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The SQDC pulls back on operating hours of twelve branches

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

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

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

The targeted branches’ operating hours will now be:

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

The 12 stores:

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

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

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

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

Featured image via Google Maps


A Manitoba cannabis brand is taking a former partner to court

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

A micro producer in BC has filed a notice of claim in provincial court alleging a third-party processor did not pay him for products they sold into the Ontario market. 

Laine Keyes, the owner of Pineapple Buds Inc., a micro cultivator and processor in Oliver, BC, filed the claim in a Penticton Court, naming several people connected to BC cannabis producer Embark Health and their parent company BevCanna.

Keyes alleges that Pineapple Buds Inc. provided cannabis to the defendants to sell to the Ontario Cannabis Store (OCS) and was not paid for the product, despite selling out in what Keyes says was “record time.”

“The defendants did not pay us for the product,” wrote Keyes in the statement. “We were told by the defendants, and given personal guarantees, that when they get paid we will be paid.”

The statement also specifically names Martino Ciambrelli, who was listed as the Responsible Person In Charge (RPIC) with the OCS by BevCanna Enterprises Inc. 

BevCanna acquired Embark in 2022.

“Fortunately I have recordings of our conversations,” continued Keye’s statement. “Martino and Bevcanna Enterprises Inc. controlled the bank accounts for Embark Health Inc. and Embark Delta Inc. Later we found out that for months Martino was misleading us by continuing to say that they hadn’t been paid, while in fact the entire time they were lying to us and were paid. Furthermore, after they received deposited funds from the OCS that were designated for Pineapple Bud Inc. Martino and Marcello paid themselves out of the Bevcanna account with the funds from the OCS designated for Pineapple Buds Inc.”

Keyes says he is seeking $35,000, which is, essentially, a limit under small claims court. Under BC’s rules, claims for more than $35,000 generally go to the BC Supreme Court. One can still make a claim for more than $35,000 in Small Claims Court, but if you do, you must abandon the amount over $35,000.

Keyes tells StratCann he is owed $70,000, but the costs associated with taking the case to the Supreme Court rather than through small claims court were too high. 

Pineapple Buds received its micro processing licence in April 2023. A processing licence is required to sell products into provincial markets. Keyes tells StratCann that Pineapple secured their deal with Embark to sell into Ontario before receiving its processing licence. The micro producer now handles its own packaging and processing.

StratCann reached out to BevCanna for comment, but they were not immediately available as of press time. Embark Health’s website is currently listed as expired.

Featured image of Laine Keyes and Kyra Horvath, the owners of Pineapple buds.


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Recall of BonBon Turkish Delight cannabis edibles in Ontario

Health Canada has issued a recall for two lots of WellCann Intl. Inc.’s BonBon Turkish Delight – Lokum edible cannabis sold in Ontario. 

The recall is due to concerns the products may contain mould. 

In their recall notice, Health Canada says that WellCann Intl. Inc. has received one complaint regarding the recalled lots. It did not involve an adverse reaction. Health Canada has not received any complaints nor reports of adverse reactions related to the recalled lots.

There were 587 units of recalled product that were sold in Ontario from December 1, 2023, to February 8, 2024. The BonBon Turkish Delight came with two 15 gram products. 

The product contains water, sugar, rosewater, lemon extract, starch, pistachio, natural colour and flavour, and emulsifier.

Health Canada says consumers who are in possession of the products should immediately stop use. They can return the product to the retailer where the product was purchased, or dispose of it entirely. Opened products, cautions the federal health agency, should be disposed of safely and out of the reach of children and young persons.

Health Canada also reminds Canadians to report any health or safety complaints related to the use of this cannabis product or any other cannabis product by filling out the online complaint form.

Ontario first listed the recall on February 13.


BC allows smoking, vaping cannabis on public patios, cannabis stores can now promote places to consume

BC has announced changes to its cannabis regulations that allow retail cannabis stores to promote a place to consume cannabis or to spend time after consuming cannabis. 

Smoking and vaping cannabis on public patios is also now permitted where smoking and vaping tobacco are already allowed, subject to local or Indigenous government bylaws and other rules. 

BC first engaged the public about these proposed changes in 2023 as part of a broader industry outreach initiative.

Previously, these were both specifically not allowed under BC’s regulations. The restrictions on associations with another business in Section 5.1.7 of the CRS and PRS Licensee Handbooks have been removed. The language restricting the promotion of a place to consume cannabis or spend time after consuming cannabis is also removed from the CRS and PRS Licensee Handbooks.

The provincial government notes that cannabis consumption is still not allowed in cannabis stores. Licensees must ensure any cannabis consumption near their store is not within their establishment.

Smoking and vaping are prohibited in all workplaces and indoor public spaces in BC. Tobacco and vapour products can be used on an outdoor hospitality patio, such as the patio of a bar, casino, or café, as long as it is within a buffer zone and there are no open windows, doors or active air intakes between the patio and the hospitality venue.

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 released in January 2023. The report showed significant public support for consumption spaces, balanced with concerns from law enforcement and public health agencies.

Jaclynn Pehota, the executive director of the Retail Cannabis Council of BC (RCCBC), told Stratcann that the organization is supportive of the “small” step forward.

“These are necessary changes especially for non cannabis primary businesses. We hope it will encourage them to embrace and promote cannabis friendly consumption venues and events. The team at LRCCBC believe that these changes are small but positive positive steps towards reducing stigma and supporting BC’s potential for cannabis tourism. 

“We are optimistic that these are the first steps towards a more comprehensive cannabis consumption strategy from the BC government and are hopeful that these changes signals an embrace of cannabis tourism by our sitting government. We encourage regulators to explore further support for the budding cannabis tourism industry in BC.”

(Note: This article has been edited to include new comments from RCCBC).

Jeff Guignard, Executive Director of the Alliance of Beverage Licensees (ABLE BC), which also offers services for BC’s retail cannabis sector, says he’s excited by the announcement. 

“This is great news for BC’s cannabis, hospitality, and tourism industries and we’re immensely grateful to our government partners for their support.

“Not only can businesses now promote places to consume cannabis, but the government has also aligned cannabis consumption rules with the rules for smoking or vaping tobacco, which just makes sense. It gives businesses much-needed flexibility to serve their cannabis-friendly customers.”

“We’re also excited that government is taking further steps toward cannabis consumption lounges, which will create an entirely new dimension for our growing industry,” he adds. “As we discussed with Solicitor General Mike Farnworth recently, we still have a lot of work to do to support legally licensed retailers. But these small steps in the right direction are clear signs that government is listening, and we as an industry are making important progress.”

Cannabis consumption in BC

One cannabis retailer in Cumberland is currently developing a community space that includes an outdoor cannabis consumption area.

British Columbia’s stance on indoor smoking and vaping restrictions has made outdoor consumption spaces like the one in Cumberland an attractive option, says Max Oudendag, who has been assisting Michael Arneja, the owner of Cumberland, BC’s Trugreen Cannabis on their consumption space.

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

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BC CSU raids cannabis stores on K’ómoks First Nation

BC’s Community Safety Unit (CSU) conducted several raids of cannabis stores operating in K’ómoks First Nation on Wednesday, February 14. 

K’ómoks First Nation is located on Vancouver Island near Comox.

BC’s 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 raids were first reported by Rob Laurie, a lawyer who represents one cannabis operator, the Buddery House, which was raided by the CSU. Laurie says he received a call late Wednesday morning on February 14, informing him of the raid. He’s aware of at least two other cannabis stores in the area that were also raided. These make-up what he calls a “mini green mile,” similar to other concentrations of cannabis stores on First Nations land. 

Although the province has long taken the position that BC’s Cannabis Act is a “law of general application” that applies to all of British Columbia, including First Nations’ land, the province’s Minister of Public Safety and Solicitor General Mike Farnworth says there is a concern that this interpretation could be “tested” by actions such as enforcement.

Products seized by CSU. Image via Rob Laurie
Products seized by CSU. Image via Rob Laurie

In his observation, Laurie says he believes the CSU is increasing enforcement actions of this kind, which he speculates could be related to an election in BC later this year. Some industry groups, as well as opposition members, have challenged the government on what they say has been a lack of enforcement of provincial rules for cannabis stores on First Nations land. 

“They definitely seem to be taking a much more aggressive, and more regular action than in the years leading up to now. Is this really the biggest issue the government should be dealing with, all things considered?”

Note: The Comox Valley Record reported that two of these stores, the Buddery House and 3420 Cannabis reopened on February 15.

In Parliament last 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.

As of January 2024, the CSU has conducted 339 educational visits, and as a result, 232 unlicensed stores have closed. CSU has investigated 1554 websites involved in the illegal sale of cannabis and has disrupted 981 of those websites. 

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.

A representative with BC’s Ministry of Public Safety and Solicitor General confirmed with StratCann via email that the CSU “conducted enforcement” on February 14, 2024, but was unable to provide information or comment on any specifics regarding action taken by the CSU. They did not answer if they had been invited to the community by K’ómoks First Nation leadership.

The representative said that BC’s Cannabis Control and Licensing Act (CCLA), is a law of general application that applies across B.C., including on lands governed by First Nations.

“All along, the aim has been to achieve voluntary compliance; however, we have been very clear that CSU will employ a progressive enforcement approach against those who continue to operate without a licence. Escalation of enforcement action is determined on a case-by-case basis and considers factors such as public safety, the integrity of the legal market, and partner and community concerns. To legally sell retail cannabis products in B.C., retailers must obtain a licence from the Liquor and Cannabis Regulation Branch (LCRB).”

K’ómoks First Nation Elected Chief & Council shared a statement with StratCann.

“The Province has moved forward with their next phase of enforcing the Cannabis Control and Licensing Act (CCLA). While they previously focused on off-reserve cannabis shops not compliant with the Act, as of late 2023, they are now prioritizing stores on First Nations lands across the province. 

“Last month, the Province’s Community Safety Unit (CSU) visited the unregulated cannabis businesses on our Reserve. They shared educational materials about the CCLA and how these businesses can become compliant with Section 119 of the Act. 

“The CCLA is a law of general application. Any laws of general application also apply on Reserves. 

“Today, the CSU started confiscating unlicensed product from the unregulated cannabis shops on Reserve. 

“We understand that the CSU’s actions today impact our members and their livelihood. K’ómoks did not have a say in the Province’s actions. The Province is enforcing their law, as is their jurisdiction. 

“The cannabis market can provide significant opportunities for First Nations communities. As the Cannabis Control and Licensing Act is designed now, it’s hard for First Nations to participate. Progress to amend legislation has been slow.

“It is our job as elected leadership to represent our people and advocate for our right for self- governance. We will continue to work on this issue to find a resolution, but it will take time. Our best course of action is to retain legal and business expertise to lobby the government to amend legislation. This will take many months of dedicated effort and community engagement. We plan to work with store owners on Reserve and consult with our community to find a path forward that works for our Nation.”

StratCann also reached out to three of the targeted cannabis stores for comment. None were available as of press time.

This article has been edited to include comments from K’ómoks First Nation Elected Chief & Council.


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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

It is also more than willing to school the market.

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

A Wider View

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

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

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

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

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

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

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

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

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

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

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

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

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

Onside with the OCS

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

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

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

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

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

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

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

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


Quebec police arrest three in connection with cannabis export scheme to the US

Police in Québec say they arrested three people on Tuesday, February 13, in connection with the illicit export of cannabis to the United States.

In addition to these arrests, the Sûreté du Québec (SQ) searched the WRS transport company in Val-d’Or, following an investigation that began in 2021 by members of the Val-d’Or Major Crimes Team, reports Radio Canada.

Val-d’Or is located about a six-and-a-half-hour drive northwest of Montreal. WRS Pro-Transport advertises a fleet of 16 trucks in service throughout Canada and the United States.

Through their investigation, police say they located a load of cannabis hidden under the trailer of a truck destined for the US. This was hidden without the knowledge of the driver. 

Following their initial discovery, police located more than 136 kilograms of cannabis intended for illicit export at various locations. These searches were carried out by the SQ as well as the RCMP, the Laval City Police and the Canada Border Services Agency.

Sergeant Hugues Beaulieu, spokesperson for Sûreté du Québec, says the two men and one woman arrested were then released pending further proceedings.

Illicit cannabis exports of cannabis from Canada to the US and other locations abroad are not uncommon. Reports of illicit products making their way to foreign shores tend to be reported in police seizures. 

Officials in Hong Kong have reported seizing large amounts of cannabis, often from Canada, as have officials in Italy, where more than 100 kilograms were discovered earlier this year by police. 

Despite stiff penalties, Hong Kongers, especially young people, are illegally importing hundreds of kilograms of cannabis from Canada and the US, local officials noted in 2020.

Most recently, Hong Kong customs seized 120 kilograms of cannabis from Canada in August 2023 in a shipment listed as chickpeas, and another 100 kilograms on July 25, declared as leisure patio chairs.

A fairly recent article in the Dutch newspaper BN DeStem noted a large seizure of cannabis en route from Canada to Germany, asking if North America was replacing the Netherlands as a source of cannabis in the region. 

The US saw a similar spike in large seizures of cannabis while the border was closed to non-essential traffic. Canadian cannabis making its way to the US is not new, but with more US states legalizing, distributors of cannabis looking for markets can still utilize US channels to send cannabis to foreign shores. 

Similarly, as more US states legalize, the allure of higher prices abroad can be difficult to resist for Canadian producers in a saturated market.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Featured image via investors.organigram.ca


Manitoba announces several new cannabis distributors

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

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

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

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

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

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

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

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

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

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

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

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

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

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


314 Pure Cannabis engaged in a Sales Process

SOLICITATION FOR OFFERS

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

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

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

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

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

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

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

OPP raid 7 illegal dispensaries, seize 63 kg of flower, 500 vape pens, 7 arrested

Ontario Provincial Police (OPP) say they executed search warrants at seven illicit cannabis storefronts in southern Ontario, seizing cannabis, cannabis products, and psilocybin.

An OPP-led Provincial Joint Forces Cannabis Enforcement Team (PFCET) executed nine search warrants in Barrie, St. Catharines, Vaughan, Toronto, and Brampton on February 6. This included several storefront locations as well as a residence in Toronto and a suspect’s vehicle.

The storefronts raided were Bayfield Bongs in Barrie, St. Paul Smoke Shop in St. Catharines, Farmers Link in Vaughan, The Planet 60, Kingston Chronic, and Lawrence Smoke Shop in Toronto, and B Loud Cannabis in Brampton. All of these businesses still have active websites as of publication of this article, except for Kingston Chronic. 

Police say they seized 63 kilograms of dried cannabis flower, 901 packages of cannabis edibles, over 500 THC vape pens, 214 grams of butane hash oil, 436 grams of hashish, almost 300 packages of psilocybin, cell phones, $500,000 in Canadian currency and brass knuckles.

Seven individuals were arrested with a total of 26 offences. They are scheduled to appear before an Ontario Court of Justice in Newmarket on Feb. 26, 2024. The investigation is ongoing.

Screenshot of products available in one of the illicit stores’ online shop

Beaumont, Alberta passes new rules for medical cannabis production

The city of Beaumont, Alberta, located near Edmonton International Airport, recently passed new rules to restrict the production of medical cannabis to agricultural land or light industrial areas.

The move comes in response to some community concerns over personal or designated medical cannabis production licences in residential neighbourhoods, says the city. 

City council approved an amendment in January to its Land Use Bylaw that restricts medical cannabis production to Agricultural Holdings and Business Light-Industrial Districts and requires a development permit for production.

The Council first approved a motion to draft amendments to Beaumont’s Land Use Bylaw that would prohibit individuals with a federally-issued licence from growing medical cannabis in residential land use districts in mid-2023. The mayor placed blame on the federal medical cannabis regulations.

“When the federal government legalized cannabis and began issuing licences for people to grow it in their home for medical use, they created a situation where a single house could have upwards of 100 or more plants,” said Mayor Bill Daneluik at the time. “Unfortunately, they didn’t include any requirements to address potential issues, like overwhelming odors, from growing large amounts of cannabis and have left municipalities to deal with the problem.”

“Beaumont’s Land Use Bylaw now has clear rules for where medical cannabis production can take place, closing the gap created by federal legislation and making sure our neighbourhoods remain vibrant and livable,” the mayor said in a press release following the passage by the new amendments.

Zoning restrictions like odour and noise are generally managed at the municipal, not federal, level. Federal rules for such personal or designated cannabis production licences for medical purposes have been repeatedly upheld by a series of court cases that have affirmed people’s right to produce their own cannabis if authorized by a medical professional.

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 by 6 percent from 20,448 in December 2022 to 19,076 in March 2023. 

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. 

Health Canada has been increasing the number of personal and designated production licences for cannabis for medical purposes, with 170 inspections in the most recent report through 2023.

Most of the licence holders inspected in the past year were in Ontario (115) or BC (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. 

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 number 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.


Canadian cannabis nursery to import unique New Zealand genetics

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

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

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

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

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

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

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

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

Oisín Tierney, Apollo Green

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

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

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

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

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

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

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Quebec closing cannabis store in Montreal

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

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

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

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

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

Featured image via Google Maps

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

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

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

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

When there is no store in Surrey, BC, what are people going to do?

Vikram Sachdeva, Seed & Stone

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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SQDC needs better online payment options, says police captain

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

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

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

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

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

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

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

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

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

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

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

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

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

Image via wikimedia commons.


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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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


Trees Corporation seeking investment or buyers

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

Infographic via bcldb.com

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

Direct Delivery

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

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

Wholesale sales in Direct Delivery increased by 23% from the same period last year, with almost $3.2 million sold. The average price per gram sold in DD was $4.51, and $3.93 for flower, down from $7.11 and $6.45 last year.

This decline in sales from Q2 2023 was driven by lower sales of cannabis flower, with $2,259,307 in Q2 and $1,863,265 in Q3. Pre-roll sales were $896,215, down from $968,026 in the previous year.

via bcldb.com

Sales of edibles and beverages were up 25% from the same quarter last year, with $16,169 sold in Q3 2023 vs $12,945 in Q3 2022.

Ingestible Extracts were way up compared to the same period last year and last quarter. In Q3 2023, sales of this product category were $24,502, doubling from $12,923 in Q2 2023 and tripling from Q3 2022’s $8,773.

More info is available here.

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Saskatchewan Polytechnic teams up with Mother Labs to tackle powdery mildew

Saskatchewan Polytechnic has partnered with Saskatchewan-based cannabis nursery Mother Labs on a breeding program focussing on screening for mildew resistance.

The applied research project was first proposed by Mother Labs, who brought the idea to Saskatchewan Polytechnic’s BioScience Applied Research Centre (BARC). The Centre gives experts from private industry access to the polytechnic’s applied research expertise.

“Our partnership with Sask Polytech symbolizes a significant stride towards addressing a spectrum of challenges in the cannabis industry,” says Jordan Hannah, Director of Operations at Mother Labs. 

Researchers use PCR-based molecular markers as a way to look for agronomic traits in cannabis plants.

Students from the BioScience Technology program extract DNA from tissue samples and use PCR-based markers (Polymerase chain reaction) to screen breeding lines for the presence or absence of specific genes.

“PCR tests, similar to the COVID PCR tests previously used for out-of-country travel, were employed by our students in the investigation of cannabis plants,” says research chair Blaine Chartrand. “Specifically, our students used PCR testing to detect plants that contained genes for resistance to powdery mildew and to determine their sex for breeding applications.”

“Collaborating with Mother Labs allowed students to gain insights into the cannabis sector through facility tours and firsthand learning experiences,” he adds. 

The team accurately determined the sex of 40 different cannabis plants using PCR tests. 

The Mother Labs project was funded by the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP).

Saskatchewan Polytechnic received cannabis research and analytical licenses from Health Canada in 2023.

“As the cannabis industry continues to mature, it will be vital to develop excellent breeding programs and energy-efficient methods of propagation. Sask Polytech’s applied research will draw on techniques that are well established in the traditional agricultural space and adapt them for use in the cannabis industry to improve plant quality and performance,” said Dr. Susan Blum, Associate Vice-President of Applied Research and Innovation at Sask Polytech at the time.

Read more about this project at saskpolytech.ca.

Other industry collaborations

This is not the only instance of such a project in Canada. Powdery Mildew is one of the most common diseases that cannabis growers often struggle with, especially in humid climates. Because of this, the industry in Canada and abroad is looking to identify and even patent genetics with resistance to the disease. 

In 2020, more than $4.2 million in federal, provincial, and industry funding was announced to aid with research at the University of British Columbia (UBC) into enhanced cannabis cultivars, focusing on disease resistance for issues like powdery mildew.

The project, Fast-Track Breeding of Powdery Mildew-Resistant Cannabis, involved UBC researchers Dr. Loren Rieseberg and Dr. Marco Todesco, in partnership with Aurora Cannabis. 

Aurora said they had filed a provisional patent application on powdery mildew resistance that was discovered through this program and will take legal action to protect their research and development.

Breeding is, of course, not limited to looking to address powdery mildew. In 2023, UBC’s Dr. Todesco also announced they were teaming up with a geneticist at Aurora to adapt cannabis for outdoor production.


Kootenay Aeroponic has deep roots in BC’s cannabis community

With several decades of experience growing cannabis, the two-person team at Kootenay Aeroponic has roots that go deep into the cannabis community in southeastern BC.

Started by Loree LaBoucane and Charles Morrison and licensed in early 2021, Kootenay Aeroponic is a micro cultivator and processor located in Creston, BC, just a few miles north of the US border. 

The two partners first met when Morrison was a designated grower under the ACMPR (MMAR?), and LaBoucane was working in a medical dispensary in nearby Kimberley. They ended up opening a medical dispensary, serving the community of Creston for a short time before transitioning into the fully regulated non-medical market in 2018, following legalization.

It’s the craft, legacy growers who made the transition that need help if they’re going to succeed. Definitely our industry could use some government assistance. The BCLDB could stop charging the 15% fee on Direct Delivery, and the federal government could reign in the excise tax which could help producers become profitable.

Loree LaBoucane, Kootenay Aeroponic Inc.

A renovated former tractor repair and supply shop provided the backdrop for Kootenay Aeroponic’s custom-built growing system. The micro cultivation team first sold products into the BC market through a third-party processor, but after receiving their processing licence in 2023, they pivoted to processing, packaging and shipping their own products through BC’s direct delivery system. 

Loree and Chuck in the office

BC’s Direct Delivery program, launched in 2022, allows small BC producers to sell directly to BC retailers rather than passing through the government’s distribution warehouse in the Lower Mainland. 

“We’re excited about Direct Delivery,” says LaBoucane, and we’re doing everything we can to let retailers know about our unique, small batch products.” As they now have their micro processing licence, Kootenay Aeroponic will also offer in-house extracts, pending receipt of their concentrates sales licence, something the two-person team is eager to share with consumers.

Located on a major route into Creston, Kootenay Aeroponic is positioned on prime real estate for a farmgate store, LaBoucane says. Although they have big plans for the location, the realities of the market and the cost to apply for a PRS licence have those plans on the back burner for the time being. 

It’s not an easy path, she explains, but it’s about their love of the plant and of their community. The micro licence means their operation is small enough that the two of them can handle the majority of the work, but it also has them burning the midnight oil to make it all work. It’s a path she hopes the government, at all levels, can do more to support.

“We’ve been in the community a long time, and do this because it’s what we love. You have to. Chuck and I do everything ourselves. It’s the craft, legacy growers who made the transition that need help if they’re going to succeed. Definitely our industry could use some government assistance. The BCLDB could stop charging the 15% fee on Direct Delivery, and the federal government could reign in the excise tax which could help producers become profitable.”

“For a long time before legalization, cannabis was a major part of the economy in places all around the Kootenays,” she continues. “If those of us who have made this transition can’t make it work, it hurts the whole region. I hope they really understand that the Kootenays has a lot to lose. The region is famous all over the cannabis world! Simply put, it only makes good economic sense.”

Still, they remain very positive, making calls and driving to local stores to highlight the products they have available through direct delivery. “It’s been very hard, we all need to work together to create an accountable AND viable industry. We need to make sure we’re supporting local, BC-grown products. We need to make sure we can preserve the legacy of BC Bud.”


Fraser Valley Regional District holding public hearing for new zoning regs for cannabis production

The Fraser Valley Regional District (FVRD) in British Columbia will hold a public hearing on February 6 to discuss new regulations for cannabis producers.

This is the second phase of a process the FVRD board first started in 2019. Phase 1 was completed in March 2020 when the board drafted bylaws for cannabis production in specific electoral areas within the FVRD, a matter the board called “urgent.”

At the time, the FVRD was home to several cannabis production facilities, including large greenhouses, that often led to complaints from homeowners about odour and light. Based on significant community support, phase 1 prohibited cannabis land uses in Electoral Areas D, E, F and H, shown in the map below.

Phase 2 is about what type of cannabis land use will be permitted within the FVRD. The FVRD Board gave First Reading to Fraser Valley Regional District Zoning Amendment Bylaw No. 1723, 2023, at its meeting on November 23, 2023.

Staff recommendations take into account the differences between small-scale micro cannabis facilities and standard facilities, which tend to be larger. 

Micro facilities would be permitted in all zones and electoral areas where a Cannabis Production Facility is currently permitted. They would be allowed in agricultural and rural zones on parcels with a minimum size of four hectares (10 acres), a maximum building gross floor area of 600 square metres, as well as screening requirements and setbacks. 

Standard facilities would be allowed only in Industrial Zones (General Industrial, Heavy Industrial, Resource Industrial 1) and would also require setbacks and screening. 

The public hearing will be held on Tuesday, February 6, 2024 at 6:00 pm.


Surrey releases proposal for up to 12 cannabis stores in BC’s second largest city

The city of Surrey, BC, which has banned cannabis stores since the beginning of legalization, is now proposing to allow up to 12 cannabis stores in the city.

The plan, detailed in a survey the city recently posted online, says if it moves forward, there would be a maximum of two in each of Surrey’s six communities.

The city has developed a draft framework to guide the location and selection criteria, and is asking residents to complete the survey to provide feedback on the draft framework.

Surrey is the second-largest municipality in British Columbia, after Vancouver, with a population of more than 560,000 people. Vancouver, which has more than 660,000 people, currently has 80 cannabis stores, according to the city’s document (83 listed as open or in the queue according to BC).

In 2023, Surrey City Council began exploring the possibility of allowing cannabis stores, directing city staff to develop a plan. In July of that year, council sent a plan back to city staff to be reworked to address some councillors’ concerns. 

The initial plan would have limited the number of store locations to one in each of Surrey’s six town centres (City Centre, Guildford, Fleetwood, Newton, Cloverdale, and Semiahmoo), with a preference for a city‐owned site in each Town Centre as the first location. 

Graphic via City of Surrey

Councill expressed concern at the proposed locations and the idea of the city being a landlord for a cannabis business. 

The new plan proposes a 200 m distance requirement from “sensitive uses and areas to limit exposure to children and youth,” as well as existing cannabis retail and production locations.

The city also says it has developed an application process for future cannabis retail store proposals. If applicants meet all pre-screening requirements, applications will then be reviewed and ranked based on the experience of the operator, a parking and access plan, visibility, lighting and crime prevention design, signage and building face design, and for Surrey-based businesses.

Deepak Anand, who lives in Surrey and is a principal at ASDA Consultancy Services, which works in the cannabis space, says the number of stores Surrey is proposing is not enough, given the city’s size. 

“While Surrey moving away from being a retail desert five years after legalization is certainly progress, the ratio of one store for 47,000 people is, frankly, ridiculous. Surrey easily has the capacity and demand for over 80 stores based on its population and in comparison to other municipalities of its size.”

The Surrey Board of Trade released a statement today saying they applaud the new proposal, and hope it is implemented this spring.

“As the City invites public input through the Retail Cannabis Framework Survey, the Surrey Board of Trade supports a framework that is developed collaboratively with the cannabis industry and the public,” said Anita Huberman, President & CEO, Surrey Board of Trade. “Surrey can implement a safe and efficient cannabis regulatory framework, including amendments to zoning bylaws, business licence bylaws, bylaw notice enforcement bylaws, and municipal ticket information bylaws.”

The Surrey Board of Trade released a report last year calling on the local government to begin allowing cannabis retailers to operate in the municipality. Jasroop Gosal, Policy & Research Manager for the Surrey Board of Trade, said the board had concerns with how long the proposed plan will take to implement, while other cities in BC and across Canada have already moved forward.

Surrey City Staff held a workshop in 2023 with cannabis retail industry members to gain insights and feedback on a revised cannabis retail policy and application process.


BC has a long way to go create a thriving cannabis industry

Shannon Ross has an idea to make BC cannabis the talk of the town again.

The once notorious province could get some of its edge back by letting people enjoy cannabis together in public, just like you would consume craft beer.

“I think the most effective thing we could do to get back on the stage and become a powerhouse, not only in British Columbia, but the whole international scene, is consumption spaces,” says Ross, co-founder of Antidote Processing in the Kootenays. “That would be a game changer.”

We’re not a financially successful industry for the majority of small businesses right now. We have our hands tied behind our back trying to create legal cannabis businesses.

Shannon Ross, Antidote Processing

Ross wants to know how the BC government plans to support consumption spaces. She says one of the biggest hindrances right now is the inability to get together and use cannabis socially. Ross wants public cannabis spaces to be similar to finding a place to enjoy a pint with pals. There’s still too much stigma around cannabis, she says.

She suggests creating farmers’ market-style gatherings as a valuable way for consumers to meet farmers, especially with the limitations placed on advertising.

“The marketing restrictions are so challenging on a federal level that the BC government could facilitate that consumer-grower connection and allow some marketing efforts to happen in a way that’s conducive to finding balance,” she says in an interview with StratCann.

There has to be a happy medium that encourages a certain level of responsible education and marketing, she adds.

“It’s really about connecting people and allowing them to consume,” she says, adding that even the big conferences are fading now.

Still, there are things that BC is doing well to set the stage for long-term relevance, namely farmgate and direct delivery. Ross calls them both tools for proactive change, but there are barriers to taking advantage.

The 15% markup on direct delivery products erodes the incentive, and getting retailers on board can be pretty tricky, she says. Also, there are extra expenses tied to both direct delivery and farmgate that cannabis businesses simply can’t justify.

“It takes a ton of resources that we don’t have yet,” says Ross. 

“Right now the industry isn’t mature enough. We’re not a financially successful industry for the majority of small businesses right now. We have our hands tied behind our back trying to create legal cannabis businesses.”

On the bright side, Ross says the provincial government has been receptive and is showing some curiosity toward cannabis by attending industry events. She says they are hearing the voices of craft growers and adapting.

She argues that the federal government is the biggest problem, particularly the excise tax. She says that until the excise tax is reduced, people won’t jump on these programs.

“The biggest challenge is access to capital in order to meet a lot of the regulatory requirements. Banks don’t want to loan very much and there’s still so much stigma, just being able to have a low interest loan… even access to $25,000. A lot of people aren’t even able to transition to legal because there’s no access to capital.” 

Kyp Rowe has a bit of a different perspective on which level of government is the most significant hindrance.

“The base hindrance is the province,” says Rowe, president of Victoria Cannabis Company (VCC). “Everybody wants to scream and yell at the feds with their excise tax, Health Canada, this, that, and the other thing. The biggest assholes in this entire industry are the provinces. The fact that they are quadruple-dipping into our pockets is making this entire industry unsustainable.”

Rowe lists the PST, GST, 15% direct delivery markup, and the province’s monopoly over the wholesale game.

“The whole thing is doomed to fail and to crush the small producer.”

While the Direct Delivery Program is a great start—“I love it,” he says—the 15% markup is aggravating. “I move my weed 30 feet into my farmgate store and I’ve got to cut them down 15%? That’s fucking ludicrous,” says Rowe.

“The Direct Delivery Program in totality as far as the rest of Canada is concerned is extremely progressive. It’s a way for the producers to make direct connections with the retailers without having the province right in the middle of it, mucking up the waters.”

Rowe also applauds farmgate but says it won’t benefit many BC producers.

VCC is only the third company to get its farmgate licence since the program came into effect over a year ago. He blames the low uptake on locations, as many facilities are in industrial parks or remote areas that don’t get much traffic. Conversely, VCC is located minutes from downtown Victoria and has 44,000 cars going past it daily.

Rowe says BC’s Liquor and Cannabis Regulation Branch made the process of getting its farmgate licence easy. 

It was the City of Victoria that dragged their feet. He says it took a year to get on the city’s docket for rezoning as they kept getting bumped from the agenda. Then, in order to get approval, VCC had to pay $60,000 for a sidewalk, which cut down its parking availability.

“We had to harass the city.”

“Three levels of government you have to deal with in the cannabis industry. They don’t talk to each other. We don’t have any power. To effect change is almost impossible.”


~David Wylie. David is a writer, father, and founder of The Oz., which covers cannabis from a consumer perspective.

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Two arrested following seizure of product from unlicensed dispensary in Saint John

Peace officers with the New Brunswick Department of Justice and Public Safety say they arrested a man and woman and seized contraband cannabis and other illegal products from a store in Saint John on January 9. 

On that day, provincial officers executed a search warrant at Milford Smoke, located at 548 Milford Rd. in Saint John, where a 63-year-old male delivery driver and 37-year-old female clerk were arrested for violations under the federal Cannabis Act.

Both were later released from custody and are due in court on April 4. The investigation is ongoing.

A post on the company’s Facebook page says the Milford Rd. location opened in November 2023, after moving from a previous location at 76 King Street in Saint John. An employee who answered the phone at the store today said they are currently only open for delivery as the storefront is now closed.

Peace officers seized:

  • 1.9 kilograms of dried cannabis
  • 327 grams of hashish
  • 327 jars/packs of cannabis shatter
  • 113 vape pens
  • 672 pre-rolled joints
  • 305 packages of edible gummies/food products
  • 206 flavoured nicotine vapes

Cannabis NB and provincially licensed private retail stores are permitted to sell cannabis in the province. Only these approved retailers offer regulated cannabis products that are approved by Health Canada and sourced by Cannabis NB.

There are 25 Cannabis NB stores in the province, plus a handful of privately-run cannabis stores.


Ontario Court rules “frivolous” statement of claim against cannabis retailer had no hope of succeeding

An Ontario judge has ruled a statement of claim by one cannabis retailer against another, as well as the provincial cannabis regulator, is frivolous and vexatious.

In a ruling posted on January 19, 2024, an Ontario Superior Court judge ruled that a claim filed by Ontario cannabis retailer Highland Cannabis Inc., with one location in Kitchener, ON, against High Tide Inc., which owns the largest chain of cannabis stores in Canada, had no hope of succeeding. 

Highland Cannabis Inc. launched its action against High Tide and the Alcohol and Gaming Commission of Ontario (AGCO) in relation to a data breach at the AGCO in 2022. The leak showed data for the sales figures at retail cannabis stores for the months of July 2021 and December 2021. Law enforcement is still investigating the leak. 

High Tide had asked the court to dismiss the action against the company, arguing it was “frivolous, vexatious, and an abuse of the court’s process.” 

Highland Cannabis told the court that representatives of High Tide approached Highland’s owner with an offer to purchase the store following the data breach. In that meeting, High Tide is alleged to have told the owners of Highland Cannabis that it was aware of the independent retailer’s sales figures. 

Although the two parties initially discussed a sale price, it ultimately did not move forward. 

The court documents say High Tide received the leaked data from two sources, and there have been no allegations that the retail chain forwarded or disseminated the leaked data to any other party. It did review the data, though. 

The owner of Highland Cannabis argued that High Tide accessed the data inappropriately, giving it an unfair advantage against Highland Cannabis. They also allege that another location High Tide was interested in, the Ira Needles location, was also based on their access to the retail sales data. The court disagreed, saying High Tide had identified the location prior to the leak. 

Messages between the two parties, shared by the court, show that High Tide offered to buy the Highlands Cannabis location for $7.2 million.

Editor’s note: This article initially stated that Highlands countered High Tide’s offer of $7.2 million, asking for $10 million. While Highlands stated anticipated growth to $10m/y, this was not a counter offer. They did not make a counter offer. In addition, while Highland commenced this action against High Tide and the Alcohol and Gaming Commission of Ontario (AGCO), the dismissal here is only in relation to the action against High Tide, not the AGCO.

Featured image via Google Maps


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Toronto area cannabis store forced to print out entire script of Shrek on customer receipt

A prankster forced a Toronto cannabis dispensary to print out the entire script of Shrek last month, something the retailer’s e-commerce provider says they quickly took measures to prevent in the future. 

A video shared online in December shows an incredibly long receipt being printed at a cannabis store and then later displayed on a wall.

The short video first references a group chat where the video was shared among what appears to be employees of a cannabis store in York. The customer purchased a single vape cart before pasting all the words from the first Shrek movie into the comments section in their order form, leading to the printing incident. 

A representative with Dutchie, the technology platform that provides the e-commerce system used by the cannabis store in question, confirmed with StratCann that they quickly took measures to prevent anyone from doing something similar in the future.


OGEN initiates sale of brand, intellectual property, product line, genetics

OGEN, a cannabis company that recently announced it was shutting down, has initiated the sale of its brand, intellectual property, product line, and genetics.

The sale, announced on January 16, 2024, includes OGEN’s fully trademarked brand, IP assets, marketing plans, campaigns, and social media accounts. The sale is being facilitated by the Canadian Cannabis Exchange (“CCX”).

The sale also includes 77 SKUs sold in eight provinces, including pre-rolls, dried flower, and milled flower, in a range of packaging configurations. 

The selection also includes 13 cannabis cultivars for sale that Ogen says were developed through a 5-year pheno-hunting process and are supported by a collection of “historical potency results, rooted clones, and seeds.” 

For all inquiries about the sale, contact CCX here.

OGEN announced it was closing its doors in November 2023. Darren Brisebois, President of OGEN Cannabis, told StratCann that high taxes and regulatory fees combined with low margins meant the end of the road for the Alberta producer. 

Brisebois says the decision to close was not his; it was at the discretion of their lenders as well as pressures from the CRA.

The company, he said, which had to let nearly ninety employees go after hearing the news of receivership from their lender, had around 25,000 cannabis plants at various stages of production that had been scheduled for destruction. 


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Safari Flower Group receives CCAA protection

Safari Flower, an Ontario-based cannabis producer, received CCAA protection on January 12, listing over $55 million in liabilities. 

The Safari Flower Group says it intends to use the restructuring process to effect a reverse vesting orders (RVO) transaction with one of its secured lenders that can be used as a way to inject cash into a company.

Next Edge General Partner (Ontario) Inc., in its capacity as general partner of NE SPC II LP, will be providing a DIP loan.

Reverse vesting orders can be used to assist in recovery in complex insolvencies in Canada, especially in instances where traditional alternatives of asset sales or restructuring plans are not effective or practical.

Brigitte Simons, CEO of Safari Flower Company, says the goal is to restructure the company’s inherited debt, emphasizing that they are still growing and selling cannabis.

“Safari elected for a secured debt restructure of our indoor grow facility and Niagara land footprint after setting goals in 2023, achieving them, and putting them in front for valuations against a timeline of a Sales Initiated Solicitation Process and a CCAA end point.”

“Safari will be backed by our secured lenders in the CCAA to support the company through a healthy balance sheet and it’s international sales growth agenda. The CCAA program enables us to focus on our mission and our employees that carry the path forward for Safari’s global craft and medical cannabis flower products.”

With a 59,000-square-foot indoor facility located in Fort Erie, Ontario, the Safari Flower Group holds international certifications that permit the company to supply cannabis to the European, Israeli, and Australian medicinal cannabis markets.

Safari Flower Co. received EU-GMP certification in December 2023.

“We are thrilled to have built a foundation on quality systems and developed professional talent to deliver cannabis to the stringent safety standards that patients demand in trust, the EU-GMP certification, a testament to our unwavering dedication to quality and compliance,” Simons said at the time. “This achievement reinforces our commitment to ENUA’s brand providing a medicinal variety of cannabis flower by small batch grows.”

Safari was cash-positive at its year-end in 2021 but has not been able to maintain profitability according to Insolvency Insider, noting that Safari attributes this to the price compression in the Canadian market. 

The cannabis industry in Canada has experienced significant financial challenges. At least 72 cannabis companies filed for some form of creditor protection in 2023, according to listings by Insolvency Insider Canada, which focuses on the Canadian insolvency market.

Note: This article has been updated to include current comments from Brigitte Simons.


Tether’s sampling event comes to Vancouver on January 24

Toronto, Ontario, Janualy 11, 2024 (GLOBE NEWSWIRE) — Tether, Canada’s Budtender community connecting cannabis brands with Budtenders and retail decision-makers, announces its first-ever Vancouver Sampling Event in collaboration with The Entourage Co. This unique event aims to provide an educational and immersive experience for industry professionals and the community at large.

Budtenders will have a unique opportunity to explore and sample a curated selection of beloved cannabis products and engage with representatives from leading brands. This inaugural function marks one of Vancouver’s first compliant sampling events since educational sampling became legal in the province in September of 2023.

Tether’s Vancouver Sampling Event is set to take place at The Beaumont Studios on Wednesday, January 24, 2024, from 6:00 – 8:00 p.m. PT. Known as a go-to venue for cannabis professionals and advocates, this strategic partnership provides an open and supportive environment for the cannabis community. Tickets are open to Budtenders, retailers, consumers, and other cannabis industry professionals including ancillary services.

In an industry that is still working to reduce social stigma and improve consumer education, engaging with Budtenders is a strategic imperative for cannabis brands to help build loyalty and brand recognition. Featured brands of the event include 40 Acre Blends, Choklit Park, Glacial Gold, Green Monké, High Plains, NightNight CBN, Sweet Justice, Weed Me, Wyld and more. For the full list of participating brands and organizations, visit Fannatickets.

“Tether is committed to the continuous success of the cannabis industry, actively contributing to its growth and innovation,” says Marina Gorin, Director of Sales at Weed Me. “With a focus on community building, the Tether team is propelling the industry forward through events like this.”

Powered by Marigold Marketing & PR, Tether serves as a bridge, connecting cannabis brands with a network of over 4,500 Canadian Budtenders through events, content, sampling, community building, and educational initiatives. As the cannabis landscape continues to evolve, Tether recognizes the importance of cultivating an informed and confident Budtender community.

Attendance at Tether’s Vancouver Sampling Event is strictly limited to individuals aged 19+. Sampling is reserved exclusively for active Budtenders and retailers. Pre-registration is required to guarantee your spot.

To stay up to date with event details and brand announcements, follow @tetherbuds on Instagram. For more information and ticket purchases for Tether’s Vancouver Sampling Event, please visit Fannatickets.

Content sponsed by: Tether Budtender Community


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

The BC government says it needs more time before it decides on previously announced potential changes to its retail cannabis rules, such as the number of stores one company can own.

Following a feedback process, the BC Liquor and Cannabis Regulation Branch (LCRB) will need additional research to decide whether it should increase the number of cannabis stores one company can operate in the province. The current limit is eight. 

“In a dedicated pursuit of continuous improvement and industry responsiveness, the Liquor and Cannabis Regulation Branch (LCRB) is committed to reviewing these market controls,” said BC Minister of Public Safety and Solicitor General Mike Farnworth in an email posted online by a board member of the Retail Cannabis Council of British Columbia (RCCBC). 

“Most recently, they concluded an engagement focused on licence cap considerations. This engagement involved discussions with industry partners and licensees, fostering a constructive dialogue to ensure a well-rounded understanding of the intricacies involved. The Ministry has now completed an initial analysis of the feedback and determined that additional research is required before any changes to current market controls, including the CRS licence cap, can be considered.”

If the government can have 39 stores then we should be allowed to. If the government doesn’t have the same rules for us and for them, I don’t find it to be a fair game.

Vikram Sachdeva, Founder & CEO​, Seed and Stone

Farnworth, who serves as the province’s lead on the cannabis file, previously told a group of cannabis industry stakeholders in April 2023 that the province was considering raising the retail cap and making changes to their tied house policies, among other possible regulatory and policy charges.  

“The Liquor and Cannabis Regulation Branch has now completed initial analysis of the feedback from this engagement. The ministry will engage further as we continue to explore this and other possible market controls.”

BC Ministry of Public Safety and Solicitor General

Under BC’s rules, a “tied house” is a connection between a cannabis retail store licensee and a cannabis producer, which is not allowed. Several other provinces have permitted this type of relationship, with a handful of cannabis producers running retail stores under the same name or through an affiliated company. 

The Ministry confirms they are continuing to look into these issues but have yet to arrive at any specific decisions. 

“The ministry recently concluded an engagement which specifically focused on licence cap considerations,” a representative with the Ministry of Public Safety and Solicitor General shared with StratCann.

“The LCRB has now completed initial analysis of the feedback from this engagement. The ministry will engage further as we continue to explore this and other possible market controls.”

The Ministry did not provide any additional information on the status of the tied house rule or any engagement; instead, it just explained the definition of tied house in response to a direct question about the engagement process.  

Industry response

A representative for the Retail Cannabis Council of British Columbia (RCCBC), representing several BC cannabis retailers who opposed raising the cap, says they are happy with the province’s decision not to make a decision yet. 

“We are pleased that the LCRB has decided to take the time to further research the potential market impacts of a licence cap increase,” Jaclynn Pehotas, the Executive Director of RCCBC told StratCann via email. “A significant majority of our membership made it very clear via member polling that an increase to the cap was not a change they were in favour of and felt that an increase would be detrimental to their businesses. 

“We communicated these polling results to the team at the LCRB with the recommendation that other market controls should be considered prior to any change in the current eight store cap. It is an unfortunate fact that the sector has seen significant negative impacts on licence holders in other provinces due to over saturation of the retail market. RCCBC feels it is critical to the health of the BC cannabis sector to protect our existing small businesses from the risk that oversaturation presents.” 

“A significant majority of our membership made it very clear via member polling that an increase to the cap was not a change they were in favour of and felt that an increase would be detrimental to their businesses. 

Jaclynn Pehotas, Retail Cannabis Council of British Columbia

Jeff Guignard, the Executive Director of BC’s Alliance of Beverage Licensees (ABLE BC), which also operates an advocacy group for cannabis retailers in the province, says he understands the province is taking its time to get the policy right. ABLE had previously advocated for the cap to be raised to 12 stores

“Given the lengthy history of BC’s cannabis culture, there are a lot of diverse perspectives on the best way forward. I think the government is working hard to understand and respect those perspectives, which is why these consultations take time. In our conversations with Solicitor General Mike Farnworth, he seems genuinely committed to making the right policy changes, which is encouraging.

“We’re encouraged that the government is working hard to understand the whole picture before it acts. For example, we’ve also been advocating for a minimum door-to-door distance criteria between retailers to be implemented at the same time as a small increase to the eight-store cap. We know from our work on behalf of liquor stores that distance rules are a very effective way to protect investments and ensure fair competition. It would make sense for those two things to be implemented at the same time.”

“A small increase to the eight-store cap would be good news for industry, especially if it’s combined with a regulated minimum distance between new stores. It would support incremental growth for businesses already at the cap, while still protecting the diversity of individual businesses at their current size. Increasing to the cap to 12 or 16 stores would give everyone room to grow while still preventing any one chain of stores from growing large enough to skew the market. Long term, increasing the cap will be essential for the financial health of BC’s cannabis retailers.”

“I understand the concerns of the mom-and-pop stores. I started out with one store, but my dreams and my goals are bigger. I want to be able to serve more communities and scale this business out.”

Vikram Sachdeva, Seed and Stone

Vikram Sachdeva, the Founder & CEO​ of Seed and Stone, a retailer with five locations in BC, says he thinks there is a need for a modest increase, especially since the BC government currently has 39 stores across the province.

“All I’ve ever wanted is a fair playing field,” Sachdeva tells StratCann. “If the government can have 39 stores then we should be allowed to. If the government doesn’t have the same rules for us and for them, I don’t find it to be a fair game. I’m not saying 50 stores or 100 stores, all I’m saying is if it’s eight, maybe double that to 16 stores.”

This kind of increase would address the concerns of those who don’t want to see large chains dominating the market, like in Ontario, where the retail cap was doubled to 150 on January 1 of this year. 

“I understand the concerns of the mom-and-pop stores. I started out with one store, but my dreams and my goals are bigger. I want to be able to serve more communities and scale this business out.”

Sachdeva adds that getting even one new store approved, given the myriad of checks and balances in place for cannabis stores in BC, plus distance regulations in many cities, means Seed and Stone even getting to 15 stores would be a considerable feat.

Omar Khan, the chief communications and public affairs officer at High Tide Inc., which owns and operates the largest chain of cannabis stores in Canada, says he believes lifting the cap in BC will help the government better displace the illicit market. 

High Tide owns Canna Cabana, with 162 current locations in British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario. It has eight locations in BC.

“Given the relative strength of the illicit market in BC, we encourage the provincial government to continue looking for ways to work with legal cannabis retailers like us to secure a sustainable and thriving legal cannabis sector in the province. This includes looking at reasonable increases to the provincial retail cannabis store cap and lowering provincial wholesale markups.”

Other regulatory changes

The province has also previously committed to reviewing the direct delivery program that allows producers to send directly to retailers, as well as the 15% service fee that applies to products sold through the program. Many in the industry say the fee, which is the same fee charged on product physically sold through the provincial distribution centre, is too high to make the program viable

However, a representative with the Ministry of Public Safety and Solicitor General could only confirm that they are continuing to look into the issue, noting that any profits generated by the LDB’s cannabis sales are remitted to the provincial treasury to support vital public services such as healthcare and education.

“The ministry is currently considering potential adjustments to the direct delivery program, including exploring changes to the 15 per cent charge that is applied to direct delivered cannabis products.”

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Two cannabis stores in BC targeted in early morning burglaries

Two BC cannabis stores have faced break-ins this week, causing significant damage to the stores and a loss of product. 

The most recent store to report a burglary was UEM Cannabis in Langley, which first posted about the incident on their social media. The post, shared on Tuesday, January 9, says that in the early morning hours of that day, two vehicles, a truck and a car, arrived with six individuals who broke into the store. 

The individuals reportedly did significant damage to the store itself to gain access, with the men quickly making off with products like vape pen batteries, cannabis beverages, and extracts.

UEM Cannabis is one of the busier cannabis stores in BC, selling a large volume of cannabis products from their location in the middle of BC’s Lower Mainland. UEM also has a location in Vancouver. An employee at the Langley store told StratCann on Wednesday, January 10, that they are still open for business. 

Seed and Stone’s Chilliwack location was the second store to face a similar burglary. Seed and Stone operates five stores in BC. 

Vikram Sachdeva, the Founder & CEO​ of Seed and Stone, confirms with StratCann that the burglary also occurred around 4:30 in the morning, similar to the previous burglary at UEM Cannabis. No employees were present at the store at the time. 

Sachdeva says, like UEM, his store faced considerable damage from the burglars gaining entry to the store and then gaining access to glass display cases. He says the store is currently closed but is expected to open again in the coming days. 

Retailers need to be very vigilant, he argues, as the industry has a “target on its back” with many assuming cannabis businesses are awash in cash. 

“We face so many issues,” says Sachdeva. “Banking is hard to come by. Margins are slim. And when we face something like this, it can be easy to get discouraged. But we just keep pushing forward. It’s what we have to do.”

He says the community has already shown him a lot of support, with customers stopping by the store offering encouragement and his landlord being very cooperative. 

“From a business point of view it puts another roadblock in front of us. But we are still here, still doing the work.”

Robberies and burglaries of cannabis stores are not uncommon in BC and other provinces. Two cannabis producers in BC were taregetted last year, as well.

Around a dozen stores have been the targets of sometimes violent robberies in the Calgary area in the last few months. Stores in Calgary have been previously targeted, as well. Several stores in Ontario were the victims of break-ins, and there were at least two incidents of arson in early 2023.

Featured image of Seed and Stone storefront in Chilliwack that was targeted by burglars.

A screenshot from a security video shared by Seed and Stone online showing the two vehicles used

Changes to cannabis rules and regulations in 2023

Like most regulations, cannabis regulations in Canada are constantly changing and evolving. 

When federal cannabis legalization came into force in 2018, followed by regulatory regimes in provinces, First Nations, and municipalities, it was the beginning of a long, never-ending cycle of push and pull between industry, consumers, and regulators for a standard that balanced all of these interests. 

While the current legislative review of the federal Cannabis Act is looking at the impact of this legislation on Canadian society, changes to the federal Cannabis Regulations are ongoing.

In 2023, we have seen several examples of these regulations changing—at all levels of government—in most instances for the better as far as industry and consumers are concerned. While some of the “big picture” needs of industry are not always immediately met, such as excise tax reform or an increase of the 10mg THC limit for edibles, small changes to federal regulations continue to make at least modest improvements in the daily activities of the industry. 

Below are a few examples from Health Canada, the provinces, First Nations, and municipalities. 

Health Canada cannabis regulations

As of October 1, 2023, Health Canada said it would phase out inspections for authorized activities change requests from processors to add the activity of sale of extract, edible, and topical cannabis products. This change applies to all processing licence holders, micro or standard.

In March 2023, Health Canada published a Notice of Intent in the Canada Gazette, Part I, seeking feedback on potential amendments to the Cannabis Regulations. The agency’s goal with these potential amendments is to streamline and clarify existing requirements, eliminate duplicative requirements, and reduce burdens where possible.

The federal regulator also extended various regulatory “flexibilities” first put in place during COVID-19 restrictions, and federal compliance and enforcement efforts continued to increase in 2023, especially for personal and designated growers.

What’s going on with CBN in Canada?

Not all changes were seen as positive, though. Health Canada had been engaging with industry for much of 2023 on the subject of “minor intoxicating cannabinoids” such as Delta-8 THC, THC-V, as well as CBN, among others. 

In August, Alberta’s AGLC contacted some producers, informing them that it would be including the amount of CBN and/or THCV in a cannabis product within the total THC, claiming this was based on Health Canada’s rules. However, Health Canada noted no such rules yet existed. By September, the AGLC had reversed that decision, pending further guidance from Health Canada.

Then, in late December, Health Canada finally released the expected guidance for cannabis producers on cannabis products with intoxicating cannabinoids other than delta-9-THC, which included CBN. This document is currently still just guidance, not a regulatory change.  

Of course, these federal regulations come with an assortment of fees, with Heath Canada collecting more than $60 million in the most recent fiscal year. 

In October, Health Canada released a document offering background and considerations for guidance on microbial and chemical contaminant tolerance limits, seeking feedback from industry on the proposed changes. 

Provinces

Several provinces also announced regulatory changes or plans for changes in 2023. British Columbia says it is considering several changes to its cannabis regulations, especially around the rules for cannabis retailers. It has been seeking feedback on its plan for modest changes to rules that could see cannabis consumption on patios.

In May, the province repealed its requirement for cannabis stores to use window coverings, and in September, they announced that cannabis producers could provide samples to retailers

BC also announced funding to support Indigenous cannabis businesses.

Also in May, Manitoba suspended its 6% Social Responsibility Fee from retailers. To the frustration of many, in October, a Manitoba court upheld the province’s ban on growing cannabis at home. The ruling is being appealed.

Although the Manitoba NDP said they wanted to make several changes to the province’s cannabis policy, including saying they did not support the provincial ban on growing cannabis at home prior to this year’s election, since they formed government in October the province has been mum on the subject.  

In Saskatchewan, the SLGA announced in June that all cannabis retail stores in the province were no longer required to ask for proof of age on every retail transaction for in-store purchases and pickups. In addition, effective immediately, the SLGA will only require personal and corporate disclosures for the applicant and any individuals, corporations, and other entities with an ownership stake of at least 10 percent of the applicant.

Also, Saskatchewan retailers who have received a cannabis store permit from First Nations Cannabis Licence Authorities (FNCA) are able to purchase cannabis from registered suppliers and permitted wholesalers in the province. With FNCA approval, they can also sell cannabis wholesale to other provincially-approved retailers. 

In March, Alberta’s AGLC said cannabis producers can now provide samples to retailers and in October, it announced several changes to its cannabis rules and regulations, including enabling self-attestation for age-gating for retailers, providing producers with more information about where their products are selling, and allowing cannabis stores to use specific terms in their signage. 

Previously, Alberta had one of the strictest age-gating rules of any province in Canada, with retailers only able to show product information on their websites if users had verified their age with an ID, either in-person or through an online form. Most provinces simply require a self-attestation, such as entering a date of birth or answering yes or no to a simple age prompt. 

The province is also considering allowing white-label cannabis products and, in October, reduced the SKU listing fee for cannabis producers. In December, it announced several changes to its retail cannabis regulations that will come into force on January 31, 2024, including allowing cannabis retailers to operate temporary sales locations at adult-only events like trade shows and festivals.

In November, Ontario’s OCS announced they would begin a pilot program to test some cannabis products being sold in the province, drawing mixed responses from the industry. In August, the OCS announced changes to how it would store consumer data. In the same month, the Alcohol and Gaming Commission of Ontario (AGCO) and the OCS announced they had developed a new data platform to help simplify retailers’ cannabis reporting requirements.

In July, the OCS began allowing deliveries from smaller vehicles, making it easier for smaller cannabis producers to send shipments to their distribution centre. The OCS also began reducing its margins and moving to a fixed markup pricing model

Ontario also plans to double the number of cannabis stores a retailer can operate from 75 to 150 and is proposing to ban the cultivation of cannabis in homes that offer childcare services.

First Nations

The Mohawk Council of Kahnawake gave the go-ahead for retail sales of cannabis in the community to begin when it voted to lift the moratorium on sales and possession for retail sales during its Monday meeting. The chief responsible for the dossier said she expects sales to begin in the New Year.

StratCann interviewed MCK Chief Tonya Perron about their plans for cannabis regulations in 2021. The lifting of the moratorium allows the Kahnawake Cannabis Control Board (CCB) to begin issuing the three licences that will be available for sales of cannabis, and possession of cannabis for sale, as soon as they get through what Perron expects will be a mountain of work on awarding those licences. Numerous stores operating in the area say they do not recognize the Council’s authority. 

Municipalities

In April, Mississauga City Council voted to approve a motion to lift its prohibition on cannabis retail stores and permit them to be located in the second-largest city in Ontario. There are currently 26 cannabis stores listed by the AGCO as being authorized to open in Mississauga.

Surrey, a large municipality in British Columbia, is also looking into allowing cannabis stores. Pitt Meadows, another municipality in BC’s lower mainland, recently began allowing them on a case-by-case basis

International cannabis

A new cannabis flower monograph was adopted at a session of the European Pharmacopoeia Commission in June 2023. The monograph on cannabis flower is now available online and will be published in European Pharmacopoeia (Ph. Eur.) Supplement 11.5 in January 2024.

Anything we missed? Let us know.


Cannabis stores in Canada continue to be targets for robbers and burglars

Cannabis stores in Canada continue to be targets for robbers and burglars, while retailers say they are doing what they can to mitigate risks.

A recent string of violent armed robberies in Calgary made headlines in the last few weeks, adding to the number of burglaries, thefts and vandalism at cannabis stores in several provinces in recent weeks and months. 

Police recently made arrests related to that string of armed robberies in Calgary, and two men were also recently arrested on charges relating to another armed cannabis store robbery, this time in Gleichen, Alberta, just outside of Calgary.

Other stores in Calgary have also been previously targeted

A business in BC was also recently burglarized on December 6, with $2,500 worth of cannabis products stolen from a store in Masset, on Graham Island in Haida Gwaii. The thieves gained entry by breaking the front window of the store.

Several stores in Ontario were the victims of break-ins, and there were at least two incidents of arson in early 2023. 

Cannabis growers and processors have not been immune, either. Earlier this year, at least two cannabis producers in BC’s Lower Mainland were the victims of early-morning burglaries.

Alberta and BC have repealed their rules that required stores to have window coverings, which retailers said made their employees less safe in such incidents. Ontario is also considering such a change.

Retailers say they are having to spend more money to secure their stores as this new “cost of doing business” continues. 

Brionne Lavoie, the owner of the Frontier Cannabis store in Masset that was recently burglarized, says he’s now installing heavy vault doors on his storage rooms to avoid similar break-ins in the future. In addition, the value of the cannabis stolen and damage to the store was below the deductibles for his insurance.

“At the end of the day it’s all deterrence,” says Lavoie. “If someone wants to break in or cause harm, they’re going to find a way without the extent of bank security, it’s just one of those things.”

Lisa Bigioni, co-founder and CEO of Stok’d Cannabis, which has four retail locations in Ontario and experienced two break-ins the week before Christmas 2022, told StratCann earlier this year that they have made several upgrades to their properties.  

“Metal gates have now been installed in our stores, and we sleep a lot better at night. It’s been costly. The gates were about $2,000 per store.”

“The fact that we’re compliant with our security cameras helped us capture them in action,” says Bigioni. “And this helped the police find them. In both cases, the police arrived before we did. The detective assigned to the cases was fantastic, and kept us well-informed along the way. Based on the evidence, he was confident the guys would be caught, which they were less than a week later.”

Ryan Roch, who owns two cannabis stores just outside Calgary, says he has a similar perspective, saying retailers can guard against this by being more vigilant with security measures. 

“Just keep your head on a swivel,” says Roch. “Do cash drops on a regular basis so there’s no excess cash sitting around. Make sure security cameras are working. Make sure staff are properly trained. Make sure you have panic buttons. There’s a lot you can do to make sure it’s a much safer environment.”


BC First Nation files lawsuit against group it says is using its land to grow and sell cannabis without licence

A First Nation in British Columbia has filed a lawsuit against individuals it says are, among other activities, using the Nation’s land for growing and selling cannabis without a license.

The Nisg̱a’a Nation, located northeast of Prince Rupert, filed a lawsuit in the Supreme Court of British Columbia on December 14, 2023, accusing a group referring to themselves as the “Raven Clan Outlaws” of illegally occupying and undertaking harmful activities at a site within Nisg̱a’a traditional territory and the Nass Wildlife Area.

“The occupants’ activities at the site include: damaging forest resources by clear-cutting trees; erecting permanent cabins and structures; marketing accommodations; operating a farm; raising and selling livestock near waterways (now at risk of contamination),” reads a press release from the Nation. “They also appear to be growing and selling cannabis without a license. They have stated they do not recognize provincial or federal laws, and we understand that they have not applied for or received approval from any government to use this land.”

Nisg̱a’a Lisims Government (NLG) launched the lawsuit in order to stop what they say is an unsanctioned occupation of their land, arguing that under the Nisg̱a’a Treaty, Nisg̱a’a citizens have constitutionally protected harvesting rights within the Nass Wildlife Area and they have a responsibility to Nisg̱a’a citizens and to protect Nisg̱a’a treaty rights as well as the environment.

The actions of the Raven Clan Outlaws, the suit continues, prevent Nisg̱a’a citizens from exercising their treaty rights to safely harvest wildlife in the area, noting that hunting near an occupied site would be dangerous and against Nisg̱a’a laws. The occupants, it says, are clear-cutting forests, not complying with environmental and cannabis legislation, polluting the grounds with farm waste, and potentially contaminating nearby waterways.

“Nisg̱a’a Lisims Government is taking this action to protect our citizens’ rights, our traditional lands, and the larger Nass Wildlife Area,” said NLG President Eva Clayton. “The occupiers are causing real harm to the environment and cannot be allowed to continue to undertake their unlawful activities at the site. The Nisg̱a’a Treaty provides our citizens with the right to hunt and harvest wildlife to provide for their families, as they always have. We will do everything we can to protect these hard-won rights.”

A statement on their website says the Nisg̱a’a Nation is represented by NLG, which has the authority to pass laws on a broad range of matters. It also states the Nisg̱a’a lawmaking authority is concurrent with federal and provincial authority. 

The Raven Claw Outlaws are described on their website as reoccupying stolen lands, saying they do not apply for permits to harvest resources on traditional lands, do not recognize provincial legislation on traditional lands, and do not recognize federal legislation on traditional lands. 

A phone number on the Outlaw’s website is no longer in service. A link on their website directs to a “​Mail Order and Local Delivery Cannabis Dispensary” with the Outlaw’s fist and raven logo, saying the crops are grown on traditional land and under traditional law. 

The website also mentions plans for a store at the Ravens Nest Ranch located at 11km on Cranberry Connector on Gamlakyeltxw Lax Yip. 

The Gitanyow Hereditary Chiefs October newsletter refers to both the Ravens Nest Ranch, established in 2023, as well as community members working to build capacity “on the farming of pigs, chickens, rabbits, cannabis, and hemp.”

The Nisg̱a’a Nation is named within BC’s Cannabis Control and Licensing Act

You can read more about the lawsuit here


Organigram posts net loss of $248.6 million in 2023

Organigram reported that net revenue increased 11% to $161.6 million in 2023, but the cannabis producer still had a net loss of $248.6 million, according to its new fiscal report. 

The New Brunswick-based company had $233.6 million in gross revenue in the past year, paying $72 million in federal excise taxes. The cost of sales was $136.4 million.

The company leveraged its spending to help secure its position in several product categories in Canada, holding the top position in the milled flower, gummies, and hash categories, the number three position in Ontario and Quebec, and the number one position in Atlantic Canada (according to Organigram’s market scans). It also says it holds the number three position in dried flower.

Organigam introduced 16 SKUs in the last quarter of 2023 for a total of 143 in the market. It sells an array of cannabis products in Canada under brands like Edison Cannabis Co., SHRED, Big Bag O’ Buds, Holy Mountain, and others. 

It also completed its first harvest at its “craft” cultivation and hash production facility in Lac-Supérieur, Quebec, which it acquired in 2021 from Laurentian Organic. Organigram has made significant inroads in the market with its SHRED X Rip-Strip hash brand

Another highly popular product from the Maritime producer, Edison Jolts, has faced pushback from Health Canada, but the company recently relaunched the product in several provincial markets. In a previous quarterly report, Organigram complained of lower net revenue and margins due to the declining price of cannabis flower, as well as a higher cost of sales, THC inflation, and Health Canada no longer allowing the sale of “ingestible extracts” like the Edison Jolts.

Organigram also signed its first UK supply agreement with 4C Labs Ltd. to distribute medical cannabis to UK-based patients, along with its first German supply agreement with Sanity Group GmbH to distribute medical cannabis to Germany-based patients.

Organigram completed international shipments totalling $18.9 million in 2023, an increase of 25% over Fiscal 2022.

In November, British American Tobacco (BAT) announced that it would invest nearly $125 million into Organigram, more than doubling its equity position in the cannabis company from about 20% to 45%. The deal is still subject to shareholder approval. 

As part of that partnership, Organigram and BAT are developing what they say are new technologies in the cannabis edible, vape, and beverage categories in addition to “new disruptive inhalation formats.” The launch of these new products will include gummies, which will feature “a new nano-emulsion technology.”

Organigram also invested in new vape technology in 2023 through a product purchase agreement with vaporization technology company Greentank, and reached an agreement with Phylos, a U.S. cannabis genetics company and provider of production-ready seeds, based in Portland, Oregon.

As part of the partnership, Phylos has been developing production-ready first-generation (“F1”) hybrid cannabis seeds for Organigram. The milestones achieved so far consist of delivery of a 1:1 THCV cultivar at 10%+ THCV potency; a 3:1 THCV cultivar at target 18% THCV (16% minimum); and four THC aroma specific cultivars (in either Berry, Citrus, or Gas).

The Moncton-based producer says it’s up-to-date on all its excise tax remittances, but notes that many other producers are not, something it says acts as a “source of alternative financing.” It also notes that THC inflation remains a significant challenge in the industry, saying it has seen the stated amount of THC on some products inflated by more than 50%. Organigram says it’s confident that efforts by Health Canada and provincial boards like the OCS will help address this issue. 


Alberta announces several changes to retail cannabis regulations through Red Tape Reduction

Alberta has announced several changes to their retail cannabis regulations that will come into force on January 31, 2024, including allowing cannabis retailers to operate temporary sales locations at adult-only events like trade shows and festivals.

Other changes include allowing cannabis retailers to keep their products in locked display cases when the store is closed rather than moving these products into a secured storage room at the close of every business day, and removing restrictions on sales and transfers between cannabis retailers to further allow Alberta Gaming, Liquor and Cannabis (AGLC) to establish resale markup limits.

“We’ve been looking at the cannabis market to determine what’s working, what needs to be improved, and what’s redundant or unnecessary while protecting public health and safety,” said Dale Nally, Minister of Service Alberta and Red Tape Reduction. 

“These changes are the result of our latest work to help curb the illegal cannabis industry and continue providing choices Albertans can trust.”

In response to a request for comment, a media representative for the AGLC tells StratCann that the “policies and processes to support cannabis licensees who are interested in operating temporary sales locations are in development and will be shared with cannabis stakeholders prior to the implementation date.”

Raj Grover, founder & CEO of High Tide Inc., which operates numerous cannabis stores in Alberta and across Canada, said he’s pleased by the announcements. 

“I am thrilled with these common-sense changes, such as allowing cannabis retailers to operate temporary sales locations for adults at festivals and trade shows. The removal of unnecessary red tape for the cannabis industry will safeguard the tens of thousands of jobs that have been created since legalization.”

Nathan Mison, the president of Diplomat Consulting, who helped lobby for these changes, says they have been in the planning stage for some time now. All three changes, he argues, will be very beneficial for the Alberta retail sector, from allowing cannabis sales at events, to saving retailers money by not needing to dedicate staff hours to moving product each night and morning, to being able to shift products between stores. 

“This a huge step forward, unlocking cannabis as a vehicle for tourism and hospitality and we’re absolutely thrilled by this step and we look forward to seeing cannabis festivals. And hopefully can open the door to cannabis lounges.”

Randy Rowe, the owner of the Grow Up industry conference, which will take place September 29 – Oct. 1, 2024, says he’s happy with the move. 

“Allowing retailers the option to temporarily sell products at trade shows and festivals is a huge step in the right direction. Consumers need to have safe and open access to cannabis while in an adults-only environment. It opens our industry trade show to include consumers in the festivities”

The AGLC has made several other changes to its cannabis rules and regulations this year, including: removing restrictions for retail cannabis store signage to allow for more flexibility in store names; simplifying the steps required for age verification for online licensed cannabis websites to more closely align with those in other provinces; and reducing listing fees for licensed producers by 83% and shipping fees for retailers by 11%.

In addition, in 2022, the province removed the requirement for window coverings for cannabis retailers. 

In October of this year, AGLC also shared with producers that it would begin sending them reports detailing sales of their products on a regional basis. AGLC will also share an “Alberta Regional Report” detailing all AGLC sales to retailers of general product categories for the month on a regional basis. 

In March, the province allowed retailers to hand out samples at cannabis events, as well. 

While producers will only receive the regional reports on their own products, the Alberta Regional Report will be available to all cannabis producers who sell into Alberta. The report will be anonymized and will apply to any product supplied by at least four cannabis producers. 

British Columbia recently announced a similar program, although it goes even further, providing producers with sales information down to the specific store. 

AGLC also recently announced they had reduced 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.

This article has been edited to include comment from the AGLC.


Health Canada detects four new synthetic cannabinoids in Canada

Health Canada’s Drug Analysis Service (DAS) identified 29 new psychoactive substances in 2022 within the country, including four cannabinoids.

The findings also identified eight hallucinogens, seven sedatives/hypnotics, five stimulants, two dissociatives, two opioids, and one other substance. 

DAS operates several laboratories that analyze suspected illicit drugs seized by Canadian law enforcement agencies and samples submitted by public health partners. Health Canada warns that synthetic cannabinoids have been associated with adverse effects, including psychosis, hallucinations, and even fatalities.

The newly identified cannabinoids were all synthetic cannabinoids (cannabimimetics), in either powder form or residue. Those four were 4-fluoro-MDMB-BICA, ADB-BUTINACA, ADB-FUBIATA, and BZO-4en-POXIZID.

The first three of these synthetic cannabinoids exhibit effects that are similar to delta-9-tetrahydrocannabinol (THC) and have the potential to be more potent than THC. The fourth, BZO-4en-POXIZID, was first developed in 2008 with the goal of targeting specific (non-psychoactive) therapeutic effects as a treatment for neuropathic pain. 

All four are classified as Schedule II in the Controlled Drugs and Substances Act.

The first NPS identifications in 2022 of these cannabinoids were in Saskatchewan, British Columbia, and Quebec.

The 4-fluoro-MDMB-BICA was first identified in Nanaimo, BC, in October 2022, along with ADB-BUTINACA. 

ADB-BUTINACA was first found in Regina, SK, in July, co-occurring with Caffeine, Eutylone (ß-keto-Ethylbenzodioxolylbutanamine), and Xylazine.

ADB-FUBIATA was detected in Vancouver, BC, in July and was identified with α-PiHP (α-Pyrrolidinoisohexanophenone), Caffeine, Cocaine, Diphenhydramine, Etodesnitazene, Fentanyl, and Metonitazene.

BZO-4en-POXIZID was first identified in Lavaltrie, QC, in November, co-occurring with Caffeine, Fentanyl, Methamphetamine, and Xylazine. 

DAS data is solely based on samples submitted to Health Canada laboratories.

Health Canada defines a new psychoactive substance (NPS) as a substance that has the potential to induce psychoactive effects, and has been identified in Canada for the first time in samples submitted to DAS for analysis by law enforcement agencies and public health partners. 


Calgary Police identify suspects in string of cannabis store robberies

Calgary Police say they have identified all the suspects involved in a string of cannabis store robberies in the city over the past several weeks. 

Police had previously identified at least a dozen cannabis stores that were robbed in Calgary in the last month, asking for help from the public in identifying them. 

The robberies were violent in nature, including one incident where the suspects kicked the store clerk unconscious and brandished a knife. Weapons such as a handgun and a hammer have also been used in other reported incidents, said police.

Now those suspects have been identified, all 16 and 17-year-old boys. Calgary Police say the investigation into the robberies remains ongoing, with charges pending.

Law enforcement had said they believed the group was targeting the cannabis stores for cash and cannabis products which can be re-sold illegally. 

Robberies and burglaries of cannabis stores are not uncommon, and stores in Calgary have been previously targeted. Cannabis growers and processors have not been immune, either. Earlier this year, at least two cannabis producers in BC’s Lower Mainland were the victims of early-morning burglaries.

Alberta recently repealed its rule requiring stores to have window coverings, which retailers said made their employees less safe in such incidents.


OCS continues to grow, with nearly $1.5 billion in wholesale sales in 2022-23

The Ontario Cannabis Store helped facilitate nearly $1.5 billion in cannabis sales through the distribution of 315,000 kilograms of cannabis products across a network of more than 1,600 stores, as well as online sales, in its most recent annual report.

By provincial order, the agency was required to pay its net profits of $150 million from its cash balance into Ontario’s Consolidated Revenue Fund (“CRF”).

The report, covering the 2022-23 fiscal year ending March 31, 2023, shows the provincial cannabis distributor and online retail generated a net income of $234.2 million over the past year and revenue of $1,474.5 million, marking a growth of $293.7 million compared to $1,180.8 million in 2021–22. 

The province captured nearly 60% of the cannabis market with its sales, a continued increase in the total share of the market. 

Sales increases were assisted by establishing the OCS’ Flow-Through program, which, combined with the number of products held in stock in the distribution warehouse, grew to 2,950 SKUs, a 46.5% increase over the previous fiscal year. 

A product sold through the OCS Flow Through program sits at the OCS warehouse

The total number of units sold through the OCS Flow Through was 1.4 million. The total number of LPs that the OCS partnered with as of March 31, 2023, was 239, which is an increase of 90 compared to 2021–22.

(Editor’s note: The above paragraph has been edited to note that the 1.4 million units sold were through Flow-Through.)

The number of stores in Ontario has continued to increase, even as store closures have also been picking up pace. Ontario added an additional 345 Authorized Cannabis Stores in the most recent fiscal year, growing to 1,661 stores across the province as of March 31, 2023. (The AGCO currently lists more than 1,700 stores as Authorized to Open.) Another 144 stores closed during this time period. 

Online cannabis sales through OCS.ca decreased in the last fiscal year as the provincial agency says it has made efforts to improve its wholesale service levels to retailers and deprioritized large or material enhancements to the online consumer platform.

Dried flower sales through OCS.ca saw a significant decline, from 49.8% of all sales in 2021-22 to 37.6% in 2022-23. Sales of generally smaller SKUs like pre-rolls, oils, capsules, vapes and concentrates, edibles and beverages increased through the online platform.

The total revenue for the OCS sales from wholesale and online sales in 2022–23 reached $1,474.5 million, marking a growth of $293.7 million compared to $1,180.8 million in 2021–22. 

Wholesale sales of vapes, pre-rolls and edibles showed growth in the most recent fiscal year, but cannabis flower still dominates with 42.7% of wholesale revenue sales in 2022-23. Combined with pre-rolls at 19.4% (non-infused), this accounts for 62.1% of total revenue share.

Vapes and concentrates represented the next largest share of revenues, with 26.2%, followed by edibles at 4.5%, oils and capsules at 3.4%, and beverages at 2.7%. Vapes and concentrates were up from 18.8% in the previous fiscal year.

The OCS will be lowering its margins on wholesale products in Q2 of 2023–24, which it expects will inject approximately $35 million into the marketplace and roughly $60 million by 2024-35 with even further planned reductions.

Currently, the fixed wholesale markup OCS charges on cannabis products ranges from 20-29%.

The total finance income for the OCS in 2022–23 reached $16.8 million, marking a growth of $14.7 million compared to $2.1 million in 2021–22. 

Ontario Cannabis Store Fixed Wholesale Mark-up Rates by Subcategory
Ontario Cannabis Store Fixed Wholesale Mark-up Rates by Subcategory. Image via OCS.

The most recent fiscal year was the most profitable year for the OCS so far, with a reported total comprehensive income of $234.2 million, compared to $184.4 million in 2021–22. 

The OCS has used these profits to repay the loan provided by the Ontario Financing Authority. In 2022–23, $7.6 million in loan principal was repaid, and $1.8 million in interest was paid, for a total payment of $9.4 million. The balance of the loan as of March 31, 2023, was $59.7 million. It completed a total of $37.6 million in payments to various governments in 2022-23.

The federal government received $27.6 million in harmonized sales tax (HST) remittances from Ontario cannabis sales in 2022–23, an increase from $27.0 million in 2021–22. The Ontario provincial sales tax component of the HST was $17.0 million in 2022–23, compared to $16.6 million in 2021–22.

On or before September 29, 2023, the Ontario Cannabis Retail Corporation was required to pay into Ontario’s Consolidated Revenue Fund (“CRF”) its net profits in the amount of $150 million from its cash balance as of March 31, 2023.

Each year the OCS has four scheduled product calls, one in the spring, summer, fall, and winter. The next product call is January 2024 for the 2024 summer product call schedule


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North Okanagan micro takes holistic approach to cannabis

Located in BC’s North Okanagan, Living Cannabis takes a high-tech, low-impact approach to its small-batch cannabis grown in living soil.

The BC-based micro cultivator’s Master Grower, Gerrit Richards, not only has a Bachelor of Applied Science in Horticulture and has studied the soil food web, but he’s also a long-time cannabis user and advocate of medical cannabis. Gerrit is committed to holistic, organic, and regenerative soil management practices. 

Living Cannabis logo

Richards and Beth Talbot, who started her career in medical cannabis, handle the cultivation duties, while one of the co-owners, Brad Marta, keeps the financials and paperwork in order at Living Cannabis, licensed since 2020.

“We wanted to create a legal cannabis company that focused on organic cannabis produced with low-waste methods and a hands-on approach to each and every plant and bud,” Marta tells StratCann. “No mass-produced factory farming here. As a micro cultivator operated by a small team of family and friends, we cherish the opportunity to care for every plant. We hang dry and hand trim all our products.”  

That means no synthetic inputs and potential pests are managed with beneficial insects in their three small grow rooms within their allotted 200 square meters of cultivation space.

While pathways to market for a micro cultivator can be difficult, Marta says they have focused on quality products to build their brand, rather than marketing budgets. 

“Like many other micro cultivators, getting to market and staying has been a long, hard battle,” adds Marta. “Our main focus right now is consistency in producing a good quality product that the consumer can be confident has been grown with care and attention. 

“We’re just a little guy trying to battle with the giants. Given all that has happened in the market over the past couple of years, we’re proud that we’re still around to compete. What distinguishes us most from the big guys is as a micro cultivator, our smaller footprint allows us to take a hands-on approach to every aspect of our operation.”

Richards, the Master Grower, says one of the things helping Living Cannabis stand out is their attention to this kind of detail and their living soil growing methods, which he maintains gives their cannabis its unique terroir. 

“We grow for more than just potency. Although that’s important in today’s market, there is a lot more depth to these plants,” says Richards. “We are adamant about the link between soil microbiology and the production of secondary metabolites such as cannabinoids, terpenes, esters, flavonoids, etc., within plants.” 

Marta says Living Cannabis has been selling its products through JVCC’s BC Black brand in BC and Ontario, including its recently sold-out Triple OG and some select offerings in Ontario like Blackberry Pancake. Living Cannabis is also part of a pre-roll sample pack called BC Craft Road Trip, available through BC’s direct delivery. Their genetics come from their internal seed bank and through partners like Life Cycle Botanics.

Having good partners like processors and nurseries is key, he adds, especially for a micro cultivator with a small staff who doesn’t necessarily have the time to reach out to retailers.

“We’re so busy as a cultivator, and our processor has been really helpful in getting a pulse of the market. They’ve often been our eyes and ears on what’s happening with retailers. Since we started, we have been so focused on growing, but we plan to connect more with retailers in the near future by providing them with better information on who we are and what we strive to do, starting with the revamp of our website in the new year.

“One lesson I’ve learned through this whole process is that you can’t go too big too fast; you’ll run out of cashflow because you’re going to have a hard time raising any extra capital. So I try to always keep that in mind for us. We try to get one thing right before moving on to the next idea.” 

Right now, times are not easy for many small craft cannabis growers, with prices dropping and costs increasing, but this also leads to a leaner and more competitive industry, explains Marta.

“Now we’re seeing in the industry who can run lean and maintain cashflow and still produce a great product, while others are posting losses in the millions or shutting down entirely. I’m really proud of how we’ve progressed as a company, financially, and with our operations as a whole. I do hope one day that, as a co-owner, I can recoup my investment and pay myself more than minimum wage.  But I also know many small growers who still aren’t even paying themselves a dime yet, all the while everyone else in the supply chain is getting a cheque. It’s going to be a long road to get better, but I’m still optimistic we’ll get there one day, eventually.”

“I think we’ll see a slight levelling out of product supply as larger cultivators start scaling back operations, but market prices these next 12 months are still going to be a big challenge for everyone in the industry.”

“Once we get through this stage, I hope the market will start to rebound, and cultivators can make a decent return. I hope the federal government realizes how much their excise tax is affecting the little guys who have invested so much of their own money into micro-cultivation, yet aren’t able to make a decent income, if any at all. I think micro cultivators are the future for this market, and the powers that be need to recognize this and support us. However, I’m not holding my breath that anything will happen soon, so for the time being, I know we’re on our own.”

This profile is brought to you by Life Cycle Botanics, the preferred cannabis nursery supplier for Living Cannabis.


Calgary Police: 12 cannabis store robberies in past month

Calgary Police are asking the public for help in identifying multiple suspects believed to be connected to a series of violent armed robberies at several cannabis stores in the city. 

Following a previous press release from late November, police in Calgary now says there have been 12 cannabis store robberies in the city, including one incident where the suspects kicked the store clerk unconscious and brandished a knife.

Weapons such as a handgun and a hammer have also been used in other reported incidents, say police.

Police shared CCTV images with the hope of identifying the suspects and encouraging the public to be wary of suspicious behaviour or activity near cannabis retail stores.

Law enforcement say they believe it is the same group targeting stores for cash and cannabis product which can be re-sold illegally. The suspects are described as males wearing dark clothing, hoodies with the hoods pulled up, masks and gloves.

Robberies and burglaries of cannabis stores are not uncommon, and stores in Calgary have been previously targeted. Cannabis growers and processors have not been immune, either. Earlier this year, at least two cannabis producers in BC’s Lower Mainland were the victims of early-morning burglaries.

Alberta recently repealed its rule requiring stores to have window coverings, which retailers said made their employees less safe in such incidents.

Industry mixed on new OCS THC testing program

Many in the industry are supportive of the recent announcement from the OCS that it will be testing some cannabis flower products that come through its central distribution warehouse beginning in January 2024. But some say the provincial buyer has also contributed to the problem it is now trying to solve.

Beginning in the new year, the provincial cannabis wholesaler will be selecting some high-THC cultivars coming into its warehouse for secondary testing. Any products with secondary testing results inconsistent with the THC levels posted on their label will be subject to further scrutiny, including a potential return-to-vendor for re-labelling.

While not all are happy with the announcement, many say it’s a needed step to begin to bring the issue of THC inflation under control. However, a few argue there’s a bit of irony that a provincial agency that has enforced a high THC narrative is now going to punish producers who are leaning into that category, no matter how accurately or not. 

“The fact that these large corporations like the OCS were those pushing for the high THC category and accepting these finished THC COAs was a major part of the problem.”

Rick Moriarity, High North Laboratories

Walker Patton, the head of corporate development at Woody Nelson, a small producer located in Nelson, BC, that has products for sale in Ontario, says he expects this policy will change how some labs are testing cannabis products.

“In our opinion, the biggest challenge to having potency numbers that folks can rely on is the lack of a standardized methodology for testing. While that isn’t exactly what the OCS has done here, it might still have the same effect. I wouldn’t be surprised to see some of the labs known for more generous results adopting Sigma’s methodology to avoid a potential rejection of product.”

Sigma Analytical Services is the testing lab the OCS has selected for this program.

Rob O’Brien, the CEO and CSO at Supra Research and Development, another analytical lab that offers testing services for the cannabis sector, also says he sees the OCS’ new testing program as a step in the right direction and something he thinks other provincial cannabis agencies should be taking on.

“Every provincial distribution centre should be accountable for what they are selling,” says O’Brien. “They should make sure that the product they are selling matches what’s on the label. It’s as simple as that. If the producers aren’t doing that, then the provinces selling those products need to ensure they are.”

O’Brien, located in BC, is no stranger to the field of cannabinoid testing and the specific issue of inflated label claims, especially for THC on dried cannabis flower products. In early 2023, he shared his own independent testing results showing inaccurate labelling on dozens of products he purchased from the BC Cannabis Store.

He says he expects to release a new round of results from even more testing very soon that will shed even more light on the issue. Those results will be shared with all relevant provincial cannabis sellers and agencies, including the OCS.

While some have criticized the OCS’ use of an acceptable variance between label claim and testing results of +/-15%*, O’Brien says he thinks this is a reasonable, if small, window. He has used a 25% allowance for variability in his own testing. 

*15% of label claim, not 15 percentage points.

“If there are products that are significantly out of label claims,” he adds, “those products should be recalled, and the provincial distribution networks should be fined. That would help us get away from this labelling issue.

“I think it’s a little tight, but it’s fair enough. Any of these products should come within 15% of the label claim.”

While the OCS is simply requiring any failed products to be relabelled by the producer, O’Brien says he would like to see these products formally recalled, and even see producers held accountable if they have approved the products for sale.   

“If there’s a conspiracy to commit fraud and the manufacturer is knowingly putting a wrong number on a product—so the customer buys that product—and the middle man is aware as well and not doing something, then they’re complicit, too.”

“If there’s a conspiracy to commit fraud and the manufacturer is knowingly putting a wrong number on a product—so the customer buys that product—and the middle man is aware as well and not doing something, then they’re complicit, too.”

Rob O’Brien, Supra Research and Development

Chris Crosbie, the founder and COO of Atlantic Cultivation in Newfoundland, which has products available for sale in Ontario, says he also supports the OCS’ testing program but shares similar concerns with variability in lab methodology as those held by Patton and Woody Nelson. 

“My main concern is that labs have a wide degree of variance for potency results. To avoid the risk of the product not being accepted, I’m inclined to start using whichever lab they have selected to have the highest chance to be within the target THC range.”

“To avoid the risk of the product not being accepted, I’m inclined to start using whichever lab they have selected to have the highest chance to be within the target THC range.”

Chris Crosbie, Atlantic Cultivation

James Ouimet, the founder of Green Canna, a cannabis sourcing company in BC specializing in B2B sales of cannabis, says he thinks policing of THC levels is important but also thinks smaller companies may be unfairly punished for participating in a race for high THC they were forced into by provinces like Ontario, who often control what products will even be available for sale in their regions. 

“I do not think this is a useful approach… It is important to address this issue and take appropriate measures to regulate THC levels in cannabis products; however, it would have been ideal if these changes had been implemented earlier when independent studies first started showing a drastic increase in THC percentages. Waiting until now to make these changes puts licensed producers and micros in a difficult position as they try to meet the high THC demands imposed by the provinces.”

Ouimet explains this is because of the trend by provincial buyers to put a greater emphasis on high-THC cannabis flower, often pushing well above the previous threshold of around +30% THC.

“The root of the problem, in my opinion, lies with the regulatory decisions made by the provinces,” continues Ouimet. “Instead of addressing the issue when it was first brought to light four years ago, provinces began only expecting cannabis flower with 20% THC or higher. This puts immense pressure on producers to increase the THC levels in their products. 

“Consequently, the industry became solely focused on achieving high THC content, thus diminishing returns on quality flower within lower THC ranges. This leaves top-level players in the cannabis market, such as micro-cultivators, struggling to keep up logistically and financially. Even flowers with THC levels of 20-23% are facing challenges in getting accepted now. 

“It is important to note that it’s the provinces, and not the producers, who make these decisions. Due to neglect, many LPs in the industry have resorted to bending the rules to meet the increasing demands set by the provinces. When you’re in the driver’s seat, it’s easy to blame the people in the back.”

Rick Moriarity, COO of High North Laboratories, says he thinks the program is a step in the right direction, but he also notes that this is an issue at least in part engendered by the OCS buyers seeking out high THC cultivars. 

“From a lab’s point of view, I’m happy that OCS has acknowledged there’s an issue with THC inflation,” Moriarity tells stratCann.

“But the fact that these large corporations like the OCS were those pushing for the high THC category and accepting these finished THC COAs was a major part of the problem.”

He says the issue is something that Health Canada should be addressing by vetting or qualifying which labs cannabis producers can use. In place of that, he thinks OCS could take that approach instead of this current testing plan.

“It’s still a step in the right direction,” he emphasizes, “but I don’t see this having a big effect.”

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BC Supreme Court puts pause on province’s efforts to seize $12 million in properties connected to illegal cannabis, psilocybin dispensaries

BC’s Director of Civil Forfeiture wants to seize a number of properties, a vehicle, and money they say are connected to a group illegally selling cannabis and psilocybin mushrooms.

However, the Supreme Court of British Columbia wants the government to wait for upcoming appeals before moving forward with civil forfeiture proceedings.

In a ruling posted in late November, the BC government alleged several individuals acquired ten properties for approximately $12 million, without mortgages, over a period of just over two years, arguing that these were purchased with the proceeds of illegal activity. 

The defendants sought to prevent the government from proceeding with the case, claiming they were seeking separate proceedings and raising Charter concerns that needed to be addressed prior to any further action by the Director of Civil Forfeiture.

The court disagreed with or dismissed some of the defendants’ concerns, but nonetheless said that the BC government will need to pause its efforts to push for civil forfeiture until it can be decided if the cases will be heard individually and any Charter concerns are addressed. 

In the meantime, the provincial government can request financial records from several financial service agencies and lending institutions relating to the defendants and their businesses, but those records will be stored until these other challenges are decided. 

“The order should be crafted in a way that ensures the information and records are obtained, but also ensures that the Director cannot make use of the information and documents until the bifurcation hearing has taken place and, if there is a bifurcation, until the alleged Charter breaches have been resolved,” wrote the judge.

“At that point, if the Director decides to pursue the civil forfeiture action, the information and documents should be produced in the action. If the bifurcation application(s) are not successful, the information and documents should be disclosed to the Director at that time.”

The defendants include the owners of MOTA Green Meds Ltd, Ocean Grown Medicinal Society, Animalitos Pet Wellness Corp, and several numbered companies. Ocean Grown, MOTA, and Animalitos were unlicensed cannabis dispensaries that had previously operated in BC.

Dianna Bridge, one of the owners of Ocean Grown, faced previous penalties from the BC government for operating a cannabis store without a licence, eventually accepting a monetary penalty of $12,000 in February 2021. According to court records, Bridge is also listed as a director of MOTA. 

Then, in July 2021, members of BC’s Community Safety Unit (CSU) attended a commercial building in Victoria, British Columbia, to conduct an inspection. It is alleged that CSU inspectors discovered psilocybin at the location, which caused them to pause their inspection and contact local police. 

Saanich Police raided the Shelbourne Street business and allegedly found packaged cannabis and records relating to the sale of cannabis products and packaging materials under the name of MOTA and Animalitos. The CSU claims it also seized a large quantity of cannabis from the property.

The BC government filed the notice of civil claim on October 6, 2022, seeking forfeiture of the ten properties, as well as a vehicle seized in a raid and the business’ proceeds. The crown contends the financial records will help it establish a connection to the $12 million in properties. 

Featured image via Google Maps


FAAFO Cannabis says micro is the way to go

Paul Pruessmann and Vincent Lanci recently launched FAAFO Cannabis, a micro cultivator located in Port Coquitlam, British Columbia, after purchasing the facility from another grower looking to leave the market.

With an increasing number of cannabis companies throwing in the towel, many have seen doom and gloom on the horizon, but Paul Pruessmann and Vincent Lanci see opportunity.

After spending several years on the sidelines waiting for some of the initial rush to licensing to fade, Pruessmann said he and his business partner Lanci finally saw an opportunity to enter the market.

“We’ve had this strategy for about five years now,” explains Pruessmann. “When legalization first kicked in, we took a step back and assessed the market and then waited until we could find a facility like this, and for much less than if we had built it ourselves.”

Both partners bring extensive experience to their endeavour, having previously worked at a much larger cannabis facility in BC. Along with Pruessmann’s 35 years of experience growing, Lanci is an aircraft engineer, a Red Seal Carpenter, and has extensive experience in facilities maintenance.

Utilizing that experience is one of the ways they hope to succeed where others struggled, explains Lanci, with his emphasis on operating the facility and Pruessmann’s intimate knowledge of the plant itself.
“We’re always looking for ways to complement each other. I’m always looking for efficiencies, and Paul is constantly refining his craft with the plants. We aren’t scared to get the job done, whatever it is. When there’s something that we need to do, we just figure it out and do it.”

After working at a large publicly-traded cannabis company, both say they saw a lot of excess and inefficiency in the industry they knew they could cut through, especially as a small micro cultivation facility with just a few hundred square meters of grow space.

And foremost, adds Pruessmann, is delivering a quality product that consumers want.

“This will distinguish us from most other producers out there. On top of cannabis literally being a part of my life daily for over 35 years—starting as a recreational user, leading to using it for medical treatment—my standards for quality are unmatched. No one will ever be harder on my products than I will. But I will always strive for better. That’s the passion that comes along with a true love of cannabis and being a people pleaser.”

Pruessmann also says he’s seeing more consumers returning to the legal market or even trying it for the first time because more quality, small-scale and micro growers are starting to hit shelves. It’s something he hopes to add to soon, when their first cultivar, supplied by Life Cycle Botanics, reaches shelves in BC in early January 2024.

“Once you have consistent quality, you can begin to repair the trust that was broken by first-to-market producers, greedy corporations, and the fugazi ‘Master Growers’. There’s a huge gap in the premium quality category, which we plan to help fill.”

This profile is brought to you by Life Cycle Botanics, the preferred cannabis nursery supplier for FAAFO Cannabis.


Victoria cannabis store sharing profits with employees

A cannabis retailer in Victoria, BC, says it will share profits with employees

Pineapple Victoria says that starting on December 1, it will be moving away from a model where profits from the business primarily benefit shareholders. Instead, the long-time retail store owners have decided to become a profit-sharing business with their half-dozen employees. 

“By sharing profits with our employees, we are directly investing in the welfare and stability of our team, allowing them to benefit from the success they help to create,” says Aaron Gray, one of the owners of the cannabis store. 

“This is another way to encourage staff to take ownership for the success of the business.”

Aaron Gray, Pineapple Victoria

“We’re an independent, mom-and-pop shop. Many of our staff have been with us for as long as about five years. We understand that a successful business is not measured solely by its financial performance but also by its positive impact on the community. The change also acknowledges that the success of a business is intrinsically linked to the wellbeing of its employees.”

Gray explains that Pineapple (formerly known as Pineapple Express) is owned by two families. Each family takes 35% of the business’ profit, while the staff will be entitled to the remaining 30% of the profit. The profit-sharing is in addition to regular merit-based raises that employees already receive. Wright notes that they are not planning on raising any of their in-store prices to cover the costs of the new profit-sharing program.

Pineapple started as a legacy-era dispensary in Victoria in 2015 and transitioned to the licensed, non-medical market in 2019, with some of its employees staying with them through that transition. 

Pineapple is lucky to have many employees sticking with them for years, says Gray, and he believes that the high rate of turnover and low wages in the industry can be frustrating for those with a passion for the business. 

“Through profit-sharing, we’re also hoping to show that working in a retail cannabis shop can be a career and can provide stability and personal satisfaction. While some might feel doubtful that this business model will work, we hope to prove them wrong.

“This is another way to encourage staff to take ownership for the success of the business.”

Kurtis Tingley, a manager at Pineapple, says he’s happy with the policy change. 

“It has been absolutely lovely to work for the owners of Pineapple, and profit sharing is just the latest in a long list of how well we are treated here. Profit sharing allows our small and tight-knit staff to have a say and agency in how the store is run, which I feel is rare in the retail industry.

“It’s a point of pride for the staff here to work for a locally owned and operated mom-and-pop store, and profit sharing only furthers that,” he continues. “It gives us an opportunity to be rewarded further for our hard work. With the cost of living increasing at such a fast pace, it’s a relief to potentially earn more hourly for doing the same job. We can feel the support from the owners, and it is very much appreciated.”


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

Ontario plans to double the number of cannabis stores a retailer can operate from 75 to 150 and is proposing to ban the cultivation of cannabis in homes that offer childcare services.

While the change to the retail store cap is expected to take place early next year, the change in cannabis cultivation rules is part of new proposed legislation. The provincial government is also considering different enforcement options against illegal online cannabis sales.

The new omnibus legislation, the Enhancing Access to Justice Act, 2023, would also further support negotiations with First Nations communities on the regulation of cannabis on reserves.

The province says the store cap increase will help combat the illicit market. The current cap of 75 stores came into force in 2021. Ontario currently has about 1,800 retail cannabis stores listed as authorized to open.

Ontario’s Attorney General Doug Downey said the fact cannabis can be cultivated in home-based child care facilities is “deeply unsettling and inappropriate,” noting that BC has a similar restriction already in place.

“Five years ago the federal government decided that cannabis would be legal in this country and part of the new legislation was to allow the cultivation of up to four cannabis plants at home,” said Downey. “As it stands, cannabis can be grown in home-based child care facilities. We find this deeply unsettling and inappropriate, and quite frankly I never imagined we would need to legislate this.”

Raj Grover, the President and CEO at High Tide Inc. says he was pleased with the proposed change. High Tide owns Canna Cabana, with 63 locations in Ontario listed by the AGCO. Other notable retail cannabis chains in Ontario are True North with 51, Sessions with 47, and Spiritleaf with 40.


OCS to begin temporary THC testing program in 2024

The Ontario Cannabis Store (OCS) will be testing high-THC cannabis products sold in Ontario as part of a new pilot program launching in January. 

The new program will identify cannabis flower products for secondary testing if OCS’s quality assurance team determines it falls within their threshold for “high THC.” 

The cannabis wholesaler is keeping the specific threshold secret to help protect against producers intentionally seeking to come in under.

The program will only apply to new SKUs entering the OCS warehouse and will not currently include products sold through flow-through.

The OCS will cover the cost of testing, which will be done through a third-party lab, Sigma Analytical Services. Any products within an acceptable range of variance (± 15%) will be released for sale. (Note, “± 15%” refers to the variance from the label claim, it does not refer to actual percentage points. For example, a product labeled at 20% THC could be allowed to fall with about 17-23% THC, because 15% of 20% is 3%).

Producers whose product falls outside of that range will have five days to dispute any results that find their product’s true THC level is not aligned with what is stated on the label. 

If disputed, the OCS will send it back to the same third-party lab for more testing. If it fails again, the product will be sent back to the producer at their cost. 

The issue of high THC products, primarily cannabis flower, is contentious in the cannabis industry, and not limited to Canada or to the regulated industry.

While research often shows that the THC percentage in most cannabis flower is in the high teens to low twenties, increasingly, many cannabis flowers on the market advertise having well over 30 percent, something considered statistically improbable but not impossible.

The goal, says OCS, is to not only check against specific label claims but also to evaluate the larger claims and concerns that many cannabis products, especially cannabis flower products, have highly inflated THC levels on their labels.

“We look forward to leveraging the data from this initiative to further engage government and industry partners, and to support the development of broader testing and sampling standards as we enable a vibrant cannabis marketplace,” said OCS COO Denny Palarchio in a memo sent out to industry. 

Such instances have prompted many in the industry, from labs to producers, consumers, and retailers, to call on the federal and even provincial governments to do more to ensure that THC levels reported on labels are accurate. 

Earlier this year, Rob O’Brien, the CEO and CSO of Supra Research and Development in Kelowna, BC, shared his own independent testing results online from 46 different cannabis products he purchased from BC Cannabis Stores.

Earlier in 2023, Heath Canada announced it was launching a data-gathering program on cannabis markets in Canada that will include sampling and testing of both legal and illegal products currently in the market.

As part of the program, Health Canada’s Regulatory Operations and Enforcement Branch (ROEB) Cannabis Laboratory will randomly purchase cannabis products from authorized retailers in Canada. It will also work with various law enforcement agencies to test samples of illicit cannabis products. 

Health Canada routinely inspects cannabis facilities and conducts secondary testing on cannabis, but maintains it does not inspect cannabis labs that provide the results used by these cannabis producers.

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BZAM brought in $1.6 million in profit in Q3 2023

BZAM Ltd., a Canadian cannabis company with facilities in BC and Ontario, reported its third-quarter financial results for 2023. The company posted $21 million in revenue, with $1.6 million in direct gross profit after expenses. 

Direct gross profit is calculated before changes in the fair value of “biological assets”, i.e. cannabis plants.

The company’s net revenue increased significantly compared to the same quarter in 2022, when it was just under $10 million, and a smaller increase compared to Q2 2023, which saw just over $19 million in sales.

Direct gross profit for Q3 2023 was 8% before changes in “fair value of biological assets”, compared to 6% in Q3 2022 and 16% in Q2 2023. BZAM attributes the decrease from Q2 2023 primarily to “inventory cost provisions and the clean-up of old inventory through sales at or below cost.”

Quarter-on-quarter increases in net revenues for BZAM were powered by the increase in sales from its Highly Dutch brand, -ness vapes, and infused pre-rolls but were partly offset by the discontinuation of some low-margin SKUs.

The BZAM brands include core brands BZAM™, TGOD™, -ness™, Highly Dutch Organic™, TABLE TOP™, and partner brands Dunn Cannabis, FRESH, and Wyld. 

Loss from operations was $12.9 million in Q3 2023, compared to $8.7 million for Q3 2022 and $12.1 million in Q2 2023.

In the most recent quarter, BZAM also received orders under its international distribution agreements in Germany, Australia, and the United Kingdom following the acquisition of its EU-GMP certification in Q2 2023. As of October 31, 2023, the company had delivered export orders to those three markets totalling $1.05 million.

After the quarter’s end, BZAM also received $1.79 million in borrowing from Stone Pine Capital Ltd., a company controlled by the BZAM’s largest shareholder and current Chairman, Bassam Alghanim. He invested another $5 million into BZAM earlier this year, as well.

BZAM’s share value has declined considerably in 2023, from about 60 cents in late November 2022 to about 15 cents in late November 2023.


OCS announces first round of Social Impact Fund partnerships

The Ontario Cannabis Store (OCS) has announced the first recipients of funding through its Social Impact Fund. 

The Fund, launched in April 2023, provides funding for organizations working to promote social responsibility in connection with cannabis.

The fund’s first recipients are the Centre on Drug Policy Evaluation, The Cannabis Social Equity and Equality Development (SEED) Initiative, the Princess Margaret Cancer Centre, the University of Calgary, the Canadian Students for Sensible Drug Policy (CSSDP), and McMaster University.

The Social Impact Fund is part of our continued commitment to making a positive impact in Ontario and beyond, and will provide a growing opportunity to invest in programming and research that aligns with OCS’s social responsibility objectives.

Dr. Jenna Valleriani, Senior Manager, Social Responsibility at OCS

The OCS has provided $500,000 to support programs, services, and research by incorporated not-for-profits, registered charitable organizations, and researchers affiliated with academic or research institutions that “contribute positively to the Ontario public and legal cannabis industry.”

These first projects cover an array of related subjects, including but not limited to studies on the physical health impacts of cannabis exposure, digital storytelling about cannabis harm reduction, and cannabis workforce empowerment programs.

More information on the program, the recipients, and the 2024 call for applications can be found here

“We are thrilled to introduce the inaugural Social Impact Fund project teams, and look forward to supporting this important work over the next year,” says Dr. Jenna Valleriani, Senior Manager, Social Responsibility at OCS. “The Social Impact Fund is part of our continued commitment to making a positive impact in Ontario and beyond, and will provide a growing opportunity to invest in programming and research that aligns with OCS’s social responsibility objectives.”

Michael Athill, the director of the Cannabis Social Equity and Equality Development (SEED) Initiative, which seeks to create opportunities for Black, Indigenous, and People of Color (BIPOC) individuals to succeed in the cannabis industry, also commented. 

“The legalization of cannabis in Canada has spawned inspiring stories of both local and global impact,” said Athill, who was also the co-founder of a cannabis micro production facility in Ontario, North America’s first entirely Black-owned, federally licensed cannabis cultivation and processing facility. 

“The SEED Initiative is our chance to write more of these stories, especially from marginalized communities,” he continued. “SEED is not just a platform; it’s our commitment to building a pipeline of success by minimizing the obstacles that hinder progress. Together, let’s lift as we climb.”

Funding through the initiative can range from $25,000 to $100,000 for projects that are eight to 12 months in length, and the first round of organizations had until May 25 of this year to apply.

The OCS initially set aside up to half a million dollars for the first year of the project, with a goal of providing capital for initiatives that are aligned with the three key pillars of OCS’s social responsibility strategy for 2021–2024: establishing a foundation for environmental sustainability, supporting a diverse and inclusive cannabis industry in Ontario, and advancing cannabis knowledge and responsible consumption.


Cronos enters into deal to sell, leaseback Peace Naturals Campus

Cronos Group Inc. says it has entered into an agreement to sell and lease back its Stayner, Ontario facility known as the “Peace Naturals Campus.”

The agreement, once fulfilled, would see Future Farmco Canada Inc. buy the facility from Cronos for $23 million in cash. Peace Naturals was one of the first licensed commercial medical cannabis facilities in Canada, licensed in October 2013. Cronos significantly expanded the site in 2017 into the cannabis campus.

Cronos acquired Peace Naturals in 2016, taking on all issued and outstanding shares of Peace Naturals Project Inc. In 2019, Altria, an American tobacco company, became the largest shareholder in Cronos Group.

In 2022, Cronos announced its plans to close the original Peace Naturals facility but partially reversed that decision in early 2023, leaving parts of the ”campus” open.

The new deal with Future Farmco Canada Inc., a vertical farming company, will allow Cronos to continue to utilize part of the Peace Naturals space through the leaseback agreement. 

“The sale-leaseback of the Peace Naturals Campus supports Cronos’ goal to reduce costs across the Company,” said Mike Gorenstein, Cronos Chairman, President, and CEO. “More specifically, this sale will aid in improving the gross margin profile of our business, while lowering costs and increasing our agility. This sale only strengthens our industry-leading balance sheet and allows us to continue to pursue organic growth and future transactions that bolster Cronos’ existing value. We do not expect any interruption to our current operations and plan to carry out existing growth plans within our leased space at the facility.”

The deal still needs to be approved by the buyer after 180 days. 


CBSA seize second shipment of Canadian cannabis heading to Caribbean

Canada Border Services Agents in Nova Scotia have again seized a large quantity of suspected cannabis on its way to the Caribbean in October.

Upon inspection, border services officers at the Port of Halifax, with assistance from Canada Border Services Agency (CBSA) intelligence officers, discovered two large boxes with 377 kg of “suspected” cannabis and 1 kg of suspected hashish.

The two boxes, part of a marine container of personal and household goods, contained 765 packages of suspected cannabis and one package of suspected hashish.

The alleged cannabis products were then turned over to the Nova Scotia Royal Canadian Mounted Police (RCMP).

The seizure is similar to a previous incident in August at the same port in which 165 kilograms of suspected cannabis were found by border service officers who were inspecting a marine container. The shipment was also destined for the Caribbean.

The CBSA reports seizing more than 6,150 kilograms of cannabis and 96 kilograms of hash coming into Canada so far in the first and second quarter of the 2023-2024 fiscal year. The agency reported more than 10 thousand kilograms of cannabis seized in the previous fiscal year, along with more than 12 kilograms of hash.


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Cannabis company working to preserve Lasqueti Island’s unique cannabis culture

A micro cultivator and processor is working to keep the cannabis culture alive on BC’s Lasqueti Island, located just east of Vancouver Island in the Strait of Georgia. 

Lasqueti Cannabis Co., a passion project run by Kathy Bond and her partner Keith Morris, was licensed in October 2022 and had its first crops on the shelves in BC one year later.

The island itself has a storied history of cannabis production. It was once referred to as a “mecca” for medical cannabis production by the RCMP and is known for helping develop unique cultivars, including Lasqueti Lemon Haze and Lasqueti Kush.

Bond, who operates as the RPIC for the micro producer, also oversees 13 employees, all island residents who have deep connections to that storied past. 

Although she says some of the culture of the island has changed since COVID-19, with some long-time residents moving off the remote island, she sees Lasqueti Cannabis as a way to help keep some of that history alive and profitable for those wanting to still live there. 

“It’s a big job creator for the island. We’re putting the island back to work doing what they do best and what they have become famous for over the years. All our employees are full-time island residents who have been growing cannabis their whole lives.”

Lasqueti Cannabis’ Stay Puff nears harvest

That protection of the island’s cannabis culture extends to some of those unique Lasqueti Island cannabis cultivars, too, continues Bond. They brought in around 150 unique varieties of cannabis in the form of 1,500 seeds and are currently working on some as-yet-to-be-named cultivars she’s particularly excited about based on their unique aromas.

Although these aren’t always the high-THC that the market currently demands, she says she’s hopeful that consumers can recognize there’s more to quality than that one number. 

“We want to prove to the world that THC isn’t what makes good cannabis,” Bond adds.

Island life makes things move a lot slower, though. Lasqueti has no outside power, and residents rely on a mixture of generators and alternative forms of energy. The one ferry that services the island is walk-on only, and all cannabis they deliver to the LDB or send to retailers via direct delivery has to be escorted on the ferry. 

As a small business, she says she still does much of the work herself, even personally delivering their first shipment to the LDB’s distribution centre in Richmond, across two ferry routes. 

“We do what we have to do, and we’re used to working together as a community.”

Ideally, Bond and Morris want to have a retail store of some kind on the island, as either a farmgate licence or a stand-alone store, to service not only the year-round locals but also the other thousand or so summer residents and tourists who come through the island’s port “city” annually. 

“We know how to grow good cannabis, and there are some great strains coming on down the line,” says Bond. “We have the people, we have the knowledge, we have the strains. We just have to get our message out there to the world to let them know who we are.” 

Lasqueti Cannabis’ Gas Truffle and Apricot Stomper are available through the LDB’s central distribution, and their Friendly Bear and Stay Puff are available through direct delivery.

Kathy Bond and Keith Morris with Tommy Chong at a recent industry event.

Calgary Police investigating string of cannabis store robberies

Calgary Police confirm they are investigating a string of recent armed robberies in the city.

Police say it is believed that the same suspects are responsible for each of these robberies. In each incident, police say the suspects fled with an undisclosed amount of cash and cannabis products from the stores.

In a press release, police say the first event occurred around midnight on Wednesday, November 15, when they were called to the Four20 cannabis store in the southwest of the city for an armed robbery. The suspects were gone by the time police arrived. Four20 has more than 30 locations in Calgary.

A week later, on Wednesday, November 22, 2023, again at around midnight, police received reports of an armed robbery. The location this time was the Dank Cannabis Weed Dispensary Parkdale in the city’s northwest. Dank has three locations in Calgary.

The suspects again fled the store prior to the arrival of police and were believed to be driving a stolen vehicle.  

Later that day, police were called for reports of a third armed robbery, this time at a different Four20 location in Calgary’s southwest. Police say it is believed that three suspects entered the store and brandished a gun and a knife.

Image via Google Maps

Police are working closely with business staff to obtain and review evidence. No suspects are in custody at this time. 

On November 22, the owner of two cannabis stores in the Calgary area noted the robberies and the aggressive nature of the robbers, including reports of employees being zip-tied. 

Robberies and burglaries of cannabis stores are not uncommon, and stores in Calgary have been previously targeted. Cannabis growers and processors have not been immune, either. Earlier this year, at least two cannabis producers in BC’s Lower Mainland were the victims of early-morning burglaries.

Alberta recently repealed its rule requiring stores to have window coverings that retailers said made their employees less safe in such incidents.

Featured image of an armed robbery at a cannabis store in Calgary in 2021

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PEI sold nearly $23 million worth of cannabis in 2022-23

PEI sold nearly $23 million worth of cannabis, the equivalent of 4,094 kg, in the 2022-23 fiscal year period from April 1, 2022, to March 31, 2023.

This represents an increase of more than half a million dollars from the previous year, with the province bringing in $6.3 million in revenue from sales and its share of excise taxes.

Total sales in the province were $22,500,680, compared to $21,894,379 the previous year. Net income was $2,909,096, compared to $2,609,580 the previous year.

Despite being the least populated Canadian province, with around 174,000 residents, PEI says its Charlottetown store, one of just four stores on the island, is one of the busiest in the country. Online sales in PEI accounted for just 0.87% of total sales, or $194.991 worth of cannabis. 

The province has plans for a fifth store just southeast of Charlottetown, in Stratford.

Just under half of sales were dried flower, while 23.7% were pre-rolls. Concentrates represented just under 10% of total sales, while ingested extracts and edibles were each just under 5%. 

Prince Edward Island Cannabis Management Corporation is a wholly-owned Crown Corporation of the Province of Prince Edward Island. It is responsible for the distribution and sale of adult-use cannabis throughout the province.

A handful of cannabis producers operate within the maritime province, including Auxly, FIGR, Remidose, Mila Supply, Green Harvest Organics, Retro Cannabis, and FOG Organics.

PEI’s 2022-23 annual report can be found here, and past reports here.


Toronto city councillor asking Ontario where additional promised cannabis tax revenue went

A Toronto city councillor wants to know why Ontario has not shared the additional promised tax revenue from cannabis sales with the city. 

James Pasternak, Toronto city councillor for Ward 6 York Centre and the Chair of the North York Community Council, first tabled a letter in late September to the Toronto City manager asking about revenue from cannabis sales that the Ontario government had promised to cities like Toronto. 

Although the province had fulfilled its initial promises to distribute $40 million over two years to municipalities who opted in to allowing private retail cannabis stores, Pasternak says the provincial government has yet to fulfil an additional promise to distribute half of any additional tax revenue the province receives from its portion of federal excise tax on cannabis sales that exceeds $100 million. 

The city says it has not received any update on cannabis excise tax revenue sharing from the Ontario government. 

Toronto has received just under $9 million as part of its share of this initial $40 million (Ontario distributed $30 million, setting aside another $10 million for “unforeseen costs”) in four payments, with the majority of funds delivered in three payments in 2019, along with one smaller payment in 2021. All funds were received and contributed to Toronto’s Cannabis Reserve Fund.

In a letter to Councillor Pasternak, the Toronto City manager says that of the $8.97 million received in the City’s Cannabis Reserve Fund, $8 million has been withdrawn to support enforcement actions against illicit cannabis businesses, like cannabis retail owners and production facilities, and enforcement of cannabis laws like impaired driving and other cannabis-related penalties. The remaining funds are expected to be used within the next year.

Ontario has said it also invested $3.26 million to support municipalities through enhanced enforcement against illegal cannabis operations. Ontario is one of only a few provinces that has shared any portion of federal excise taxes from cannabis with their municipalities

Despite these initial payments, the Ontario government reported a total revenue of $310 million in Ontario’s portion of the Federal Cannabis Excise Duty during the 2022/2023 fiscal period, $210 million beyond the $100 million threshold set.

The Ontario Government has also budgeted another $269 million from its portion of the Federal Cannabis Excise Duty for the 2023- 2024 fiscal period.

On October 13, Toronto City Council sent a letter to the Ontario Board of Health requesting info on what the cannabis funds had been spent on and whether any such allocations included funds for addiction treatment or addressing mental health issues.

The Board of Health will be considering the question on November 27, which will then be considered by Toronto City Council on December 13, 2023, subject to the actions of the Board of Health.

Cities in other provinces have raised similar concerns about what they say is their share of the federal excise tax from cannabis. For years, cities in BC’s Lower Mainland have been raising the issue.

Earlier this year, municipalities in New Brunswick were asking for their share. 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” associated 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. “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.”


Raid on unlicensed cannabis store in New Brunswick leads to product seizure, one arrest

Officers from the New Brunswick Department of Justice and Public Safety recently seized cannabis products at an unlicensed dispensary in Saint John, with one man arrested. 

The cannabis store, Chronic Kings, operating out of a former car wash at 8 Simpson Dr. in Saint John, was raided on November 1 when public safety officers executed a search warrant. Peace officers seized dried cannabis, edibles, concentrates, vape pens, and cash. 

The man arrested, a 47-year-old from Saint John, was later released from custody and is scheduled to appear in court on January 30, 2024. The investigation is ongoing.

Officers seized:

·     2.7 kilograms of dried cannabis

·     116.3 grams of hashish

·     141.6 grams of cannabis resin (brick form)

·     About 1,007 grams of extracted resin/oil

·     362 packages of edible gummies

·     119 packages of edible food products

·     175 jars/packs of shatter

·     43 packages of cannabis distillate vape oil

·     114 THC vape pens

·     91 pre-rolled joints

·     About four pounds of homemade gummies

Additionally, about $1,200 in cash was seized from the property. A Facebook page for the business appears to show it had been operating since at least December 2021.

The Government of New Brunswick operates provincially-run Cannabis NB stores and also licenses a handful of privately-run cannabis stores in the province.

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

Quebec brought in $61.4 million from cannabis sales and taxes in the second quarter of this year selling $151.7 million worth of cannabis.

The SQDC’s most recent quarterly report covers its operations from June 18 to September 9, 2023.

The SQDC reported a net income of $24.9 million from the sale of 27,498 kg of cannabis for this quarter, compared to $22.3 million from the sale of 24,378 kg for the same quarter of the previous year, a year-over-year increase of 9%.

The SQDC also saw an increase in the number of cannabis transactions, with 3.6 million compared to 3.2 million at the same time last year. The average selling price was $6.34 per gram, including taxes, compared to $6.56 per gram in Q2 2022.

Most sales were made in-store, with $142.3 million of the SQDC’s sales in-store and $9.4 million online. 

The cost of goods sold also increased to $103 million compared to $95.3 million for the second quarter last year, bringing in a gross profit of $48.7 million compared to $43.9 million in Q2 2022.

While still increasing, sales have begun to plateau in Quebec as the province shifts from adding new stores to trying to refine the customer experience. Recently, the provincial cannabis seller listed cannabis-infused sausages and ramen.

A strike that impacted dozens of stores in the province also recently ended, and in October, the SQDC appointed a new president and CEO, Suzanne Bergeron. 

Bergeron replaced interim CEO Robert Dalcourt, who was appointed in June to replace previous long-time CEO Jacques Farcy.


Strike at dozens of SQDC stores now coming to an end

A strike that had impacted up to 26 cannabis stores in Quebec for more than a year is coming to an end. 

The Société québécoise du cannabis (SQDC) posted the news on Monday, November 13, and the Canadian Union of Public Employees (CUPE-5454) shared their confirmation on November 14.

The strike began 18 months ago and called for better working conditions and wages for the 300 members currently employed in two dozen SQDC branches. The SQDC has said that they hope to reach a negotiated agreement to the satisfaction of all parties involved.

The wage scale of employees at the SQDC was reviewed as part of the negotiations and now includes fewer wage steps. Also, beginning in 2024, new hires will be paid $21 an hour. For 2025-2026 and 2026-2027, the wage rates will increase in accordance with the general parameters negotiated by public sector unions. The union expects wages to be between $21.60 and $25.45 an hour. The agreement from the union is for a period of 5 years.

“Our members decided to fight to the hilt to get better working conditions and wages on par with those paid by other Crown Corporations. We set the bar high and cleared it. We’re proud of our success that we owe to the solidarity, combativeness, and determination of our members,” said David Clément, president of CUPE 5454. 

Other negotiated terms include reduced uncertainty for workers, with improved schedules and hour guarantees.

“Our members’ acceptance of the conciliator’s recommendation allows us to emerge from this crisis with our heads held high. These recommendations include an improved wage scale and settlements of all disputes. We now have to sign these new contracts which, once signed, will take effect and remain in force until March 31, 2027,” added CUPE union representative Daniel Morin.

The SQDC says it is “pleased to count on the professionalism and commitment of all of its teams in its 98 branches in order to pursue its mission of ensuring the sale of cannabis from a health protection perspective” and notes that the resumption of normal opening hours could take place over a few weeks. Schedules will be posted on the SQDC.ca website.

“The SQDC salutes the valuable work of the striking branch managers, who oversaw the operations of their reduced-staff branches for several months,” continued the press release. “We would also like to thank customers for their understanding during this period.”


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Strike at SQDC locations could be ending soon

A strike that has been affecting 26 SQDC cannabis retail outlets across Quebec could be ending soon, says the union behind the action. 

On November 7, both parties received a recommendation from a mediator, which both accepted. The union will now present it to the approximately 230 members of CUPE 5454 to renew their collective agreement in a vote at a special meeting on November 12. It will be recommending acceptance of the decision.

CUPE 5454 (The Canadian Union of Public Employees) is one of the unions representing employees of some province-run SQDC cannabis stores. The union called a general strike in May of this year in response to the suspension of the president and vice-president of the union, along with 75 employees. 

The union has been calling for better working conditions and wages for their 300 members currently employed in two dozen SQDC branches. The SQDC has said that they hope to reach a negotiated agreement to the satisfaction of all parties involved.

“We managed to put an end to this crisis, which will finally enable the workers we represent to be paid wages befitting a Crown Corporation. They will have the last word, but our bargaining committee believes that this recommendation deserves acceptance,” commented CUPE representative Daniel Morin.

SQDC has not yet released a comment on the topic. In an update posted on October 29, the provincial agency listed several striking locations that were expected to occasionally close over “the next few weeks.”

Earlier this year, a Superior Court of Quebec issued an injunction to limit union “pressure tactics” against SQDC. 

Note: This article has been edited to change the number of impacted stores form 24 to 26.


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

The race to the bottom in prices is good for consumers but bad for growers, says Darren Brisebois, President of OGEN Cannabis, which closed the doors at its Calgary facility last week after going into receivership.

The company, which suddenly had to let nearly ninety employees go after hearing the news of receivership from their lender, has around 25,000 cannabis plants at various stages of production now scheduled for destruction. Its vaults, though, are mostly empty, says Brisebois, with their products selling quickly into several provincial markets.

Moving product wasn’t enough for OGEN to keep the lights on and payroll fulfilled. The company was at a difficult crossroads, he explains, struggling with the debt taken on to build their 60,000 sq ft facility (35,000 sq ft of cultivation space) while seeing the cost of cannabis products continue to drop.

The only path out that he could see, continues Brisebois, was to increase production somehow to lower the overall cost per gram to be able to eke out a profit in a market with wholesale indoor dried flower going for under $2 a gram, and production costs often over the $2 a gram mark. While his facility was producing about 5,000 kilograms of cannabis a year, he figured he needed to double that within the same facility to pay his bills and bring in a profit.

“We’re chasing this down, and the only way to be sustainable is to produce more. All of our costs are fixed.”

“Everyone on the market, they want to buy it for a buck, buck fifty right now,” he adds. “And the smaller producers can’t get the economies of scale that I have. So if you’re a small producer, I can’t see you getting below two (dollars a gram), indoor.”

The other big problem, he says, is government taxes and fees, both at the federal and provincial levels.
“When I look at my profit and loss statement, I’m paying somewhere between forty and forty-five percent right off the top to various government agencies. The selling price is now well below the cost of production.”

In addition, as more companies are closing and their supply gets sold at below-market rates, prices are further eroded, creating a downward spiral.

“The B2B market is really a big factor in this with a lot of different facilities closing. That puts even more downward pressure on the selling price per gram.”

Brisebois says the decision to close was not his, it was at the discretion of their lenders as well as pressures from the CRA.

Despite this need to get bigger, he says he also sees the pitfalls of growing too large and taking on too much debt—something he attributes to the early days of legalization when the industry was flush with cash.

Being small carries some advantages, but he thinks it can be a bit of a trap where it’s tough to really grow as a business.
“I wouldn’t want to be really big. I would rather be really small, frankly. And maybe there’s a labour of love in it. But it’s a catch-22 because maybe you can break even on that scale. Then how do you grow to establish yourself across the country?”

Another issue, he says, is the increasing cost of power in some parts of the country. In Alberta, this has been increasing significantly, contends Brisebois. Although he was able to lock in a low rate a few years ago, if paying current market prices, he says he would have seen his monthly electricity bill double from about $170,000 a month to more than $300,000.

This is exacerbated by an increasing cost to build, meaning anyone wanting to expand right now will have a hard time, especially with capital markets shunning most of the cannabis industry.

The future is probably somewhat bleak, he says.

“I think there’s going to be a handful of companies that will own portfolios of brands. I see a consolidation of market share.”

Companies will continue to swoop up the successful brands, he says, or just start their own brands with distressed assets they get from other closing companies. This is ultimately driven by consumer demand and what provinces buy, and is impacted by an enormous amount of regulatory and tax burden.

“It’s a very price-sensitive market. Price and THC. It’s really unfortunate, but that’s how it is for most consumers.”

Featured image via pancakenap.com

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

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

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

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. 

image via Organigram.ca

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.” 

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No more “ingestible extracts” means some BC consumers discovering cannabis capsules

The brief appearance of ingestible extracts on cannabis shelves and their subsequent disappearance has potentially introduced more consumers to cannabis oil capsules, say some BC cannabis retailers. 

So-called ingestible extracts or “edible extracts”, sold with much more than the 10mg THC per package allowed in cannabis edibles, have become very popular with some consumers over the past year. Organigram’s introduction of their Edison Jolts, a 10mg THC lozenge sold with up to 25 each per package (250mg THC), first released in summer 2021, was soon followed by products like Aurora Glitches and several others in 2022 with similar high THC offerings per package.

Sales of these products shot up over the last few quarters in BC before Health Canada put a stop to the fun earlier this year, declaring them to be non-compliant with federal regulations. In early January 2023, Health Canada sent a notice to producers highlighting their concerns. Companies had until May 31, 2023, to cease sales and distribution

Although some retailers were able to stock up, many stores have since run out, and BC’s most recent quarterly report for Q2 2023 shows sales dropping significantly. 

However, their disappearance from shelves has given at least some retailers an opportunity to tell consumers about another similar product that has been available since the beginning of legalization: cannabis oils and cannabis oil capsules. 

While sales of cannabis capsules in BC slightly declined as ingestibles increased, their rapid decline in Q2 2023 was matched by a slight increase in the sale of cannabis oils. 

Kayla DeFazio, an Assistant Manager at Spiritleaf in Maple Ridge, one of the top-selling stores in the province, says she has seen that trend play out in her store, often guided by herself and other employees. 

Like the ingestible extracts, cannabis capsules offer consumers a similarly larger quality of THC per container, in individual servings of up to 10 mg THC, explains DeFazio, listing off one popular product in their store that offers ten, 50, and 100 capsule bottles with each capsule containing 10 mg THC.

“A lot of people really, truly think that it works best in a gummy. Maybe everyone else is finally catching on and realizing that is not the case.”

Mike Babins, Evergreen Cannabis

She points out that while these types of cannabis capsules have long been available, she thinks the conversation about the lack of these ingestible extracts has helped introduce them to many consumers who weren’t familiar with them. Consumers come in looking for ingestible extracts that they no longer carry, and they tell them about these other, similar products.

“We’re just trying to find a better solution for people. A lot of them have a higher tolerance, and they definitely need a higher dosage, so when we weren’t able to give them that with the (ingestible extracts), we tried to move them on to something as a different option. “

“A lot of people just really like the idea of having an edible, having a gummy, having different flavours,” she continues. “But then a lot of people were also turned off by the excess sugar. So once we showed them that there was a better price point and something maybe a little bit healthier, they had an easier time moving on to something new.”

“…a lot of people were also turned off by the excess sugar. So once we showed them that there was a better price point and something maybe a little bit healthier, they had an easier time moving on to something new.”

Kayla DeFazio, Spiritleaf in Maple Ridge

Trevor Pewarchuk, District Manager for Trees Cannabis, with multiple locations on Vancouver Island, says he’s also seen evidence of a similar trend in his stores.

Products like Edison Jolts and Aurora’s Glitches were “insanely popular,” says Pewarchuk, but he notes they quickly sold out once Health Canada told producers to stop shipping more to retailers. 

Instead, some consumers have gone back to buying edibles or gummies, he says, but some are discovering they can get a similar product with the same effect without the added sugar and at a lower cost when they buy cannabis oil capsules. 

“Generally, we would direct them in that case to an oil or a capsule option just because they tend to be the closest equivalent they can purchase with the max amount of active ingredient per dose,” explains Pewarchuk. 

However, he says most of the customers who were interested in those higher potency items were edible consumers already, and they are now just purchasing multiple packs to get the same effect.

“Some are going to oils, but many are just shifting to buying multiple edibles or multiple beverages.”

“Generally, we would direct them in that case to an oil or a capsule option just because they tend to be the closest equivalent they can purchase with the max amount of active ingredient per dose.”

Trevor Pewarchuk, Trees Cannabis

Meanwhile, in Vancouver’s first licenced cannabis store, Evergreen Cannabis, owner Mike Babins says this is a conversation he’s been having with consumers since edibles first began appearing in late 2019 or early 2020. 

“As soon as edibles came in, anyone coming in looking for (a large amount), we immediately say to them that we’re happy to sell you that, but you can buy a jar of (capsules) that are the same thing. You can then go next door and get a pack of gummy bears if you really need candy. And you can save a lot of money.”

Babins says he thinks there’s still a lot to do to educate consumers about products like cannabis oils and capsules, with some consumers believing that being in an “edible” form somehow increases its potency.

“A lot of people really, truly think that it works best in a gummy. Maybe everyone else is finally catching on and realizing that is not the case.

“Maybe the public is finally getting informed and starting to understand that there are other higher THC options for edibles. The more people who understand that, the easier it’s for us to guide them in that direction and help them decide.”

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

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. 

Chart via LDB.com

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. 

via LDB.com

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.

via LDB.com

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.

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

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

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.

via BCCSU

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Cannabis sales continue to grow across Canada

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

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Few BC growers interested in farmgate a year after program launched

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.

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Cannabis sales continue to increase in Nova Scotia

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


BC cannabis company asking the provincial government for tax money back

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.


BC providing funding for cannabis testing research project

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.