Week in Weed – February 3, 2024

| David Brown

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

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

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

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

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

In other cannabis news

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

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

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

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

Law enforcement

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

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

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

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

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

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

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

International cannabis news

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

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

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

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