Cannabis Council of Canada, National Cannabis Working Group of the Canadian Chamber of Commerce, and C-45 Quality Association. The topic of intoxicating cannabinoids other than delta-9-THC has been raised in these discussions.”

Week in Weed – August 19, 2023

Written by David Brown on August 19, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Government, International, Manitoba, New Brunswick, Newfoundland and Labrador, Ontario, Quebec, Saskatchewan.

This week at StratCann, we covered an ongoing story about a decision made by the AGLC to include CBN within the total allowable THC in a cannabis product (more to come on this soon), the issuance of the first formal cannabis farmgate licence in BC, and looked at Ontario projecting $463 million in revenue from cannabis sales, taxes for 2023-24.

We also covered Canopy Growth entering into an agreement for the sale of its Hershey Drive facility in Smiths Falls, the Australian Greens tabling a bill to legalize cannabis, a new study showing legal, medical cannabis lowers individual market health insurance premiums in the US, and reported on a large raid in Ontario of an unlicensed facility.

Elsewhere in cannabis news:

CBC covered a new private cannabis store in New Brunswick, McCannabis in Salisbury. New Brunswick currently lists six private cannabis stores, six farmgate stores, and 26 Cannabis NB locations.

In Newfoundland, Taylor Giovannini, co-owner of Oceanic Releaf, is making news again along with Atlantic Cultivation’s CEO Chris Crosbie as they discuss cannabis excise taxes and the absurd $1 per gram federal rate, 75 percent of which goes back to the province.

The Prince George Citizen featured the region’s newly-licensed micro cultivator Kush Mountain Craft Cannabis. The owners were the recipients of a $150,000 loan from Community Futures to assist in the $3 million start-up.

Winnipeg Free Press covered the impending closure of the Cronos cannabinoid factory in Winnipeg. The 84,000-square-foot facility was purpose-built for Apotex in 1990 at a cost of about $50 million. Cronos Group Inc. bought the former Apotex Fermentation plant in 2019 for an undisclosed sum, partnering with Boston-based Ginkgo Bioworks Inc. to produce cultured cannabinoids.

The first year of enhanced entrance security at the Saskatoon Ex resulted in “a tremendous amount of marijuana” being seized.

Tilray announced it is taking on full ownership of the cannabis beverage company it ran with Molson Coors Canada, Truss, which is behind the XMG, Little Victory, Mollo, Veryvell, House of Terpenes, and Bedfellows Liquid Arts brands.

The New York Times ran a feature on Smiths Falls and the sales of the old Hershey Factory from Canopy back to Hershey. Since April, Canopy has sold seven of its buildings across the country, the latest being the plant at 1 Hershey Drive in Smiths Falls.

Finance & Markets

Auxly Cannabis Group Inc. shared their Q2 2023 financial report, with total net revenues of $22 million, a decrease of $2 million or eight percent from the previous quarter and a decrease of $5.3 million or 20 percent compared to the same period in 2022. The company says it still managed to retain the #5 LP position in Canada with a 5.2 percent market share and continued to improve sales in the pre-roll segment, with Back Forty Wedding Pie growing to become the #1 non-infused pre-roll SKU nationally in the quarter.

Approximately 85 percent of cannabis sales during the period originated from sales to British Columbia, Alberta, and Ontario. Net losses for the three months ended June 30, 2023, were $12.9 million.

Organigram announced a deal to supply 4C LABS cannabis for distribution to medical cannabis patients in the UK. Under the terms of the agreement, OGI expects to supply approximately 600 kilograms. The Canadian producer now has international supply agreements in place with Israel, Australia, Germany, and the United Kingdom.

MediPharm Labs Corp. announced financial results for its second quarter, which ended June 30, 2023. The company completed its first commercial delivery to the United States. The delivery consisted of clinical trial material for a fully funded large-scale phase two clinical trial.

MediPharm’s Canadian medical cannabis revenue for Q2 2023 was $3.8M versus $0.2M in Q2 2022 and $0.6M in Q1 2023, driven by the integration of the VIVO medical channel, Canna Farms. International Medical revenue in Q2 2023 was $3 million. The growth of International Medical was largely driven by the integration of VIVO’s Australian business, Beacon Medical Australia.

Revenue for Q2 2023 of $9.6 million increased approximately 120% versus Q2 2022 and 64% versus Q1 2023.

High Tide announced a new store in Oshawa, Ontario, their 51st in Ontario. High Tide’s Canna Cabana now has 155 locations across Canada.

Delta 9 Cannabis released its Q2 2023 report. The cannabis producer, retailer, and distributor had net revenue of $18.3 million for the second quarter of 2023, an increase of 4% from $17.5 million for the same quarter last year. Gross profit was $5.2 million, an increase of 12% from $4.6 million for the same quarter the previous year. Loss from operations was $3.5 million for the second quarter of 2023 versus a loss from operations of $3.4 million for the same quarter last year. The release also included earnings reports from Q1.

Rubicon Organics shared their Q2 2023 financial results. The certified organic producer reported net revenue of $11.3 million (28 percent increase) and $20.1 million (44 percent increase) for the three and six months ended June 30, 2023.

This quarter included the introduction of three new flavours of live rosin edibles under its brand, 1964 Supply Co.

SNDL released its Q2 2023 report. Revenue for its cannabis retail locations was $71.9 million for the second quarter of 2023, with a $17.8 gross margin and $2.3 million in earnings. The report also notes its “data licensing program is driving improved profitability and supplier relationships.”

SNDLs cannabis production saw net revenue of $20.9 million, a gross margin of -$1.2 million and a loss of $14 million. After recently “rightsizing” its Alberta facility, SNDL has now centralized most manufacturing activities and consolidated processing, labelling, and excising at its Kelowna, BC facilities.

SNDL’s business is operated and reported in four segments: Liquor Retail, Cannabis Retail, Cannabis Operations, and Investments. With its ownership interest in Nova, SNDL is Canada’s largest private-sector cannabis retailer, operating 196 locations under its four retail banners: Value Buds, Spiritleaf, Superette, and Firesale Cannabis.

As of August 11, 2023, the Spiritleaf store count is 98 (21 corporate stores and 77 franchise stores), the Value Buds store count is 91 corporate stores, the Superette store count is five corporate stores, and the Firesale store count is two corporate stores.

Fire & Flower announced that Fika Cannabis was the winner of an auction for aspects of the cannabis retail company and brand. The deal still needs to be completed, and more details are expected.

MTL Cannabis received final approval to list its common shares on the Canadian Securities Exchange under the trading symbol “MTLC” and to commence trading at the opening on Monday, August 21, 2023.

MTL Cannabis is the parent company of Montréal Medical Cannabis Inc., Abba Medix Corp., IsoCanMed Inc., and Canada House Clinics Inc.

International Cannabis News

Police in Trinidad say they seized 6.48 kg of cannabis illegally imported from Canada.

Two BC cannabis companies in conflict over payment

Written by David Brown on August 19, 2023. Posted in British Columbia, Business, Cannabis News.

Two BC cannabis companies are at odds over payment for a large quantity of cannabis, according to two filings in BC court this past week.

In a filing from August 10, cannabis grower Okanna Craft said that Joint Venture Craft Cannabis (JVCC), a cannabis processor, owes it payment for 76 kg of cannabis based on a purchase price of $3.41 per gram.

In their statement of defence, JVCC denies the claims and says their agreement with Okanna Craft was based on consignment, not a set purchase price, and that it had difficulty selling cannabis for Okanna due to issues with quality.

Okanna Craft is located in Kelowna and has two micro cultivation licences, a micro processing licence, and a nursery licence. JVCC is located in Salmon Arm and is a processor that packages and processes cannabis and brings it to the provincial retail markets in Canada on behalf of growers.

The Notice of Civil Claim from Okanna Craft alleges that the two companies entered an agreement in 2021 that would allow JVCC to process, package, and market Okanna Craft’s cannabis to the provincial retail markets, at which point Okanna would receive payment.

Okanna further alleges that it has made 13 separate shipments of cannabis to JVCC since August 2021, each sold at different prices, for a total of 167,295 grams. The company says JVCC has paid Okanna Craft for 75,975 grams and argues JVCC still has 64,629 grams of unsold cannabis in their processing facility in Salmon Arm.

Okanna also alleges that JVCC refuses to pay them the agreed-upon price of $3.41 per gram, is charging additional fees for marketing they say was not part of the original agreement, and has failed to sell their cannabis in a timely manner.

In their statement of defence, JVCC denies Okanna’s claims and argues that Okanna Craft maintained ownership of all cannabis in its possession through a consignment deal, whereby the grower would be paid once cannabis was successfully sold. JVCC denies that it had an agreement to purchase the cannabis outright and maintains that the agreement for payment took into account “various deductions for costs and expenses, as well as other factors such as the retail price for the cannabis.”

In addition, JVCC alleges that it applied various price deductions for these fees with each batch Okanna Craft delivered to be processed, and the cultivator continued to deliver subsequent batches of new cannabis to be processed.

The statement of defence goes on to argue that JVCC had a written agreement that Okanna Craft did not guarantee a specific price, and that the price per gram for its cannabis “may vary based on demand and the offers to purchase from wholesalers” and was “exclusive of transportation costs, customs, tariffs and duties, insurance, and any other similar financial contributions or obligations relating to the sale” of the cannabis, as well as costs related to packing, crating and boxing, and that the agreed purchase price would be for salable product only.”

JVCC argues that the cannabis it received from Okanna was of poor quality and it possesses a “small amount” of Okanna’s cannabis that it was unable to sell, which it claims Okanna has refused to take back.

None of these allegations have been proven in court.

Okanna Craft on their long transition into the legal rec market

March 21, 2021

Canopy Growth enters into an agreement for the sale of Hershey Drive facility in Smiths Falls

Written by Staff on August 17, 2023. Posted in Business, Cannabis News, Ontario, Producers, Quebec.

Canopy Growth says it has entered into an agreement to sell its Hershey Drive facility in Smiths Falls, Ontario, back to Hershey.

The cannabis producer famously purchased and took over the facility when licensed in 2013.

Earlier this year, the company announced it was laying off 800 workers and would move to an “asset-light model,” moving cannabis flower production from Smiths Falls to its Mirabel, Quebec facility. Rumours have been circulating for months that Hershey would be repurchasing the factory.

The facility will be sold to Hershey Canada, Inc. for approximately $53 million.

“We are pleased to have reached an agreement with Hershey on this important sale. This is the latest milestone in our focused effort to reduce costs and further enhance our balance sheet,” said David Klein, Chief Executive Officer of Canopy Growth. “Each of the steps we have taken as part of our transformation to a simplified, asset-light operating model supports our ability to deliver in-demand products from brands our customers love, with greater agility and less execution risk. Once again, we have demonstrated Canopy Growth’s ability to achieve significant organizational and operational change to position the Company for future growth in the Canadian market.”

“Our intent to purchase the Hershey Drive property in Smiths Falls is another example of the strategic investments we’re making in our supply chain network and our Canadian operations to support growth,” added Jason Reiman, Chief Supply Chain Officer, The Hershey Company.

Once the sale is complete, the Smiths Falls facility will be the seventh property sold by Canopy Growth for an aggregate gross of approximately $155 million since April 1, 2023. Canopy says the proceeds of the sale will pay down their senior secured credit facility.

The sale of the facility follows the centralization of post-harvest manufacturing at the Company’s former beverage facility in Smiths Falls and the consolidation of all flower cultivation in the Company’s purpose-built sites in Kincardine, Ontario, and Kelowna, British Columbia.

Canopy’s stock fell below $1 a share earlier this year, causing it to be delisted from the TSX.

Ontario projects $463 million in revenue from cannabis sales, taxes for 2023-24

Written by Staff on August 15, 2023. Posted in Business, Cannabis News, Government, Ontario.

The Ontario government expects to bring in $269 million from its portion of the federal cannabis excise duty for the 2023-24 fiscal year.

The provincial government also projects another $194 million in revenue from the Ontario Cannabis Store, out of more than $204 billion in total revenue for the province projected for the current fiscal year.

These figures show an increase from the $253 million the province brought in from their portion of federal cannabis taxes in the 2022-23 fiscal year, $215 million in the year prior, and $106 million in the 2020-21 fiscal year.

This compares to the $617 million the province projects to bring in from tax revenue from the sales of beer, wine, and spirits in the province and $840 million from the tobacco tax in 2023-24.

The Ontario Cannabis Store brought in $67 million in revenue in 2020-21, $186 million in 2021-22, and $225 million in 2022-23.

Ontario, like most provinces, receives 75 percent of the $1 per gram excise tax charged at the federal level. Only Manitoba opted out of the initial tax-sharing agreement, although the provincial government is currently in talks with the federal government to take part in that.

Earlier this year, the Ontario Cannabis Store announced it would lower its margins and move to a fixed-price model. The change comes as part of a commitment to improving process transparency in its 2022-2025 Business plan, which includes a review of the OCS pricing structure. With this new change, the OCS projects that margin reductions will contribute approximately $35 million to the marketplace in 2023–24.

Ontario sold more than 63 million grams of legal cannabis in the first three months of 2022, representing over $405 million in sales. This data is from the most recent financial reports from the OCS since it stopped issuing quarterly reports. The next report is expected later this year.

Ontario sold more than $1.5 billion of cannabis in fiscal year 2021 ($405,000,000 in Q4, $398,700,000 in Q3, $393,900,000 in Q2 and $307,000,000 in Q1).

*Ontario Portion of the Federal Cannabis Excise Duty*

Legal medical cannabis lowers individual market health insurance premiums in US

Written by David Brown on August 14, 2023. Posted in Business, Cannabis News, Government, Research.

US States that have legalized medical cannabis see a significant decrease in health insurance premiums compared to states that keep it illegal. Legalizing cannabis nationwide could save Americans more than $16 billion in health insurance costs.

A new research paper in the US that looked at health insurance premiums in various states found that individual market health insurance premiums decreased after the implementation of medical cannabis laws.

Following the legalization of cannabis for medical purposes, these states saw a small reduction in premiums in the first five years, followed by a reduction in year six of about $500. The biggest effects were not immediate.

“We find a statistically significant decrease in health insurance premiums starting in year seven post-MCLs [medical cannabis laws], and this downward trend is persistent for following years.”

Researchers found “statistically significant” decreases in health insurance premiums starting seven years after medical cannabis became legal in a particular state, with the downward trend continuing in the following years.

In the seventh, eighth, and ninth year following the implementation of a legal medical cannabis market, researchers found a reduction of health premiums of about US$1,500-$1,700 per year.

The paper’s authors speculate that the savings increase over time as more people begin using cannabis for medical purposes, and any shifts from more conventional medications to cannabis may happen over time with a healthcare provider.

Due to how medical insurance in the US operates, by collecting premiums from all enrollees and paying expenses for the subset of enrollees who need medical treatment, researchers also note that these lower premiums are enjoyed not just by medical cannabis users but by all in states with legal medical cannabis access. In other words, if the costs of using the medical system go down, everyone pays less.

States with access to medical cannabis saw rates of use of the medical system decline. This is also because these health insurance premiums do not cover cannabis used for medical purposes. As individuals who may have otherwise used medication that would have been at least partially covered by health insurance are instead using cannabis, the cost to the system itself goes down, benefitting all who pay in.

However, these effects take time. Researchers found decreases in health insurance premiums starting seven years after medical cannabis became legal in a particular state, but the downward trend continued in the following years.

“We find a statistically significant decrease in health insurance premiums starting in year seven post-MCLs, and this downward trend is persistent for following years,” the paper notes.

“Our results are important as health care expenses, including health insurance premiums, have been growing faster than inflation and comprise an increasing share of a household’s budget.”

Researchers used figures from Arizona, Connecticut, and New Jersey as these are the only states with seven or more years of post-implementation data. The study also excluded states like California, Washington, Oregon, and Colorado that legalized medical cannabis before 2010.

To better understand how these savings could benefit the health insurance sector moving forward, researchers looked at 18 US states that had legalized medical cannabis between 2010-2021 that were not included in the survey results because the systems there are not yet seven years old.

If these states have a similar experience to those observed in this study (Arizona, Connecticut, and New Jersey), researchers estimate a similar savings of about $1,600 per person annually, an annual health insurance premium savings of approximately $9.6 billion.

The paper also estimates that if medical cannabis laws (MCLs) were enacted nationally, the US could have a savings of at least $16.8 billion.

Some Winnipeg cannabis retailers concerned with province allowing sales in gas stations

Written by David Brown on August 11, 2023. Posted in Business, Cannabis News, Government, Manitoba, Retail.

Some retailers in Winnipeg say they are frustrated by the province issuing a retail cannabis licence to a gas station/convenience store, something they worry could be a new trend.

The province maintains that such licences—the retail cannabis controlled-access store licence—have been available since 2018, with the first issued in December 2020. Eight such locations are now licensed.

Melanie Bekevich, the owner of Mistik Cannabis in Winnipeg, says she only heard about a new cannabis “C store” in Winnipeg Beach after a friend recently visited the store for gas and overheard someone buying pre-rolls at the gas station counter.

Although she says she’s aware of other C-Stores in Manitoba that hold a ‘store within store’ retail cannabis space, the ability for a convenience store owner to sell cannabis struck her as out of line with the province’s own rules and mandate.

“I am shocked by it,” says Bekevich. I can understand in small, rural communities… but there should be some controls, especially if they’re saying they’re going to keep it out of the hands of youth, but then they’re directly exposing youth to the transaction.

“We’re also required to make a significantly bigger investment,” she adds. “I’m a bit confused by what is happening in the province.”

Lisa Hansen, a communications analyst with the Liquor, Gaming and Cannabis Authority of Manitoba (LGCA), the regulatory agency that licences retail cannabis stores in the province, says all licensed cannabis retailers, regardless of licence type, cannot sell cannabis to anyone younger than 19 years old, and their staff must ask customers who appear young for ID to verify their age.

“All staff who sell cannabis and store managers must successfully complete the LGCA’s Smart Choices Cannabis Retail Certification training before starting work in a store,” she notes. “This training focuses on legal and safety obligations such as checking ID and not selling to minors or intoxicated people.”

Sharon Clark, the manager at Big Buds Cannabis Sales Ltd, also in Winnipeg, says the government is contradicting their own rules when it comes to protecting kids because there are no controls in place to prevent young people from seeing and hearing transactions involving cannabis—something not allowed in standard retail cannabis stores.

“They are knowingly putting youth in a situation where they are going to be watching cannabis transactions taking place. This is in direct contravention of their own guidelines and rules. That is inherently wrong because part of their mandate is to protect youth, and now they’re directly exposing youth by actively pursuing this licensing tier.”

Another double standard, according to Clark, is that the cost requirement for controlled-access stores is much less than for stores like hers, which she says can spend hundreds of thousands of dollars meeting strict provincial security standards.

“They don’t need to make a significant investment that we did and other stores did. They just need a locking drawer and a safe place for the cannabis.”

StratCann reached out to the DOMO – Interlake C-Store in Winnipeg Beach for comment but did not hear back by press time. An employee says the store began selling cannabis in late July.

Organigram’s application for judicial review of edible extracts ruling approved

Written by Staff on August 9, 2023. Posted in Business, Cannabis News, Government, Products.

A judge has approved Organigram’s application for judicial review of Health Canada’s decision that Jolts “ingestible extracts” were in contravention of the federal Cannabis Regulations.

The judgement, posted on August 8, states that Organigram’s application for judicial review has been granted. The matter will now be sent back to Health Canada for redetermination, taking the judge’s reasons into consideration.

However, when all of the circumstances of the case are taken into account… I find that there was a breach of procedural fairness arising from inadequate notice of Health Canada’s reliance on a factor contained in the Compliance Promotion Statement and, as a result, that Organigram was not afforded a meaningful opportunity to respond to that concern and thereby prejudiced in its ability to respond to that concern.
Judge Cecily Y. Strickland, Organigram Inc. v. Minister of Health et al.

Organigram was seeking a judicial review following Health Canada’s move to end the production and sale of so-called “edible extracts” earlier this year. The company is one of a handful producing products in this category that were packaged exceeding the federal limit of 10mg THC per package for edibles. These were generally in the form of lozenges and gummies.

The company had hoped to see Health Canada’s order quashed or set aside, instead requiring Health Canada to determine that its Jolts lozenges are a cannabis extract and do not constitute edible cannabis under the Regulations.

Organigram and others who have made these products contend they are compliant products.

In early January 2023, Health Canada sent a notice to producers highlighting their concerns with these products. Companies were told they had until May 31, 2023, to cease sales and distribution.

Health Canada issued a public warning about these products on March 3.

“Some edible cannabis products were found to contain more than the allowable limit of 10mg of THC per package,” notes the press release. “These non-compliant products in product formats similar to gummies and other confectionery products, such as hard candy, have been incorrectly marketed and sold as cannabis extracts.”

The federal health authority also issued a new online document providing clarity on the issue of the classification of edible cannabis. The document, in part, notes that a cannabis edible is defined as any article manufactured, sold, or represented for use as food or drink for human beings, chewing gum, or any ingredient that may be mixed with food for any purpose.

Although Organigram had argued that Health Canada’s decision that their edible or “ingestible” extract products weren’t compliant was incorrect, the judge disagreed. Instead, the judge ruled that the federal health agency’s process to reach that conclusion was not fair and deserved further analysis.

The judge ruled that the unfairness of Health Canada’s decision on the ingestible extracts was, in part, due to it including additional factors in its decision-making process that Ogranigram was not provided an opportunity to respond to.

For example, court records show that Health Canada introduced a “fourth factor” in the decision that was omitted from the Notice of Non-Compliance that it issued to Organigram. The judge argued this factor—the product’s sensory and physical characteristics—is not found in Health Canada’s Guidance Document because Organigram was not given an opportunity to respond to Health Canada’s objection to the Jolts size and shape or suitability for sublingual and buccal absorption.

Organigram was not afforded a meaningful opportunity to respond to that concern and thereby prejudiced in its ability to respond to that concern,” wrote the judge in their analysis.

“Given my finding that Health Canada breached the duty of procedural fairness by relying on a product classification factor found only in the Compliance Promotion Statement, which was published after the decision was issued, I need not address Organigram’s further procedural fairness submission based on delay, nor the submissions as to the reasonableness of the decision,” concluded judge Cecily Y. Strickland.

“I am satisfied that a lower level of procedural fairness was owed to Organigram and that several opportunities to respond were provided to it throughout the decision-making process, with which Organigram engaged,” the judge also wrote in their ruling. “However, when all of the circumstances of the case are taken into account… I find that there was a breach of procedural fairness arising from inadequate notice of Health Canada’s reliance on a factor contained in the Compliance Promotion Statement and, as a result, that Organigram was not afforded a meaningful opportunity to respond to that concern and thereby prejudiced in its ability to respond to that concern.”

The case will now go back to Health Canada for their opportunity to respond.

Health Canada initially issued warnings to some producers or manufacturers of so-called “edible extracts” in January, warning them they were not compliant with federal regulations. One producer, Vortex Cannabis, confirmed they received an order from Health Canada to stop sales of their Full Spectrum THC Jelly Cubes due to these being inaccurately classified as extracts rather than edibles.

The Vortex Jelly Cubes came in 10mg THC squares, sold with multiple units per pack.

Several other companies make similar products, including Indiva, Organigram, Loosh Brands, and Aurora Cannabis.

The court documents also reference the Vortex Jelly Cubes, which caused one woman to be taken to hospital where she was told she had overdosed on cannabis after consuming several of the product, assuming they contained only 10mg THC for the entire container, rather than 100mg THC.

Cronos closing cannabis fermentation facility in Winnipeg, Manitoba

Written by Staff on August 8, 2023. Posted in Business, Cannabis News, Manitoba, Producers.

Cronos Group says it will be winding down its cannabinoid “fermentation facility” in Winnipeg, Manitoba, with the intent to list the facility for sale.

As part of its second quarter results for 2023, the Canadian-based cannabis company says it will be closing a facility in Manitoba used to produce “cultured cannabinoids.”

The facility, operated in partnership with hands-on expertise from its partner, Ginkgo Biologics, has been used to engineer strains of yeast that can produce cannabinoids through a fermentation process, rather than through cultivation and then extraction of cannabis.

This process is accomplished, in part, by transferring the DNA sequences for cannabinoid production into organisms like yeast and E. coli. The cultured cannabinoids are identical to those extracted from the plant using traditional methods.

Ginkgo’s website says its cannabinoid program has run eight million tests of more than 10,000 engineered strains in the course of just two years. “These efforts yielded several strains with industry-relevant titers for multiple rare cannabinoid compounds, the first of which is beginning commercial scale production.”

In August 2021, Ginkgo and Cronos announced the achievement of its first “equity milestone” for cannabigerolic acid (CBGA). Then in October 2021, Cronos launched its first cultured CBG product. In 2022, the two companies announced their third equity milestone for tetrahydrocannabivarin (THCV).

Cronos utilized the novel cannabinoids in its gummies sold under the Spinach brand, which it says is the number one edible in Canada.

In 2021, it recorded impairment charges of $4.8 million related to its Ginkgo exclusive licenses for CBGA and CBGVA “for the difference between the fair value of the licenses and the consideration paid.”

Another company, Willow Biosciences, has also produced CBG through fermentation.

In the same quarterly report, Cronos said it had successfully exited the US hemp-derived cannabinoid market, a plan first announced earlier this year in order to “streamline” operations. Cronos first entered the sector in a $300 million (US) deal in 2018 when it purchased Lord Jones, a CBD brand it says it plans to now bring to the Canadian market by Q4 2023.

The company reported net revenue and gross profit both down in Q2 2023 compared to the previous year, which it blames on lower sales in Israel, as well as “an adverse price/mix shift in cannabis flower sales in Canada,” among other issues like the weakening Canadian and Israeli dollars.

Despite these lower sales in Israel, Cronos has also recently signed an agreement with one of the leading distributors of medical cannabis in Germany, which the company hopes to begin exporting to soon under the Peace Natural Brand. Peace Naturals was one of the first federally-licensed commercial medical cannabis producers in Canada. Cronos purchased it in 2016.

In 2022, it announced the closure of the original Peace Naturals facility, but partially reversed that decision in early 2023, leaving parts of the ”campus” open.

Featured image via ginkgobioworks.com

Changes to OCS privacy policy could mean customer data stored outside of Canada

Written by David Brown on August 7, 2023. Posted in Business, Cannabis News, Government, Newfoundland and Labrador, Ontario, Retail.

The Ontario Cannabis Store is making a change to its privacy policy that could potentially result in customers’ personal information being stored outside of Canada.

Effective August 17, 2023, the OCS says it is making this change in privacy policy in response to consumer demands. To meet those demands, it says it will consider new technology platforms, including those that may store their data outside of Canada.

In a public post, the online cannabis retailer says that any new technology platforms they may adopt “will maintain a high level of security and will be offered by service providers that are required to adhere to laws that protect personal information.”

“Any new technology platforms that OCS may adopt will maintain a high level of security and will be offered by service providers that are required to adhere to laws that protect personal information.”
Amanda Winton, Ontario Cannabis Store

A representative with the OCS confirms with StratCann that under this change, customer personal information may be stored in countries such as the United States. Until then, OCS assures the public that all personal information collected from customers before the policy change will continue to be stored in Canada.

“Since legalization, our customers have asked us to improve their online shopping experience on OCS.ca,” says Amanda Winton, Manager of Communications and Strategic Engagement with the OCS. “Assessing new technology platforms will allow the OCS to make enhancements to OCS.ca informed by customer feedback that supports continuous improvement and to keep up with industry best practices.

“Any new technology platforms that OCS may adopt will maintain a high level of security and will be offered by service providers that are required to adhere to laws that protect personal information,” she adds.

“OCS will continue to meet legal, privacy and security requirements and standards. This is done by employing organizational, contractual, technical and physical security measures to protect personal information. This includes ensuring that each country where data may be securely stored is assessed and the appropriate data security measures are in place.”

The OCS has previously affirmed their commitment to keeping such data in Canada. Its privacy policy currently includes the statement: “All personal information collected from customers before the policy change will continue to be stored in Canada.”

In 2018, Canada’s Privacy Commissioner cautioned consumers against purchasing from retailers who stored their personal data outside the country.

Shopify, the eCommerce platform currently providing backend services for the OCS online cannabis store, also provides these services for several other provincial online stores. In 2022, Cannabis N.L. informed consumers who bought cannabis from Newfoundland’s online cannabis store that Shopify, which hosts the website, would be transferring consumer data from servers in Canada to servers in the United States as of July 31, 2022.

Shopify did not respond to a request for comment for this article.

“The personal information of cannabis users is … very sensitive. For example, some countries may deny entry to individuals if they know they have purchased cannabis, even lawfully,” noted a report from the Privacy Commissioner in 2018.

Newfoundland and Labrador Liquor Corporation chief marketing officer Peter Murphy told CBC that the company was notified of the transfer by Shopify in 2021.

Brenda McPhail, the acting executive director, master of public policy in digital society at McMaster University and the former director of privacy, technology and surveillance with the Canadian Civil Liberties Association, says there is always some risk when a company stores information outside of Canada and that the risks increase when the information connects an individual to the purchase of a product that is still illegal in other jurisdictions.

“The data will be subject to the laws of that jurisdiction and it’s worth noting that many countries, including the US, don’t extend the same (or sometimes any) privacy protections to non-citizens, so even if there is a data protection law in that jurisdiction, it may or may not help a Canadian whose personal information about cannabis purchases is stored there.

“The promise on the Ontario Cannabis Store website that data will only be stored in countries with data protection laws is insufficient without additional assurance that those laws will protect Canadians’ data to the standard of Canadian law,” she adds. “For people to feel safer about this move, the Cannabis Store should at a minimum be transparent about where data will be stored, what laws will apply, and what contractual provisions they have negotiated (and there should be some) to provide additional protection for Canadian’s sensitive data in a foreign jurisdiction.

“It’s worth asking why they seem to have decided that ‘an improved online shopping experience’ cannot be created using a platform that has servers in Canada, or better yet, by a Canadian or even an Ontarian platform, rather than subjecting customer’s information about cannabis purchases to any level of risk.”
Brenda McPhail, McMaster University

McPhail says consumers should share any concerns they have with the OCS, or any other retailer before a deal is signed, as well as shopping in person and using cash.

“It’s worth asking why they seem to have decided that “an improved online shopping experience” cannot be created using a platform that has servers in Canada, or better yet, by a Canadian or even an Ontarian platform, rather than subjecting customer’s information about cannabis purchases to any level of risk.”

Sam Andrey, the managing director at The Dais, a public policy and leadership institute at Toronto Metropolitan University also questions why the changes require using a service outside of Canada, but says customers of the OCS online store will have little recourse.

“It isn’t clear why this is necessary—there are a variety of e-commerce solutions that allow customer data to be retained within Canada. Short of advocating for stronger privacy laws, there is little that OCS customers can do in this situation.”

“Unfortunately Ontario privacy law does not require users to consent to their personal data being transferred outside of Canada, and there are not meaningfully enforced limits on the transfer of data to jurisdictions with insufficient protection against unauthorized access or surveillance.”

Andrey says that in a survey that our team conducted in 2020, 86 percent of Canadians supported requirements to keep Canadians’ data within Canada.

“Only BC and Nova Scotia require public organizations to keep personal data stored in Canada,” he adds.

Week in Weed – August 5, 2023

Written by Staff on August 5, 2023. Posted in Business, Cannabis News, Government, International.

It’s been another busy, news-filled week at StratCann, where we ran a piece looking at CannStandard’s Dried Flower Price Outline 2021-2023.

We also covered: UBC and Aurora Cannabis looking at developing better outdoor cultivars for Canada; Metro Vancouver rethinking regulation of cannabis VOCs; Alberta’s consideration of white label cannabis products; a Conservative Party policy proposal to abolish medical cannabis tax; the AGCO and OCS rolling out a new POS data platform; and a new study that calls into question the accuracy of field sobriety tests for cannabis.

We also noted that Stats Canada says some cannabis users are one toke over the line, and that BC is reviewing cannabis sampling rules for producers and retailers.

In other cannabis news…

CBC ran a story on upcoming changes to the OCS’ wholesale pricing in September, an announcement the province made earlier this year. The article includes comments from George Smitherman of C3, OCS president and CEO David Lobo, and Cameron Brown of The Hunny Pot.

Globe and Mail ran an interview with Anne McClellan, former Chair of the federal government’s Task Force on Cannabis Legalization and Regulation says she is surprised at the lack of research on the health effects of cannabis use. “The big disappointment coming out of the legalization project is that governments and researchers have not stepped up in the way that we had hoped after legalization to do a lot of that research,” Ms. McLellan said. “There is a lot that we do not know that we are going to need to know.”

Total in-house research and development expenditures in Canada

MediPharm announced the first delivery of its pharmaceutical cannabis product for an NIH-funded clinical trial, following an import permit from the US Drug Enforcement Agency (DEA) and a Health Canada export permit. This is the first US FDA Audit of a purpose-built commercial cannabis facility in Canada. This clinical trial material is cannabis oil that contains both CBD and THC. To the company’s knowledge, this is the first Phase 2 clinical trial of its kind sourced from a Canadian Licenced Producer.

Labstat says it would like to see tax revenue from the federal and provincial governments used to fund comprehensive product research and testing. “We need stronger collaboration between industry and government to provide transparent health information to consumers,” said Labstat President Michael Bond.

The law firm McCarthy Tetrault shared a recent ruling from the Alberta Gaming, Liquor and Cannabis Commission (AGLC) in its decision in the matter of Canna Cabana Inc., in which, Acting on a public complaint, the AGLC’s Regulatory Services Division (RSD) investigated and determined that a tagline and customer reviews from a recent promotional newsletter were non-compliant with AGLC policy. The RSD imposed an administrative penalty of $25,000 or a 100-day suspension.

The panel found the tagline that used the phrase “get higher” was promoting overconsumption, that customer reviews were prohibited testimonials or endorsements and claimed positive impacts from the usage of cannabis products: in particular, the enhancement of recreation. The authors of the article conclude that a judicial review of the decision is likely, given the significant penalty imposed and the potential consequences to the retailer of subsequent contraventions.

——————–

Brands and Products

Glow LifeTech Corp, a Canadian-based biotechnology company focused on producing nutraceutical and cannabinoid-based products, announced the launch of two cannabis consumer brands in Canada, MOD and .decimal, with both featuring Glow’s portfolio of “liquid and powder cannabis ingredient technologies.”

Cannabis brand BC Bud announced three new extracts available in the BC market. The brand house works with several BC producers like Cedar Organics, Habitat Life, Blackrose Organics, Tricanna, and more, as well as Manitoba brand Toba Grown.

Organigram announced new “tube style” pre-rolls in 10×0.4g packs, taking aim at a sector dominated by products like Redees.

Aurora announced new infused pre-rolls available through its medical platform, Aurora Medical, “tested at 52.8% total THC.”

———————–

Phoena Holdings Inc. (formerly CannTrust) has pulled out of cannabis production entirely and revoked the licence on their 2nd Ontario production facility. “This announcement was really just a formality,” Mayor Marvin Junkin tells Pelham Today. “The last harvest was two months ago, and since then, the company has entertained a steady stream of interested buyers and tire kickers. Like all others in the town, I am anxious to see the next chapter unfold for this property.”

Greenway, a cannabis producer in Ontario, reported its audited annual financial statements for the year ended March 31, 2023. The company notes an average cash cost per gram expensed for the year of $0.76. Greenway reported $5,621,933 of revenue, a 183% increase in revenue over the prior fiscal year but a loss of $2,605,705.

The Oakville News did a feature on Buzzed Buds, a new retailer in Mississauga also seeking to serve the Oakville area with deliveries. While Mississauga recently moved to allow cannabis stores, they are still banned in Oakville.

The Pointer ran a story on the progress of new cannabis stores in Mississauga and the support they are receiving from the local business community.

Powassan, ON, two hours east of Sudbury, finally considering allowing cannabis stores. OPP told council: “since the laws changed, I’m not aware of a single issue that’s been brought forward to any of our policing location regarding cannabis retail stores.”

Matt Lamers ran an interview with Bedrocan founder Tjalling Erkelens about the medical cannabis market. “People were asking me, ‘Why don’t you do rec?’ I said that would take my focus off what I’m really trying to do. I think adult use in the end will be a bear market – the lowest price will prevail,” he said in an interview with MJBizDaily.

Solomon Israel ran a feature on consolidations in the cannabis sector, with comments from equity analysts Nadine Sarwat and Jesse Redmond.

The Global Cannabis Intellectual Property Symposium 2023 will be from September 28th-29th at McGill University in Montreal.

Following up on news from last week, Avicanna has closed the previously announced acquisition of the Medical Cannabis by Shopper’s business from Shoppers Drug Mart® and is pleased to announce the launch of an all-new medical cannabis care platform, MyMedi.ca.

According to the 2023 Cannabis Global Price Index (CGPI), Toronto is the 7th highest city in the world, at least in terms of how much cannabis they consume, while Montreal has the cheapest cannabis in the world. Cannabis consumption figures were collected from cities in countries around the world. The City of Toronto ranked 7th for annual cannabis consumption, supposedly smoking 16.7 metric tons a year. Four other Canadian cities were also in the top ten for cheapest weed, with Notre Dame (a suburb of Montreal), Vancouver, Charlottetown, and Annapolis, NS, helping fill out the ranks.

The CBSA is again reminding people entering or leaving Canada not to bring cannabis.

In international news, Axios covered the termination of a merger with Cresco Labs, a Chicago-based cannabis producer, and New York-based rival Columbia Care, which would have created the largest U.S. cannabis company by sales.

The Australia Greens a new what we heard report on their upcoming, revised cannabis legalisation bill they plan to table soon. Read the full report here. It includes the allowance for people to make their own edibles at home and to grow up to six plants per household. The sale price is estimated to start at $13 a gram and go down to $6 after five years of operation.

The Greens have four seats in the Senate, where the bill will be introduced. To get anywhere, the bill will need support from the ruling Labour government, which has not indicated any support for legalization.

And finally, a Canadian man caught with cannabis worth €700k in Dublin airport is in custody with local officials.

North Vancouver Cannabis Education Expo

Written by Staff on August 4, 2023. Posted in British Columbia, Business, Cannabis News, Retail.

The North Vancouver Cannabis Education Expo takes place from 11am-7pm on Saturday, August 26th, at the aptly-named North Vancouver Shipyards “Pipe Shop” venue.

The one-day event is expected to bring together more than 30 local cannabis producers, brands, and retailers for a day of networking and information-sharing.

Tyler Atkins of 1st Cannabis in North Vancouver, who is leading up this inaugural event, says his goal is to bring the local community together in a positive space.

“Education is the key to understanding, so we hope that partnering with brands, producers, and agencies behind legal cannabis, we can help to make a difference,” says Atkins.

This event is inclusive to all and is not put on or sponsored by any cannabis stores. The goal is to bring the community together and keep the education growing, as well as to normalize the industry.
Tyler Atkins, 1st Cannabis

“As someone who has been in the industry since legalization in the recreational market, I have clearly seen the gap in education. These events have no slant towards stores or brands and this allows the community to come and ask questions as well as giving an additional space for people within the community to connect.”

“This event was created out of love for our community and with the hopes of increasing education,” he adds. “We also see this as an opportunity to continue to remove negative stigma from the industry. We hope to see the event become annual as well as visit other cities that are looking for education and an opportunity to bring the community together and remove stigma.”

The event will feature CBD yoga, a community art project, a photo wall, a live DJ, rolling lessons, giveaways and a raffle, and an after-party at a nearby pub.

While Atkins says much of the event is geared toward those working in the space, he points out all are welcome.

“This event is designed for everyone, from your grandmother wanting to ask questions but not ready to visit a store, to your OG user wanting to talk up processing methods to pick his favourite producer, to a first-time grower that wants advice on growing their first legal plant. The goal is to have an event that suits anyone interested in cannabis. We know that even our budtenders in the industry don’t get as much face time as they would like with brand representatives, and this opens up that opportunity.”

Although Atkins works at a local cannabis store, he points out the event stands on its own.

“This event is inclusive to all and is not put on or sponsored by any cannabis stores. The goal is to bring the community together and keep the education growing, as well as to normalize the industry. Cannabis needs to be viewed the same as any other business and be represented, taxed and have the same opportunities.”

BC gov reviewing cannabis sampling rules for producers, retailers

Written by David Brown on August 3, 2023. Posted in British Columbia, Business, Cannabis News, Government, Producers, Retail.

The BC government is reviewing its rules about cannabis sampling between producers and retailer stores.

While some provinces allow cannabis producers to provide product samples to retailers, others say BC is lagging behind.

Provincial regulations in BC currently prevent producers from providing such samples. A representative with the province’s Ministry of Public Safety and Solicitor General—the agency that oversees the cannabis file—tells StratCann that the ministry is currently reviewing the rules about cannabis sampling between licensees, such as federal producers and provincial licensees.

Product sampling is critical to making informed wholesale purchasing decisions for licensed retailers. Sampling is also an important sales tool for producers.
Jaclynn Pehota, Retail Cannabis Council of BC

Some other provinces allowed such samples from the beginning of legalization, like Ontario and Saskatchewan, while Alberta recently began allowing them earlier this year.

A spokesperson for the Cannabis Cultivators of BC, representing a handful of producers, says its members would love to see the province create an accessible cannabis sampling program. This would allow producers to inform retailers of what is already on the market and what is coming soon.

Jaclynn Pehota, the executive director of the Retail Cannabis Council of BC (RCCBC), says it has been lobbying the BC government to make such changes.

“RCCBC has expressed to our partners in government that members are eager to see sampling implemented,” she adds. “The delay with implementation of sampling is obviously disappointing, but we are actively encouraging our regulators to take action to align BC with other Canadian markets that have already taken this important step.”

Pehota says she would also like to see producers able to ensure any such allowances are not adding additional paperwork requirements.

Jeff Guignard, Executive Director at Alliance of Beverage Licensees (ABLE BC), which recently launched its cannabis division to represent industry concerns, says it’s high time BC made such changes, especially since this is allowed in some other provinces.

“Sampling products in this industry has been part of the culture for generations, so we should be encouraging that activity in a legally licensed framework,” says Guignard. “I absolutely think that being able to provide samples to retailers in a responsible manner is a natural evolution for the industry. It’s allowed in other provinces. It’s time for BC to catch up.”

BC has yet to provide a timeline on when they will make any decisions on whether or not to allow sampling. The province recently announced they were seeking industry feedback on removing provincial rules on promoting locations for cannabis consumption and allowing cannabis consumption on patios. That feedback period is open until August 11.

AGCO, OCS rolling out new POS data platform

Written by David Brown on August 2, 2023. Posted in Business, Cannabis News, Government, Ontario, Retail.

The Alcohol and Gaming Commission of Ontario (AGCO) and the Ontario Cannabis Store (OCS) have developed a new data platform to help simplify retailers’ cannabis reporting requirements.

The point-of-sale (POS) system is intended to help reduce retailers’ regulatory burden and improve the accuracy of data collection while integrating with existing POS systems. This new POS data platform is being rolled out with POS providers and their retail clients.

An AGCO notice says the new platform will automatically extract, standardize, and automate retailers’ monthly reports directly from their own internal POS systems, processed by the OCS through an Application Programming Interface (API) and then shared with the AGCO.

The AGCO is committed to protecting the retail data we receive, including through robust cyber security measures, with guidance from industry standards such as National Institute of Standards and Technology – Cybersecurity Framework and International Organization for Standards ISO 2700½.
Alcohol and Gaming Commission of Ontario (AGCO)

The goal is to eliminate retailers’ need for monthly preparation and submission of reports and help improve the accuracy of the data submitted to the province.

James Manning, an account executive with Cova Software, a POS system used by many cannabis retailers in Ontario and across Canada, says the company was aware the changes were coming and has been working with the AGCO and OCS on the issue in advance.

“We’ve been working with the AGCO and OCS on this for about a year and a half now,” says Manning. “Cova will be fully integrated into the compliance reporting requirements by AGCO and OCS.”

Owen Allerton, the owner of Highlands Cannabis, says he doesn’t see the change as very significant for his business, but says if it works correctly, it could save him some time on monthly reporting.

“As a retailer, it’s not terribly burdensome. I think they’re doing this more to benefit themselves, but from our perspective, if this goes smoothly and saves me a few hours a month, it’s immaterial.”

Although not included in this most recent change, Allerton says he would also like to see a way for the OCS to provide sales data to LPs that would allow them to better understand which stores are carrying their products and how they are selling. He argues this would be helpful, especially for smaller producers, and thinks it would make it harder for retailers to disguise shelf-space kickbacks as “data” agreements.

The new system will automatically pull the required provincial and federal regulatory reporting data from retailers directly from their in-store POS system.

Once processed by the OCS, the data required for provincial and regulatory reporting will then be available for federal regulatory reporting. The OCS will populate and complete reports required by Statistics Canada and Health Canada.

The AGCO says the OCS has put several security measures in place to address any concerns with data security, something the OCS has had issues with in the past.

“The AGCO takes its responsibility to protect data seriously and will continue to do so when receiving POS data from the OCS,” notes a company update. “The AGCO is committed to protecting the retail data we receive, including through robust cyber security measures, with guidance from industry standards such as National Institute of Standards and Technology – Cybersecurity Framework and International Organization for Standards ISO 2700½.”

The AGCO also highlights that they and the OCS will not be collecting any new or additional data, and the POS will be configured so that all the data that is required for provincial regulatory reporting (to AGCO) and federal Cannabis Tracking System (CTS) reporting (to Health Canada and Statistics Canada) will be collected automatically by a retailer’s POS system.

In Ontario, the OCS is designated as the public body responsible for consolidating and reporting CTS information to the federal government.

Sasha Soeterik, the owner of Flower Pot on Dundas in Toronto, says she’s supportive of the plan, but is concerned about any of her data that goes to the OCS, given the data breach in 2022.

“On one hand, I welcome the change as it can be annoying to remember to report,” Soeterik explains. “On the other hand, I do not share my data with the OCS so I hope we can still opt out.”

Featured image via Cova

Alberta to consider white label cannabis products

Written by David Brown on August 1, 2023. Posted in Alberta, Business, Cannabis News, Government, Retail.

Alberta Gaming, Liquor and Cannabis (AGLC), Alberta’s cannabis regulator, is exploring the possibility of allowing white-label cannabis products in the province.

These would be products sold by retailers with their store’s branding and logo but supplied by licensed producers.

In a memo sent recently to stakeholders, Dave Berry, the executive vice president of public engagement and CRO with the AGLC, says the agency has been hearing from many in the industry who would like to sell such products.

It can also provide an opportunity for producers to sell product that would otherwise be sitting in their vaults given the current oversupply of dry flower in the market.
Omar Khan, High Tide Inc.

Provincial regulations in Alberta currently do not allow these kinds of products, although several other provinces do. In the past, Canna Cabana, a national retail cannabis chain, announced a white-label agreement for products sold in its Saskatchewan, Manitoba, and Ontario stores. Other companies have announced similar deals.

Ontario’s cannabis regulator momentarily considered banning such deals in 2022 before quickly pulling back, facing industry pressure.

The AGLC is conducting an online survey to gather input from all licensed cannabis retailers and registered representatives, such as licensed cannabis producers, brand owners, and other marketing entities.

The survey will be open until August 18, 2023.

Omar Khan, chief communications and public affairs officer with High Tide Inc., which owns the Canna Cabana chain of stores operating in Alberta and several other provinces, says they support the proposal.

“We look forward to participating in the AGLC’s white-label consultation. Our experience in provinces like Ontario, Manitoba, and Saskatchewan indicates that the availability of white-label products allows for greater product differentiation and consumer choice while creating room for increased retail margins. These are things that can help retailers of all sizes. It can also provide an opportunity for producers to sell product that would otherwise be sitting in their vaults given the current oversupply of dry flower in the market.”

Alena Jenkins, the president of FivePoint Cannabis, with one location in Calgary, says she isn’t opposed to the proposal but doesn’t see it as a priority. Instead, she would like the ability to carry exclusive products that her competitors don’t carry, and to have producers allocate a specific amount of products to her store on a weekly basis.

“I don’t really care if my name is on it. I would prefer to have exclusive rights to products that I want,” says Jenkins, adding that this could allow her to distinguish her small, independent store from her competitors in a unique way.

Scott Morrow, president and CEO FOUR20 Premium Market, with 41 locations in Alberta, says he sees this as a positive step and would be open to carrying white label products in his stores and will help retailers create somerthing unique for consumers.

“I think it’s positive for retailers in Alberta to have access to private products to start creating some product differentiation in our space, which really doesn’t exist today, largely. We’re all ordering from the same product list on a weekly basis and have very limited opportunity to create a point of differentiation with products in our stores.”

Featured image via Numo Cannabis.

Metro Vancouver rethinking regulation of cannabis VOCs

Written by David Brown on July 31, 2023. Posted in British Columbia, Business, Cannabis News, Government, Producers.

Metro Vancouver’s Regional Board (MVRD) of Directors says they want to collaborate with other provincial agencies on any potential regulation of cannabis farm emissions rather than continuing to develop its own regulations.

Several MVRD board members said they felt the staff proposal to regulate Volatile Organic Compounds (VOCs) from cannabis production facilities and farms was a backdoor route to trying to regulate the odour of cannabis itself.

Several mayors—who serve as board members—also questioned the need to spend the board’s time and resources on regulating something that amounts to less than one percent of all regional VOCs and concerns that this will lead to regulatory creep into other types of farms.

Metro Vancouver—encompassing 21 cities in BC’s Lower Mainland, one electoral area, and one treaty First Nation—first announced its plans to regulate volatile organic compounds (VOCs) from cannabis production in 2019, holding stakeholder meetings in late 2020 and early 2021.

In 2021, the BC Ministry of Agriculture, Food and Fisheries issued its own report that called into question Metro Vancouver’s plans, noting that cannabis production only accounts for a small fraction of overall VOCs in the region.

“We have a very diverse agricultural community, and we want to ensure they are not over-regulated”
Nicole Macdonald, Mayor of Pitt Meadows

It estimates that indoor cannabis accounts for about 146 tonnes of VOCs per year, compared to 715 for crops and pasture land, 9,500 from plants and vegetation (non-commercial crops), and over 37,000 from other non-agricultural, human sources such as fuel, vehicles, and paints and chemical products.

In a board meeting on Friday, July 28, Patrick Johnstone, the mayor of New Westminster, echoed these concerns, saying he would like to see the board working with the Ministry of Agriculture, and added that VOCs from cannabis production represent less than 1% of total VOC’s for the region.

Nicole MacDonald, the mayor of Pitt Meadows, home to several cannabis growers and processors, says she was concerned about city staff’s proposed approach and how it would further “isolate” cannabis farmers from other types of farms.

“We have a very diverse agricultural community, and we want to ensure they are not overregulated,” said MacDonald.

Mike Bose, a city councillor from Surrey, spoke of “legislative creep” and over-regulation, saying that he felt the real goal of the proposal was to find a way to deal with the odour of cannabis.

“Agriculture is smelly, it’s noisy, it’s dirty, it’s messy,” said Bose, adding, “We’re talking about limiting the use of some of the most productive land in the country, let alone the province.”

“All we’re going to do is find a way to legislate away the smell from a greenhouse that’s growing cannabis, then tomorrow it’s a dairy farm, then the day after it’s a chicken farm, and then it’s oh my god, the blueberry farms….”

Last, Dan Ruimy, the newly-elected mayor of Maple Ridge, pointed out that Health Canada already has strict rules in place to control odour for indoor facilities, and said that such regulations could “destroy a fledgling industry.”

Staff proposed two suggestions. One was to send a letter to the Ministers of Agriculture and Food, Environment and Climate Change Strategy, and Public Safety and the Solicitor General, requesting collaboration with Metro Vancouver on developing a concerted approach for managing emissions from cannabis production and processing in the Metro Vancouver region in a manner that protects public health and regional economic prosperity.

“All we’re going to do is find a way to legislate away the smell from a greenhouse that’s growing cannabis, then tomorrow it’s a dairy farm, then the day after it’s a chicken farm, and then…the blueberry farms….”
Mike Bose, a city councillor in Richmond, BC

The second was to direct staff to continue developing options to manage emissions from cannabis production and processing as described in the June 23, 2023 report titled “Phase 2 Engagement Summary and Next Steps for Managing Emissions from Cannabis Production and Processing.”

The MVRD board approved the first proposal but rejected the second. The next step will be for staff to send the letter and report back to the board when they have more information at a future date.

The meeting can be viewed online here.

Note: This article previously attributed Director Bose’s comments to Bill McNulty, a city councillor in Richmond, BC.

UBC and Aurora Cannabis looking at developing better outdoor cultivars for Canada

Written by Staff on July 31, 2023. Posted in British Columbia, Business, Cannabis News, Government, Producers, Research.

A researcher at the UBC Biodiversity Research Centre is teaming up with a geneticist at Aurora Cannabis to adapt cannabis for outdoor production.

The work is one of eight new projects that have received a combined $1.84 million in funding from the Genomic Innovation for Regenerative Agriculture, Food and Fisheries (GIRAFF) program—a collaboration between Genome BC and the Investment Agriculture Foundation of BC (IAF) with support from the BC Ministry of Agriculture and Food.

Dr. Marco Todesco from the University of British Columbia and Jose Celedon, director of genetics at Aurora Cannabis, are working to develop cannabis cultivars better suited to Canadian climates and environment to address the carbon footprint of indoor cannabis production. By some estimates, about four percent of the total greenhouse gasses from Canadian agriculture come from cannabis production, primarily indoor production.

Our project uses leading-edge genomics technologies to help develop more sustainable cannabis varieties that can be grown outdoor at Canadian latitudes, reducing greenhouse gas emission from cannabis cultivation in BC and beyond.
Dr. Marco Todesco, UBC Biodiversity Research Centre

The team is working on developing more suitable commercial cultivars for use in outdoor settings by cross-breeding so-called autoflower characteristics into “elite” cannabis genetics.

Dr. Todesco, assistant professor at the Biodiversity Research Centre, University of British Columbia, says the goal is to develop cultivars better suited to not just BC but all of Canada.

“The cannabis industry plays an important role in the BC economy, but unfortunately, cannabis cultivation in indoor facilities also has an enormous carbon footprint,” says Todesco. “Our project uses leading-edge genomics technologies to help develop more sustainable cannabis varieties that can be grown outdoor at Canadian latitudes, reducing greenhouse gas emission from cannabis cultivation in BC and beyond.”

The program has a budget of $250,000 for its research and began the work in 2022.

Dr. Caledon, the director of breeding and genetics at Aurora Cannabis, applauds the work of UBC in collaboration with the cannabis producer.

“As a global cannabis company enabled by science, we are proud to invest in the continued advancement of cannabis cultivation that will positively impact the longevity of the industry in Canada. Our long-standing relationship with UBC has allowed for valuable, collaborative work in genomics. Our shared findings from the GIRAFF project will be applied to Aurora’s leading growing practices today and in the future, supporting a more sustainable industry.”

This is not the first cannabis breeding program involving UBC and Aurora, which operates its cannabis breeding facility on Vancouver Island, Aurora Coast, which hosts the Occo research centre. In 2020, more than $4.2 million in federal, provincial, and industry funding was announced to aid with UBC research into enhanced cannabis cultivars, focusing on disease resistance.

The project, Fast-Track Breeding of Powdery Mildew-Resistant Cannabis, involved UBC researchers Dr. Loren Rieseberg and Dr. Todesco in partnership with Aurora Cannabis.

Aurora said they recently 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.

“There is a misconception amongst growers and LPs, both domestically and internationally, that you cannot protect or own the genetics around a particular cultivar, ” Aurora CEO Miguel Martin said earlier this year. “That’s completely untrue. We are licensing unique genetic markers of these cultivars that we develop, and we are able to identify those that are infringing upon that; the law is very clear on this issue. We’ll have a very strong case. You’ll start to see litigation around that, as well as those that we believe have infringed on some of our bio-synthetic assets, and that’s also an additional revenue stream for the company.”

The project was part of a larger $56.4 million in funding from the federal and provincial government, as well as private industry and is part of 10 new genomics research projects funded through Genome Canada in conjunction with Genome BC. Genome Canada is a non-profit organization funded by the Government of Canada that seeks to use genomics-based technologies to improve the lives of Canadians. Genome BC is a not-for-profit organization undertaking similar research in BC.

Aurora also says their Coast facility has produced ten new cultivars launched during fiscal 2023, including two high-THC cultivars—Sourdough and Farm Gas— that have also launched in Europe and Australia.

*Charles Pick (left), senior vice-president of science and innovation for Aurora Cannabis, and Greg Baute at Aurora’s cannabis facility in Comox, B.C.*

Week in Weed – July 29, 2023

Written by Staff on July 29, 2023. Posted in British Columbia, Business, Cannabis News, Government, International, New Brunswick, Ontario, Provinces, Quebec, Saskatchewan.

This past week on StratCann, we covered Surrey city council’s new proposal for the city to regulate cannabis stores, and that Council sent the report back to staff to make changes before it would consider it further. We also covered Aurora closing its sale on a former cannabis greenhouse, Vancouver’s High Hopes launching a cannabis substitution project, and another look at how the media continues to misreport issues relating to hospitalizations from edibles.

Outside of StratCann’s coverage, the big news this week was the Canadian Press story on the BC Supreme Court approving a cannabis ‘fire sale’ as Tantalus Labs entered bankruptcy, with the CRA stayed from taking any actions against Tantalus with respect to cannabis stamps and cannabis inventory. Court documents show Tantalus with more than $14 million in debt to creditors and other companies, including $4 million to the CRA.

The Tyee uncovered an auditors’ report from 2022 that says BC’s provincial agency responsible for ensuring that licensed cannabis retail stores follow the law is understaffed and lacks key tools. The 26-page report, Compliance and Enforcement of Cannabis Retail Stores, made 14 recommendations that the in-house government auditors said would improve the program and make it more efficient and effective.

Some cannabis retailers in Saskatchewan expressed frustration at competing with what they say are unregulated cannabis retailers selling unregulated products on First Nations land in the province, including one store that made headlines recently. Local First Nations store owners say they are governed by their own regulations.

Natoaganeg First Nation in New Brunswick announced a new therapy program run by the Gitpo Spirit Lodge, which has received $1.2 million from Health Canada for two years. Dr. Shelley Turner, a member of Pimicikamak First Nation in Manitoba and an expert in medical cannabis, will educate healthcare providers on the use of medical cannabis for this therapy, also called cannabinoid therapy. CBC reports that in Turner’s practice, she starts patients on THC and CBD in one-milligram increments.

A new research paper out of Ontario says there is an association between non-medical cannabis legalization and emergency department visits for cannabis-induced psychosis. The article attributes this increase to something it calls “cannabis commercialization.” While the abstract doesn’t note why they chose this start date, the timing correlates with when edibles became more common in both the legal and illicit markets (March 2020–September 2021). Increases were seen only for those above the legal age of purchase.

In financial news, Tilray released their Q4 financials, showing a net revenue increase of 20 percent, and a net loss of USD$120 million in the fourth quarter compared to the net loss of the prior year quarter. Cannabis gross margin for Tilray increased to 61 percent in the quarter from -36 percent in the previous year’s quarter, which the company attributes to contributions from the HEXO arrangement. Tilray says its market share in Canada is about 13 percent.

On the other hand, Quebec-based producer Cannara Biotech reported Q3 2023 net revenue of $15.9 million and $39.3 million for the first nine months of 2023, a 57 percent and 63 percent increase respectively, compared to the three and nine-month period in 2022. Cannara sells under the brands Tribal, Nugz, and Orchid CBD. The company primarily sells in Quebec but has products in BC, Ontario, and Alberta.

Meanwhile, The Deep Dive had fun swimming amongst the schadenfreude that is the collapse of the once-mighty Canopy Growth—a fun read for anyone who has followed the highs and lows of this sector.

In cannabis banking news, Turtle Island News reported that the Six Nations Cannabis Commission (SNCC) has been unable to find a bank willing to work with them. The SNCC has licensed three retail stores within its territory. The regulator issued its first production licence to Bloom Cannabis last year.

“I’ve met with every bank across Canada, including credit unions,” said Kathy Mair, the Six Nations Cannabis Commission’s (SNCC) chief commissioner. “Everybody takes me along, and everybody says they can help, and then something comes up, and they can’t. Nobody is willing to go against the banking charter.”

A new medical cannabis access platform, MyMedi.ca, announced its initial product offering on its website, launching on August 1, with more than 30 brands. MyMedi says it’s providing “continuity of care” for Medical Cannabis by Shoppers Drug Mart patients following a partnership between Avicanna and Shoppers Drug Mart signed in March.

GrowerIQ, a seed-to-sale tracking system based in Canada, announced it was partnering with the Barbados Medicinal Cannabis Licensing Authority (BMCLA), the island’s regulatory body for the medicinal cannabis industry, to manage tracking and reporting of all cannabis production there for the next five years.

International

Big news in the US this week, Mastercard told financial payment companies they must stop allowing US customers to buy cannabis with its debit cards. Mastercard said the move comes after it found some stores accepted debit payments despite the federal ban.

Uruguay has sold more than 10 million grams of cannabis in the six years when first legalized. Authorized pharmacies in Uruguay have sold 10,693,210 grams between July 19, 2017, and July 19, 2023, according to the IRCCA, the agency that oversees both medical and adult-use cannabis. People can buy three different types of cannabis in the country, with varying amounts of THC and CBD, with the highest level of THC at 15 percent—not much below the averages shown by analytical testing of supplies in the US and Canada.

As of February in Uruguay, 5 grams of legal cannabis from a pharmacy costs approximately $400-450, or about $15 Canadian. There is a 10-gram per week purchasing limit, with three exclusive modes of access that someone must choose: buying through a pharmacy, growing at home, or growing as part of a cooperative.

Nominations now open for Grow Up’s Awards Gala

Written by Staff on July 25, 2023. Posted in British Columbia, Business, Cannabis News, Provinces.

Nominations are now open for the 2023 Grow Up Awards Gala, set to take place in Victoria, BC, in early October.

The Grow Up Conference & Expo is returning to Victoria for the second time, following its first show in BC’s capital city in 2022.

The conference expects several thousand attendees over the three-day event, from Sunday, October 1 to Tuesday, October 3. The awards ceremony will be at the Historical Crystal Garden in the Victoria Conference Centre.

Our awards gala aims to highlight the exceptional contributions taking place in the industry, and to celebrate the achievements of our peers.
Randy Rowe, Grow Up Conference & Expo

Randy Rowe, President of Grow Up, has been hosting the expo since 2019 and says this year’s event will also honour Ted Smith, the founder of the Victoria Cannabis Buyers’ Club, with a Lifetime Achievement Award, Wanda L. James as the events 2023 Cannabis Pioneer recipient, and Kevin Jodrey as their Grow Up Hall of Fame inductee.

The gala will be hosted by Jenny West Cooney from local radio station Zone 91.3.

“We are looking forward to honouring the dedicated professionals working tirelessly to set new standards in the ever-changing cannabis industry,” said Rowe.

“Our awards gala aims to highlight the exceptional contributions taking place in the industry, and to celebrate the achievements of our peers. The gala is also a perfect opportunity to relax and get away from the stresses of the cannabis industry, even if it’s just for a night.”

Nominations are open until Sunday, August 6, 2023. Voting takes place August 10-28, and the winners will be announced at the awards ceremony.

“We encourage everyone in the cannabis industry to participate, either by nominating those who deserve recognition, or by attending this landmark event,” Rowe added.

Tickets for the Grow Up Conference & Expo are on sale now, and information on nominations can be found at growupawards.com.

Aurora Cannabis closes sale of Sun facility

Written by Staff on July 24, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Ontario, Producers, Provinces.

Aurora Cannabis has closed the sale of its Medicine Hat, Alberta facility to Bevo Farms, a subsidiary of Bevo Agtech Inc.

The facility, dubbed Aurora Sun, was to be a 1.63 million square foot cannabis greenhouse, but construction was suspended in late 2019. Aurora said they would only build approximately 238,000 square of the 1.63M square foot facility by 2020, with the rest completed when market conditions improved.

The Aurora Sun Facility was sold via Bevo Farms’ acquisition of one of Aurora’s wholly-owned subsidiaries. Aurora has a controlling interest in Bevo as of 2022. Founded in 1986, Bevo operates 63 acres of greenhouse in British Columbia.

Bevo could pay “up to” $15 million to Aurora in connection with the Aurora Sun transaction as long as Bevo Farms successfully achieves specific financial milestones at the Aurora Sun facility.

“I am pleased that this transaction will achieve the dual objectives of improving Aurora’s cash flow, while benefiting Bevo as they proceed with the expansion of their business,” said Aurora’s CEO Miguel Martin in a press release.

Leo Benne, CEO of Bevo, added, “Bevo’s ability to deliver propagated plants directly from Medicine Hat to the Alberta greenhouse industry and beyond delivers a win for the Alberta greenhouse industry, the City of Medicine Hat and its residents, for Bevo, and for Aurora. We would like to express our gratitude to the City of Medicine Hat for their essential contributions to this transaction. We look forward to further developing our partnerships in Alberta in the years to come.”

Other facility closures

Aurora announced the sale of another facility in Alberta, Aurora Polaris, earlier this year.

Originally located next to the now-defunct Aurora Sky facility, the company first announced the plans for a 300,000 square foot Polaris project in 2019, at an estimated cost of $50 million. The building was originally intended to serve as Aurora’s “centre of excellence for the industrial-scale production of higher margin, value-added products, such as edibles.”

In May 2022, Aurora announced the closure of Aurora Sky, with 214 lost jobs. Martin points out that Bevo had already taken over the Aurora Sky facility.

“Bevo has successfully repurposed the Aurora Sky facility in Edmonton, and we’re excited to further support their continued growth. Bevo’s acquisition of the Aurora Sun facility further demonstrates the close synergies between our companies and the value that our partnership creates for shareholders.”

In September 2021, the company announced their plans to close the Polaris facility, representing a loss of eight percent of its global workforce. A news report at the time noted an Alberta government website listed the Aurora Polaris facility as being around 2,800 square meters “with one-third of the space dedicated to warehousing and distribution of cannabis products and the remainder hosting product manufacturing.”

In 2022, Aurora closed down the 200-acre “Aurora Valley” cannabis farm in BC. A spokesperson for Aurora Cannabis told StratCann at the time that the Thrive Cannabis location replaced the need for the Aurora Valley site.

In 2020, Aurora sold a massive Ontario greenhouse for $17 million, which it had inherited when the company acquired medical cannabis producer MedReleaf. In their most recent quarterly report, Aurora reported a net loss of $87 million.

Surrey City Council to consider framework to approve cannabis stores

Written by David Brown on July 23, 2023. Posted in British Columbia, Business, Cannabis News, Government, Provinces, Retail.

Surrey City Council may soon consider allowing cannabis stores in BC’s second-largest city.

Surrey initially banned cannabis stores entirely. In March, Mayor Brenda Locke told StratCann that the city is developing a plan to potentially consider applications.

The city’s Planning & Development Department and the Engineering Department posted a staff report on July 20, to be considered at the next council meeting on July 24, that seeks council approval of a policy framework for regulating cannabis retail stores.

Staff are proposing a general framework for regulating cannabis retail stores in Surrey and recommending a city‐owned site at 13455–72 Avenue in the Newton Town Centre as an initial “pilot” location for a cannabis retail store.

“This framework is going to result in a lengthy implementation timeline.”
Jasroop Gosal, Surrey Board of Trade

The plan would also initially limit the number of store locations to one in each of Surrey’s six Town Centres as designated in the Official Community Plan (City Centre, Guildford, Fleetwood, Newton, Cloverdale, and Semiahmoo), with a preference for a city‐owned site in each Town Centre.

For these locations, the city would hold a competitive process to select a business operator based on specific criteria and a scoring system that is still to be determined. If no city-owned site is available in a Town Centre that meets locational criteria, a competitive process would be held to select both a site and business operator.

If Council supports the Newton Town Centre pilot site location, staff will prepare a city‐initiated rezoning proposal for Council’s consideration in the Fall of 2023, along with a concurrent selection process of a business operator for this location.

Staff also recommend that the city close and refund application fees for two locations previously filed with the city before any regulatory framework. These locations are 7380 King George Boulevard (7923‐0066‐00) and 13650–102 Avenue (7923‐0048‐00).

If Council approves the recommendations in this report, city staff will bring forward a more detailed report regarding the retailer selection process, licensing conditions and criteria, as well as a proposed monitoring and reporting process for council’s consideration.

“I understand that each city and community has its own specific needs. I am enthusiastic about collaborating with the City of Surrey to ensure the success of their approach.”
Vikram Sachdeva, Seed & Stone

Vikram Sachdeva, the CEO of Water Leaf Management Services, a Songhees Nation business initiative, says he’s pleased with these initial plans for a cannabis policy framework. Acknowledging that the city has taken a cautious approach to cannabis retail policy compared to other municipalities, Sachdeva says, “I wholeheartedly embrace this unique approach because I understand that each city and community has its own specific needs. I am enthusiastic about collaborating with the City of Surrey to ensure the success of their approach.”

Water Leaf Management provides operational services to all Seed & Stone and Songhees Cannabis stores. Seed & Stone holds the distinction of being the first to obtain licenses in Delta, Hope, and Coquitlam, and has recently applied to be the first retailer in Pitt Meadows.

Pitt Meadows, another BC city that banned cannabis retailers at the beginning of legalization, just announced its plans to begin hearing applications on a case-by-case basis.

The Surrey Board of Trade released a report earlier this 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, says it has concerns at how long the proposed plan will take to implement.

“This framework is going to result in a lengthy implementation timeline,” said Gosal in a press release. “Many cities from across the province allow retail operations to occur on private land, which meet the prudent criteria put in place by the Provincial Government. The report also doesn’t indicate a timeline for the pilot, initial phase, or future phases.”

BC Chamber of Commerce calls on province to address municipal “cannabis deserts”

January 18, 2022

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

March 1, 2023

Mississauga to allow cannabis stores

April 19, 2023

Featured image of Queensborough Cannabis Co in Delta, on the border with Surrey. Both images via Google.

Editor’s note: This article has been updated to include new comments from the Surrey Board of Trade.

Week in Weed – July 22, 2023

Written by Staff on July 22, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Manitoba, Ontario, Provinces, Saskatchewan.

It’s been busy on StratCann this week, where we shared our newest insight piece on the cannabis distribution systems in Manitoba and Saskatchewan.

We also broke the story of an apparent robbery of a cannabis producer in BC, as well as a new BC muni now accepting cannabis retail applications, a new “sovereign” cannabis store in Saskatchewan, the OCS allowing new smaller-vehicle deliveries to their DC, and an update on the court challenge in Manitoba against home grow bans.

We also covered how the MBLL is handling a strike in Manitoba, and how the Alberta government is auctioning off a strange outfit originally intended for a cannabis education campaign.

Outside of that, it was a relatively slow week in cannabis news in Canada.

Several news agencies made rage-bait hay by reporting that Aurora’s CEO Miguel Martin received a base salary of about $590,500 as well as about $3.8 million in share-based options and almost $1.1 million in option-based awards in the past fiscal year, as well as about $815,000 in non-equity incentive plan compensation and $416,000 in other compensation.

High Tide filed a preliminary base shelf prospectus to replace an expired base shelf prospectus. The prospectus was filed in each of the provinces and territories in Canada.

Mission, BC Mayor Paul Horn says he wrote to Canadian health minister Jean-Yves Duclos on July 6, describing the impact legalization has had on his community, especially regarding the impact of designated and personal grows. The mayor also expressed concern with licensed commercial production sites.

Stats Canada’s Monthly Retail Trade Survey collects data on sales, e-commerce sales, and the number of retail locations by province, territory, and selected census metropolitan areas from a sample of retailers.

New monthly figures from Stats Canada show that cannabis retailers sold more than $415 million in May 2023—an increase of about $5 million from the previous month and an increase from $373 million in May 2022. The monthly increases were seen across most provinces and territories, with declines in BC and PEI. Sales in BC were down about 5 percent from the previous month, while sales in PEI were down nearly 36 percent ($1,868,000 vs $1,196,000).

Meanwhile, police in Ontario say a 20-month-old baby in Prince Edward County was treated in hospital after consuming a quantity of cannabis chocolate. The origins of the edible were not reported.

Also, a Canadian man was charged with importing cocaine and cannabis into Bermuda. According to prosecutor Carrington Mahoney, the cannabis in question has an estimated value of almost $474,000, and the cocaine has a value of about $201,300.

Finally, Lauren Kelly, a Pharmacologist and Associate Prof at the University of Manitoba, tweeted that she has finally received approval to conduct research on cannabinoids for drug-resistant epilepsy.

Manitoba taking steps to mitigate strike’s impact on cannabis sales

Written by David Brown on July 21, 2023. Posted in Business, Cannabis News, Government, Manitoba, Provinces.

Manitoba Liquor & Lotteries’ Cannabis Operations team says it has a plan in place to ensure a strike action from the Manitoba Government and General Employees’ Union does not impact cannabis producers’ ability to send products to suppliers and retailers in the province.

In a memo sent to cannabis producers on July 21, Manitoba Liquor & Lotteries (MBLL) says that while it is “severely impacted” by the work stoppage from the Manitoba Government and General Employees Union (MGEU), it has developed a contingency plan in advance to mitigate any industry concerns.

The government regulator was informed on July 14 of the pending job action by the MGEU, which includes staff from Cannabis Operations. The union issued a one day walk out on July 19, which has now developed into a more long-term strike.

During the strike, the MBLL’s Cannabis Operations are required to operate with a skeleton staff, limiting the ability to process new purchase orders. As such, the agency will be pausing or delaying these activities:

Support resolving order discrepancies and resending packaging slips.
Issuing financial credits and refunds.
Tracking open purchase orders and providing status updates.
Providing Cannabis Customer Self Service troubleshooting support.
Password resets and account set-up support (for CCSS and MBLL Partners) will continue with some delays.
Limited to no product price changes or new product set-ups in the product catalogue.
Cannabis Tracking and Licensing System (CTLS) (seed-to-sale) reporting on behalf of Retailers Account administration (changes to supplier and retailer information).
The Cannabis Contact Centre, Cannabis PO, and Cannabis Buyers email accounts will be monitored for urgent matters, but responses will be limited or delayed.

Any suppliers dealing with a product list status change should still inform the MBLL, who will take action when they can.

If a supplier has a list status change (to a Pending/Terminated status), continue to advise MBLL, they will take action accordingly as time and resources permit.

The union has been striking to bring attention to their contract negotiations, shutting down several liquor stores, and the union says some workers will continue to strike on Thursday. The MGEU has over 1,400 Manitoba members and says they have been working under an expired contract since March last year.

Job actions in other provinces have caused challenges for producers and retailers. In 2022, British Columbia’s central distribution system was temporarily halted due to a government employee’s union strike. Strikes in Quebec have also temporarily closed or otherwise impacted some stores in the province.

While the MBLL does not run a warehouse for cannabis like other provincial governments, it does approve products and suppliers into the province. Producers can then ship directly to retailers, or go through private distribution systems.

Michael Gruber, the owner of Parrot Pot Shop, with two locations in Winnipeg and a third on the way, says his main concern is if sales are impacted. Customer loyalty is important in such a highly saturated market like Winnipeg.

“Our main concern would be if we can’t service customers. That’s what really counts. If there are issues with purchase orders or credit notes, it can wait. As long as we can get product to our customers the rest can wait.”

Kerri Michell of Farmer Jane Cannabis, with five locations in Winnipeg, says she is optimistic that this will not negatively impact her business, as long as the strike doesn’t go on very long.

“MBLL has been really good with communicating so far and seem to care about the impact on the industry.”

Gord Nichol, the owner of North 40 Cannabis, a micro producer in Saskatchewan that sells into the Manitoba market, says he’s happy with how the MBLL is handling the issue.

“I’m glad to see them focusing on making sure that products are still flowing. We’ll get the returns fixed up, any overages or any issues, those can go on the back burner because that’s not going to affect anyone’s ability to do business. So it sounds to me like they’re focused on the right things.

Featured image via MGEU on Twitter

Team fighting Manitoba’s home grow ban are back in court in September

Written by David Brown on July 20, 2023. Posted in Business, Cannabis News, Government, Manitoba, Provinces.

The group challenging Manitoba’s ban on home-grown cannabis will head back to court in September to make new arguments for why the provincial ban is unconstitutional.

Jesse Lavoie, who has been leading the charge against the provincial ban through his organization TobaGrown, says he and his legal team are filing a brief on July 21, with a scheduled court date of Friday, September 8.

Lavoie and his two lawyers, Kirk Tousaw and Jack Lloyd, will be arguing that the recent Supreme Court ruling that upheld Quebec’s ban on growing cannabis at home does not create a precedent to be followed in Manitoba.

While Quebec’s law banning home-grown weed is based on civil fines, Manitoba’s is based on criminal penalty, something Tousaw says is not in the purview of the provincial government.

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 in Manitoba.

The province’s ban does not extend to those authorized to grow cannabis for medical purposes, who have been protected by federal court.

“The argument being advanced this September in Manitoba is that the decision of the Supreme Court of Canada in the Murray-Hall case is not binding authority,” explains Tousaw. “This is because that decision was based on Québec’s very specific provincial legislative scheme, which includes the creation of a state monopoly—and which does not, unlike Manitoba, penalize home growing with the potential of up to a $100,000 fine and one year in prison. We say that Manitoba has improperly exercised the criminal law power in a way that is quite different from what Quebec did.”

“Ultimately, issues like this are best resolved in the legislature, so long as the legislature does not overstep its constitutional bounds,” he continues. “Irrespective of the outcome of the court case, it would be best for the citizens of Manitoba if the legislature simply allowed Manitobans to grow their four plants like every other Province except Quebec does.”

In the Quebec case, the provincial government had successfully argued in a lower court that they had the right to ban growing cannabis at home entirely, and were doing so to protect young people. The Supreme Court then dismissed an appeal of that ruling, concluding that the provincial government’s ban on growing cannabis at home was not in conflict with the federal law allowing Canadians to grow up to four plants at home.

Federal regulations allow Canadians to grow up to four cannabis plants per home. Provinces are allowed to place restrictions on that allowance, such as limiting the number of plants and/or requiring them to be grown in a secure area or out of view of the public.

In developing the Cannabis Act and Regulations, the federal government argued that limiting the number of cannabis plants to zero or banning them outright would be out of the scope of their powers.

This is similar to the federal age limit of 18 for access to alcohol, but provinces can raise this amount. All provinces and territories in Canada except Alberta and Quebec have established 19 as the age of access for cannabis. Alberta’s is 18, and Quebec’s is 21.

Lavoie, who launched his challenge of provincial law in 2020, says he’s frustrated that the current government continues to maintain the ban on Mantiobans’ ability to grow a few cannabis plants at home.

“This lawsuit has been going on for three years now, and it’s very disappointing to witness our opponents, the Elected Government, pushing for a lazy victory with a lack of their own evidence,” says Lavoie. “Despite Quebec’s ruling being based on protecting a Cannabis monopoly that doesn’t exist in Manitoba, our Opponents’ lead argument has been “We can because Quebec can”. Our legal team has spent countless hours preparing for this September 8 legal showdown, and I’m confident that we will prevail in this case.”

Jack Lloyd, another lawyer working with TobaGrown on the case, who also worked on the challenge in Quebec, filed by Janick Murray-Hall, agrees that the Quebec case does not, in his estimation, provide cover for Mantioba’s ban.

“The situation is significantly different in Manitoba, which means that in our view, Manitoba’s legislation cannot escape judicial scrutiny on the back of the SCC’s ruling in Murray Hall.”

The Manitoba government will have until August 18 to file their response. The two groups are scheduled to meet in court on September 8. TobaGrown says it has received permits to have over 1,000 people on the front steps of the Manitoba Legislative building from 8:30 a.m. to 9:30 a.m. on September 8, 2023, before the team heads to court at 10:00 a.m.

Affidavits filed in Manitoba home grow court challenge

January 29, 2021

Buying cannabis seeds and clones in Canada in 2023

March 13, 2023

Challenging Manitoba’s ban on home-grown cannabis

August 15, 2020

OCS DC now accepting deliveries from smaller vehicles

Written by David Brown on July 20, 2023. Posted in Business, Cannabis News, Government, Micro, Ontario, Producers, Provinces, Retail.

The Ontario Cannabis Store is making it easier for cannabis producers to send smaller shipments to their distribution centre.

As of July 17, the OCS Distribution Centre (DC) will accept deliveries from sprinter vans carrying up to 260 master cases per delivery and “alternative vehicles” carrying up to 60 master cases per delivery.

The OCS says the changes will address industry demands for smaller businesses with smaller shipments to engage directly with the world’s largest cannabis distribution centre. Many smaller producers have partnered with larger companies to address this previous gap.

This decision permits LPs to consolidate shipments, leading to significant time savings for both LPs and receivers. No longer will trucks be dispatched for small loads that occupy as little as one or two percent of the total vehicle space.
Kayla Nguyen, Ontario Cannabis Association (OCA)

The Ontario Cannabis Association (OCA), representing around 50 cannabis producers, says it’s happy with what it says is a “long-awaited” change that helps out cannabis producers across Ontario.

“After years of requests, the OCS has made a ground-breaking decision to allow the type of delivery that optimizes operations and streamlines the delivery process,” said Kayla Nguyen, director of membership and outreach with the OCA, in a press release.

“This decision permits LPs [licensed cannabis producers] to consolidate shipments, leading to significant time savings for both LPs and receivers. No longer will trucks be dispatched for small loads that occupy as little as one or two percent of the total vehicle space.

”The change represents another small step the cannabis distributor is taking to better address the needs of smaller cannabis companies. While Ontario’s cannabis distribution centre is primarily built around addressing the needs of companies shipping the larger batches of products that dominated the market at the beginning of legalization, the industry has shifted towards smaller micro and craft producers.

While many of these smaller cannabis growers and processors still work with larger companies to gain access to provincial markets, Ontario has been refining its massive distribution centre to address small-batch needs. As one example, while the OCS still does not allow producers to send products directly to retailers, it has been expanding the Flow-Through program that allows retailers to order from a list of products not traditionally stored at the distribution centre.

The OCS DC operates within 220,000 square feet of space, shipping and receiving the equivalent of approximately 1,100 kg of dried cannabis every day from more than 250 of Canada’s federally licensed cannabis producers. A team of about 400 employees operates the facility 24 hours a day, connecting almost 1,700 privately owned retail stores across Ontario with more than 3,000 products.

Every week on average, 1.7 million units—equivalent to almost 7 million grams of cannabis—arrive at the Distribution Centre operated by third-party Domain Logistics, not including products sold through OCS’ Flow-Through program.

Weekly, the OCS also ships roughly the same amount of product 1,100 kg of cannabis is transported to Ontario’s retailers daily.

Images via the OCS

First Nations community near Regina opens “sovereign” cannabis store

Written by David Brown on July 19, 2023. Posted in Business, Cannabis News, Government, Provinces, Retail, Saskatchewan.

One First Nations community in Saskatchewan has recently opened a retail store under their own local regulations.

Miyo Askiy Cannabis Co is located within the Piapot First Nations, which is a Cree First Nation in southern Saskatchewan near Regina. They had their grand opening on Wednesday, July 19. The Piapot First Nations own the building itself, which operates under Piapot cannabis regulations.

Saskatchewan recently passed legislation that said First Nations in the province would no longer need to get a permit from the Saskatchewan Liquor and Gaming Authority (SLGA) in order to operate on-reserve cannabis stores. The SLGA is the provincial agency regulating the liquor and cannabis industries.

The provincial rule change also gives more enforcement authority to local First Nations, something some community leaders have called for.

First Nations assert their jurisdiction and maintain community safety by creating laws under the Indian Act, land codes, and other federal legislation, but there have been difficulties in enforcing these laws in the courts.
Darcy Bear, Chief of the Whitecap Dakota First Nation

However, the province says First Nations cannabis rules must essentially mirror provincial rules and will still require products to be purchased through federally-regulated producers. Not all First Nations leaders agree—Piapot First Nations leadership among them.

In a press release shared in June, the Nation said the business is licensed to operate under the Piapot First Nation Cannabis Act and will comply with the Piapot First Nation Cannabis Regulations, which it says will “meet or exceed the provincial and federal regulations with respect to cannabis.”

“The Piapot Nation is committed to exercising its sovereign right to pursue economic opportunities that benefit the Nation and its membership.” Miyo Askiy says it will give back 15 percent of its proceeds to the community.

Images shared by the store online display an assortment of cannabis flower, extracts and edibles, with prices ranging from $5-15 a gram for dried flower, shatter around $17-20 a gram, and commercially-packaged edibles commonly found in the illicit market.

Images of products for sale at Miyo Askiy Cannabis Co.

Peter Flaman, a business adviser with Piapot First Nation, told local media the store would be able to distinguish itself from numerous other retailers in the Regina area by “running a lot cheaper store.”

A representative with Piapot First Nations was not immediately available for comment.

A handful of other First Nations communities in the province have opened their own stores under similar circumstances. Another Cree First Nation in Saskatchewan located near Regina, the Peepeekisis Cree Nation, created its own cannabis regulations in 2019 and opened its first cannabis store in 2020.

The Pheasant Rump Nakota First Nation has published its own cannabis regulations as well, opening a retail store in 2019 about 2 hours southeast of Regina. At that time, Pheasant Rump Chief Ira McArthur told the Regina Leader Post that they purchase products “from a supplier that grows it in quality control conditions, and the product is tested by one of the same laboratories that Health Canada uses.” The store advertises flower, CBD and THC tinctures, capsules, concentrates, edibles, and topicals.

The Muscowpetung First Nation took a similar approach, opening its own store in 2018 based on its own cannabis regulations. The provincial government asked the First Nation to close the store, with the Nation, in turn, filing a statement of claim in the Court of Queen’s Bench in 2019. The claim sought a declaration that the Nation has an inherent right to self-government and that it has the power to sell and regulate cannabis under the constitutional rights of Indigenous people in Canada.

That store, the Mino-Maskihki, is currently listed online as being closed.

While some First Nations in the province (and across Canada) have taken a more sovereign approach to their cannabis regulations, some have made efforts to align their own laws with provincial and/or federal regulations.

Darcy Bear, the Chief of the Whitecap Dakota First Nation near Saskatoon, praised Saskatcehwan’s changes to First Nations cannabis rules, saying they will give them the ability to better enforce the law in their communities.

“First Nations assert their jurisdiction and maintain community safety by creating laws under the Indian Act, land codes, and other federal legislation, but there have been difficulties in enforcing these laws in the courts,” says Bear. “Through our work with the provincial government, the amendments to SOPA will give us access to prosecution and enforcement tools that will give force to our laws in areas such as environmental protection and community safety, and strengthen the place of our laws alongside federal and provincial law.”

Not everyone is happy with the possible changes, though. Chief Derek Sunshine of the Fishing Lake First Nation told CBC last year that he had no intention of pursuing an agreement with the province or SLGA.

“They have no say in my nation,” he said, noting that the band created its own licensing system, and its store operates under that authority. “They have no right to say to my nation that we need a licence.” Numerous First Nation communities in the province and across Canada have opened their own cannabis stores, operating outside provincial and federal regulations, with at least eight communities creating their own bylaws.

h/t to the Regina Leader Post

Canada’s first Indigenous-owned cannabis producer releases first products to a First Nation retailer

April 23, 2021

BC says cannabis rules apply to First Nations, but are concerned enforcement could lead to court challenges

August 19, 2020

Senate Committee on Indigenous Peoples calls for jurisdiction over cannabis possession, sale, distribution in Canada

June 15, 2023

BC cannabis producer loses 120 kg of cannabis in early morning burglary

Written by David Brown on July 18, 2023. Posted in British Columbia, Business, Cannabis News, Producers, Provinces.

The owner of a BC cannabis company says his Agassiz facility was robbed recently, with several men in a truck getting away with 120 kg of cannabis.

Dylan King, the owner of Pistol and Paris, a BC-based cannabis processor and brand, says police were called to his small micro processing facility after several individuals broke in early in the morning on July 18.

Around 4:30 a.m., says King, several people drove their truck through two gates at the site before cutting into a shipping container where the cannabis was being stored. Police who responded to the call briefly pursued the truck as it was leaving the facility but were unable to immediately catch them, he adds.

“It’s a big loss, financially, unfortunately,” says King. ”We’ve got a lot of demand for these products and now we’re officially out of stock.

One of his biggest concerns is trying to get back on his feet to ensure his 13 employees still have work.

“It’s really a big blow. Things are already challenging enough with the way the industry is with price compressions and all these other things. There are so many guys going out of business, it’s just so difficult to operate. So a huge hit like this is deflating. I think of all the staff and I really want to keep everyone working.”

The individuals made off with several boxes of Pistol and Paris’ Orange Tings, Blackberry Breath, Notorious, and Pink Goo which were waiting to be packaged into pre-rolls and 7-gram SKUs. An employee who was on site at the time of the robbery said the individuals were driving a black truck.

King says he’s still holding out hope that police are able to receive the stolen product, but says the robbery was a wake-up call for him, especially because he didn’t have insurance on the product itself—something he didn’t think he needed in the legal industry. He hopes others use his experience as a cautionary tale.

“Just because you’re legal don’t think that these rippers are going to stay away. These rippers don’t seem to care whether you’re legal or not. I wish I had insurance to be able to help with some of this loss. I’m definitely going to be changing the way I run my business.”

StratCann will provide more details on this story as they emerge.

One of the two gates broken down to enter the site

Empty boxes outside of the shipping container where cannabis was stored

High marks for distribution models in Saskatchewan and Manitoba

Written by Tim Wilson on July 17, 2023. Posted in Business, Government, Insight, Manitoba, Producers, Provinces, Retail, Saskatchewan.

In Canada, each province and territory has a unique cannabis distribution model. Though by no means perfect, many retailers and LPs rank Saskatchewan and Manitoba among the best.

“In Saskatchewan, an LP can sell directly to a retail store,” says Ian Chadsey, VP Corporate Affairs at Delta 9 Cannabis, an LP with retail operations in the two provinces. “Manitoba also doesn’t take possession of the cannabis—there is no warehouse —but the government will take orders through its portal and add excise fees. We then deliver directly.”

In both examples, retailers have a lot of leeway in terms of ordering what they want.

Saskatchewan, for example, allows for direct relationships with LPs. Retailers can have net terms for all orders, which is reflective of a true B2B model, and has a positive impact on cash flow. There is a wholesaling option that allows for next-day delivery and quick adjustments, with credit for defective products. Emergency orders are also possible.

“This can all be done in a timely manner, direct with producers,” says Kerri Michell, president of Farmer Jane Cannabis, which has 14 retail stores in Saskatchewan and Manitoba. “In Saskatchewan, there’s a large product selection and variety, with LPs typically giving price reductions on aged inventory, especially products that can’t be sent to the larger government wholesalers. The province is almost at the point where a retailer could use a single wholesaler for 90-95% of product if they wished.”

By comparison, Manitoba offers simplified purchasing using the MBLL portal. This is a one-stop shop for all cannabis, which ensures accuracy for orders.

“In Manitoba, a retailer can set weekly payments and credits,” says Michell. “The province can also have a larger database of SKUs than in other provinces because the products aren’t physically held in a Manitoba warehouse.”

The good and the bad

In Saskatchewan, independent distributors help LPs to get their product to market. Some of these are owned by or have special relationships with large LPs or retail chains and have been criticized for not having smaller retailers’ interests at heart.

“These distribution companies make money on the backs of the struggling retailers for their own benefit, unlike the cooperative model,” says RJ Fafard, Director of Retail Operations at the Pot Shack, which has four retail locations in Saskatchewan. “From my perspective, the Weed Pool cooperative is the best option. It offers a two-day order turnaround, free delivery, and a low percentage markup on products, given that they’re only covering costs. There’s a large craft selection, and immediate invoicing.”

However, distributors in Saskatchewan, no matter their business model, will sometimes demand exclusivity, which can limit opportunity.

“The Weed Pool is a very good partner for us, but we can only sell to the stores they sell to in Saskatchewan,” says Alex Kratz, CEO of Western Cannabis, a family-run LP in Saskatchewan. “However, it’s normal and understandable for a distributor to want some exclusivity. In return, we get excellent support.”

Many LPs will have an exclusive contract with one distributor, and that’s it, which can place limits on market access. If multiple distributors are used, there’s a risk that an LP won’t receive favoured treatment. By comparison, in Manitoba every store has an equal chance to purchase any product they want.

“I’m a fan of how Manitoba does it,” says Kratz. “It is very open, with one distribution model that allows for all stores to have an equal chance to buy our product. We can then support the market in various ways, including popups and swag for independent stores. Every independent store in Manitoba has bought our product—whereas I can’t say the same for Saskatchewan.”

That said, dealing with a distributor in Saskatchewan has its advantages.

“The Weed Pool ordering system is one of the best,” says Kratz. “It’s so smooth—that’s definitely one of the perks. Order, buy, ship—it’s fast and simple.”

Manitoba also has its challenges, particularly on the retail side.

“We pay upfront for products that may not hit our stores for four to six weeks,” says Michell from Farmer Jane. “We’ve seen improvement overall, but there’s little recourse for slow delivery timelines from LPs. There have been several instances of extreme delivery delays.”

Many LPS also don’t like to have to ship to every store, regardless of volumes, which can reduce the interest in Manitoba as a market.

“This can result in worse service and higher prices, with LPs preferring to do business in other provinces,” says Michell. “Although a store in Manitoba can order weekly, many producers still ship bi-weekly. This means multiple orders from the same PO can arrive at once, causing confusion with packing slips. Also, listed products sometimes aren’t in supply with producers, and when this happens, there’s no ability to sub a different product.”

Scaling what works

Given the diverse views of market participants, there are differing ideas on what would improve the distribution systems in the two provinces—if anything. For some, minimal government involvement, as in Saskatchewan, is by far the best possible route.

“The Saskatchewan cannabis market works the best for us, as we can sell directly to the retail store,” says Chadsey from Delta 9 Cannabis. “It’s similar to the cigarette industry that supplies products directly to the retail outlet. There’s no need for the provincial government to be the middle person in the supply chain.”

However, Saskatchewan is a relatively small market—its population is only 1.2 million—which may make a hands-off approach more viable. Applying this laissez-faire model to larger markets could create complications.

“The Saskatchewan model imposes additional shipping costs on LPs, so the impact would be amplified in a larger market,” says Michell. “However, there are lucrative offsets that may balance out those expenses.”

It’s also uncertain how private distributors would scale their operations. Could exclusivity be enforced in multiple jurisdictions, and would that be problematic? As it stands, within the present model in Saskatchewan, Kratz says that Western Cannabis’s stance has been to sell to the Weed Pool, and to explore other markets.

“As a local LP, it would be nice to be in every city in Saskatchewan that has a cannabis store, but that’s impossible with the current model,” he says. “Thankfully, both Saskatchewan and Manitoba made it so that we could survive through our first couple of years as an LP. They’ve supported us from the beginning.”

Week in Weed – July 15, 2023

Written by Staff on July 15, 2023. Posted in British Columbia, Business, Cannabis News, Government, New Brunswick, Ontario, Producers, Provinces, Retail, Saskatchewan.

There’s been quite a flurry of news on StratCann this week, starting with Metro Van continuing to call for regulation of cannabis farm emissions, the OCS launching a new public awareness campaign, Health Canada announcing a plan to begin testing of licit and illicit cannabis, and BC engaging stakeholders on possible (minor) changes to provincial consumption rules.

In addition, Organigram blames lower sales on THC inflation and no longer being able to sell “ingestible extracts,” and StratCann profiled BC micro Kush Mountain.

In other news…

Saint Andrews, a town in New Brunswick, rejected Cannabis NB’s efforts to open a mobile retail store. The town council said a mobile cannabis store was a step too far, with one councillor worrying about the town’s image. *

“I just see a big CBC,” said councillor Lee Heenan referring to a potential news headline, according to the CBC. “Saint Andrews, first town to have mobile cannabis truck. I don’t know if that’s the publicity that we’d like to see.”

Greenway Greenhouse Cannabis Corporation, a cannabis nursery and processor in Ontario, entered into a debt settlement agreement with a marketing services provider, issuing 964,285 common shares at a deemed issuance price per share of $0.28 and a cash payment of $35,100.

In similar cannabis stock news, Canopy Growth signed agreements with lenders to reduce its debt by $437 million over the next six months, weeks after the Canadian firm raised doubts about its ability to continue as a going concern. The company’s total debt outstanding as of March 31, 2023, was $1.3 billion.

Saskatchewan RCMP say they are seeing an increase in cannabis-impaired driving at check stops, something RCMP Traffic Services Unit Cpl. Brian Ferguson attributes it to officers becoming more adept at “recognizing signs and symptoms of someone utilizing THC products and, as well, we do have some extra tools now that are available to us in more quantities.”

Health Canada’s Forward Regulatory Plan 2023-2025 includes references to proposing amendments to the Cannabis Regulations relating to Flavours in Cannabis Extracts. This is an extension of previous messaging from Health Canada on the subject going back to 2021. The regulator has yet to provide any new details on specifics or an expected timeline.

CBC also reported on how veterans and frontline workers say cannabis is tackling PTSD and depression, speaking with people from CannaConnect in Saskatchewan and UBC cannabis researcher Zachary Walsh.

A new Indigenous-owned cannabis store opened in Stratford, Ontario, eschewing provincial and federal cannabis regulations, with the owner arguing that he is within the Charter of Rights to operate the store on traditional land. In a statement, Stratford police said they “recognize the complexities of the issue and want to ensure that all lawful rights are taken into consideration.”

Retail cannabis chain Trees, with about a dozen locations in Ontario and BC, announced that it has entered into a business combination agreement with 420 Investments Ltd., which operates FOUR20, a cannabis retail chain in Alberta with about 40 locations. The agreement says that 420 will undertake a reverse takeover of Trees. The move came just as BC announced they are considering lifting the 8-store cap for cannabis retailers in the province.

Freida Butcher, Chair of the Board at 420, said they “are very proud of the performance of FOUR20 to not only survive the pandemic but to have grown from 14 stores in 2020 to our current 40 stores. We are very pleased to have found another retailer in Trees with the same values and with stores that will expand our brand in Ontario and allow us to take our first steps into BC.

Lastly, MJBiz reports that the OCS is calling on changes to cannabis packaging rules and THC limits on edibles.

CBC originally reported a “pop up” store had previously operated in Saint Andrews. This portion of CBC’s article has been edited to remove this section and as such we have removed it fro our recap. The store was also proposed as a Cannabis NB store, not a private store.

BC asking for feedback on changes to where people can consume cannabis

Written by David Brown on July 14, 2023. Posted in British Columbia, Business, Cannabis News, Government, Provinces, Retail.

The BC Government plans on making several changes to provincial cannabis rules, which it says will assist the cannabis industry and cannabis tourism in BC.

As part of a broader industry outreach initiative, BC’s Liquor and Cannabis Regulation Branch (LCRB) is seeking input from the cannabis industry and related stakeholders regarding plans to eliminate provincial constraints on promoting locations for cannabis consumption and to allowing cannabis consumption on patios, with the latter limited to areas where smoking and vaping are already permitted under provincial regulations.

Currently, BC does not allow anyone to smoke or vape cannabis on a patio, even in places where they can smoke tobacco or vape non-cannabis products. Provincial law also does not allow anyone to promote a place at which to consume cannabis. Municipalities and local First Nations may also have their own restrictions in place that would not be affected by any provincial rule changes.

The proposed changes would not allow for in-store consumption, but are a step towards creating allowances that will allow for the formal marketing of spaces and events that can more directly cater to consumption.

BC has announced that this feedback exercise, available to stakeholders until August 11, is a crucial step in the gradual development of cannabis hospitality and tourism “experiences” in the province.

BC has been increasingly focussing on the issue of consumption spaces and cannabis tourism, launching a province-wide engagement paper last year. The What We Heard report from that engagement process was then released in January 2023. The report showed significant public support for consumption spaces, balanced with concerns from law enforcement and public health agencies.

Industry response is mixed

According to Jaclynn Pehota, the executive director of the Retail Cannabis Council of BC (RCCBC), the organization’s members are supportive of the proposed changes regarding cannabis consumption locations in BC. However, Pehota highlights that the members are primarily focused on several other industry concerns.

“RCCBC’s member retailers are pleased to see the LCRB opening consultation on restrictions around consuming cannabis in outdoor spaces. RCCBC’s members are broadly supportive of leaving decisions specifically related to the appropriateness of cannabis consumption on patios to local governments. It seems reasonable that citizens and their representatives are best equipped to decide how to integrate outdoor cannabis consumption in their communities.”

“Membership welcomes the LCRB regularly revisiting BC’s regulatory framework for cannabis. Regular policy review ensures BC’s framework remains in step with the reality of today’s sector,” she added.

“Encouraging the government to undertake a review of the wholesale fee structure has been a focus of our advocacy since the launch of the Direct Delivery program in August 2022.
Jaclynn Pehota, Retail Cannabis Council of BC

In regard to raising the eight-store cap for cannabis retailers, Pehota says the RCCBC is cautiously supportive as long as the government takes a careful approach that can “safeguard the diverse community of small businesses that has been fostered in BC’s cannabis sector” and avoid the kind of downward price pressure seen in provinces that have a greater number of large discount chain stores.

Still, Pehota says the priority for RCCBC’s members is reducing the LDB’s 15 percent wholesale markup, especially for sales made through the direct delivery program that allows small-scale BC producers to ship products directly to retailers. The LDB charges this “proprietary fee” on products that go through its centralized distribution centre in the Lower Mainland, as well as on products that producers sell directly to retailers, without ever making their way through the central warehouse.

Instead, RCCBC’s recommendation is a reduction to 2.5 percent or lower, which Pehota says would be more comparable to the markup for craft beer

Jeff Curtis, the owner of Boro and Beyond in BC, which offers among its services, dab bars for cannabis pop-up events in the province, says the proposed changes to allow the promotion of locations for cannabis consumption and to allow cannabis consumption on patios, while modest, are a big first step towards what he sees as a more compressive approach to consumption spaces.

“Besides being able to mitigate public nuisance impacts, consumption spaces represent a place where government can concentrate marketing efforts to educate about overconsumption and where trained professionals can give first experiences and education to reduce adverse reactions.

“Aside from these, having licensable, insurable establishments and destinations to promote 19+ events would be huge. We’ve seen how big events and festivals bring in local revenue and generate jobs, and opening up cannabis would be no different.”

15 Percent Direct Delivery fee an industry priority

While many producers and retailers say they are very happy with the direction of the Direct Delivery program, the fact producers still have to pay this fee while also taking on the extra work of distribution has made it less than ideal for others.

“Our member retailers and our associate member producers have delivered the message loud and clear that reducing the 15 percent markup, especially in the context of Direct Delivery, is an advocacy priority,” Pehota told StratCann. “Encouraging the government to undertake a review of the wholesale fee structure has been a focus of our advocacy since the launch of the Direct Delivery program in August 2022.

“A lower whole markup can’t come soon enough for both retailers and producers,” she adds.

The retail organization instead recommends fees comparable to what the LDB charges for craft beer producers to sell directly to retailers. In a memo the organization sent out to members earlier this month, Pehota said they hope to see changes to the fee structure sometime in 2024.

“RCCBC continues to deliver the message that strong sectoral supports, like a reduction in wholesale fees, are desperately needed in BC as licence holders continue to fight to win market share from unregulated operators.”

The priority is saving BC craft cannabis. And in order to do so, this government has to make a substantial reduction or elimination of the wholesale markup on direct delivery.
Ehren Richards, Sunrise Cannabis

BC’s Ministry of Public Safety and Solicitor General, which oversees the cannabis file in the province, says it’s committed to reviewing the direct delivery program and is expected to “include consideration of the 15 percent markup that is applied to products registered for the direct delivery program and the program’s eligibility criteria.”

Some Vancouver retailers StratCann spoke with were somewhat more candid about their concerns over BCs focus on lifting the store cap rather than addressing the direct delivery fees.

Ehren Richardson, the co-owner of Sunrise Cannabis on Kingsway in Vancouver, says he doesn’t see the changes in consumption as particularly significant, and doesn’t understand the call to lift the eight-store cap. Instead, he says the removal of the 15 percent fee that producers must pay to sell into the direct delivery program would benefit retailers like him because it would allow them to carry a greater variety of local products at more competitive prices.

“I think that issue [the eight-store cap] is probably among the lowest priority issues facing the cannabis industry right now,” says Richardson. “The priority is saving BC craft cannabis. And in order to do so, this government has to make a substantial reduction or elimination of the wholesale markup on direct delivery. That’s the only thing that’s going to save us, not lifting the eight-store cap.”.

“There seems to be a disconnect between what the industry needs and what the BC government is doing”
Feven Berhane, KushKlub Canada

Grant Pan, General Manager at La Canapa, with three locations in Vancouver, shares a similar sentiment. While the BC government says it wants to support BC’s small craft growers, Pan is skeptical.

“It seems all their policy changes just benefit the big players. We’re a small store with three locations, and we don’t need the cap lifted. I think that’s just the big chains. That doesn’t help the BC craft industry. I don’t think the government really wants to help the little guys.”

However, Jeff Guignard, Executive Director at Alliance of Beverage Licensees (ABLE BC), which recently launched its own cannabis division to represent industry concerns, says he understands the concerns some retailers have but sees the change, if it happens, being modest in comparison to other provinces.

“I don’t think anybody wants to see a massive, single monopoly chain controlling the retail industry,” Guignard tells StratCann,“ but there are economies of scale that come from scaling up. I’m not suggesting we necessarily remove the cap. I don’t think industry so far says they support that. But there’s definitely some interest in increasing it, doubling it or increasing it to twelve, something like that.”

Feven Berhane, the co-founder of retail store KushKlub Canada, with a handful of locations in BC, Manitoba, and Ontario, says she is also unsure of why BC is prioritizing raising the store cap rather than prioritizing changing the 15 percent fee.

“There seems to be a disconnect between what the industry needs and what the BC government is doing,” says Bernhane. “If they help the micros they help everybody. But I don’t think the BC government understands that. That is what will help independent retailers. Even lowering that fee by a few points would make a big difference.”

Organigram blames lower sales on THC inflation and no longer being able to sell “ingestible extracts”

Written by David Brown on July 14, 2023. Posted in Business, Cannabis News, New Brunswick, Producers, Provinces.

New Brunswick-based cannabis producer Organigram says its net revenue and margins decreased in the third quarter of 2023 due to the declining price of cannabis flower.

The company also blamed a higher cost of sales, THC inflation, and Health Canada no longer allowing the sale of “ingestible extracts.”

Organigram had previously produced and sold Edison JOLTS—a cannabis-infused lozenge sold in packages containing 100mg THC, ten times Health Canada’s allowed limit of 10mg THC per package. Health Canada issued a notice to cease sale and distribution of these kinds of products earlier this year.

Organigram has filed for a judicial review of Health Canada’s decision.

The company posted its third quarter results for 2023 on June 13, with net revenue down 14 percent to $32.8 million, from $38.1 million in Q3 2022.

Organigram’s cost of sales also increased to $32.3 million, from $29.4 million in the third quarter of the previous year, an increase of 10 percent.

The cannabis producer blames lower sales of its cannabis flower on “the increasingly common practice of THC-inflation” by “some licensed producers” which it says are taking part in lab shopping and selective sampling.

Citing data from High Tide’s “Cabannalytics” data program, Organigram says that the total number of SKUs ina large national retail chain of cannabis stores that were labelled as having 30% THC or higher increased ten-fold since last year, having a “profound impact” on the sales of their own cannabis flower.

Derrick West, Organigram’s Chief Financial Officer, says the company is working to increase their own THC levels to meet market demand.

“Our results for the third quarter of Fiscal 2023 were impacted by a reduction in sales in two of our higher margin categories of international sales and ingestible extracts,” said West in a company press release.

“Further, to address the impact of THC inflation, which forced us to adjust our pricing to remain competitive, we intentionally accelerated adjustments to growing conditions to increase whole flower THC levels to meet consumer demand. This temporarily reduced our flower yields, negatively impacting our margins on all flower categories.”

Despite these concerns, Organigram’s recreational net revenue was $92.5 million for the nine months ended May 31, 2023, an increase of $8 million over the same prior-year period. International sales for the first nine months of fiscal 2023 were also up considerably, nearly doubling from $9.5 million in 2022 to $18.4 million.

Image via organigram.com

Week in weed – June 24, 2023

Written by David Brown on June 24, 2023. Posted in Business, Cannabis News.

This week on Stratcann, we had stories on overall sales growth (albeit slowing) in the cannabis market, the Ontario regulator getting hip with the times and reconsidering the window covering rule, as well as data on new license applications and a look at a cannabis festival in Eastern BC

Elsewhere…

While I have a hard time believing it’s ever been hard to get your hands on some cannabis in Whistler, BC, you’ll soon be able to do so completely legally: the ski town has finally approved applications for four stores, five years after legalization. (There are still some council members unhappy about it: “Deep in my heart, I could care less if there’s a weed store in Whistler,” said lead curmudgeon Councillor Ralph Forsyth.)

MJBiz reports that a group of Fire & Flower shareholders is opposing a proposed agreement between the cannabis retailer and its largest shareholder, an affiliate of convenience store operator Alimentation Couche-Tard.

Organigram is consolidating its shares in an effort to stay listed on the Nasdaq. The New Brunswick producer’s share price has fallen below the minimum $1 price required to be on the Nasdaq, leading to its announcement of a 4-to-1 consolidation. They’re not the only big company to do this—both Aurora and Hexo recently did the same.

TerrAscend, a Canadian LP with operations in several US states, announced it has received conditional approval from the Toronto Stock Exchange to list its common shares.

Cannabis retail sales in Canada in April increased by just over one percent from the previous month to $411.7 million. Sales spiked to their highest level yet in December to $425.9 million, before an expected post-holiday decline in January and February, before climbing again in March and April.

A Statistics Canada survey suggests that the risks of cannabis addiction may be higher for young men and people with anxiety. The report found that overall, around 5 percent of people are at risk for cannabis “addiction,” and the risk is elevated for particular groups (though it’s also worth noting here that many people have issues with the application of the term addiction to cannabis dependency).

There’s been some industry reaction to a story we flagged last week where Ottawa Public Health recommended graphic warning labels on cannabis. CTV spoke to Spiritleaf Crossroads franchisee Richard Dufour, who was critical of the idea, pointing out that in most circumstances, the sale is already done by the time the customer would see the warnings anyways.

More losses at Canopy Growth. The company reported a $648-million Q4 loss this week. On its earnings call the company also said that it is continuing to make management and staffing changes related to its troubled BioSteel sports drink business.

April’s growth in sales was driven mostly by increased sales in Ontario and British Columbia and to a lesser degree, Saskatchewan and Alberta. Other provinces and territories saw either a decline in sales or the same as sales in March.

Cova Software announced a new Point of Sale platform for Canadian cannabis retailers.

Nathan Mison continues his mission to push for cannabis tourism in Edmonton, calling for Alberta festivals to officially designate cannabis consumption areas.

International

Internationally, one Canadian cannabis beverage company has its eyes on the Mexican CBD market. Hopes of legalization in Mexico have mostly faded, but Xebra Brands’ exec Rodrigo Gallardo spoke with Bloomberg this week about the long-term potential he sees in Mexico. “Everyone talks about Colombia or Costa Rica—but Mexico is the crown jewel,” he said. “We have more land than any of those countries and, more importantly, we share a border with the world’s largest consumer.”

In law enforcement news

Montreal police have arrested a suspect they allege is the head of a network that distributes cannabis vaping products outside Montreal, largely to teenaged customers. Police say the products were sold on social media. Police also seized 17,000 vapes, wax, and dried cannabis, along with cash and other goods.

TMZ reported that Afroman was stopped at the US Border with a small amount of cannabis oil after returning from Canada. He was issued a $500 fine.

Ontario, BC, helps drive cannabis sales in April as overall market growth slows

Written by David Brown on June 23, 2023. Posted in Alberta, British Columbia, Business, Cannabis News, Ontario, Provinces, Retail, Saskatchewan.

Retail cannabis sales increased again in April for the second month in a row, following a post-holiday lull in January and February.

Ontario and British Columbia, as well as Alberta and Saskatchewan, helped drive retail cannabis sales up by just over one percent in April compared to March.

Retail cannabis sales in Canada increased by just over $5 million in April compared to the previous month, despite month-over-month declines in sales in the six other provinces. Sales in Yukon were flat, and sales figures from the Northwest Territories and Nunavut were unavailable.

Sales in Canada hit their highest level last December, at $425.9 million, before declining in the post-holiday downturn in January and February. Sales increased again in March to $406.4 million and $411.7 million in April.

Sales across Canada continue to increase year-over-year, although increases in 2023 have been less significant than in previous years. This data correlates with a decrease in new retail stores nationwide and, potentially, consumer saturation among those currently using the legal market.

Retail cannabis sales in Canada since legalization

Atlantic Canada saw the most significant decline in April compared to March, with retail cannabis sales in Newfoundland and Nova Scotia declining by nearly four percent, PEI declining by more than two percent, and New Brunswick declining by less than two percent.

Every province and Yukon (NWT and Nunavut figures are not available) showed a year-over-year increase in sales compared to April 2022, except for Quebec, which saw a slight decline.

Retail cannabis sales across Canada April 2022-April 2023

While cannabis retail sales continue to increase on a year-over-year basis, looking at the trend of sales figures from January 2019, the rate at which sales are increasing is declining, if not levelling off at around $420 million a month.

Sales tripled year-over-year from January 2019-January 2020 and nearly doubled the following year. From January 2021-January 2022, sales increased by about 25 percent. In the most recent year, from January 2022-January 2023, sales only increased by about 14 percent.

The number of retailers across Canada has also been levelling off in a similar trend. Quebec only added about ten stores in 2022, and sales in the province were nearly identical in the past two years, according to its most recent annual report.

Ontario saw a significant spike in retailers from 2020-2022 but has been slowing in the last year. The province has been hovering around 1,700 producers for much of the past year. Alberta has also seen significant retail growth in the first few years of legalization and has settled out around 750. While these provinces still see new retail licences issued, these are often accompanied by other retail closures.

BC is the only province to have seen significant retail expansion over the past year, with around 100 public and private stores added from June 2022-June 2023. Saskatchewan added about 40 stores but has not listed its annual sales report for the past fiscal year.

Despite this slowing in sales, the legal cannabis market does continue to capture more of the overall market share from the illicit market. A survey from late 2022 showed that 67 percent of those who consumed cannabis in the previous year “never” obtained their products from illegal sources. This was an increase from 63 percent in 2021 and 55 percent in 2020.

Canadian cannabis companies increasingly exploring export market

Written by Contributor on June 14, 2023. Posted in Business, Cannabis News, Producers.

Canadian licensed producers might be enduring an oversupply and price compression challenge domestically, but troubles within the country’s borders aren’t swaying LPs from looking overseas to invigorate their bottom line.

Whether the shipments head to Israel, Germany, or Australia, Canadian cannabis continues to go global, especially in burgeoning medical cannabis markets.

Aurora is one of the leading Canadian LPs setting their sights globally, with a presence in 14 international markets such as Germany, the UK, Denmark, the Czech Republic, and Uruguay. Boasting medical market share in Canada at around 25%, Aurora is focused on growth opportunities in the medical cannabis market in Europe, says Dirk Heitepriem, VP of external affairs at Aurora Europe.

“This is not just about brand recognition, but about the future success of Canadian licensed producers,” he says.

For a market such as Germany, it makes sense for Canadians to enter the medical space: Germany placed a cap on domestic commercial cannabis production, meaning most medical cannabis needs to be imported.

What helped Aurora establish a foothold in Germany was acquiring a firm with a strong presence in the region. In 2017, Aurora acquired Pedanios, a wholesale importer, exporter, and distributor of medical cannabis in the European Union. “To be in a country looking for high-quality cannabis that also has a reimbursement option for medical cannabis patients, well, it was a no-brainer for us,” says Heitepriem.

Organigram also exports its cannabis to medical cannabis markets in Israel and Australia, beginning as early as 2018. CEO Beena Goldenberg says the LP sought international revenue for two main reasons: consumers want high-quality and consistent cannabis, and the excise-tax costs LPs face in Canada aren’t an issue overseas.

Beena Goldenberg, CEO of Organigram at their New Brunswick facility

Goldenberg also addresses the over-supply challenge in Canada, which continues to plague LPs. According to December 2022 data, the cannabis inventory in the country sat at 19 million units, while sales only reeled in 4.7 million units. “It’s good to get that excess supply out of the country, and it helps to get the first-mover advantage in international markets,” she says.

But does the medical cannabis field attract the same kind of sales as the rec market domestically? Goldenberg doesn’t specify any revenue data, but stresses how the medical cannabis consumer is often committed to a strain that assists them with their ailment while rec users dabble with various strains and formats. Also, branding makes an impact in regions such as Israel.

“When the packaging on products says that the cannabis is indoor grown in Canada, that kind of messaging can differentiate our products from others available there,” she says.

In regions outside Canada, LPs should sign partnerships with local firms familiar with that market’s demographic, says Ranjeev Dhillon, a partner at McCarthy Tetrault LLP, who is co-head of their cannabis practice.

“But even with partnerships in place, getting an export-import license and all the associated costs and time that comes with that…it can be challenging for Canadian LPs looking to scale their business,” says Dhillon.

He noticed that the “empire-building” days of 2018, where LPs were flush with investor funds and media hype, have given way to LPs struggling for “domestic survival,” as he notes. Some LPs shouldn’t look to other countries for revenue when their own homegrown sales are floundering.

The promise of overseas revenue could also give way to a more realistic truth: “Some jurisdictions, down the road, might put in regulations that say, ‘Let’s grow our own cannabis here, in the EU, and restrict how much we import’.”

BC company ships 20 kg of cannabis to Jamaica

March 8, 2023

Israeli company completes cannabis seed shipment to Canada

October 28, 2022

What LPs have to recognize, is that each country will have its own red tape and regulations to follow, so what an LP had to do to import cannabis into Germany, say, will differ from the paperwork and audits they face when they enter Australia’s market.

Still, even for smaller craft LPs such as Alberta’s Decibel, entering markets such as Israel felt like a natural extension for the brand. “We’re in the unusual position where we have sold everything we cultivate in Canada,” says Adam Coates, Decibel’s Chief Revenue Officer. “And with our fifth shipment to Israel out the door this week, this relationship isn’t going to slow down for us.”

Partnering with Breath of Life in Israel, which handles the processing and distribution of Decibel’s dried flower, the LP broke into the country after noticing how “those medical markets needed consistent and quality cannabis, and we think our craft cultivation process is attractive to those consumers,” says Coates.

“But LPs in Canada can’t expect to just dump their cannabis in an overseas market and expect it to sell. It’s hyper-competitive, and we have boots on the ground in Israel, with a sales team there and engaging in conversations with consumers and pharmacies. This kind of work can be complex but we also wanted to scale our business by looking to take advantage of international markets.”

-David Silverberg

David Silverberg is a freelance journalist who contributes to BBC News, The Toronto Star, The Globe & Mail, Fast Company, MIT Technology Review, Leafly and several brands. He also coaches creative and non-fiction writers via online 1-on-1 courses which can be found on his website.

More than $100 million of cannabis sold in Nova Scotia last year

Written by Staff on June 13, 2023. Posted in Business, Cannabis News, Government, Nova Scotia, Provinces.

More than $100 million worth of cannabis was sold in Nova Scotia last year.

Nova Scotia sold $111.1 million worth of cannabis in the fiscal year ending March 31, 2022, an increase of 9 percent compared to the previous year according to the most recent annual report.

Transactions involving cannabis also increased by 12.7 percent. While the average basket size decreased by 3.1 percent to $38.40, this is likely due to a 2.8 percent reduction in the average price per gram of $6.19.

The Nova Scotia Liquor Corporation (NSLC) which oversees cannabis sales in the province also added 11 new cannabis stores, for a total of 48 across the province.

“We continue to look for ways to compete with the illicit cannabis market and offer Nova Scotians an accessible and safe supply of cannabis,” said Greg Hughes, NSLC president & CEO. “This includes finding ways to partner with local cannabis producers and help them bring their products to market.”

The NSLC has also been promoting Nova Scotia-grown cannabis products. These products accounted for over 30 percent of all cannabis sales in the province, an increase year-over-year of nearly 42 percent for a total of $33.5 million in sales.

Revenue from cannabis sales in Nova Scotia goes towards the funding of “key public services”.

Related Articles

Court dismisses health claims associated with Organigram pesticide recalls

Organigram asks court to overrule Health Canada on edibles extract restrictions

Organigram blames lower sales on THC inflation and no longer being able to sell “ingestible extracts”

In other cannabis news this past week…

US Cannabis news

Direct Delivery

Related Articles

BC LDB releases first wholesale quarterly sales report

BC bought $420 million worth of (legal) cannabis last year

BC cannabis sales increase as prices continue to drop

Related Articles

BC CSU lists 4 dispensary fines worth $1.2 million, another 29 outstanding

BC Cannabis Secretariat rejects call for a temporary exemption for the Victoria Cannabis Buyers Club

BC says cannabis rules apply to First Nations, but are concerned enforcement could lead to court challenges

Related Articles

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

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

Ontario cannabis market continues to expand as new stores are added

Working for paper

Making it right

In other cannabis news this week…

Cannabis International

Cannabis Farmgate across Canada

Related Articles

Medz Cannabis and Thrive Cannabis receive first cannabis “farmgate” licences in Ontario

ShuCanna receives cannabis farmgate store in Salmon Arm

Victoria Cannabis Co moves one step closer to their cannabis farmgate licence

Related Articles

Canadian cannabis companies increasingly exploring export market

Canadian exports—Global medical cannabis markets

BC company ships 20 kg of cannabis to Jamaica

C3’s Key Recommendations to Government:

Celebrating Success

Looking to the Future

International

Law Enforcement

SOLICITATION FOR OFFERS

Compliance activities related to promotions

Personal and Designated Grows

Law Enforcement and Politics

Related Articles

AGLC reverses decision on including CBN, THCV in THC total

Alberta cannabis producers are having trouble selling locally

Alberta has collected more than $176,000 in cannabis fines since 2018

Pubcos:

Research

Law Enforcement

International Cannabis

In other cannabis news this past week:

International cannabis news

Related Articles

Aurora issues voluntary recall of 2 lots of live resin due to labelling error

Canadian cannabis company recalls 100,000 disposable vape pens made in China

Cannabis recalled for labelling error, THC higher than on package

The resolution reads:

Munis in other provinces want their share, too

Additional resolution

Related Articles

NB Munis want to know where their share of cannabis tax revenues went

BC has brought in more than $157 million in cannabis excise tax since legalization

Manitoba munis, others calling for their share of provincial cannabis excise taxes

Demographics

Related Articles

Cannabis Act review to focus on progress, impact of legalization in Canada

Cannabis consumers in Canada more likely to be younger, female compared to the US

Stats Canada releases new report on cannabis cultivation at home

Related Articles

BC releases What We Heard report on cannabis consumption spaces

BC Cannabis Secretariat rejects call for a temporary exemption for the Victoria Cannabis Buyers Club

Vancouver Island’s VCBC again raided by BC’s Community Safety Unit

Events

Cannabis Education

Business

International

Law enforcement

Related Articles

Is there a future for cannabis consumption lounges?

BC releases What We Heard report on cannabis consumption spaces

Lit Research provides space for sensory testing of cannabis products in downtown Toronto