The BC LDB will soon launch a new data report that they say will help provide licensed producers with better insight into which retailers are purchasing their products.
The report comes based on feedback from many producers in the industry who need such insight to better understand where to focus their efforts and engagement with retailers, as well as potentially address so-called “data deals” between some retailers and producers.
In a memo sent out to stakeholders, the LDB explains that the BC Cannabis Wholesale Customer Distribution Report “will provide LPs with a list of the retailers that are purchasing their products and the number of cases purchased by each retailer, by SKU, over a four-week period.”
Beginning October 2, 2023, the report will automatically be included in LPs’ report portfolios. This report will be free for the first year. After that, the province will review the program to decide what fee structure will be needed.
“I have a feeling this will lead to more reps coming to my door. But my big concern is if you’re making money off this, we should be getting our share because it’s our data. And I would prefer it was anonymous and it was telling them which regions.”
The report will only include purchasing data for an LP’s product, not any other producers or any other data related to retailers’ sales.
The report will include the business name and address of each retailer that purchased their product, the LDB SKU number and product name of each product purchased, and the number of cases purchased by each retailer, by SKU.
Two BC cannabis producers tell StratCann the news is welcome and needed, although one retailer says they aren’t too excited by the idea of the LDB sharing their data with producers.
Sean Curly, the director of sales at FN Canna/All Nations, says he’s excited by the news, and that this can save struggling producers money while also allowing them to better identify which stores are most familiar with their products.
“One of the foundations of our business is around connection,” says Curly. “We strive to create connections with all our partners, including our partner retailers. So this is a huge step forward to be able to now connect directly with those retailers that support us.”
He says it can also help address so-called “data programs” or “data deals” where producers pay retailers for similar data.
“If other provinces can come to the plate and deliver a service like this, I think that can help get rid of those kinds of deals. The more the government can provide transparency and allow LPs to connect directly with retailers is only going to support this industry and help create a healthy, vibrant industry.”
Mike Babins, the owner of Evergreen Cannabis in Vancouver, says he supports the idea behind the report and thinks it could address the “data deals”. However, he’s not too excited by the idea of his sales data being provided and potentially sold to LPs.
“On the one hand, I think I should be the one who should be sharing the info with them,” says Babins. “On the other hand, if I were one of those doing data deals, it would hurt me, I suppose. But I’m not doing that because I think that’s not appropriate to do.
“I have a feeling this will lead to more reps coming to my door. But my big concern is if you’re making money off this, we should be getting our share because it’s our data. And I would prefer it was anonymous and it was telling them which regions.”
Janeen Davis, VP of sales at Joint Venture Craft Cannabis, echoes the concerns about “data deals” and the hope that this report will help combat them.
“Data deals have hit BC now, and the unfortunate writing is on the wall that certain retailers would not stock supplier’s products unless they were paid for data. With the BC LDB and BC government coming out with this level of transparency, it will prove that many retailer data deals are simply disguised slotting fees which most suppliers cannot afford. I am proud to see BC LDB lead the charge to create a sustainable industry for suppliers as well as retailers.
Cities in BC’s Lower Mainland are asking for what they say is their share of cannabis excise tax revenue from the province.
In a resolution to be considered at this week’s annual Union of BC Municipalities (UBCM) convention, the government of Port Moody, with support from the Lower Mainland Local Government Association, is calling on the provincial government to share up to half of its portion of the federal excise tax.
The resolution could be considered this week at the convention in Vancouver, held from September 18-22.
The Federal government provides 75 percent of the excise tax it collects when cannabis producers sell into a provincial market or through the medical market. The federal tax is collected at a rate of $1/gram or 10 percent of a producer’s selling price, whichever is higher. The federal portion of cannabis excise tax revenue is capped at $100 million a year.
Under an agreement first signed prior to legalization, provinces successfully argued they would need to deal with the bulk of enforcement and regulations when it came to cannabis, especially municipalities, and should, therefore, get a large portion of the federal tax. But munis in several provinces, including BC, say they have not received that tax money.
A representative with BC’s Ministry of Finance explains that the excise tax is remitted to the federal government by a licensed cannabis producer and is then distributed back to provinces from the federal government. This cannabis excise tax revenue then goes into the province’s Consolidated Revenue Fund for programs like health care, education, and child care.
As of September 1, 2023, BC has received $226.99 million in federal excise duty payments on cannabis since March 1, 2019: $6.42 million in 2019, $24.84 million in 2020, $51.34 million in 2021, $70.83 million in 2022, and $73.57 million so far in 2023.
In 2020, the Union of BC Municipalities (UBCM) said a survey of their membership showed $11.5 million per year in local government incremental costs for the three years following cannabis legalization.
Earlier this year, a representative with BC’s Ministry of Finance said the agency had not provided any of this tax revenue, but they are in talks on the subject with the UBCM as part of a long-term plan.
“In general, provincial taxes, including PST, revenue flow into the Province’s consolidated revenue fund to provide the programs and services people rely on, such as health care and education,” notes the Ministry representative. “To date, the BC government has not provided any excise tax revenue to local governments.
“We’re currently working with the Union of BC Municipalities on a review of local government finance systems in BC, including signing an MOU in 2022 laying out that we’ll work together over the next few years. Cannabis revenue sharing is one of the items we will be looking at over the longer term. As the cannabis market continues to mature, we are working cooperatively with UBCM through this process to promote local governments’ financial resiliency.”
Although the resolution notes that several other provinces, such as Ontario, Quebec, and Alberta, have shared this revenue with their municipalities, the BC government has never made a commitment to do so.
The resolution reads:
“Whereas the Canadian federal government has clearly stated its expectation that provincial cannabis tax revenue be shared with local governments and such revenues are currently being shared between the provinces and local governments in Ontario, Quebec, and Alberta, but not in British Columbia; And whereas the sharing of cannabis tax revenue will provide much needed funding for local governments: Therefore be it resolved that UBCM ask the Province to share up to 50 percent of provincial revenues generated from the production and sale of cannabis products with BC local governments.” ~NR31 Provincial Cannabis Tax Sharing with Local Governments Port Moody
UBCM raised the issue in 2016, 2017, 2018, 2019, 2020, and 2022, as well.
Munis in other provinces want their share, too
Cities in other provinces have raised similar concerns about what they say is their share of the federal excise tax from cannabis. Earlier this year, municipalities in New Brunswick were asking for 25 percent. In 2021, the Association of Manitoba Municipalities released a position paper that called on the province to share 25 percent of its cannabis tax revenue with its municipalities. More recently, the provincial government in Manitoba said there were few “societal costs” with legalization.
The same issues were raised in the association’s pre-budget plan. The report notes that the Federation of Canadian Municipalities (FCM) says that municipal administration and local policing costs related to legalization will total $3-4.75 million per 500,000 residents, representing a range of approximately $210-335 million per year in costs incurred by municipalities across Canada.
“According to the Federation of Canadian Municipalities (FCM), municipal administration and local policing costs linked to cannabis legalization will total $3-4.75 million per 500,000 residents on an annual basis,” wrote the AMM in an email to StratCann at the time. “Since these costs should not be downloaded to municipalities, it is imperative that municipalities be included as meaningful participants in revenue-sharing conversations. We continue to urge the federal and provincial governments to co-develop a revenue-sharing model that respects municipal authority.”
Additional resolution
A second resolution, NR30, the Cannabis Control and Licensing Act, was brought forward by the Okanagan-Similkameen regional district. It calls for a change to the provincial Cannabis Control and Licensing Act (CCLA) that would allow cities and Indigenous governments to opt out of giving the province feedback on a retail licence application. Currently, the provincial licensing process requires input from a city before a licence can be issued.
Both resolutions could be voted on this week and are among 205 to potentially be debated, pending time. You can read about other cannabis-related resolutions at UBCM 2023 here.
A BC court has thrown out a lawsuit filed by several BC cannabis retailers who say the government has failed to enforce its own regulations.
The plaintiffs had alleged that the BC government failed to enforce its licencing requirements to shut down retail cannabis locations that operate without provincial approval.
In their defence, the province claims it does not owe the plaintiffs a private duty of care to ensure they do not lose profits while competing with unlicensed cannabis retailers operating on Indigenous Reserves.
In a ruling posted September 18, the court ruled that the retailers’ claims were not reasonable and that they cannot prove the government has a duty of care owed to them to enforce provincial regulations. Although the court does not dispute that provincial law states all cannabis retailers in the province must be licensed by the BC government, it ruled that the government does not have “positive duties to enforce its regulations,” noting they are “discretionary enforcement powers.”
The judge in the case writes: “The discretionary exercise of these enforcement powers that takes reconciliation with Indigenous people into account is neither unusual nor surprising. This is because whenever such powers are conferred by statute, it is expected that decision-makers will balance many competing rights and obligations beyond the obligation to enforce the law. These considerations include “the government’s obligation to bring about the reconciliation of Indigenous and non-Indigenous peoples through negotiation”.
The lack of enforcement of provincial cannabis regulations by provincial authorities constitutes a breach of public trust and negligence of duties, argues the group of retailers.
In the past, BC’s Minister of Public Safety noted that the province has been hesitant to enforce its own laws in relation to cannabis stores on First Nations’ lands due to the potential of exposing the province to a wider lawsuit dealing with jurisdictional challenges. These challenges could have the potential to extend well beyond cannabis regulations, leading provinces and the federal government to move cautiously.
Rather than prioritizing the enforcement of provincial retail cannabis regulations in First Nations communities, the province has focussed on assisting communities who express an interest in creating opportunities within the provincially regulated market. These include a recent addition to the province’s regulations, section 119, which allows the province to enter into sales agreements with First Nations communities operating within provincial and federal regulations.
Some retailers have expressed frustration that numerous unregulated cannabis stores operating in BC with no provincial enforcement are undermining their ability to operate profitably. Retailers note they have spent years obtaining a provincial licence and paying a significant amount of provincial taxes, making it impossible to compete with unregulated retailers. The issue has been especially felt in BC’s interior region, where some estimate more than 100 unregulated retail stores operate.
Mike Morris, the BC MLA for Prince George/Mackenzie and the official opposition critic for Public Safety and Solicitor General, has raised the same concerns.
“Our view of the claim that’s being advanced is that proper enforcement by the government of British Columbia will benefit all of British Columbia’s communities, both on reserve and off reserve,” says David Milosevic of Milosevic Fisk LLP, the legal team for the plaintiff.
GrowerIQ, a seed-to-sale software company for cannabis producers, has now secured just over one million dollars in funding from the federal government.
In a press release today, the Ontario-based company announced the completion of its latest funding round, securing CAD $1,080,000. GrowerIQ says the funding, which comes through the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), will be used to improve its cannabis tracking system.
Andrew Wilson, CEO of GrowerIQ, says the funding round will help the company continue to grow as not only a Canadian brand but a global one.
“We are thrilled to have secured this funding to accelerate our mission of transforming the cannabis industry,” said Andrew Wilson, CEO of GrowerIQ. “This investment will allow us to further develop our cutting-edge technology and expand our global footprint. We are committed to providing cannabis producers with the tools they need to succeed in an increasingly competitive market.”
“Our goal is to bring together all systems, processes, advisors, and capabilities into one place, to help simplify what can easily spiral into something very complex,” Wilson previously told StratCann about his approach to the service. “We built the seed-to-sale platform from the perspective of the grower, and coded those insights right into the system’s process flows. So, users of GrowerIQ benefit from those decades of agricultural experience just by using the system.”
BZAM, a Canadian licensed producer behind several successful brands, has let more than 90 personnel go as part of a corporate restructuring and the recent sale of several facilities in BC.
The company also says it is “focusing the scope of activities” at its Pitt Meadows, BC facility and “concentrating other activities at its Ancaster, ON facility” as part of its final phase to “unlock company-wide synergies” following its merger with Ontario-based The Green Organic Dutchman (TGOD) in 2022. TGOD’s (now BZAM) greenhouse is located in located in Ancaster, near Hamilton.
At the time, the merger was touted as a way to emphasize TGOD’s market strength in Quebec and Ontario with BZAM’s strong presence in western Canada. A representative with BZAM confirmed with StratCann via email that the layoffs occurred Monday, September 18.
BZAM’s Pitt Meadows facility was said at the time to provide TGOD with low-cost THC distillate and extraction capabilities.
In their most recent quarterly report in August, BZAM said it had recently sold its facilities in Midway, BC and Maple Ridge, BC and referenced a focus in 2023 on “streamlining” operations. The report also referred to the recent divestment in their Puslinch, ON facility and Edmonton, AB facility. BZAM had previously purchased a hotel in Midway to house its employees at the outdoor farm near the US border.
However, the same quarterly report referred to the Pitt Meadows facility as one of its two “core” facilities, the other being the one in Ancaster, ON acquired through the merger with TGOD.
BZAM’s plan included getting rid of what it called “redundant facilities” and focusing production activities on its remaining sites, as well as reducing “selling, general, and administrative expenses,” which it noted include reducing its headcount “by more than 90 additional personnel.”
BZAM recently posted several job listings for its Pitt Meadows and Hamilton (Ancaster) sites.
Alberta Gaming, Liquor and Cannabis (AGLC) says it will be relisting CBN and THCV products.
In a letter to licensed producers today, the AGLC now says it will be reversing a recent policy change to include CBN and THCV in THC totals, saying it was based on a misinterpretation of federal messaging.
The letter, which was sent to producers who sell products within the province early in the afternoon on September 18, says that “effective immediately,” the AGLC “will relist and accept new products that contain these cannabinoids, and will not include CBN and THCV when determining THC totals until clear direction is provided by Health Canada.”
Note: This article has been edited to correct the date above from Sept. 28 to Sept 18.
In mid-August, the AGLC contacted at least some producers, informing them that it would be including the amount of CBN and/or THCV in a cannabis product within the total THC. This covered any edibles that had more than 10mg total of THC, CBN, and/or THVC per serving or per package. It would also apply to the 1000mg THC limit for extracts, including vape pens.
Several products sold in Alberta would have been impacted, including one micro producer who was informed of the change via email, being told that all their products would be removed from shelves.
The AGLC had initially told StratCann that the decision to include CBN and THVC within the total THC amounts was based on messaging from Health Canada and had been implemented by several other provinces, including the OCS.
However, four separate provincial cannabis agencies, including in Ontario, confirmed with StratCann that they have no such policy in place, as did a representative from Health Canada.
The AGLC now says it interpreted the information it had received from Health Canada “to mean measures were immediately needed to curtail the supply of products with minor intoxicating cannabinoids” in order to protect Albertans from the risk of overconsumption.
In March of this year, Health Canada reached out to the cannabis industry seeking feedback on potential amendments to Cannabis Regulations, including whether the “limits on the maximum quantity of delta-9-THC contained in a cannabis product (by container and ingestible unit) apply to the sum total of all intoxicating cannabinoids found in the product.” It did not reference CBN specifically.
Sources close to the issue say the federal health agency has also floated a draft document to stakeholders with guidelines for licensed producers on the subject of these minor “intoxicating cannabinoids” such as Delta-8 THC, THC-V, and CBN, among others. However, no licensed producers StratCann has spoken to for this topic have received official guidance from Health Canada on this subject in reference to including CBN within the existing THC limit for products like edibles.
The AGLC’s policy on including delta-8 and delta-10 in the total THC remains in place.
“We apologize for any inconvenience and will continue to do our best to keep Alberta’s cannabis industry vital and sustainable,” says the letter sent to producers from the AGLC.
The BC government should take lessons from one of the province’s only indoor cannabis consumption spaces, says a new research paper.
An indoor consumption lounge inside one of Canada’s oldest compassion clubs offered members a chance to consume cannabis in a safe space, with the club itself serving as an example of a community-based model of cultivation, distribution, and consumption, says the study.
The study was recently posted in the peer-reviewed journal, Contemporary Drug Problems, which publishes research on alcohol and other psychoactive drugs, licit and illicit. The authors present a case study of the Victoria Cannabis Buyers Club (VCBC) and its consumption space, affectionately called “The Box”.
The Box was a small room inside the VCBC’s former location that was used as a cannabis consumption space by many of the club’s members. The Box closed in February 2023 when the VCBC was forced to move locations due to enforcement from the province, but the research paper argues it can serve as an example for the province as it continues to look at cannabis consumption spaces.
With research beginning in 2021, The Box was at the time closed due to pandemic-related restrictions, but information was collected through a survey sent out to members. The survey was open between January and March 2022 and was completed by 104 respondents. Although the club says they have 8,000 members, the number of current, active members is not provided.
Survey results showed members used The Box for an array of reasons, from socializing to learning more about cannabis. Respondents reported using The Box as often as several times a day to one or two times a month. Many reported using the space because of a lack of space to consume at home, with smoking being the most common mode of consumption.
The BC government can learn from this model, concludes the research paper, especially given that the government is currently looking at rules for consumption spaces. Although those potential rules will specifically exclude indoor smoking and vaping, the usefulness of these spaces for those using cannabis for therapeutic purposes needs to be taken into account, it says.
In a 7-2 vote in a city council meeting on September 14, The Victoria Cannabis Company (VCC) received approval from the city to move one step closer to building its cannabis farmgate space in Victoria West.
The VCC rezoning application has now passed third reading to build their cannabis farmgate store at the site of their production facility that is currently home to a nursery, two micro cultivation sites, and a standard processing site.
There is one formality left in place before the cannabis producer can begin building out their retail store. VCC president Kyp Rowe tells StratCann they now need to sign a business agreement with the city to build a sidewalk in front of their facility. Once that is signed, their application will go back to council for a fourth reading and final approval. At that point, formal construction on the store can begin.
Once finished, VCC will receive a final inspection from both the city and the province to get final approval to open the store. VCC hopes to have their farmgate store open for business around the end of the year, depending on the speed of construction and permits.
Outside the facility near the corner of Mary St. and Esquimalt Rd. in Vic West. Image via Google Maps, September 2021.
“We couldn’t be more pleased with the Victoria City Council’s decision to grant our rezoning request to allow us to go to a fourth reading for our Farmgate store,” says Rowe. “We are hoping to be open for Christmas this year.
“What we are most excited about is that we will finally be given the opportunity to have a forum to educate the public on all things cannabis while at the same time creating a larger revenue stream for the business during these very challenging times in our industry.”
Located at the corner of Mary St. and Esquimalt Rd., the VCC is situated along the Galloping Goose trail. Rowe told council the goal is to be a community centre that showcases products grown and produced on site, as well as products from other local BC growers.
The licence still requires final approval from the province and, once approved, would be the second official Farmgate licence, referred to as a Producer Retail Store (PRS). The first was ShuCanna in Salmon Arm, licensed in August. ShuCanna tells StratCann they hope to open by next week.
The province charges an application fee of $7,500, a first-year licensing fee of $1,500, and an annual renewal fee of $1,500. The licence allows federally licensed cannabis growers to also operate a retail store licence, a PRS, at the same site as their production facility or farm.
Ontario and New Brunswick also have formal farmgate licensing, with a handful of stores in each province.
Vote passed! We got our Farmgate!!!!!! Thanks to everyone who showed up to support our application! pic.twitter.com/cLK4REyv9x
Nestled in the heart of Cumberland, BC, Trugreen Cannabis is pioneering a project that promises to transform the landscape of cannabis consumption spaces. Under the visionary leadership of Michael Arneja, President of Trugreen Cannabis, this endeavour is set to establish one of British Columbia’s first outdoor cannabis consumption lounges.
This ambitious project first took root with a series of pop-up spaces adjacent to Trugreen Cannabis, serving as a summer pilot project. The goal was to gather insights and pave the way for a more permanent and official community space, slated to be unveiled by the end of 2024 under the moniker “CUB,” short for the Community Urban Bazaar.
Arneja’s vision extends beyond the mere creation of a cannabis consumption area: it seeks to nurture “a stigma-free space where the community can gather and celebrate the cannabis culture with a responsible blend of cannabis use and community building.”
“We’ve been operating these pop-ups to see what the space could look like, and to get feedback from the community on what they want it to look like,” he adds, highlighting the project’s community-driven nature.
An artist rendering of the future Community Urban Bazaar
The space, occupying an adjoining lot next to Trugreen, was initially conceived as an “incubator” for local entrepreneurs. However, the overwhelming interest from existing businesses in the area has led to the expectation that CUB will soon house a bakery, coffee shop, fish and chips establishment, and serve as a venue for community activities like yoga and live music.
Guiding this unique endeavour alongside Arneja is Max Oudendag, who has been instrumental in curating a space that seamlessly combines family-friendly community activities with responsible cannabis consumption. Their mission is clear: prioritize being kid and family-friendly while establishing a legal and community-accepted cannabis consumption area.
“We’re excited to be in a position to explore how to break down the stigma of cannabis consumption and find a way to integrate that into a healthy community gathering space,” Oudendag emphasizes.
Their dedication has not gone unnoticed. The project is on a “shortlist” to become one of the first legal consumption spaces in British Columbia. Earlier this year, British Columbia released a “What We Heard” report, soliciting input on the nature of cannabis consumption spaces in the province. This feedback will significantly influence provincial decisions regarding the allowance and regulation of such spaces.
British Columbia’s stance on indoor smoking and vaping restrictions has made outdoor consumption spaces like the one in Cumberland an attractive option. Arneja recognizes that the ability to promote and formally consume cannabis in an outdoor setting is vital for the success of their venture.
“We still have a lot of work to do, but we hope to be the first, if not one of the first, community consumption spaces of this kind in British Columbia.”
As the journey unfolds, Cumberland’s cannabis culture landscape is set for a remarkable transformation. Trugreen Cannabis and the Community Urban Bazaar aim to redefine how cannabis is perceived and enjoyed, all while fostering a vibrant and inclusive community hub. In this pioneering project, British Columbia may find a blueprint for responsible and community-driven cannabis consumption.
~Michael Arneja
For inquiries and further information, please contact Michael Arneja at [email protected] or 250-400-0420, and @cub.space on Instagram.
Join the movement and witness the evolution of cannabis culture in Cumberland, BC.
The owner of a chain of cannabis stores across Canada is launching a new consumer-facing digital magazine.
High Tide, the owner of the Canna Cabana chain of retail stores, is launching Cabanalytics Consumer Insights, which they say will be an extension of their Cabanalytics “business data and insights platform”.
Canna Cabana currently has 156 locations across Canada, making High Tide the largest retailer in the country.
Beginning September 14, and continuing monthly, the company says in a press release that over 1.1 million ELITE and Cabana Club members will receive the free digital publication, covering topics such as the best-selling cannabis products and accessories and reports on consumer behaviour.
Over time, the company plans to expand their distribution into other markets like the US.
“Innovation is a key part of High Tide’s DNA, which led to the launch of our unique discount club model two years ago and our paid membership tier ELITE almost a year ago,” said Raj Grover, President and CEO of High Tide in a press release while acknowledging the program’s success is subject to provincial and federal regulations. “Today, I’m thrilled to announce the launch of Cabanalytics Consumer Insights, an extension of our highly successful Cabanalytics business data and insights platform.”
Grover adds that the company aims to monetize the platform by utilizing a captive audience of consumers, and he hopes to expand its coverage to include topics such as data on hydroponics, cannabis seeds, and growing equipment.
High Tide’s third-quarter results will be published on September 14. Cabanalytics data sales were $6.4 million in the second fiscal quarter of 2023, compared to $5.1 million for the same quarter last year and $6.6 million in the first fiscal quarter of 2023. Gross profits in Q2 2023 for High Tide were $31.6 million.
City council in Pitt Meadows, BC, has formally approved their first cannabis store.
Following a meeting in July where the city tentatively approved an application for its first cannabis store, Pitt Meadows city staff informed council in a meeting on September 12 that it had received a referral from BC’s Liquor and Cannabis Regulation Branch (LCRB) for the retail location.
City Council then voted to formally adopt their new zoning bylaw for cannabis stores and sent approval of the application back to the LCRB.
While the final licensing authority for a cannabis store rests with the province, BC’s rules require that the province first receive feedback from the community where the store would be located.
In 2018, Pitt Meadows City Council voted to prohibit the retail sale of cannabis, although they did allow interested parties to apply for rezoning of specific sites on a case-by-case basis. However, the city had no bylaws in place if an applicant did come forward.
In 2022, cannabis retailer Seed & Stone applied, which led to a city staff report on how to address these types of applications. Council was largely supportive and passed several bylaws this past April to allow for hearings from applicants looking to open a cannabis store, as well as a separate licence for a cannabis farmgate storefront.
Vikram Sachdeva, the founder of Seed & Stone, says the process to become the first cannabis retailer to have a chance to open in Pitt Meadows was a challenging but rewarding one.
“This has been a two-year journey for us working with the city and the council,” says Sachdeva. “This approval not only empowers us to grow our business, but also allows us to create jobs and stimulate economic growth in the city. We look forward to working closely with local authorities and residents to ensure our operations benefit the community as a whole”.
He tells StratCann the retailer will be applying for a building permit and hopes to open in early 2024.
The Manitoba Liberal Party is including cracking down on illicit online cannabis sales as part of its platform in the lead-up to the provincial election on October 3.
The party commits to cracking down on the sales of illicit drugs online, specifically referencing an uneven playing field faced by legal cannabis retailers in the province that they say is due to a lack of enforcement on those selling cannabis illegally online.
They promise to give the Liquor, Gaming, and Cannabis Authority of Manitoba (LGCA) more authority to go after these types of websites and services.
From the party platform: “Legal Manitoba-based cannabis stores have struggled to compete because there has been no enforcement against illicit sales, either online or with brick-and-mortar stores. While illicit tobacco sales are being investigated and prosecuted by the province, cannabis sales are not. We will strengthen the legislative authority of the Liquor, Gaming, and Cannabis Authority of Manitoba to ensure they are inspecting and prosecuting illicit sales of cannabis to protect the legal market.”
Dougald Lamont, Manitoba Liberal Leader and MLA for St. Boniface, tells StratCann that what he and his party want to see is the LGCA and the Province of Manitoba “inspecting, enforcing and busting illicit cannabis sales, the same way they crack down on other illicit drugs and on contraband tobacco.”
“If we’re busting people for illegal cigarettes, we should be busting them for illegal cannabis. There are people selling cannabis in storefronts and online with similar packaging, no quality standards.”
“The LGCA and Manitoba Finance need to be working together on actively inspecting and disrupting the illicit cannabis market, and working with other provincial governments, and the federal government, to go after online sales,” he adds. “Right now, legal cannabis stores in Manitoba can’t advertise, but illicit operators can sell online.”
Lamont says this policy proposal is based on feedback he has received from those working in Mantioba’s legal cannabis industry.
“They had a ton of basic common-sense suggestions—enforce the law, make sure we have standards. Really, it’s about getting the government to listen and actually do its job. We’re thankful because the insights into the challenges of the legal cannabis industry were incredible. Big retailers have their place, but the Manitoba Liberal priority is to make sure we have strong independent Manitoba businesses, and that includes legal cannabis shops.”
The Manitoba Liberals are not expected to form government in the upcoming election. The Progressive Conservatives and NDP are currently polling within a few points of each other.
Todd Freisan, the general manager at AAAAA Supercraft, located in Ste-Anne, Manitoba, says he appreciates the proposal’s intent but sees the issue as a national problem, not a provincial one.
“This is a federal issue; this is not a provincial issue,” says Friesan. “What can a province do in terms of stamping out the illicit market online? Not a whole heck of a lot.
“It’s a noble cause to go after some of these shops and try and balance the scales, but at the end of the day, it’s like a hydra: you can cut off one head, and three others come back.
“The only way to really get a hold of the illicit market and start changing people’s minds on the legal market is [addressing] the federal taxation program. That’s the only way it’s ever going to balance itself, when the pricing starts to even itself out. That makes prices higher, and that drives people to the illicit market.”
RJ Kusmack at Fiddler’s Green, a cannabis retailer in downtown Winnipeg, shares a similar sentiment. He says he appreciates that Lamont is trying to address industry concerns, but feels the more significant challenge he faces when it comes to the illicit market is the large number of corner stores and convenience stores that sell cannabis illegally that are also not facing much, if any, enforcement.
“They’re all over. They sell it right over the counter: cannabis, tobacco, all kinds of things. They need to do more about that.”
Still, he says the lack of enforcement on illicit online stores frustrates him as someone who follows the provincial rules.
“If I had to do it all over again, I’d probably open up a black market website because of how cheap you can execute it for and the fact there isn’t even a small amount of policing or enforcement. There’s zero.”
While making no specific mention of the illicit cannabis market, the Manitoba NDP has pledged to crack down on drug traffickers with an Unexplained Wealth Act.
The legislation, Bill 10, was first introduced in November 2022 and initially proposed to repeal the fee payments back to January 2023. The government then extended this back an extra year, eventually offering refunds to stores that had paid into the program beyond that date.
Policing the black market online
Unlicensed retailers selling cannabis online have long been a challenge for law enforcement. While many unlicensed brick-and-mortar cannabis retailers closed down in the wake of legalization, the number of f illicit online cannabis sites has increased, with some former brick-and-mortar businesses moving online and many new online stores opening up.
While there have been some notable instances of enforcement against illicit online retailers, they can require lengthy investigations, and law enforcement agencies say they y lack the resources to target them all.
“Unfortunately, it’s been described as a whack-a-mole: we take down one site and two more open up,” Abbotsford BC Police Chief Mike Serr told the Globe and Mail in 2019.
“If you were to do a simple Google search, you would see numerous sites coming up, and one of the issues for consumers is it’s really difficult to tell online who is a legal seller and who is an illegal seller.”
In 2020, a popular subreddit geoblocked a forum dedicated to illicit online retailers in Canada, although the subreddit is still easily accessible through a VPN.
Earlier in the year, BC’s director of civil forfeiture announced the province sought to confiscate cash and eight properties worth nearly $7 million allegedly connected to three illicit cannabis websites.
In 2020, Ontario Provincial Police (OPP), along with the Ontario Provincial Joint Force Cannabis Enforcement Team (PJFCET), conducted a raid on an illicit online cannabis retailer.
A cannabis processor in Mission, BC, was broken into in the early morning of September 11.
Tricanna, a cannabis processor who works with numerous cannabis growers to bring products to market, posted about the break-in on their Instagram page.
The post states that no staff were harmed, but a “significant amount” of product was stolen. It also notes the processor is working with RCMP on the issue.
Dayne Lange, the CFO and one of the founders of TriCanna, tells StratCann that she received alerts on her phone around 3:45 am on Monday, September 11 and watched the break-in occur live on a security camera feed while they waited for police to arrive.
“It was so organized. They had all the tools they needed to get the job done in the time frame they needed,” says Lange. “They were emptying out our secure room and all of a sudden they just left, so they obviously had someone telling them when to leave.”
A video shared on Twitter that was said to be from security footage, now removed, showed what appeared to be a large vehicle ramming open an outside door or wall, providing several individuals in high-vis vests and face masks access to enter the building and begin cutting open a secondary inside door. One of the individuals knocked the video camera off its stand just before the video ended.
Lange says the RCMP has confirmed that they have suspects in mind and they are actively investigating.
She also wants to allow this incident to serve as a warning to others in the industry to remain vigilant.
“We just want to let everyone know, that no one should be taking the legal industry for granted right now in relation to security.”
BC RCMP did not immediately respond to a request for comment on details about the break-in.
Another cannabis processor, Pistol and Paris, was the victim of a similar break-and-enter on the early morning of July 18, with several individuals smashing through a grate, cutting into a Sea-Can to gain access to a storage building, and making off with a large quantity of cannabis.
Police who responded to the call briefly pursued the truck as it was leaving the facility but were unable to immediately catch them. In August 2022, Police in Abbotsford, BC, put out a press release warning of several recent home invasions at licensed medical cannabis grows in the area, saying they appeared to be coordinated efforts by a team targeting grow operations at people’s homes.
A proposal to consider the abolition of tax on cannabis for medical purposes did not have a chance to become official party policy at the Conservative Party convention over the weekend.
The proposal would have called on the Conservative Party of Canada to adopt a policy that would “abolish the excise tax on medical cannabis, fostering compassionate patient care and promoting its potential as a ‘Made in Canada’ safer alternative to addictive opioids.”
Policy 1849 had passed the first stage of voting and was then heard as a regional priority from New Brunswick in a breakout session on Friday. However, the proposal did not make it past that stage. Had it passed, it would have had a chance to proceed to the convention floor for a final vote on Saturday, September 9.
Tanner Stewart, who helped bring the proposal forward, says he is disappointed the proposal didn’t make it to the floor, but feels it was still a worthwhile effort to spread awareness of the issue. Stewart is the founder of Stewart Farms, a cannabis producer in St. Stephen, New Brunswick.
“This weekend I stood with two great men, veteran Trapper Cane and MP Scott Ried, at the CPC policy convention in Quebec, and moved the conversation forward on making medical cannabis more affordable for Canadians,” Stewart told StratCann Sunday morning. “We supported a policy to abolish the tax on medical cannabis.”
“While the policy in its current form didn’t make it through, we found lots of support and moved the needle forward. There is a lot of work to be done in battling 100 years of demonization of one the most safe and useful medicinal drugs on earth.”
MP Scott Reid is a Conservative MP representing Lanark—Frontenac—Kingston in Ontario. He was the only Conservative to vote in support of the Liberal’s legalization bill in 2018. He has said he was punished for crossing the party line on the issue, which the Conservatives had otherwise staunchly opposed.
Trapper Cane, a veteran of the Canadian Armed Forces and director of the St. Croix New Brunswick Progressive Conservative Association, helped bring the policy to the convention as well.
Cane, who served as a paratrooper and was seriously injured in a mid-air collision leading to issues with chronic pain and PTSD and co-founded the Canadian Army Veterans (CAV) Motorcycle Unit, told StratCann last week that without cannabis, he would have never been able to take part in such events.
“It was the medical marijuana that got me out of the dark spots I was in and helped me ignore the pain and to get myself on a motorcycle.”
“Medicine is essential. In my experience as a veteran of the Canadian Armed Forces, I was both crippled physically, and I suffer from post-traumatic stress injury, so marijuana for me is a lifesaver. This is a medicine, and it’s brutally taxed already, and we need to make that go away.”
The Conservative Party’s convention was in Quebec City from September 7-9.
Applying the same tax system for medical and non-medical cannabis products was a recommendation of the federal government’s expert task force on cannabis legalization and regulations.
Featured image via Tanner Stewart. From left, Scott Reid, Tanner Stewart, and Trapper Cane.
A cannabis nursery in New Brunswick and another in Ontario are teaming up to bring “seedless” cannabis cultivars to the Maritime provinces.
Hidden Harvest Inc., the only licensed cannabis nursery in New Brunswick, is bringing the seedless “triploid” cannabis cultivars to markets in Eastern Canada that were developed at the University of Guelph by researchers at Remix Genetics in Dundas, Ontario.
While most cannabis cultivars, or “strains,” have two sets of matching chromosomes, known as “diploid” or 2n, Remix Genetics says they have developed special polyploid cultivars with more than two sets of matching chromosomes. These cannabis strains are referred to as 3n, 4n, etc., depending on the number of matching chromosomes.
Remix maintains that these polyploid varieties can increase yield and finish faster, and can also create “seedless” strains that are not likely to produce seeds, saving growers headaches from lower yields.
Both companies say the first commercial offerings of this new product will be introduced to the market for purchase in early 2024.
“Innovation plays a crucial role in how Hidden Harvest delivers value to professional and at-home cannabis cultivators,” says Rod Wilson, CEO. “Our collaboration with Remix is an example and result of our continuous search for innovations that aid cannabis cultivators in achieving their harvest objectives.”
Department of Justice and Public Safety peace officers in New Brunswick recently seized cannabis products from two locations in the province, one in Saint John and one in Moncton.
The raids also resulted in the seizure of psilocybin, contraband cigarettes, cash, and three arrests.
On August 29, officers executed a search warrant at Up Town Smoke West in Saint John at 391 Lancaster Ave, seizing 3,941 grams of dried cannabis, 801 grams of hashish, an undisclosed quantity of assorted cannabis products and edibles, and $7,065 in cash.
A press release says a 41-year-old man from Saint John and a 37-year-old woman from Passekeag could face charges. The investigation is ongoing.
Very little information on Up Town Smoke is available online. The company’s Facebook page was active until June of this year, with a recent comment referencing a raid. The website the Facebook page links to is no longer available, but an archive of the site from earlier this year lists a different address in Saint John. A Google street view of the Lancaster Ave location in June 2022 had signage for Up Town Smoke West.
On August 30, officers executed a search warrant at the L’Nuk Lounge in Moncton at 575 Main St. and seized 7,719.5 grams of dried cannabis, 690.4 grams of hashish, 171.3 grams of psilocybin (magic mushrooms), 246 grams of cannabis shatter, an undisclosed quantity of assorted cannabis products, edibles, contraband cigarettes, and $10,432 in cash.
Authorities say a 33-year-old man from Eel River Bar First Nation could face charges, and the investigation is ongoing.
A video shared on Facebook in May shows several store employees and First Nations representatives delivering a letter to the RCMP stating that the store is operating under the territorial rights, which they argue does not need a licence from the province. The store is located just a few doors down from an RCMP station.
Former National Assembly of First Nations Chief Del Riley also appears in the video, and has been working with many First Nations communities in Canada to make similar arguments of sovereignty for cannabis retailers on First Nations land.
The government of New Brunswick maintains that only Cannabis NB, the provincially-run cannabis branch in the province, and provincially licensed private retail stores are permitted to sell cannabis.
A cannabis producer in Victoria, BC, is trying to generate support for its application with the city for a cannabis farmgate licence.
The Victoria Cannabis Company (VCC), located at 340 Mary Street in Victoria West, has filed an application with the province for its producer retail store licence, also called a cannabis farmgate licence, but still needs municipal approval for the location. If approved, the application will go back to the province for final approval.
The province began accepting applications for producer retail stores (PRS) in November 2022. The program allows micro cultivators, standard cultivators, and nurseries to sell their own products in a retail cannabis store at their own production facilities or sites, as well as an array of products from other producers.
Only two producers have applied so far, with the first, ShuCanna located in Salmon Arm, receiving their licence in August 2023. The province charges an application fee of $7,500, plus a first-year licensing fee of $1,500 and an annual renewal fee of $1,500.
“We are not located in an industrial park on the outskirts of town. Our store is just minutes from the sea wall in Lime Bay and has the potential to become a tourist destination.”
Kyp Rowe, VCC President
The VCC’s farmgate application comes before Victoria City Council on September 14, they have posted a petition to show community support for their application.
“By signing below, the undersigned provides support for the proposal and, specifically, encourages Council to approve the retail sales of cannabis via the farmgate proposed for 340 Mary Street,” reads the petition, in part.
Kyp Rowe, president of VCC, tells StratCann their goal is to create a dynamic storefront that can show off not only their own unique cannabis products from cannabis grown on-site, but also other small craft producers in BC. VCC’s location is near the E&N Rail Trail, a popular bike path.
“We are very excited at the opportunity to be among the first potential Production Retail Store locations in British Columbia,” says Rowe. “What sets us apart from other locations is the amount of frontage traffic we have in Vic West. We are not located in an industrial park on the outskirts of town. Our store is just minutes from the sea wall in Lime Bay and has the potential to become a tourist destination.
“Our goal will be to focus on British Columbia producers as well as featuring our own flower grown and packaged on-site. Now, more than ever, small provincial craft producers need an opportunity at the retail level to showcase their products. With all of the pay-to-play for shelf space and the discount retail chains, more and more small producers are getting edged out by large corporations. We want to be able to tell BC’s rich craft cannabis story, and we feel this new farmgate store will give us this opportunity.”
The rezoning application for VCC was first heard by council in May 2023 and passed first and second reading on August 3. The September 14 meeting is a public hearing, after which the application will go to third and final reading. The application says the majority of products the store will carry, if licensed, would be produced on-site. A previous council meeting referenced concern about competition from a nearby cannabis retailer.
Two other provinces, Ontario and New Brunswick, also have cannabis farmgate licenses, with a handful of stores licenced in each province.
Substance Law began in June 2018 as Harrison Jordan Law, offering services for cannabis clients across Canada, focusing on the Ontario retail cannabis market.
Since then, Harrison Jordan has built upon his personalized approach to cannabis law, assisting retailers, licensed producers, and ancillary businesses in navigating a complex array of federal, provincial, and even local municipal rules and regulations.
With a focus on the Ontario sector, where Jordan lives and operates, he says his focus is national and international, taking into account the realities of operating in the Canadian market.
“I support clients across the country. I am only called to the bar in Ontario, but inevitably, some matters require a cross-country approach. I do take on work from clients in other provinces when it makes sense. Each province has its own regime when it comes to retail sales and promotions, and you have to know the contours of those. Some are quite strict with their cannabis laws and enforcement (looking at you, Alberta) while some are more laissez-faire.”
Billing itself as Canada’s law firm for regulated substances and industries, Substance Law offers services on matters relating to the federal Cannabis Act and Regulations, how to open a cannabis store in Ontario, Health Canada labelling and packaging compliance, Ontario AGCO budtender training, as well as incorporations for businesses, drafting and reviewing agreements–such as employment agreements and franchise agreements–and much more.
With its history of focus on the cannabis industry, Jordan says he can provide unique insights into the market for his clients. The story of the growth of his business is one of the growth of the market in general, he explains.
“Almost right after I was called to the bar in Ontario, I hung up my shingle (as it’s called), essentially putting up a website and seeking cannabis industry clients to assist. That summer, I started working at MNP as a consultant on a contract basis on cannabis files for their clients, and the idea was that during weekends, I would bring on and assist my own clients while working at MNP during the week. There were very few Toronto-based lawyers with a presence on Google at that time stating they were focused on the cannabis industry; that was when interest in lining up to apply to open a cannabis retail store in Ontario was heating up. At a certain point, I had to tell the team at MNP, “Look, my phone’s ringing off the hook. For better or worse, I’ve got to stop working here,” and since then, I’ve been building my law practice full-time.”
Jordan’s passion for cannabis and law was an obvious combination for him.
“When I was applying to enter law schools, in my entrance essay to Osgoode Hall at York University, I wrote how it intrigued me that they tenured Alan Young as a professor. He was a lawyer who fought for the rights of individuals to safely practice “consensual crimes” such as cannabis use, sex work, and gambling. That fascinated me. Coincident or not, I was accepted into Osgoode Hall, placed in his first year Criminal Law class, and ended up working for him. Once I graduated from Osgoode Hall, I articled at Lewin & Sagara, where noted cannabis lawyer Paul Lewin taught me the ropes of cannabis law and where I obtained in-court experience.”
Being a small business, Jordan says he can relate to other small businesses in this space in ways that larger firms might not.
“All clients get my direct line, and I pride myself on timely service. Our focus is on small businesses and doing what we can to prepare them to enter the industry successfully, even when they have very little, if any, experience in the industry to begin with. We know what it’s like to be a small business because we’re one too!”
Despite challenges in the industry, Jordan says he’s hopeful that there are still many opportunities for those seeking to make their cannabis business work.
“The best is yet ahead. The federal government is aware that the current excise duty regime – essentially $1 per gram – is knee-capping producers. They recently released a consultation asking how they could reduce red tape. Yes, there will be setbacks, including an ill-advised planned move by Health Canada to restrict the smell or taste of inhaled cannabis extracts from being anything other than what is “typical” of cannabis – but I think the best is yet to come. Companies are becoming smarter, and more are moving to an asset-light approach that, for some, makes the most sense.”
A cannabis retailer in BC has avoided penalties after an employee sold edibles to a minor in a sting operation.
A court has found that the company was not responsible for an employee failing to check the ID of a customer due to an extensive training program in place. While the employee was fired for their oversight, the retailer, Eggs Canna, did not have to face a $7,000 monetary penalty or shut down for seven days.
Here is the sequence of events: On March 26 of this year, as part of an inspection, two BC Liquor and Cannabis Inspectors entered a cannabis store in Vancouver, including one “minor agent” who was only 18 years old. The age of legal access to cannabis in BC is 19.
The “minor agent” then asked the employee if she could purchase edibles. The employee then directed the inspector to a display where the 18-year-old inspector selected what court records described as a package of Real Fruit Raspberry Chews containing THC 5mg per unit.
Although the staff member advised the minor agent of a 15 percent discount, they did not ask the minor agent what her age was, nor did the employee ask for any identification from the underage agent.
Once the two inspectors left the store with the purchased edibles, a third inspector entered the store, informed the staff member that he had sold cannabis to a minor, and asked for their Selling It Right certificate, which the staff member provided.
Two days later, on March 28, an inspector issued an electronic notice of non-compliance, which led to the issuance of a Notice of Enforcement Action (NOEA) dated April 4, 2023.
In court, the same inspector confirmed that the Licensee, Eggs Canna, had no history of non-compliance and that the contravention alleged in the NOEA was a first offence within a twelve-month period. Because of this, the Liquor and Cannabis Regulation Branch fine would be the lowest penalty as set out in Schedule 2 of the Regulation for a contravention of this nature, either $7,000 or a seven-day licence suspension.
Eggs Canna opted, if found responsible, for a seven-day suspension.
However, the court found that the owners of Eggs Canna had taken the necessary steps to train their employees to check for IDs as part of a three-day “New Hire Orientation” training program. Eggs Canna’s regional manager also confirmed that the employee who sold cannabis to a minor had been fired following the incident. Eggs Canna also had a policy in place at the time requiring employees to ask for the ID of anyone who appeared to be under the age of 40, and the store’s point of sale system included prompts to ask for ID.
Although the Liquor and Cannabis Regulation Branch argued that Eggs Canna was liable for the employee’s noncompliance, the court ruled otherwise, finding the store had a “strict culture of compliance prohibiting the sale of cannabis to minors.”
The representative for Eggs Canna told the court that she would like to see BC’s regulatory branch more willing to work with industry in a more collaborative manner, using discretion, and not penalizing operators “for missteps as the regulatory framework evolves.”
Eggs Canna has three locations, two in Vancouver and one in Kelowna, and is a legacy-era cannabis retailer.
Featured image of the interior of an Eggs Canna location.
A cannabis producer in Newfoundland has completed a purchase of cannabis from a BC producer as it deals with restructuring.
Atlantic Cultivation in St. John’s, Newfoundland, a cannabis producer that also operates retail stores in Newfoundland, recently completed a purchase of cannabis from Tantalus Labs, located in British Columbia, as well as control of the Tantalus brand.
The sale includes the transfer of 70,853 units of packaged and unstamped inventory, including dried flower, pre-rolls, and infused pre-rolls, and 33,919 units of seeds, as well as some equipment like trimming machines and fans.
Tantalus products will soon be available in Atlantic Cultivation’s retail stores in Newfoundland and Labrador.
“This acquisition is founded upon our shared values, reflecting our unwavering commitment,” said Chris Crosbie, the founder and COO of Atlantic Cultivation, in a press release. He went on to say that the deal reflects the two companies’ shared values. “We persist in our mission to elevate cannabis quality and ensure its widespread accessibility.”
The move was part of a sale approved by the court following Tantalus Labs’ recent announcement that it had given notice to its creditors and would be pursuing bankruptcy.
Outside Tantalus Labs in Maple Ridge, BC
A court ruled in July that the sale could happen despite efforts by the CRA to destroy the products, as its excise licence was set to expire on July 10, 2023. Any sales of products would require an excise licence.
CRA told the court that on June 12, 2023, Tantalus had agreed to terms that would include seven monthly payments of $35,000 to begin June 30, in addition to its 11 ongoing payments for monthly excise taxes due, all pending notice of intent from Tantalus.
According to court records, the CRA agreement with Tantalus also stated that if the payments were not made on the agreed timeline, the CRA “may have to take legal action without further notice, including garnishing income, directing the sheriff to seize and sell assets, and use any other legal means to collect the amount due.”
Tantalus’ creditor, Sungrown Mortgage Corporation, had threatened to enforce its security against the property where Tantalus operates unless the latter agreed to several key points, including recognizing a debt of over $5.5 million owed to Sungrown as of June 28, 2023. Total debts for Tantalus were listed as over $14 million, including more than $4 million to the CRA. Tantalus’ total debts were listed as $14,023,083.82.
The property, including the 69,000 sq ft greenhouse with 38,000 sq/ft of growing space and a five-bedroom home, is currently listed for $5.56 million.
Tantalus said rushing the sale of its inventory of cannabis would force it to accept a lower price than if its excise licence was extended to allow it to pursue a more profitable deal.
Tantalus told the court it had approximately 345 kilograms of packaged inventory ready for sale, and 865 kilograms of bulk unpackaged cannabis inventory (trimmed and dried). The most recent court filings show that the remaining cannabis inventory as of July 25, 2023, consisted of 70,853 units of packaged and unstamped inventory, including dried flower, pre-rolls and infused pre-rolls, and 33,919 units of seeds.
A July filing shows Tantalus sold approximately 1,300 kilograms of bulk unpackaged cannabis inventory (trimmed and dried) to Atlantic. The sale proceeds were received on July 24, 2023, which court filings show to be for at least $1 million.
Nova Scotia sold $29.1 million worth of cannabis in its first quarter of 2023, from April 1, 2023-July 2, 2023.
This represents a 6.7 percent increase in cannabis sales compared to the same period last year.
Nova Scotia cannabis sales led growth in local products sold through the Nova Scotia Liquor Corporation (NSLC), with a 22.2% increase in sales to $9.5 million.
Nova Scotia cannabis accounted for 32.6 percent of all cannabis sales in the province, which NSLC says is the largest seen to date. The province has said in the past that it is focussing on partnering with local cannabis producers to help fight the illicit market.
The price of cannabis sold in the province also continues to decline.
“This quarter, the average price of cannabis per gram was further reduced 2.1 percent to $6.02, compared to last year, as we work to impact illicit sales in the province,” said NSLC president and CEO Greg Hughes.
The average price per gram in Nova Scotia was $6.94 in their fiscal year-end report for 2021-2022.
The NSLC manages the sale of beverage alcohol and cannabis in Nova Scotia, with all of its profits going to help fund public services.
Elevate Cannabis Industry Expo is the first cannabis conference brought to you by Canadian retailers, delivering four full days of immersive training and education, a trade show floor, and plenty of networking mixers to build and strengthen the community.
The event takes place September 12-15 at the Mirage Banquet Hotel in Toronto.
Acknowledging the challenges that retailers, budtenders, and licensed producers are currently navigating, “the intent of this event is to bring transparency and collaboration to the forefront of our industry,” says Jazz Samra, Owner and Founder of VIP Media Group and Sativa Bliss Cannabis Boutique.
“We are providing a safe space to be vulnerable, ask questions and gain insight into some best practices from successful members of our industry, while surrounded by like-minded people – this is an invaluable opportunity to connect, elevate and grow, together.”
Samra says he decided to launch his own industry conference after feeling like other events weren’t quite meeting the industry’s needs from his perspective as a retailer.
“Some of the events I’ve attended have been so disappointing. They are totally disconnected from the needs of the industry. Conferences like this are the best way to bring the industry together and create opportunities. We need more education; we need more training. So I wanted to make a conference that is heavily focussed on education, with three days for education and training, and one day for the trade show.”
The conference’s theme is “We rise by lifting others,” and Samra says his mission is to empower retailers, budtenders, and LPs to elevate their businesses and thrive in the current and future climate. The event is designed to foster a collaborative environment, focusing on education, training, and inclusion to build a robust, cohesive, thriving industry here in Canada.
“We called it Elevate because we want to elevate the industry and create our own ecosystem where we’re supporting each other and keeping our money within the industry,” Samra adds. We’re from this industry and contributing to this industry, and this is how we all succeed, by elevating others.”
With a variety of registration options to choose from, the Elevate Expo includes:
Day 1: Store Managers/Owners Training Day
Day 2: Budtender Training Day (hosted by CanMar)
Day 3: Licensed Producers & Brand Rep Training
Day 4: Industry Trade Show + Additional Social Networking
The University of British Columbia Vancouver campus is launching a new Biology of Cannabis course this year, starting in January 2024.
The three-credit course will serve as an entry point for students to better understand the “biological aspects of cannabis, including structure and function, photosynthesis, plant growth, specialized metabolites, neuroscience and the human endocannabinoid system, and applications for human use in medicine, consumer products and textiles.”
Taught by science education specialist Dr. Christine Goedhart, the course currently has a waitlist with 30 students already registered.
“Adult use of cannabis became legal in Canada in 2018,” notes Goedhart. “Since then, cannabis has become more socially acceptable and increasingly integrated into mainstream cultural, social, health and economic institutions. As such, students will likely be coming into contact with cannabis at some point and will need to make informed decisions about how they choose to engage with it.”
The University of British Columbia (UBC) has a rich history of working with cannabis.
“For more than 40 years, everything that we thought about cannabis cells was inaccurate because it was based on dated electron microscopy,” says Livingston’s co-author, Dr. Lacey Samuels, a plant cell biologist at UBC. “This work defines how cannabis cells make their product. It’s a paradigm shift after many years, producing a new view of cannabinoid production. This work has been challenging, partly the result of legal prohibition, and also due to the fact that no protocol for the genetic transformation (engineering) of cannabis has been published.”
Another study published in 2022, led by Davi de Ferreyro Monticelli, a doctoral student in UBC’s Department of Earth, Ocean and Atmospheric Sciences, looked at the specifics behind the aromas associated with cannabis that arise from terpenes and volatile organic compounds. In a 2019 study published in The Plant Journal, UBC researchers took a closer look at glandular trichomes and their cannabinoid and terpene production.
Cannabis sales continue to increase as prices continue to drop in BC, according to a new wholesale quarterly report for April, May, and June, 2023.
Sales of smaller SKU dried flower, such as 1-gram and 3.5-grams, declined overall, while larger formats, such as 7-gram, 14-gram, 28-gram, and 30-gram, increased. Sales of cannabis extracts, including the increasingly popular infused pre-roll category, saw the most significant year-over-year increase of 76.4 percent in total units sold and a 51.5% increase in year-over-year sales.
The BC LDB, which oversees wholesale cannabis sales and distribution in the province, saw more than thirty thousand kilograms of wholesale cannabis sales (30,655,160 grams), a more than 32 percent increase from the same period last year. Wholesale increased by nearly 16 percent to more than $127 million, while the number of stores in BC increased from 442 in the same period in 2022 to 487 at the end of June 2023.
The average price of cannabis also continued to decline in the province to a new low of $4.14, while the average cost of dried cannabis dropped to $3.40 a gram.
Chart via BC LDB
Total dollar sales of 1-gram, 3.5-gram, 7-gram, 14-gram, and 28-gram offerings of dried flower priced at more than $5 a gram all declined significantly compared to the same period last year. Eighths selling for $5 a gram or less increased, as did 7-gram and 14-gram SKUs. The 28-gram offerings priced at $3 a gram or less increased while all other prices declined.
Dollar sales of beverages increased by just over 20% year-over-year, while edibles sales increased by just 0.3 percent. Overall, dried flower sales were down 4.4 percent, and ingestible extracts like cannabis oils and capsules, driven by high sales of now-discontinued products like Jolts and Glitches, were up by 5.6 percent.
Inhalable extracts like vape pens, shatter, hash, and rosins, as well as infused pre-rolls, increased by a whopping 56.5 percent, pre rolls sales increased by 14.2 percent, while seeds sales dropped by 7.1 percent and sales of cannabis topicals decreased by 11.1 percent.
Cannabis sales in Canada passed the 420 million mark again in June, following a slight decline after the Christmas shopping season.
Total retail sales of cannabis in June 2023 were over $426 million, up from $415 million in the previous month and a peak of $425 million in December 2022.
Like sales in many retail sectors, cannabis sales have dipped in the months following the Christmas shopping seasons over the last three years, before again building on an ongoing, upward trend.
The number of retail stores across Canada also continues to grow, although the pace has slowed considerably compared to the first four years of legalization.
BC: 506 public and private stores as either open or “coming soon”
While Alberta’s AGLC maintains it has considered CBN within the THC limits on cannabis products like edibles, concentrates, or topicals, based on guidance from Health Canada, four other provincial cannabis agencies say they have received no such guidance.
A representative with Health Canada does confirm it is currently considering the development of a guidance document for licence holders concerning what it considers intoxicating cannabinoids other than delta-9-THC. They have not made any changes to the federal regulations at this time.
The information comes in the wake of Alberta’s provincial distributor, the AGLC, reportedly telling some cannabis producers that it was including CBN within the federal 10mg THC limit for edibles. The AGLC says this was based on guidance from Health Canada, but points to a guidance document Health Canada published earlier this year that made no reference to CBN, only delta-8-THC and delta-10-THC.
While the AGLC tells StratCann that the regulatory change came into effect in February of this year, representatives from four other provincial cannabis agencies—New Brunswick’s Cannabis NB, BC’s LDB, Ontario’s OCS, and Quebec’s SQDC—tell StratCann that they have not received any guidance or directive from Health Canada regarding minor cannabinoids in general, nor CBN specifically.
Cannabis NB:
“No, Health Canada has not provided guidance to Cannabis NB in regard to minor cannabinoids. Cannabis NB will continue to sell products that meet Health Canada guidelines and regulations,” writes Angela Bosse, a communications specialist with Cannabis NB.
BC LDB:
“The BC Liquor Distribution Branch (LDB) has not received any recent direction from Health Canada regarding minor cannabinoids and the THC limit for edibles,” says Kate Bliney, a communications officer with the LDB, who also notes that in December 2022, the LDB advised licensed producers that it would not be registering or replenishing any products that contain delta-8-THC.
“At this time, the LDB has not issued any directives regarding other minor cannabinoids,” she adds.
The SQDC:
“The SQDC has not received any regulatory change or directive on regulatory application regarding minor cannabinoids,” writes Fabrice Giguère, communications advisor and spokesman for the SQDC, in an email to StratCann.
“We currently don’t have a policy on the matter. We have no reason to believe that any of our suppliers’ edible products are not compliant with both the federal and provincial regulations relating to the limit of THC. Hence, we’re not planning on delisting or removing any edible products.”
“In Québec, the maximum THC content allowed for ready-to-eat products is set at 10mg per package and 5mg per distinguishable unit contained within the package. As for ready-to-drink products, the maximum THC content allowed is set at 5mg per distinct unit.”
The OCS:
“The OCS is unaware of any formal guidance provided by Health Canada to Licensed Producers (LPs) of cannabis relating to suggested limits on intoxicating cannabinoids,” Daffyd Roderick, Senior Director, Communications and Social Responsibility at the OCS. “Should Health Canada issue formal guidance, the OCS will work with its LPs to understand the impacts and to support their compliance, as appropriate.”
While the AGLC told StratCann via email last week that the Ontario Cannabis Store also implemented the same requirements in regard to CBN based on Health Canada’s recommendations earlier this year, the OCS notes the only change they made was in reference to delta8-THC, not CBN or any other minor cannabinoids.
“In December 2022, OCS made a proactive decision to begin limiting the sale of products containing delta-8 THC in response to health and safety concerns raised in the United States. At that time, the OCS communicated with both LPs and licensed cannabis retailers to notify them of this change, which was made out of an abundance of caution while the industry waited for formal guidance and direction from Health Canada on whether amendments are required to the Cannabis Act and its Regulations to address intoxicating cannabinoids and other synthetic derivatives not explicitly captured within the framework.
“OCS remains committed to enabling a vibrant cannabis marketplace that offers adult consumers access to innovative, legal cannabis products, transitioning consumers away from unregulated sources and promoting social responsibility in connection with cannabis. Clear and specific regulatory guidance from Health Canada on the matter of intoxicating cannabinoids is critical to achieving these objectives.”
While the AGLC claims the change came into effect in February 2023, several producers tell StratCann that the AGLC continued to accept orders of products that contained CBN and fell outside of the province’s interpretation of these products by having more than 10mg THC, with CBN included in that total.
AGLC points to a document they sent out in February as being the notice in question, but that document referred only to delta-8-THC and delta-10-THC, not CBN or any other minor cannabinoids.
The AGLC also says the policy applies to any cannabis product “containing any combination of natural or synthetic intoxicating cannabinoids that exceed the THC limits set out for edibles and extract products in the Cannabis Regulations (10mg & 1000mg, respectively, per retail pack), including products with CBN.”
The 1,000mg THC limit would apply to concentrates and topicals.
From an AGLC memo sent to producers and retailers on February 15, 2023
The Alberta cannabis agency also maintains that this rule about CBN was communicated to all LPs on Feb 15, 2023, when it says it requested LPs contact their respective AGLC category management specialists if they had any available products that were impacted by this policy.
“It recently came to our attention that there are certain SKUs which remain non-compliant with this requirement and so we have begun notifying affected LPs,” an AGLC comms person tells StratCann via email.
The AGLC says the list of cannabinoids it considers intoxicating is still changing and more could be added to the list in the future, which it says it is doing based on guidance from Health Canada.
“The cannabis plants make over 100 different minor/rare phytocannabinoids and there are also synthetic intoxicating cannabinoids created in lab,” continues AGLC’s communications team in an email to StratCann. “As such, the category of novel and minor intoxicating cannabinoids is still evolving. AGLC does not determine if a cannabinoid is intoxicating but instead follows guidance provided by Health Canada.
“The following are a few examples of intoxicating cannabinoids:
Synthetic cannabinoid derivatives (currently not allowed in Alberta): – tetrahydrocannabiphorol (THCP), tetrahydrocannabutol (THCB), tetrahydrocannabinol-O-acetate (THC-O) etc.
“As AGLC receives Health Canada guidance, it will continue to work with stakeholders to ensure LPs are aware of potential changes.”
A representative with Zelca, who was told by their category manager that one of their products was being immediately delisted, now says the AGLC has somewhat walked back their initial claim and will allow the sale of the in-stock Zelca product in question but will not be filling future orders.
Part of the confusion appears to be the inclusion of CBN as a “minor intoxicating cannabinoid” (MIC). While internal messaging shared with StratCann shows Health Canada is currently considering cannabinol (CBN) as a MIC, along with delta-8-THC, delta-10-THC, delta-6a-10a-THC, THC-O, HHC, THCV, THCP, and THCB, there is nothing official from Health Canada on the subject. However, the federal regulator has not issued any official regulator changes or guidelines regarding CBN to the provinces.
“Health Canada is also currently considering the development of a guidance document that would help licence holders understand the application of the Cannabis Act and its regulations on intoxicating cannabinoids other than delta-9-THC,” Anna Maddison, senior media relations advisor with Health Canada, tells StratCann via email.
“As with other topics and issues, Health Canada has regular discussions with licence holders and industry associations such as the Cannabis Council of Canada, National Cannabis Working Group of the Canadian Chamber of Commerce, and C-45 Quality Association. The topic of intoxicating cannabinoids other than delta-9-THC has been raised in these discussions.”
CBC covered a new private cannabis store in New Brunswick, McCannabis in Salisbury. New Brunswick currently lists six private cannabis stores, six farmgate stores, and 26 Cannabis NB locations.
In Newfoundland, Taylor Giovannini, co-owner of Oceanic Releaf, is making news again along with Atlantic Cultivation’s CEO Chris Crosbie as they discuss cannabis excise taxes and the absurd $1 per gram federal rate, 75 percent of which goes back to the province.
The Prince George Citizen featured the region’s newly-licensed micro cultivator Kush Mountain Craft Cannabis. The owners were the recipients of a $150,000 loan from Community Futures to assist in the $3 million start-up.
Winnipeg Free Press covered the impending closure of the Cronos cannabinoid factory in Winnipeg. The 84,000-square-foot facility was purpose-built for Apotex in 1990 at a cost of about $50 million. Cronos Group Inc. bought the former Apotex Fermentation plant in 2019 for an undisclosed sum, partnering with Boston-based Ginkgo Bioworks Inc. to produce cultured cannabinoids.
Tilray announced it is taking on full ownership of the cannabis beverage company it ran with Molson Coors Canada, Truss, which is behind the XMG, Little Victory, Mollo, Veryvell, House of Terpenes, and Bedfellows Liquid Arts brands.
The New York Times ran a feature on Smiths Falls and the sales of the old Hershey Factory from Canopy back to Hershey. Since April, Canopy has sold seven of its buildings across the country, the latest being the plant at 1 Hershey Drive in Smiths Falls.
Finance & Markets
Auxly Cannabis Group Inc. shared their Q2 2023 financial report, withtotal net revenues of $22 million, a decrease of $2 million or eight percent from the previous quarter and a decrease of $5.3 million or 20 percent compared to the same period in 2022. The company says it still managed to retain the #5 LP position in Canada with a 5.2 percent market share and continued to improve sales in the pre-roll segment, with Back Forty Wedding Pie growing to become the #1 non-infused pre-roll SKU nationally in the quarter.
Approximately 85 percent of cannabis sales during the period originated from sales to British Columbia, Alberta, and Ontario. Net losses for the three months ended June 30, 2023, were $12.9 million.
Organigram announced a deal to supply 4C LABS cannabis for distribution to medical cannabis patients in the UK. Under the terms of the agreement, OGI expects to supply approximately 600 kilograms. The Canadian producer now has international supply agreements in place with Israel, Australia, Germany, and the United Kingdom.
MediPharm Labs Corp. announced financial results for its second quarter, which ended June 30, 2023. The company completed its first commercial delivery to the United States. The delivery consisted of clinical trial material for a fully funded large-scale phase two clinical trial.
MediPharm’s Canadian medical cannabis revenue for Q2 2023 was $3.8M versus $0.2M in Q2 2022 and $0.6M in Q1 2023, driven by the integration of the VIVO medical channel, Canna Farms. International Medical revenue in Q2 2023 was $3 million. The growth of International Medical was largely driven by the integration of VIVO’s Australian business, Beacon Medical Australia.
Revenue for Q2 2023 of $9.6 million increased approximately 120% versus Q2 2022 and 64% versus Q1 2023.
High Tide announced a new store in Oshawa, Ontario, their 51st in Ontario. High Tide’s Canna Cabana now has 155 locations across Canada.
Delta 9 Cannabis released its Q2 2023 report. The cannabis producer, retailer, and distributor had net revenue of $18.3 million for the second quarter of 2023, an increase of 4% from $17.5 million for the same quarter last year. Gross profit was $5.2 million, an increase of 12% from $4.6 million for the same quarter the previous year. Loss from operations was $3.5 million for the second quarter of 2023 versus a loss from operations of $3.4 million for the same quarter last year. The release also included earnings reports from Q1.
Rubicon Organics shared their Q2 2023 financial results. The certified organic producer reported net revenue of $11.3 million (28 percent increase) and $20.1 million (44 percent increase) for the three and six months ended June 30, 2023.
This quarter included the introduction of three new flavours of live rosin edibles under its brand, 1964 Supply Co.
SNDL released its Q2 2023 report. Revenue for its cannabis retail locations was $71.9 million for the second quarter of 2023, with a $17.8 gross margin and $2.3 million in earnings. The report also notes its “data licensing program is driving improved profitability and supplier relationships.”
SNDLs cannabis production saw net revenue of $20.9 million, a gross margin of -$1.2 million and a loss of $14 million. After recently “rightsizing” its Alberta facility, SNDL has now centralized most manufacturing activities and consolidated processing, labelling, and excising at its Kelowna, BC facilities.
SNDL’s business is operated and reported in four segments: Liquor Retail, Cannabis Retail, Cannabis Operations, and Investments. With its ownership interest in Nova, SNDL is Canada’s largest private-sector cannabis retailer, operating 196 locations under its four retail banners: Value Buds, Spiritleaf, Superette, and Firesale Cannabis.
As of August 11, 2023, the Spiritleaf store count is 98 (21 corporate stores and 77 franchise stores), the Value Buds store count is 91 corporate stores, the Superette store count is five corporate stores, and the Firesale store count is two corporate stores.
Fire & Flower announced that Fika Cannabis was the winner of an auction for aspects of the cannabis retail company and brand. The deal still needs to be completed, and more details are expected.
Two BC cannabis companies are at odds over payment for a large quantity of cannabis, according to two filings in BC court this past week.
In a filing from August 10, cannabis grower Okanna Craft said that Joint Venture Craft Cannabis (JVCC), a cannabis processor, owes it payment for 76 kg of cannabis based on a purchase price of $3.41 per gram.
In their statement of defence, JVCC denies the claims and says their agreement with Okanna Craft was based on consignment, not a set purchase price, and that it had difficulty selling cannabis for Okanna due to issues with quality.
Okanna Craft is located in Kelowna and has two micro cultivation licences, a micro processing licence, and a nursery licence. JVCC is located in Salmon Arm and is a processor that packages and processes cannabis and brings it to the provincial retail markets in Canada on behalf of growers.
The Notice of Civil Claim from Okanna Craft alleges that the two companies entered an agreement in 2021 that would allow JVCC to process, package, and market Okanna Craft’s cannabis to the provincial retail markets, at which point Okanna would receive payment.
Okanna further alleges that it has made 13 separate shipments of cannabis to JVCC since August 2021, each sold at different prices, for a total of 167,295 grams. The company says JVCC has paid Okanna Craft for 75,975 grams and argues JVCC still has 64,629 grams of unsold cannabis in their processing facility in Salmon Arm.
Okanna also alleges that JVCC refuses to pay them the agreed-upon price of $3.41 per gram, is charging additional fees for marketing they say was not part of the original agreement, and has failed to sell their cannabis in a timely manner.
In their statement of defence, JVCC denies Okanna’s claims and argues that Okanna Craft maintained ownership of all cannabis in its possession through a consignment deal, whereby the grower would be paid once cannabis was successfully sold. JVCC denies that it had an agreement to purchase the cannabis outright and maintains that the agreement for payment took into account “various deductions for costs and expenses, as well as other factors such as the retail price for the cannabis.”
In addition, JVCC alleges that it applied various price deductions for these fees with each batch Okanna Craft delivered to be processed, and the cultivator continued to deliver subsequent batches of new cannabis to be processed.
The statement of defence goes on to argue that JVCC had a written agreement that Okanna Craft did not guarantee a specific price, and that the price per gram for its cannabis “may vary based on demand and the offers to purchase from wholesalers” and was “exclusive of transportation costs, customs, tariffs and duties, insurance, and any other similar financial contributions or obligations relating to the sale” of the cannabis, as well as costs related to packing, crating and boxing, and that the agreed purchase price would be for salable product only.”
JVCC argues that the cannabis it received from Okanna was of poor quality and it possesses a “small amount” of Okanna’s cannabis that it was unable to sell, which it claims Okanna has refused to take back.
None of these allegations have been proven in court.
Earlier this year, the company announced it was laying off 800 workers and would move to an “asset-light model,” moving cannabis flower production from Smiths Falls to its Mirabel, Quebec facility. Rumours have been circulating for months that Hershey would be repurchasing the factory.
The facility will be sold to Hershey Canada, Inc. for approximately $53 million.
“We are pleased to have reached an agreement with Hershey on this important sale. This is the latest milestone in our focused effort to reduce costs and further enhance our balance sheet,” said David Klein, Chief Executive Officer of Canopy Growth. “Each of the steps we have taken as part of our transformation to a simplified, asset-light operating model supports our ability to deliver in-demand products from brands our customers love, with greater agility and less execution risk. Once again, we have demonstrated Canopy Growth’s ability to achieve significant organizational and operational change to position the Company for future growth in the Canadian market.”
“Our intent to purchase the Hershey Drive property in Smiths Falls is another example of the strategic investments we’re making in our supply chain network and our Canadian operations to support growth,” added Jason Reiman, Chief Supply Chain Officer, The Hershey Company.
Once the sale is complete, the Smiths Falls facility will be the seventh property sold by Canopy Growth for an aggregate gross of approximately $155 million since April 1, 2023. Canopy says the proceeds of the sale will pay down their senior secured credit facility.
The sale of the facility follows the centralization of post-harvest manufacturing at the Company’s former beverage facility in Smiths Falls and the consolidation of all flower cultivation in the Company’s purpose-built sites in Kincardine, Ontario, and Kelowna, British Columbia.
Canopy’s stock fell below $1 a share earlier this year, causing it to be delisted from the TSX.
BC’s first cannabis farmgate licence was issued recently to a micro grower in Salmon Arm.
ShuCanna Growers, a micro cultivator and processor located on the Trans Canada Highway on the outskirts of Salmon Arm, recently received their Production Retail Store (PRS) licence from BC’s Liquor and Cannabis Regulation Branch (LCRB).
The store plans to open soon.
The province previously licensed two other farmgate stores through special arrangements with two First Nations-owned cannabis producers, both licensed in 2022. ShuCanna’s licence represents the first formal farm-to-gate licence issued by the province under its PRS licence, launched late last year. As of press time, only one other PRS applicant is working through the process, the Victoria Cannabis Co on Vancouver Island.
“It’s very hard for the micros to get to market. This is how we can ensure we have a way to sell what we grow.”
Terry Robinson, ShuCanna Growers
The PRS farmgate licence allows federally-licensed cannabis cultivators to operate their own store at the same location as their facility and sell their products directly without going through the province’s central distribution system. These stores can operate as typical retail stores, carrying the same products as any other cannabis store in BC, and they can also choose to only carry their own exclusive products.
Although ShuCanna is still going through the final stages of opening its store, once fully stocked, it will be a complete, formal retail store located in the same building as its cultivation and processing facility. ShuCanna will carry its own cannabis, with various other products available.
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 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 biggest problem is we were the first, so nobody knew what was going on. We were being passed to different departments. But hopefully that makes it easier for the next person.”
ShuCanna first received their micro cultivation licence in May 2021 and then their micro processing and federal sales licences in November 2022, just as BC began allowing people to apply for a PRS “farm to gate” licence.
As a micro, ShuCanna operates with a small staff of about a half-dozen people, with Robinson, like the owners of most micros, wearing numerous hats, including master grower and head of security, and dealing with much of the day-to-day operations. He’ll now also be hiring budtenders to run the store.
This represents the end of a very long process Robinson has had his eye on for many years. Now that they are licensed, he says he still has more hoops to jump through to begin placing and receiving orders from the LDB, the cannabis wholesale agency in BC.
But he hopes their own cannabis flower and pre-rolls, grown and packaged on-site, won’t have to go through that process, giving his store an edge.
“It can take nine months to get our product to retailers if we go through another processor who then goes through the LDB. That’s the advantage of a farmgate licence: we can take our product from one room directly into the store.”
Getting products accepted by the BC LDB to go through that process can be a challenge for micros, he says, making farmgate, as well as BC’s direct delivery program, vital to the survival of micros.
“For us, I think farmgate is paramount,” says Robinson. “It’s very hard for the micros to get to market. This is how we can ensure we have a way to sell what we grow. We’re excited. It took a long time to get here. We still have a lot to do, but I think this is going to help a lot.”
The Ontario government expects to bring in $269 million from its portion of the federal cannabis excise duty for the 2023-24 fiscal year.
The provincial government also projects another $194 million in revenue from the Ontario Cannabis Store, out of more than $204 billion in total revenue for the province projected for the current fiscal year.
These figures show an increase from the $253 million the province brought in from their portion of federal cannabis taxes in the 2022-23 fiscal year, $215 million in the year prior, and $106 million in the 2020-21 fiscal year.
This compares to the $617 million the province projects to bring in from tax revenue from the sales of beer, wine, and spirits in the province and $840 million from the tobacco tax in 2023-24.
The Ontario Cannabis Store brought in $67 million in revenue in 2020-21, $186 million in 2021-22, and $225 million in 2022-23.
Ontario, like most provinces, receives 75 percent of the $1 per gram excise tax charged at the federal level. Only Manitoba opted out of the initial tax-sharing agreement, although the provincial government is currently in talks with the federal government to take part in that.
Earlier this year, the Ontario Cannabis Store announced it would lower its margins and move to a fixed-price model. The change comes as part of a commitment to improving process transparency in its 2022-2025 Business plan, which includes a review of the OCS pricing structure. With this new change, the OCS projects that margin reductions will contribute approximately $35 million to the marketplace in 2023–24.
Ontario sold more than 63 million grams of legal cannabis in the first three months of 2022, representing over $405 million in sales. This data is from the most recent financial reports from the OCS since it stopped issuing quarterly reports. The next report is expected later this year.
Ontario sold more than $1.5 billion of cannabis in fiscal year 2021 ($405,000,000 in Q4, $398,700,000 in Q3, $393,900,000 in Q2 and $307,000,000 in Q1).
Ontario Portion of the Federal Cannabis Excise Duty
Some retailers in Winnipeg say they are frustrated by the province issuing a retail cannabis licence to a gas station/convenience store, something they worry could be a new trend.
The province maintains that such licences—the retail cannabis controlled-access store licence—have been available since 2018, with the first issued in December 2020. Eight such locations are now licensed.
Melanie Bekevich, the owner of Mistik Cannabis in Winnipeg, says she only heard about a new cannabis “C store” in Winnipeg Beach after a friend recently visited the store for gas and overheard someone buying pre-rolls at the gas station counter.
Although she says she’s aware of other C-Stores in Manitoba that hold a ‘store within store’ retail cannabis space, the ability for a convenience store owner to sell cannabis struck her as out of line with the province’s own rules and mandate.
“I am shocked by it,” says Bekevich. I can understand in small, rural communities… but there should be some controls, especially if they’re saying they’re going to keep it out of the hands of youth, but then they’re directly exposing youth to the transaction.
“We’re also required to make a significantly bigger investment,” she adds. “I’m a bit confused by what is happening in the province.”
Lisa Hansen, a communications analyst with the Liquor, Gaming and Cannabis Authority of Manitoba (LGCA), the regulatory agency that licences retail cannabis stores in the province, says all licensed cannabis retailers, regardless of licence type, cannot sell cannabis to anyone younger than 19 years old, and their staff must ask customers who appear young for ID to verify their age.
“All staff who sell cannabis and store managers must successfully complete the LGCA’s Smart Choices Cannabis Retail Certification training before starting work in a store,” she notes. “This training focuses on legal and safety obligations such as checking ID and not selling to minors or intoxicated people.”
Sharon Clark, the manager at Big Buds Cannabis Sales Ltd, also in Winnipeg, says the government is contradicting their own rules when it comes to protecting kids because there are no controls in place to prevent young people from seeing and hearing transactions involving cannabis—something not allowed in standard retail cannabis stores.
“They are knowingly putting youth in a situation where they are going to be watching cannabis transactions taking place. This is in direct contravention of their own guidelines and rules. That is inherently wrong because part of their mandate is to protect youth, and now they’re directly exposing youth by actively pursuing this licensing tier.”
Another double standard, according to Clark, is that the cost requirement for controlled-access stores is much less than for stores like hers, which she says can spend hundreds of thousands of dollars meeting strict provincial security standards.
“They don’t need to make a significant investment that we did and other stores did. They just need a locking drawer and a safe place for the cannabis.”
StratCann reached out to the DOMO – Interlake C-Store in Winnipeg Beach for comment but did not hear back by press time. An employee says the store began selling cannabis in late July.
As part of its second quarter results for 2023, the Canadian-based cannabis company says it will be closing a facility in Manitoba used to produce “cultured cannabinoids.”
The facility, operated in partnership with hands-on expertise from its partner, Ginkgo Biologics, has been used to engineer strains of yeast that can produce cannabinoids through a fermentation process, rather than through cultivation and then extraction of cannabis.
This process is accomplished, in part, by transferring the DNA sequences for cannabinoid production into organisms like yeast and E. coli. The cultured cannabinoids are identical to those extracted from the plant using traditional methods.
Ginkgo’s website says its cannabinoid program has run eight million tests of more than 10,000 engineered strains in the course of just two years. “These efforts yielded several strains with industry-relevant titers for multiple rare cannabinoid compounds, the first of which is beginning commercial scale production.”
In August 2021, Ginkgo and Cronos announced the achievement of its first “equity milestone” for cannabigerolic acid (CBGA). Then in October 2021, Cronos launched its first cultured CBG product. In 2022, the two companies announced their third equity milestone for tetrahydrocannabivarin (THCV).
Cronos utilized the novel cannabinoids in its gummies sold under the Spinach brand, which it says is the number one edible in Canada.
In 2021, it recorded impairment charges of $4.8 million related to its Ginkgo exclusive licenses for CBGA and CBGVA “for the difference between the fair value of the licenses and the consideration paid.”
Another company, Willow Biosciences, has also produced CBG through fermentation.
In the same quarterly report, Cronos said it had successfully exited the US hemp-derived cannabinoid market, a plan first announced earlier this year in order to “streamline” operations. Cronos first entered the sector in a $300 million (US) deal in 2018 when it purchased Lord Jones, a CBD brand it says it plans to now bring to the Canadian market by Q4 2023.
The company reported net revenue and gross profit both down in Q2 2023 compared to the previous year, which it blames on lower sales in Israel, as well as “an adverse price/mix shift in cannabis flower sales in Canada,” among other issues like the weakening Canadian and Israeli dollars.
Despite these lower sales in Israel, Cronos has also recently signed an agreement with one of the leading distributors of medical cannabis in Germany, which the company hopes to begin exporting to soon under the Peace Natural Brand. Peace Naturals was one of the first federally-licensed commercial medical cannabis producers in Canada. Cronos purchased it in 2016.
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The Ontario Cannabis Store is making a change to its privacy policy that could potentially result in customers’ personal information being stored outside of Canada.
Effective August 17, 2023, the OCS says it is making this change in privacy policy in response to consumer demands. To meet those demands, it says it will consider new technology platforms, including those that may store their data outside of Canada.
In a public post, the online cannabis retailer says that any new technology platforms they may adopt “will maintain a high level of security and will be offered by service providers that are required to adhere to laws that protect personal information.”
“Any new technology platforms that OCS may adopt will maintain a high level of security and will be offered by service providers that are required to adhere to laws that protect personal information.”
A representative with the OCS confirms with StratCann that under this change, customer personal information may be stored in countries such as the United States. Until then, OCS assures the public that all personal information collected from customers before the policy change will continue to be stored in Canada.
“Since legalization, our customers have asked us to improve their online shopping experience on OCS.ca,” says Amanda Winton, Manager of Communications and Strategic Engagement with the OCS. “Assessing new technology platforms will allow the OCS to make enhancements to OCS.ca informed by customer feedback that supports continuous improvement and to keep up with industry best practices.
“Any new technology platforms that OCS may adopt will maintain a high level of security and will be offered by service providers that are required to adhere to laws that protect personal information,” she adds.
“OCS will continue to meet legal, privacy and security requirements and standards. This is done by employing organizational, contractual, technical and physical security measures to protect personal information. This includes ensuring that each country where data may be securely stored is assessed and the appropriate data security measures are in place.”
The OCS has previously affirmed their commitment to keeping such data in Canada. Its privacy policy currently includes the statement: “All personal information collected from customers before the policy change will continue to be stored in Canada.”
Shopify, the eCommerce platform currently providing backend services for the OCS online cannabis store, also provides these services for several other provincial online stores. In 2022, Cannabis N.L. informed consumers who bought cannabis from Newfoundland’s online cannabis store that Shopify, which hosts the website, would be transferring consumer data from servers in Canada to servers in the United States as of July 31, 2022.
Shopify did not respond to a request for comment for this article.
“The personal information of cannabis users is … very sensitive. For example, some countries may deny entry to individuals if they know they have purchased cannabis, even lawfully,” noted a report from the Privacy Commissioner in 2018.
Newfoundland and Labrador Liquor Corporation chief marketing officer Peter Murphy told CBC that the company was notified of the transfer by Shopify in 2021.
Brenda McPhail, the acting executive director, master of public policy in digital society at McMaster University and the former director of privacy, technology and surveillance with the Canadian Civil Liberties Association, says there is always some risk when a company stores information outside of Canada and that the risks increase when the information connects an individual to the purchase of a product that is still illegal in other jurisdictions.
“The data will be subject to the laws of that jurisdiction and it’s worth noting that many countries, including the US, don’t extend the same (or sometimes any) privacy protections to non-citizens, so even if there is a data protection law in that jurisdiction, it may or may not help a Canadian whose personal information about cannabis purchases is stored there.
“The promise on the Ontario Cannabis Store website that data will only be stored in countries with data protection laws is insufficient without additional assurance that those laws will protect Canadians’ data to the standard of Canadian law,” she adds. “For people to feel safer about this move, the Cannabis Store should at a minimum be transparent about where data will be stored, what laws will apply, and what contractual provisions they have negotiated (and there should be some) to provide additional protection for Canadian’s sensitive data in a foreign jurisdiction.
“It’s worth asking why they seem to have decided that ‘an improved online shopping experience’ cannot be created using a platform that has servers in Canada, or better yet, by a Canadian or even an Ontarian platform, rather than subjecting customer’s information about cannabis purchases to any level of risk.”
Brenda McPhail, McMaster University
McPhail says consumers should share any concerns they have with the OCS, or any other retailer before a deal is signed, as well as shopping in person and using cash.
“It’s worth asking why they seem to have decided that “an improved online shopping experience” cannot be created using a platform that has servers in Canada, or better yet, by a Canadian or even an Ontarian platform, rather than subjecting customer’s information about cannabis purchases to any level of risk.”
Sam Andrey, the managing director at The Dais, a public policy and leadership institute atToronto Metropolitan University also questions why the changes require using a service outside of Canada, but says customers of the OCS online store will have little recourse.
“It isn’t clear why this is necessary—there are a variety of e-commerce solutions that allow customer data to be retained within Canada. Short of advocating for stronger privacy laws, there is little that OCS customers can do in this situation.”
“Unfortunately Ontario privacy law does not require users to consent to their personal data being transferred outside of Canada, and there are not meaningfully enforced limits on the transfer of data to jurisdictions with insufficient protection against unauthorized access or surveillance.”
The one-day event is expected to bring together more than 30 local cannabis producers, brands, and retailers for a day of networking and information-sharing.
Tyler Atkins of 1st Cannabis in North Vancouver, who is leading up this inaugural event, says his goal is to bring the local community together in a positive space.
“Education is the key to understanding, so we hope that partnering with brands, producers, and agencies behind legal cannabis, we can help to make a difference,” says Atkins.
This event is inclusive to all and is not put on or sponsored by any cannabis stores. The goal is to bring the community together and keep the education growing, as well as to normalize the industry.
“As someone who has been in the industry since legalization in the recreational market, I have clearly seen the gap in education. These events have no slant towards stores or brands and this allows the community to come and ask questions as well as giving an additional space for people within the community to connect.”
“This event was created out of love for our community and with the hopes of increasing education,” he adds. “We also see this as an opportunity to continue to remove negative stigma from the industry. We hope to see the event become annual as well as visit other cities that are looking for education and an opportunity to bring the community together and remove stigma.”
The event will feature CBD yoga, a community art project, a photo wall, a live DJ, rolling lessons, giveaways and a raffle, and an after-party at a nearby pub.
While Atkins says much of the event is geared toward those working in the space, he points out all are welcome.
“This event is designed for everyone, from your grandmother wanting to ask questions but not ready to visit a store, to your OG user wanting to talk up processing methods to pick his favourite producer, to a first-time grower that wants advice on growing their first legal plant. The goal is to have an event that suits anyone interested in cannabis. We know that even our budtenders in the industry don’t get as much face time as they would like with brand representatives, and this opens up that opportunity.”
Although Atkins works at a local cannabis store, he points out the event stands on its own.
“This event is inclusive to all and is not put on or sponsored by any cannabis stores. The goal is to bring the community together and keep the education growing, as well as to normalize the industry. Cannabis needs to be viewed the same as any other business and be represented, taxed and have the same opportunities.”
The BC government is reviewing its rules about cannabis sampling between producers and retailer stores.
While some provinces allow cannabis producers to provide product samples to retailers, others say BC is lagging behind.
Provincial regulations in BC currently prevent producers from providing such samples. A representative with the province’s Ministry of Public Safety and Solicitor General—the agency that oversees the cannabis file—tells StratCann that the ministry is currently reviewing the rules about cannabis sampling between licensees, such as federal producers and provincial licensees.
Product sampling is critical to making informed wholesale purchasing decisions for licensed retailers. Sampling is also an important sales tool for producers.
Some other provinces allowed such samples from the beginning of legalization, like Ontario and Saskatchewan, while Alberta recently began allowing them earlier this year.
A spokesperson for the Cannabis Cultivators of BC, representing a handful of producers, says its members would love to see the province create an accessible cannabis sampling program. This would allow producers to inform retailers of what is already on the market and what is coming soon.
“Allowing cannabis sampling gives retailers the ability to touch, see, and feel the products they plan on bringing into their stores, increasing transparency in the process and instilling confidence in what they recommend to their consumers.
“Items for consideration could include making sampling available for products prior to provincial launch by BCLDB and allowing producers to distribute samples directly from their own facilities: aspects which would help our sector improve speed, remove administrative burden, and remain responsive to changing consumer and retailer needs.”
Jaclynn Pehota, the executive director of the Retail Cannabis Council of BC (RCCBC), says it has been lobbying the BC government to make such changes.
“Product sampling is critical to making informed wholesale purchasing decisions for licensed retailers. Sampling is also an important sales tool for producers,” Pehota tells StratCann. “RCCBC made a formal recommendation in April 2023 that representative samples of any cannabis product in the market should be allowed on a B2B basis in BC.”
“RCCBC has expressed to our partners in government that members are eager to see sampling implemented,” she adds. “The delay with implementation of sampling is obviously disappointing, but we are actively encouraging our regulators to take action to align BC with other Canadian markets that have already taken this important step.”
Pehota says she would also like to see producers able to ensure any such allowances are not adding additional paperwork requirements.
Jeff Guignard, Executive Director at Alliance of Beverage Licensees (ABLE BC), which recently launched its cannabis division to represent industry concerns, says it’s high time BC made such changes, especially since this is allowed in some other provinces.
“Sampling products in this industry has been part of the culture for generations, so we should be encouraging that activity in a legally licensed framework,” says Guignard. “I absolutely think that being able to provide samples to retailers in a responsible manner is a natural evolution for the industry. It’s allowed in other provinces. It’s time for BC to catch up.”
BC has yet to provide a timeline on when they will make any decisions on whether or not to allow sampling. The province recently announced they were seeking industry feedback on removing provincial rules on promoting locations for cannabis consumption and allowing cannabis consumption on patios. That feedback period is open until August 11.
The Alcohol and Gaming Commission of Ontario (AGCO) and the Ontario Cannabis Store (OCS) have developed a new data platform to help simplify retailers’ cannabis reporting requirements.
The point-of-sale (POS) system is intended to help reduce retailers’ regulatory burden and improve the accuracy of data collection while integrating with existing POS systems. This new POS data platform is being rolled out with POS providers and their retail clients.
An AGCO notice says the new platform will automatically extract, standardize, and automate retailers’ monthly reports directly from their own internal POS systems, processed by the OCS through an Application Programming Interface (API) and then shared with the AGCO.
The AGCO is committed to protecting the retail data we receive, including through robust cyber security measures, with guidance from industry standards such as National Institute of Standards and Technology – Cybersecurity Framework and International Organization for Standards ISO 2700½.
Alcohol and Gaming Commission of Ontario (AGCO)
The goal is to eliminate retailers’ need for monthly preparation and submission of reports and help improve the accuracy of the data submitted to the province.
James Manning, an account executive with Cova Software, a POS system used by many cannabis retailers in Ontario and across Canada, says the company was aware the changes were coming and has been working with the AGCO and OCS on the issue in advance.
“We’ve been working with the AGCO and OCS on this for about a year and a half now,” says Manning. “Cova will be fully integrated into the compliance reporting requirements by AGCO and OCS.”
Owen Allerton, the owner of Highlands Cannabis, says he doesn’t see the change as very significant for his business, but says if it works correctly, it could save him some time on monthly reporting.
“As a retailer, it’s not terribly burdensome. I think they’re doing this more to benefit themselves, but from our perspective, if this goes smoothly and saves me a few hours a month, it’s immaterial.”
Although not included in this most recent change, Allerton says he would also like to see a way for the OCS to provide sales data to LPs that would allow them to better understand which stores are carrying their products and how they are selling. He argues this would be helpful, especially for smaller producers, and thinks it would make it harder for retailers to disguise shelf-space kickbacks as “data” agreements.
The new system will automatically pull the required provincial and federal regulatory reporting data from retailers directly from their in-store POS system.
Once processed by the OCS, the data required for provincial and regulatory reporting will then be available for federal regulatory reporting. The OCS will populate and complete reports required by Statistics Canada and Health Canada.
The AGCO says the OCS has put several security measures in place to address any concerns with data security, something the OCS has had issues with in the past.
“The AGCO takes its responsibility to protect data seriously and will continue to do so when receiving POS data from the OCS,” notes a company update. “The AGCO is committed to protecting the retail data we receive, including through robust cyber security measures, with guidance from industry standards such as National Institute of Standards and Technology – Cybersecurity Framework and International Organization for Standards ISO 2700½.”
The AGCO also highlights that they and the OCS will not be collecting any new or additional data, and the POS will be configured so that all the data that is required for provincial regulatory reporting (to AGCO) and federal Cannabis Tracking System (CTS) reporting (to Health Canada and Statistics Canada) will be collected automatically by a retailer’s POS system.
In Ontario, the OCS is designated as the public body responsible for consolidating and reporting CTS information to the federal government.
Sasha Soeterik, the owner of Flower Pot on Dundas in Toronto, says she’s supportive of the plan, but is concerned about any of her data that goes to the OCS, given the data breach in 2022.
“On one hand, I welcome the change as it can be annoying to remember to report,” Soeterik explains. “On the other hand, I do not share my data with the OCS so I hope we can still opt out.”
The head of a regional Conservative electoral district association in New Brunswick has put forward a policy proposal to abolish excise tax on medical cannabis.
The proposal will be considered for inclusion in the Party platform as the Conservatives prepare for their national convention from September 7-9 in Quebec City.
The submission calls on the Conservative Party of Canada to adopt a policy that will “abolish the excise tax on medical cannabis, fostering compassionate patient care and promoting its potential as a ‘Made in Canada’ safer alternative to addictive opioids.” (archived here)
It argues that ending this tax would encourage economic growth, support healthcare affordability, and could lessen opioid use.
The big thing is making sure that it’s done in a way to ensure that the [savings] are passed down to patients.
“Canadians seeking relief through medical cannabis face undue financial burdens due to the current excise tax,” reads the proposal. “This policy removes such inequities, emphasizing compassionate care. Moreover, amid an opioid crisis, medical cannabis may serve as a safer, homegrown alternative to highly addictive opioids. Simultaneously, it bolsters our local cannabis industry, spurring economic growth. Removing this tax also aligns with principles of fiscal conservatism, eliminating a regressive levy that disproportionately impacts those with chronic health conditions. This policy aligns compassionate care, potential reduction of opioid dependence, and economic growth, demonstrating a balanced approach to health and industry.”
Max Monahan-Ellison, board chair with Medical Cannabis Canada (MCC), a national, non-profit medical cannabis advocacy group, says MCC is broadly supportive of the proposal and points out individual Party members have previously supported similar messaging.
His main concern is that any such efforts are done in a way that benefits medical cannabis users, not just the companies they purchase from.
“Medical Cannabis Canada is very supportive of any progress on medical cannabis taxation,” Monahan-Ellison tells StratCann. “The big thing is making sure that it’s done in a way to ensure that the [savings] are passed down to patients.”
“How is this going to be done in a way that is the most effective for the patient?”
Blair Gibbs, a policy consultant based in Vancouver and a former advisor to the UK Prime Minister and a member of the Stanford Network for Addiction Policy, wrote an opinion piece earlier this year suggesting that Poileivre’s Conservatives could better take advantage of gaps in federal cannabis policy, including taxes on medical cannabis.
“Cutting taxes in the right way is always something Conservatives should do, and this proposal is long overdue,” Gibbs tells StratCann. “It was bad policy to apply the excise tax to medical products, undermining the distinction between two separate regulated products.
“Pierre Poilievre’s national party needs a balanced platform on cannabis that accepts the reality of a well-established, safe, legal recreational market, but they must also fix some of the flaws of the Trudeau regime. Changing the tax on cannabis to focus on potency and investing more in road policing and border enforcement against traffickers in illicit cannabis would be other steps the Conservatives should pledge to take if elected.”
Cannabis and Conservatives?
Although some Conservatives have made similar calls for the end of taxes on cannabis for medical purposes in the past, the platform proposal does stand in contrast to other conservative party messaging on cannabis, both medical and non-medical.
The Party’s former Shadow Minister of Health, Marilyn Gladu, who has a history of interesting comments on the subject, told the Globe and Mail in 2019 that the party would seek to ban home grows as well as personal and designated medical grow licenses while supporting larger companies over smaller craft and micro growers. She had also said the party was looking at paring back allowances for cannabis edibles and beverages.
“Conservatives believe that prescription medications should not be taxed. For consistency, this means that prescriptions for cannabis should also not be taxed,” Gladu said at the time.
Alberta Gaming, Liquor and Cannabis (AGLC), Alberta’s cannabis regulator, is exploring the possibility of allowing white-label cannabis products in the province.
These would be products sold by retailers with their store’s branding and logo but supplied by licensed producers.
In a memo sent recently to stakeholders, Dave Berry, the executive vice president of public engagement and CRO with the AGLC, says the agency has been hearing from many in the industry who would like to sell such products.
It can also provide an opportunity for producers to sell product that would otherwise be sitting in their vaults given the current oversupply of dry flower in the market.
Provincial regulations in Alberta currently do not allow these kinds of products, although several other provinces do. In the past, Canna Cabana, a national retail cannabis chain, announced a white-label agreement for products sold in its Saskatchewan, Manitoba, and Ontario stores. Other companies have announced similar deals.
The AGLC is conducting an online survey to gather input from all licensed cannabis retailers and registered representatives, such as licensed cannabis producers, brand owners, and other marketing entities.
The survey will be open until August 18, 2023.
Omar Khan, chief communications and public affairs officer with High Tide Inc., which owns the Canna Cabana chain of stores operating in Alberta and several other provinces, says they support the proposal.
“We look forward to participating in the AGLC’s white-label consultation. Our experience in provinces like Ontario, Manitoba, and Saskatchewan indicates that the availability of white-label products allows for greater product differentiation and consumer choice while creating room for increased retail margins. These are things that can help retailers of all sizes. It can also provide an opportunity for producers to sell product that would otherwise be sitting in their vaults given the current oversupply of dry flower in the market.”
Alena Jenkins, the president of FivePoint Cannabis, with one location in Calgary, says she isn’t opposed to the proposal but doesn’t see it as a priority. Instead, she would like the ability to carry exclusive products that her competitors don’t carry, and to have producers allocate a specific amount of products to her store on a weekly basis.
“I don’t really care if my name is on it. I would prefer to have exclusive rights to products that I want,” says Jenkins, adding that this could allow her to distinguish her small, independent store from her competitors in a unique way.
Scott Morrow, president and CEO FOUR20 Premium Market, with 41 locations in Alberta, says he sees this as a positive step and would be open to carrying white label products in his stores and will help retailers create somerthing unique for consumers.
“I think it’s positive for retailers in Alberta to have access to private products to start creating some product differentiation in our space, which really doesn’t exist today, largely. We’re all ordering from the same product list on a weekly basis and have very limited opportunity to create a point of differentiation with products in our stores.”
Metro Vancouver’s Regional Board (MVRD) of Directors says they want to collaborate with other provincial agencies on any potential regulation of cannabis farm emissions rather than continuing to develop its own regulations.
Several MVRD board members said they felt the staff proposal to regulate Volatile Organic Compounds (VOCs) from cannabis production facilities and farms was a backdoor route to trying to regulate the odour of cannabis itself.
Several mayors—who serve as board members—also questioned the need to spend the board’s time and resources on regulating something that amounts to less than one percent of all regional VOCs and concerns that this will lead to regulatory creep into other types of farms.
Metro Vancouver—encompassing 21 cities in BC’s Lower Mainland, one electoral area, and one treaty First Nation—first announced its plans to regulate volatile organic compounds (VOCs) from cannabis production in 2019, holding stakeholder meetings in late 2020 and early 2021.
“We have a very diverse agricultural community, and we want to ensure they are not over-regulated”
Nicole Macdonald, Mayor of Pitt Meadows
It estimates that indoor cannabis accounts for about 146 tonnes of VOCs per year, compared to 715 for crops and pasture land, 9,500 from plants and vegetation (non-commercial crops), and over 37,000 from other non-agricultural, human sources such as fuel, vehicles, and paints and chemical products.
In a board meeting on Friday, July 28, Patrick Johnstone, the mayor of New Westminster, echoed these concerns, saying he would like to see the board working with the Ministry of Agriculture, and added that VOCs from cannabis production represent less than 1% of total VOC’s for the region.
Nicole MacDonald, the mayor of Pitt Meadows, home to several cannabis growers and processors, says she was concerned about city staff’s proposed approach and how it would further “isolate” cannabis farmers from other types of farms.
“We have a very diverse agricultural community, and we want to ensure they are not overregulated,” said MacDonald.
Mike Bose, a city councillor from Surrey, spoke of “legislative creep” and over-regulation, saying that he felt the real goal of the proposal was to find a way to deal with the odour of cannabis.
“Agriculture is smelly, it’s noisy, it’s dirty, it’s messy,” said Bose, adding, “We’re talking about limiting the use of some of the most productive land in the country, let alone the province.”
“All we’re going to do is find a way to legislate away the smell from a greenhouse that’s growing cannabis, then tomorrow it’s a dairy farm, then the day after it’s a chicken farm, and then it’s oh my god, the blueberry farms….”
Last, Dan Ruimy, the newly-elected mayor of Maple Ridge, pointed out that Health Canada already has strict rules in place to control odour for indoor facilities, and said that such regulations could “destroy a fledgling industry.”
Staff proposed two suggestions. One was to send a letter to the Ministers of Agriculture and Food, Environment and Climate Change Strategy, and Public Safety and the Solicitor General, requesting collaboration with Metro Vancouver on developing a concerted approach for managing emissions from cannabis production and processing in the Metro Vancouver region in a manner that protects public health and regional economic prosperity.
“All we’re going to do is find a way to legislate away the smell from a greenhouse that’s growing cannabis, then tomorrow it’s a dairy farm, then the day after it’s a chicken farm, and then…the blueberry farms….”
Mike Bose, a city councillor in Richmond, BC
The second was to direct staff to continue developing options to manage emissions from cannabis production and processing as described in the June 23, 2023 report titled “Phase 2 Engagement Summary and Next Steps for Managing Emissions from Cannabis Production and Processing.”
The MVRD board approved the first proposal but rejected the second. The next step will be for staff to send the letter and report back to the board when they have more information at a future date.
A researcher at the UBC Biodiversity Research Centre is teaming up with a geneticist at Aurora Cannabis to adapt cannabis for outdoor production.
The work is one of eight new projects that have received a combined $1.84 million in funding from the Genomic Innovation for Regenerative Agriculture, Food and Fisheries (GIRAFF) program—a collaboration between Genome BC and the Investment Agriculture Foundation of BC (IAF) with support from the BC Ministry of Agriculture and Food.
Dr. Marco Todesco from the University of British Columbia and Jose Celedon, director of genetics at Aurora Cannabis, are working to develop cannabis cultivars better suited to Canadian climates and environment to address the carbon footprint of indoor cannabis production. By some estimates, about four percent of the total greenhouse gasses from Canadian agriculture come from cannabis production, primarily indoor production.
Our project uses leading-edge genomics technologies to help develop more sustainable cannabis varieties that can be grown outdoor at Canadian latitudes, reducing greenhouse gas emission from cannabis cultivation in BC and beyond.
Dr. Marco Todesco, UBC Biodiversity Research Centre
The team is working on developing more suitable commercial cultivars for use in outdoor settings by cross-breeding so-called autoflower characteristics into “elite” cannabis genetics.
Dr. Todesco, assistant professor at the Biodiversity Research Centre, University of British Columbia, says the goal is to develop cultivars better suited to not just BC but all of Canada.
“The cannabis industry plays an important role in the BC economy, but unfortunately, cannabis cultivation in indoor facilities also has an enormous carbon footprint,” says Todesco. “Our project uses leading-edge genomics technologies to help develop more sustainable cannabis varieties that can be grown outdoor at Canadian latitudes, reducing greenhouse gas emission from cannabis cultivation in BC and beyond.”
The program has a budget of $250,000 for its research and began the work in 2022.
Dr. Caledon, the director of breeding and genetics at Aurora Cannabis, applauds the work of UBC in collaboration with the cannabis producer.
“As a global cannabis company enabled by science, we are proud to invest in the continued advancement of cannabis cultivation that will positively impact the longevity of the industry in Canada. Our long-standing relationship with UBC has allowed for valuable, collaborative work in genomics. Our shared findings from the GIRAFF project will be applied to Aurora’s leading growing practices today and in the future, supporting a more sustainable industry.”
This is not the first cannabis breeding program involving UBC and Aurora, which operates its cannabis breeding facility on Vancouver Island, Aurora Coast, which hosts the Occo research centre. In 2020, more than $4.2 million in federal, provincial, and industry funding was announced to aid with UBC research into enhanced cannabis cultivars, focusing on disease resistance.
“There is a misconception amongst growers and LPs, both domestically and internationally, that you cannot protect or own the genetics around a particular cultivar, ” Aurora CEO Miguel Martin said earlier this year. “That’s completely untrue. We are licensing unique genetic markers of these cultivars that we develop, and we are able to identify those that are infringing upon that; the law is very clear on this issue. We’ll have a very strong case. You’ll start to see litigation around that, as well as those that we believe have infringed on some of our bio-synthetic assets, and that’s also an additional revenue stream for the company.”
The project was part of a larger $56.4 million in funding from the federal and provincial government, as well as private industry and is part of 10 new genomics research projects funded through Genome Canada in conjunction with Genome BC. Genome Canada is a non-profit organization funded by the Government of Canada that seeks to use genomics-based technologies to improve the lives of Canadians. Genome BC is a not-for-profit organization undertaking similar research in BC.
Aurora also says their Coast facility has produced ten new cultivars launched during fiscal 2023, including two high-THC cultivars—Sourdough and Farm Gas— that have also launched in Europe and Australia.
Charles Pick (left), senior vice-president of science and innovation for Aurora Cannabis, and Greg Baute at Aurora’s cannabis facility in Comox, B.C.
Outside of StratCann’s coverage, the big news this week was the Canadian Press story on the BC Supreme Court approving a cannabis ‘fire sale’ as Tantalus Labs entered bankruptcy, with the CRA stayed from taking any actions against Tantalus with respect to cannabis stamps and cannabis inventory. Court documents show Tantalus with more than $14 million in debt to creditors and other companies, including $4 million to the CRA.
The Tyee uncovered an auditors’ report from 2022 that says BC’s provincial agency responsible for ensuring that licensed cannabis retail stores follow the law is understaffed and lacks key tools. The 26-page report, Compliance and Enforcement of Cannabis Retail Stores, made 14 recommendations that the in-house government auditors said would improve the program and make it more efficient and effective.
Some cannabis retailers in Saskatchewanexpressed frustration at competing with what they say are unregulated cannabis retailers selling unregulated products on First Nations land in the province, including one store that made headlines recently. Local First Nations store owners say they are governed by their own regulations.
Natoaganeg First Nation in New Brunswick announced a new therapy program run by the Gitpo Spirit Lodge, which has received $1.2 million from Health Canada for two years. Dr. Shelley Turner, a member of Pimicikamak First Nation in Manitoba and an expert in medical cannabis, will educate healthcare providers on the use of medical cannabis for this therapy, also called cannabinoid therapy. CBC reports that in Turner’s practice, she starts patients on THC and CBD in one-milligram increments.
A new research paper out of Ontario says there is an association between non-medical cannabis legalization and emergency department visits for cannabis-induced psychosis. The article attributes this increase to something it calls “cannabis commercialization.” While the abstract doesn’t note why they chose this start date, the timing correlates with when edibles became more common in both the legal and illicit markets (March 2020–September 2021). Increases were seen only for those above the legal age of purchase.
In financial news, Tilray released their Q4 financials, showing a net revenue increase of 20 percent, and a net loss of USD$120 million in the fourth quarter compared to the net loss of the prior year quarter. Cannabis gross margin for Tilray increased to 61 percent in the quarter from -36 percent in the previous year’s quarter, which the company attributes to contributions from the HEXO arrangement. Tilray says its market share in Canada is about 13 percent.
On the other hand, Quebec-based producer Cannara Biotech reported Q3 2023 net revenue of $15.9 million and $39.3 million for the first nine months of 2023, a 57 percent and 63 percent increase respectively, compared to the three and nine-month period in 2022. Cannara sells under the brands Tribal, Nugz, and Orchid CBD. The company primarily sells in Quebec but has products in BC, Ontario, and Alberta.
Meanwhile, The Deep Dive had fun swimming amongst the schadenfreude that is the collapse of the once-mighty Canopy Growth—a fun read for anyone who has followed the highs and lows of this sector.
In cannabis banking news, Turtle Island News reported that the Six Nations Cannabis Commission (SNCC) has been unable to find a bank willing to work with them. The SNCC has licensed three retail stores within its territory. The regulator issued its first production licence to Bloom Cannabis last year.
“I’ve met with every bank across Canada, including credit unions,” said Kathy Mair, the Six Nations Cannabis Commission’s (SNCC) chief commissioner. “Everybody takes me along, and everybody says they can help, and then something comes up, and they can’t. Nobody is willing to go against the banking charter.”
A new medical cannabis access platform, MyMedi.ca, announced its initial product offering on its website, launching on August 1, with more than 30 brands. MyMedi says it’s providing “continuity of care” for Medical Cannabis by Shoppers Drug Mart patients following a partnership between Avicanna and Shoppers Drug Mart signed in March.
Big news in the US this week, Mastercard told financial payment companies they must stop allowing US customers to buy cannabis with its debit cards. Mastercard said the move comes after it found some stores accepted debit payments despite the federal ban.
Uruguay has sold more than 10 million grams of cannabis in the six years when first legalized. Authorized pharmacies in Uruguay have sold 10,693,210 grams between July 19, 2017, and July 19, 2023, according to the IRCCA, the agency that oversees both medical and adult-use cannabis. People can buy three different types of cannabis in the country, with varying amounts of THC and CBD, with the highest level of THC at 15 percent—not much below the averages shown by analytical testing of supplies in the US and Canada.
As of February in Uruguay, 5 grams of legal cannabis from a pharmacy costs approximately $400-450, or about $15 Canadian. There is a 10-gram per week purchasing limit, with three exclusive modes of access that someone must choose: buying through a pharmacy, growing at home, or growing as part of a cooperative.
The High Hopes Foundation, a community group providing access to medical cannabis in Vancouver’s Downtown Eastside, recently launched a pilot project to explore the potential for cannabis as a substitute for people with severe alcohol dependence.
The group was selected by the Canadian Institute for Substance Use Research as a partner in launching the project, which will evaluate cannabis substitution intervention as a component of its Managed Alcohol Programs (MAPs) for people with alcohol use disorders who are experiencing unstable housing.
That study, titled, in part, “If I knew I could get that every hour instead of alcohol, I would take the cannabis,” explores the potential of using cannabis within MAPs. Many of the participants in the MAPs program said they were already using cannabis as a substitute for cravings and withdrawals, preferring dried cannabis, followed by edibles and oil capsules.
The paper concludes that cannabis substitution was a viable approach but noted a need for proper funding and “inexpensive, legal, and reliable sourcing of cannabis.” High Hopes typically provides cannabis to registered patients through its own medical cannabis sales licence at a few dollars a gram, but the Health Canada program will cover the cost of cannabis used within the program.
Sarah Blyth, High Hopes’ founder, has deep roots in Vancouver’s Downtown Eastside community and says she and her team are excited to begin their work.
“As research partners, High Hopes is eager to further explore cannabis as an alcohol harm reduction tool,” Blyth tells StratCann. “Our prior work has demonstrated cannabis’ promise in reducing opioid misuse and improving patient quality of life. We now aim to apply that expertise to studying cannabis as a potential therapeutic for alcohol addiction.
“With our experienced team of researchers and peer workers, High Hopes will continue pioneering safe, effective cannabis treatments to address major community health concerns.”
High Hopes notes that early feasibility study data shows promising results for cannabis as an alcohol substitution:
63% already substitute cannabis for alcohol. Of those, 52.6% use cannabis daily and 42.1% use it weekly for alcohol substitution.
78.9% use cannabis for alcohol cravings, 52.6% for withdrawal symptoms.
84% would participate in a cannabis substitution program if offered. 57.9% felt cannabis could help reduce drinking but cited availability and cost as barriers.
78.9% are open to partial substitution, 63.2% to complete substitution.
The community organization received their medical sales licence in 2022 and, after a long search, secured its first supply partnership with Canna Farms, a cannabis grower located just a few hours outside Vancouver in Hope, BC.
Blyth says they have also established two discreet, official pick-up locations for its patients, with plans to add more soon.
Nominations are now open for the 2023 Grow Up Awards Gala, set to take place in Victoria, BC, in early October.
The Grow Up Conference & Expo is returning to Victoria for the second time, following its first show in BC’s capital city in 2022.
The conference expects several thousand attendees over the three-day event, from Sunday, October 1 to Tuesday, October 3. The awards ceremony will be at the Historical Crystal Garden in the Victoria Conference Centre.
Our awards gala aims to highlight the exceptional contributions taking place in the industry, and to celebrate the achievements of our peers.
Randy Rowe, President of Grow Up, has been hosting the expo since 2019 and says this year’s event will also honour Ted Smith, the founder of the Victoria Cannabis Buyers’ Club, with a Lifetime Achievement Award, Wanda L. James as the events 2023 Cannabis Pioneer recipient, and Kevin Jodrey as their Grow Up Hall of Fame inductee.
The gala will be hosted by Jenny West Cooney from local radio station Zone 91.3.
“We are looking forward to honouring the dedicated professionals working tirelessly to set new standards in the ever-changing cannabis industry,” said Rowe.
“Our awards gala aims to highlight the exceptional contributions taking place in the industry, and to celebrate the achievements of our peers. The gala is also a perfect opportunity to relax and get away from the stresses of the cannabis industry, even if it’s just for a night.”
Nominations are open until Sunday, August 6, 2023. Voting takes place August 10-28, and the winners will be announced at the awards ceremony.
“We encourage everyone in the cannabis industry to participate, either by nominating those who deserve recognition, or by attending this landmark event,” Rowe added.
Tickets for the Grow Up Conference & Expo are on sale now, and information on nominations can be found at growupawards.com.
Residents of Surrey, BC, will not be able to buy weed locally any time soon.
Surrey city council has voted to send a report on cannabis retail stores back to city staff to be retooled before it will be considered.
In a council meeting on Monday, July 24, staff presented council with a proposal for a policy framework for regulating cannabis retail stores within the city. Earlier this year Council directed staff to produce a report to address how the city could potentially allow cannabis stores.
But in Monday’s meeting, all but one city councillor voted to refer the report back to staff to consider new options. Namely, councillors were concerned that the staff report suggested the city first look at authorizing cannabis stores on city-owned property to give the city more control over those stores.
Seven of the eight city councillors, plus the mayor, agreed with a motion from councillor Doug Elford to refer the report back to staff, with Mayor Brenda Locke noting that she still feels it’s “unfortunate” that cannabis was legalized at all. When Locke was running for Mayor, she said residents “definitely” want to see cannabis stores in the city.
One councillor, Harry Bains, said he understood city staff’s reasoning for proposing that the city first consider city-owned property for possible future stores. However, he still supported Elford’s motion.
A previous city council had banned cannabis stores from Surrey entirely. Since then, several stores have popped up on the city’s border in neighbouring communities. Residents can also receive deliveries from stores located in other cities.
Councillor Mandeep Nagra also noted that he feels the residents of Newton Town Centre, the township within Surrey that would be home to the first proposed property, located at 13455–72 Avenue, would not be welcomed by residents.
Staff pointed out to council that the option to first consider city-owned properties was not a requirement, and that other privately-owned locations could be considered. A timeline for an updated staff report to council is to be determined.
The Surrey Board of Trade released a report earlier this year calling on the local government to begin allowing cannabis retailers to operate in the municipality. Jasroop Gosal, Policy & Research Manager for the Surrey Board of Trade, says the board has concerns with how long the proposed plan will take to implement, while other cities in BC and across Canada have already moved forward.
“This framework is going to result in a lengthy implementation timeline,” said Gosal in a press release. “Many cities from across the province allow retail operations to occur on private land, which meets the prudent criteria put in place by the Provincial Government. The report also doesn’t indicate a timeline for the pilot, initial phase, or future phases.”
Aurora Cannabis has closed the sale of its Medicine Hat, Alberta facility to Bevo Farms, a subsidiary of Bevo Agtech Inc.
The facility, dubbed Aurora Sun, was to be a 1.63 million square foot cannabis greenhouse, but construction was suspended in late 2019. Aurora said they would only build approximately 238,000 square of the 1.63M square foot facility by 2020, with the rest completed when market conditions improved.
The Aurora Sun Facility was sold via Bevo Farms’ acquisition of one of Aurora’s wholly-owned subsidiaries. Aurora has a controlling interest in Bevo as of 2022. Founded in 1986, Bevo operates 63 acres of greenhouse in British Columbia.
Bevo could pay “up to” $15 million to Aurora in connection with the Aurora Sun transaction as long as Bevo Farms successfully achieves specific financial milestones at the Aurora Sun facility.
“I am pleased that this transaction will achieve the dual objectives of improving Aurora’s cash flow, while benefiting Bevo as they proceed with the expansion of their business,” said Aurora’s CEO Miguel Martin in a press release.
Leo Benne, CEO of Bevo, added, “Bevo’s ability to deliver propagated plants directly from Medicine Hat to the Alberta greenhouse industry and beyond delivers a win for the Alberta greenhouse industry, the City of Medicine Hat and its residents, for Bevo, and for Aurora. We would like to express our gratitude to the City of Medicine Hat for their essential contributions to this transaction. We look forward to further developing our partnerships in Alberta in the years to come.”
Other facility closures
Aurora announced the sale of another facility in Alberta, Aurora Polaris, earlier this year.
Originally located next to the now-defunct Aurora Sky facility, the company first announced the plans for a 300,000 square foot Polaris project in 2019, at an estimated cost of $50 million. The building was originally intended to serve as Aurora’s “centre of excellence for the industrial-scale production of higher margin, value-added products, such as edibles.”
In May 2022, Aurora announced the closure of Aurora Sky, with 214 lost jobs. Martin points out that Bevo had already taken over the Aurora Sky facility.
“Bevo has successfully repurposed the Aurora Sky facility in Edmonton, and we’re excited to further support their continued growth. Bevo’s acquisition of the Aurora Sun facility further demonstrates the close synergies between our companies and the value that our partnership creates for shareholders.”
In September 2021, the company announced their plans to close the Polaris facility, representing a loss of eight percent of its global workforce. A news report at the time noted an Alberta government website listed the Aurora Polaris facility as being around 2,800 square meters “with one-third of the space dedicated to warehousing and distribution of cannabis products and the remainder hosting product manufacturing.”
In 2022, Aurora closed down the 200-acre “Aurora Valley” cannabis farm in BC. A spokesperson for Aurora Cannabis told StratCann at the time that the Thrive Cannabis location replaced the need for the Aurora Valley site.
Surrey City Council may soon consider allowing cannabis stores in BC’s second-largest city.
Surrey initially banned cannabis stores entirely. In March, Mayor Brenda Locke told StratCann that the city is developing a plan to potentially consider applications.
The city’s Planning & Development Department and the Engineering Department posted a staff report on July 20, to be considered at the next council meeting on July 24, that seeks council approval of a policy framework for regulating cannabis retail stores.
Staff are proposing a general framework for regulating cannabis retail stores in Surrey and recommending a city‐owned site at 13455–72 Avenue in the Newton Town Centre as an initial “pilot” location for a cannabis retail store.
“This framework is going to result in a lengthy implementation timeline.”
Jasroop Gosal, Surrey Board of Trade
The plan would also initially limit the number of store locations to one in each of Surrey’s six Town Centres as designated in the Official Community Plan (City Centre, Guildford, Fleetwood, Newton, Cloverdale, and Semiahmoo), with a preference for a city‐owned site in each Town Centre.
For these locations, the city would hold a competitive process to select a business operator based on specific criteria and a scoring system that is still to be determined. If no city-owned site is available in a Town Centre that meets locational criteria, a competitive process would be held to select both a site and business operator.
If Council supports the Newton Town Centre pilot site location, staff will prepare a city‐initiated rezoning proposal for Council’s consideration in the Fall of 2023, along with a concurrent selection process of a business operator for this location.
Staff also recommend that the city close and refund application fees for two locations previously filed with the city before any regulatory framework. These locations are 7380 King George Boulevard (7923‐0066‐00) and 13650–102 Avenue (7923‐0048‐00).
If Council approves the recommendations in this report, city staff will bring forward a more detailed report regarding the retailer selection process, licensing conditions and criteria, as well as a proposed monitoring and reporting process for council’s consideration.
“I understand that each city and community has its own specific needs. I am enthusiastic about collaborating with the City of Surrey to ensure the success of their approach.”
Vikram Sachdeva, Seed & Stone
Vikram Sachdeva, the CEO of Water Leaf Management Services, a Songhees Nation business initiative, says he’s pleased with these initial plans for a cannabis policy framework. Acknowledging that the city has taken a cautious approach to cannabis retail policy compared to other municipalities, Sachdeva says, “I wholeheartedly embrace this unique approach because I understand that each city and community has its own specific needs. I am enthusiastic about collaborating with the City of Surrey to ensure the success of their approach.”
Water Leaf Management provides operational services to all Seed & Stone and Songhees Cannabis stores. Seed & Stone holds the distinction of being the first to obtain licenses in Delta, Hope, and Coquitlam, and has recently applied to be the first retailer in Pitt Meadows.
The Surrey Board of Trade released a report earlier this year calling on the local government to begin allowing cannabis retailers to operate in the municipality. Jasroop Gosal, Policy & Research Manager for the Surrey Board of Trade, says it has concerns at how long the proposed plan will take to implement.
“This framework is going to result in a lengthy implementation timeline,” said Gosal in a press release. “Many cities from across the province allow retail operations to occur on private land, which meet the prudent criteria put in place by the Provincial Government. The report also doesn’t indicate a timeline for the pilot, initial phase, or future phases.”
Outside of that, it was a relatively slow week in cannabis news in Canada.
Several news agencies made rage-bait hay by reporting that Aurora’s CEO Miguel Martin received a base salary of about $590,500 as well as about $3.8 million in share-based options and almost $1.1 million in option-based awards in the past fiscal year, as well as about $815,000 in non-equity incentive plan compensation and $416,000 in other compensation.
Mission, BC Mayor Paul Horn says he wrote to Canadian health minister Jean-Yves Duclos on July 6, describing the impact legalization has had on his community, especially regarding the impact of designated and personal grows. The mayor also expressed concern with licensed commercial production sites.
Stats Canada’s Monthly Retail Trade Survey collects data on sales, e-commerce sales, and the number of retail locations by province, territory, and selected census metropolitan areas from a sample of retailers.
New monthly figures from Stats Canada show that cannabis retailers sold more than $415 million in May 2023—an increase of about $5 million from the previous month and an increase from $373 million in May 2022. The monthly increases were seen across most provinces and territories, with declines in BC and PEI. Sales in BC were down about 5 percent from the previous month, while sales in PEI were down nearly 36 percent ($1,868,000 vs $1,196,000).
Meanwhile, police in Ontario say a 20-month-old baby in Prince Edward County was treated in hospital after consuming a quantity of cannabis chocolate. The origins of the edible were not reported.
Also, a Canadian man was charged with importing cocaine and cannabis into Bermuda. According to prosecutor Carrington Mahoney, the cannabis in question has an estimated value of almost $474,000, and the cocaine has a value of about $201,300.
Manitoba Liquor & Lotteries’ Cannabis Operations team says it has a plan in place to ensure a strike action from the Manitoba Government and General Employees’ Union does not impact cannabis producers’ ability to send products to suppliers and retailers in the province.
In a memo sent to cannabis producers on July 21, Manitoba Liquor & Lotteries (MBLL) says that while it is “severely impacted” by the work stoppage from the Manitoba Government and General Employees Union (MGEU), it has developed a contingency plan in advance to mitigate any industry concerns.
The government regulator was informed on July 14 of the pending job action by the MGEU, which includes staff from Cannabis Operations. The union issued a one day walk out on July 19, which has now developed into a more long-term strike.
During the strike, the MBLL’s Cannabis Operations are required to operate with a skeleton staff, limiting the ability to process new purchase orders. As such, the agency will be pausing or delaying these activities:
Support resolving order discrepancies and resending packaging slips.
Issuing financial credits and refunds.
Tracking open purchase orders and providing status updates.
Providing Cannabis Customer Self Service troubleshooting support.
Password resets and account set-up support (for CCSS and MBLL Partners) will continue with some delays.
Limited to no product price changes or new product set-ups in the product catalogue.
Cannabis Tracking and Licensing System (CTLS) (seed-to-sale) reporting on behalf of Retailers Account administration (changes to supplier and retailer information).
The Cannabis Contact Centre, Cannabis PO, and Cannabis Buyers email accounts will be monitored for urgent matters, but responses will be limited or delayed.
Any suppliers dealing with a product list status change should still inform the MBLL, who will take action when they can.
If a supplier has a list status change (to a Pending/Terminated status), continue to advise MBLL, they will take action accordingly as time and resources permit.
Job actions in other provinces have caused challenges for producers and retailers. In 2022, British Columbia’s central distribution system was temporarily halted due to a government employee’s union strike. Strikes in Quebec have also temporarily closed or otherwise impacted some stores in the province.
While the MBLL does not run a warehouse for cannabis like other provincial governments, it does approve products and suppliers into the province. Producers can then ship directly to retailers, or go through private distribution systems.
Michael Gruber, the owner of Parrot Pot Shop, with two locations in Winnipeg and a third on the way, says his main concern is if sales are impacted. Customer loyalty is important in such a highly saturated market like Winnipeg.
“Our main concern would be if we can’t service customers. That’s what really counts. If there are issues with purchase orders or credit notes, it can wait. As long as we can get product to our customers the rest can wait.”
Kerri Michell of Farmer Jane Cannabis, with five locations in Winnipeg, says she is optimistic that this will not negatively impact her business, as long as the strike doesn’t go on very long.
“MBLL has been really good with communicating so far and seem to care about the impact on the industry.”
Gord Nichol, the owner of North 40 Cannabis, a micro producer in Saskatchewan that sells into the Manitoba market, says he’s happy with how the MBLL is handling the issue.
“I’m glad to see them focusing on making sure that products are still flowing. We’ll get the returns fixed up, any overages or any issues, those can go on the back burner because that’s not going to affect anyone’s ability to do business. So it sounds to me like they’re focused on the right things.
The Alberta government is auctioning off a donair costume the government purchased in 2015 for use in a traffic safety video campaign.
The government told CBC that the costume was never used because the campaign was abandoned prior to launching.
“The idea was to focus on the perils of impaired driving caused by cannabis and urge motorists to make responsible choices,” the statement said. “Ultimately, the Wise Donair video production was cancelled, and the government’s efforts to raise awareness about the perils of drug-impaired driving were refocused on other tactics.”
The human-sized latex donair costume is approximately 56 inches high, 27 inches wide, and about 16 inches deep and comes with a silver-coloured body suit to match the tinfoil-looking wrapping on the donair. The costume is about 75 inches head to toe and comes with adjustable shoulder straps.
As of press time, the highest bid is $7,000, and the closing date is August 14. Arranged shipping is not available for this auction item. The buyer will be responsible for making their own arrangements for shipping, packaging, loading, and removal of this auction item.
Mason said the proposed pitch was to play on getting “the munchies” while stoned. Staff debated whether the campaign made sense and whether hallucinating a talking donair after consuming cannabis would seem far-fetched to viewers.
“I think that some of the people working on that campaign were unfamiliar with the use of the substance,” Mason said
Ultimately, it was decided the campaign was a bit far-fetched.
“The intention was very good, but I pulled the plug on their project because I just didn’t think it was going to be a very effective way to communicate,” Mason told Politics Today. “I also thought a lot of people would think it’s a little weird.”
The group challenging Manitoba’s ban on home-grown cannabis will head back to court in September to make new arguments for why the provincial ban is unconstitutional.
Jesse Lavoie, who has been leading the charge against the provincial ban through his organization TobaGrown, says he and his legal team are filing a brief on July 21, with a scheduled court date of Friday, September 8.
Lavoie and his two lawyers, Kirk Tousaw and Jack Lloyd, will be arguing that the recent Supreme Court ruling that upheld Quebec’s ban on growing cannabis at home does not create a precedent to be followed in Manitoba.
While Quebec’s law banning home-grown weed is based on civil fines, Manitoba’s is based on criminal penalty, something Tousaw says is not in the purview of the provincial government.
Quebec and Manitoba were the only two provinces to challenge that authority, banning home growing entirely, as did the territory of Nunavut. While Quebec’s rules implement fines for those found growing cannabis, Manitoba’s ban creates criminal penalties and a $2,542 fine for growing non-medical cannabis in a residence in Manitoba.
The province’s ban does not extend to those authorized to grow cannabis for medical purposes, who have been protected by federal court.
“The argument being advanced this September in Manitoba is that the decision of the Supreme Court of Canada in the Murray-Hall case is not binding authority,” explains Tousaw. “This is because that decision was based on Québec’s very specific provincial legislative scheme, which includes the creation of a state monopoly—and which does not, unlike Manitoba, penalize home growing with the potential of up to a $100,000 fine and one year in prison. We say that Manitoba has improperly exercised the criminal law power in a way that is quite different from what Quebec did.”
“Ultimately, issues like this are best resolved in the legislature, so long as the legislature does not overstep its constitutional bounds,” he continues. “Irrespective of the outcome of the court case, it would be best for the citizens of Manitoba if the legislature simply allowed Manitobans to grow their four plants like every other Province except Quebec does.”
In the Quebec case, the provincial government had successfully argued in a lower court that they had the right to ban growing cannabis at home entirely, and were doing so to protect young people. The Supreme Court then dismissed an appeal of that ruling, concluding that the provincial government’s ban on growing cannabis at home was not in conflict with the federal law allowing Canadians to grow up to four plants at home.
Federal regulations allow Canadians to grow up to four cannabis plants per home. Provinces are allowed to place restrictions on that allowance, such as limiting the number of plants and/or requiring them to be grown in a secure area or out of view of the public.
In developing the Cannabis Act and Regulations, the federal government argued that limiting the number of cannabis plants to zero or banning them outright would be out of the scope of their powers.
This is similar to the federal age limit of 18 for access to alcohol, but provinces can raise this amount. All provinces and territories in Canada except Alberta and Quebec have established 19 as the age of access for cannabis. Alberta’s is 18, and Quebec’s is 21.
Lavoie, who launched his challenge of provincial law in 2020, says he’s frustrated that the current government continues to maintain the ban on Mantiobans’ ability to grow a few cannabis plants at home.
“This lawsuit has been going on for three years now, and it’s very disappointing to witness our opponents, the Elected Government, pushing for a lazy victory with a lack of their own evidence,” says Lavoie. “Despite Quebec’s ruling being based on protecting a Cannabis monopoly that doesn’t exist in Manitoba, our Opponents’ lead argument has been “We can because Quebec can”. Our legal team has spent countless hours preparing for this September 8 legal showdown, and I’m confident that we will prevail in this case.”
Jack Lloyd, another lawyer working with TobaGrown on the case, who also worked on the challenge in Quebec, filed by Janick Murray-Hall, agrees that the Quebec case does not, in his estimation, provide cover for Mantioba’s ban.
“The situation is significantly different in Manitoba, which means that in our view, Manitoba’s legislation cannot escape judicial scrutiny on the back of the SCC’s ruling in Murray Hall.”
The Manitoba government will have until August 18 to file their response. The two groups are scheduled to meet in court on September 8. TobaGrown says it has received permits to have over 1,000 people on the front steps of the Manitoba Legislative building from 8:30 a.m. to 9:30 a.m. on September 8, 2023, before the team heads to court at 10:00 a.m.
The Ontario Cannabis Store is making it easier for cannabis producers to send smaller shipments to their distribution centre.
As of July 17, the OCS Distribution Centre (DC) will accept deliveries from sprinter vans carrying up to 260 master cases per delivery and “alternative vehicles” carrying up to 60 master cases per delivery.
The OCS says the changes will address industry demands for smaller businesses with smaller shipments to engage directly with the world’s largest cannabis distribution centre. Many smaller producers have partnered with larger companies to address this previous gap.
This decision permits LPs to consolidate shipments, leading to significant time savings for both LPs and receivers. No longer will trucks be dispatched for small loads that occupy as little as one or two percent of the total vehicle space.
Kayla Nguyen, Ontario Cannabis Association (OCA)
The Ontario Cannabis Association (OCA), representing around 50 cannabis producers, says it’s happy with what it says is a “long-awaited” change that helps out cannabis producers across Ontario.
“After years of requests, the OCS has made a ground-breaking decision to allow the type of delivery that optimizes operations and streamlines the delivery process,” said Kayla Nguyen, director of membership and outreach with the OCA, in a press release.
“This decision permits LPs [licensed cannabis producers] to consolidate shipments, leading to significant time savings for both LPs and receivers. No longer will trucks be dispatched for small loads that occupy as little as one or two percent of the total vehicle space.
”The change represents another small step the cannabis distributor is taking to better address the needs of smaller cannabis companies. While Ontario’s cannabis distribution centre is primarily built around addressing the needs of companies shipping the larger batches of products that dominated the market at the beginning of legalization, the industry has shifted towards smaller micro and craft producers.
While many of these smaller cannabis growers and processors still work with larger companies to gain access to provincial markets, Ontario has been refining its massive distribution centre to address small-batch needs. As one example, while the OCS still does not allow producers to send products directly to retailers, it has been expanding the Flow-Through program that allows retailers to order from a list of products not traditionally stored at the distribution centre.
The OCS DC operates within 220,000 square feet of space, shipping and receiving the equivalent of approximately 1,100 kg of dried cannabis every day from more than 250 of Canada’s federally licensed cannabis producers. A team of about 400 employees operates the facility 24 hours a day, connecting almost 1,700 privately owned retail stores across Ontario with more than 3,000 products.
Every week on average, 1.7 million units—equivalent to almost 7 million grams of cannabis—arrive at the Distribution Centre operated by third-party Domain Logistics, not including products sold through OCS’ Flow-Through program.
Weekly, the OCS also ships roughly the same amount of product 1,100 kg of cannabis is transported to Ontario’s retailers daily.
One First Nations community in Saskatchewan has recently opened a retail store under their own local regulations.
Miyo Askiy Cannabis Co is located within the Piapot First Nations, which is a Cree First Nation in southern Saskatchewan near Regina. They had their grand opening on Wednesday, July 19. The Piapot First Nations own the building itself, which operates under Piapot cannabis regulations.
Saskatchewan recently passed legislation that said First Nations in the province would no longer need to get a permit from the Saskatchewan Liquor and Gaming Authority (SLGA) in order to operate on-reserve cannabis stores. The SLGA is the provincial agency regulating the liquor and cannabis industries.
The provincial rule change also gives more enforcement authority to local First Nations, something some community leaders have called for.
First Nations assert their jurisdiction and maintain community safety by creating laws under the Indian Act, land codes, and other federal legislation, but there have been difficulties in enforcing these laws in the courts.
Darcy Bear, Chief of the Whitecap Dakota First Nation
However, the province says First Nations cannabis rules must essentially mirror provincial rules and will still require products to be purchased through federally-regulated producers. Not all First Nations leaders agree—Piapot First Nations leadership among them.
In a press release shared in June, the Nation said the business is licensed to operate under the Piapot First Nation Cannabis Act and will comply with the Piapot First Nation Cannabis Regulations, which it says will “meet or exceed the provincial and federal regulations with respect to cannabis.”
“The Piapot Nation is committed to exercising its sovereign right to pursue economic opportunities that benefit the Nation and its membership.” Miyo Askiy says it will give back 15 percent of its proceeds to the community.
Images shared by the store online display an assortment of cannabis flower, extracts and edibles, with prices ranging from $5-15 a gram for dried flower, shatter around $17-20 a gram, and commercially-packaged edibles commonly found in the illicit market.
Images of products for sale at Miyo Askiy Cannabis Co.
Peter Flaman, a business adviser with Piapot First Nation, told local media the store would be able to distinguish itself from numerous other retailers in the Regina area by “running a lot cheaper store.”
A representative with Piapot First Nations was not immediately available for comment.
A handful of other First Nations communities in the province have opened their own stores under similar circumstances. Another Cree First Nation in Saskatchewan located near Regina, the Peepeekisis Cree Nation, created its own cannabis regulations in 2019 and opened its first cannabis store in 2020.
The Pheasant Rump Nakota First Nation has published its own cannabis regulations as well, opening a retail store in 2019 about 2 hours southeast of Regina. At that time, Pheasant Rump Chief Ira McArthur told the Regina Leader Post that they purchase products “from a supplier that grows it in quality control conditions, and the product is tested by one of the same laboratories that Health Canada uses.” The store advertises flower, CBD and THC tinctures, capsules, concentrates, edibles, and topicals.
The Muscowpetung First Nation took a similar approach, opening its own store in 2018 based on its own cannabis regulations. The provincial government asked the First Nation to close the store, with the Nation, in turn, filing a statement of claim in the Court of Queen’s Bench in 2019. The claim sought a declaration that the Nation has an inherent right to self-government and that it has the power to sell and regulate cannabis under the constitutional rights of Indigenous people in Canada.
That store, the Mino-Maskihki, is currently listed online as being closed.
While some First Nations in the province (and across Canada) have taken a more sovereign approach to their cannabis regulations, some have made efforts to align their own laws with provincial and/or federal regulations.
Darcy Bear, the Chief of the Whitecap Dakota First Nation near Saskatoon, praised Saskatcehwan’s changes to First Nations cannabis rules, saying they will give them the ability to better enforce the law in their communities.
“First Nations assert their jurisdiction and maintain community safety by creating laws under the Indian Act, land codes, and other federal legislation, but there have been difficulties in enforcing these laws in the courts,” says Bear. “Through our work with the provincial government, the amendments to SOPA will give us access to prosecution and enforcement tools that will give force to our laws in areas such as environmental protection and community safety, and strengthen the place of our laws alongside federal and provincial law.”
Not everyone is happy with the possible changes, though. Chief Derek Sunshine of the Fishing Lake First Nation told CBC last year that he had no intention of pursuing an agreement with the province or SLGA.
“They have no say in my nation,” he said, noting that the band created its own licensing system, and its store operates under that authority. “They have no right to say to my nation that we need a licence.” Numerous First Nation communities in the province and across Canada have opened their own cannabis stores, operating outside provincial and federal regulations, with at least eight communities creating their own bylaws.
The owner of a BC cannabis company says his Agassiz facility was robbed recently, with several men in a truck getting away with 120 kg of cannabis.
Dylan King, the owner of Pistol and Paris, a BC-based cannabis processor and brand, says police were called to his small micro processing facility after several individuals broke in early in the morning on July 18.
Around 4:30 a.m., says King, several people drove their truck through two gates at the site before cutting into a shipping container where the cannabis was being stored. Police who responded to the call briefly pursued the truck as it was leaving the facility but were unable to immediately catch them, he adds.
“It’s a big loss, financially, unfortunately,” says King. ”We’ve got a lot of demand for these products and now we’re officially out of stock.
One of his biggest concerns is trying to get back on his feet to ensure his 13 employees still have work.
“It’s really a big blow. Things are already challenging enough with the way the industry is with price compressions and all these other things. There are so many guys going out of business, it’s just so difficult to operate. So a huge hit like this is deflating. I think of all the staff and I really want to keep everyone working.”
The individuals made off with several boxes of Pistol and Paris’ Orange Tings, Blackberry Breath, Notorious, and Pink Goo which were waiting to be packaged into pre-rolls and 7-gram SKUs. An employee who was on site at the time of the robbery said the individuals were driving a black truck.
King says he’s still holding out hope that police are able to receive the stolen product, but says the robbery was a wake-up call for him, especially because he didn’t have insurance on the product itself—something he didn’t think he needed in the legal industry. He hopes others use his experience as a cautionary tale.
“Just because you’re legal don’t think that these rippers are going to stay away. These rippers don’t seem to care whether you’re legal or not. I wish I had insurance to be able to help with some of this loss. I’m definitely going to be changing the way I run my business.”
StratCann will provide more details on this story as they emerge.
One of the two gates broken down to enter the site
Empty boxes outside of the shipping container where cannabis was stored
In Canada, each province and territory has a unique cannabis distribution model. Though by no means perfect, many retailers and LPs rank Saskatchewan and Manitoba among the best.
“In Saskatchewan, an LP can sell directly to a retail store,” says Ian Chadsey, VP Corporate Affairs at Delta 9 Cannabis, an LP with retail operations in the two provinces. “Manitoba also doesn’t take possession of the cannabis—there is no warehouse —but the government will take orders through its portal and add excise fees. We then deliver directly.”
In both examples, retailers have a lot of leeway in terms of ordering what they want.
Saskatchewan, for example, allows for direct relationships with LPs. Retailers can have net terms for all orders, which is reflective of a true B2B model, and has a positive impact on cash flow. There is a wholesaling option that allows for next-day delivery and quick adjustments, with credit for defective products. Emergency orders are also possible.
“This can all be done in a timely manner, direct with producers,” says Kerri Michell, president of Farmer Jane Cannabis, which has 14 retail stores in Saskatchewan and Manitoba. “In Saskatchewan, there’s a large product selection and variety, with LPs typically giving price reductions on aged inventory, especially products that can’t be sent to the larger government wholesalers. The province is almost at the point where a retailer could use a single wholesaler for 90-95% of product if they wished.”
By comparison, Manitoba offers simplified purchasing using the MBLL portal. This is a one-stop shop for all cannabis, which ensures accuracy for orders.
“In Manitoba, a retailer can set weekly payments and credits,” says Michell. “The province can also have a larger database of SKUs than in other provinces because the products aren’t physically held in a Manitoba warehouse.”
The good and the bad
In Saskatchewan, independent distributors help LPs to get their product to market. Some of these are owned by or have special relationships with large LPs or retail chains and have been criticized for not having smaller retailers’ interests at heart.
“These distribution companies make money on the backs of the struggling retailers for their own benefit, unlike the cooperative model,” says RJ Fafard, Director of Retail Operations at the Pot Shack, which has four retail locations in Saskatchewan. “From my perspective, the Weed Pool cooperative is the best option. It offers a two-day order turnaround, free delivery, and a low percentage markup on products, given that they’re only covering costs. There’s a large craft selection, and immediate invoicing.”
However, distributors in Saskatchewan, no matter their business model, will sometimes demand exclusivity, which can limit opportunity.
“The Weed Pool is a very good partner for us, but we can only sell to the stores they sell to in Saskatchewan,” says Alex Kratz, CEO of Western Cannabis, a family-run LP in Saskatchewan. “However, it’s normal and understandable for a distributor to want some exclusivity. In return, we get excellent support.”
Many LPs will have an exclusive contract with one distributor, and that’s it, which can place limits on market access. If multiple distributors are used, there’s a risk that an LP won’t receive favoured treatment. By comparison, in Manitoba every store has an equal chance to purchase any product they want.
“I’m a fan of how Manitoba does it,” says Kratz. “It is very open, with one distribution model that allows for all stores to have an equal chance to buy our product. We can then support the market in various ways, including popups and swag for independent stores. Every independent store in Manitoba has bought our product—whereas I can’t say the same for Saskatchewan.”
That said, dealing with a distributor in Saskatchewan has its advantages.
“The Weed Pool ordering system is one of the best,” says Kratz. “It’s so smooth—that’s definitely one of the perks. Order, buy, ship—it’s fast and simple.”
Manitoba also has its challenges, particularly on the retail side.
“We pay upfront for products that may not hit our stores for four to six weeks,” says Michell from Farmer Jane. “We’ve seen improvement overall, but there’s little recourse for slow delivery timelines from LPs. There have been several instances of extreme delivery delays.”
Many LPS also don’t like to have to ship to every store, regardless of volumes, which can reduce the interest in Manitoba as a market.
“This can result in worse service and higher prices, with LPs preferring to do business in other provinces,” says Michell. “Although a store in Manitoba can order weekly, many producers still ship bi-weekly. This means multiple orders from the same PO can arrive at once, causing confusion with packing slips. Also, listed products sometimes aren’t in supply with producers, and when this happens, there’s no ability to sub a different product.”
Scaling what works
Given the diverse views of market participants, there are differing ideas on what would improve the distribution systems in the two provinces—if anything. For some, minimal government involvement, as in Saskatchewan, is by far the best possible route.
“The Saskatchewan cannabis market works the best for us, as we can sell directly to the retail store,” says Chadsey from Delta 9 Cannabis. “It’s similar to the cigarette industry that supplies products directly to the retail outlet. There’s no need for the provincial government to be the middle person in the supply chain.”
However, Saskatchewan is a relatively small market—its population is only 1.2 million—which may make a hands-off approach more viable. Applying this laissez-faire model to larger markets could create complications.
“The Saskatchewan model imposes additional shipping costs on LPs, so the impact would be amplified in a larger market,” says Michell. “However, there are lucrative offsets that may balance out those expenses.”
It’s also uncertain how private distributors would scale their operations. Could exclusivity be enforced in multiple jurisdictions, and would that be problematic? As it stands, within the present model in Saskatchewan, Kratz says that Western Cannabis’s stance has been to sell to the Weed Pool, and to explore other markets.
“As a local LP, it would be nice to be in every city in Saskatchewan that has a cannabis store, but that’s impossible with the current model,” he says. “Thankfully, both Saskatchewan and Manitoba made it so that we could survive through our first couple of years as an LP. They’ve supported us from the beginning.”
In addition, Organigram blames lower sales on THC inflation and no longer being able to sell “ingestible extracts,” and StratCann profiled BC micro Kush Mountain.
In other news…
Saint Andrews, a town in New Brunswick, rejected Cannabis NB’s efforts to open a mobile retail store. The town council said a mobile cannabis store was a step too far, with one councillor worrying about the town’s image. *
“I just see a big CBC,” said councillor Lee Heenan referring to a potential news headline, according to the CBC. “Saint Andrews, first town to have mobile cannabis truck. I don’t know if that’s the publicity that we’d like to see.”
Greenway Greenhouse Cannabis Corporation, a cannabis nursery and processor in Ontario, entered into a debt settlement agreement with a marketing services provider, issuing 964,285 common shares at a deemed issuance price per share of $0.28 and a cash payment of $35,100.
In similar cannabis stock news, Canopy Growthsigned agreements with lenders to reduce its debt by $437 million over the next six months, weeks after the Canadian firm raised doubts about its ability to continue as a going concern. The company’s total debt outstanding as of March 31, 2023, was $1.3 billion.
Saskatchewan RCMP say they are seeing an increase in cannabis-impaired driving at check stops, something RCMP Traffic Services Unit Cpl. Brian Ferguson attributes it to officers becoming more adept at “recognizing signs and symptoms of someone utilizing THC products and, as well, we do have some extra tools now that are available to us in more quantities.”
Health Canada’s Forward Regulatory Plan 2023-2025 includes references to proposing amendments to the Cannabis Regulations relating to Flavours in Cannabis Extracts. This is an extension of previous messaging from Health Canada on the subject going back to 2021. The regulator has yet to provide any new details on specifics or an expected timeline.
A new Indigenous-owned cannabis storeopened in Stratford, Ontario, eschewing provincial and federal cannabis regulations, with the owner arguing that he is within the Charter of Rights to operate the store on traditional land. In a statement, Stratford police said they “recognize the complexities of the issue and want to ensure that all lawful rights are taken into consideration.”
Retail cannabis chain Trees, with about a dozen locations in Ontario and BC, announced that it has entered into a business combination agreement with 420 Investments Ltd., which operates FOUR20, a cannabis retail chain in Alberta with about 40 locations. The agreement says that 420 will undertake a reverse takeover of Trees. The move came just as BC announced they are considering lifting the 8-store cap for cannabis retailers in the province.
Freida Butcher, Chair of the Board at 420, said they “are very proud of the performance of FOUR20 to not only survive the pandemic but to have grown from 14 stores in 2020 to our current 40 stores. We are very pleased to have found another retailer in Trees with the same values and with stores that will expand our brand in Ontario and allow us to take our first steps into BC.
CBC originally reported a “pop up” store had previously operated in Saint Andrews. This portion of CBC’s article has been edited to remove this section and as such we have removed it fro our recap. The store was also proposed as a Cannabis NB store, not a private store.
The BC Government plans on making several changes to provincial cannabis rules, which it says will assist the cannabis industry and cannabis tourism in BC.
As part of a broader industry outreach initiative, BC’s Liquor and Cannabis Regulation Branch (LCRB) is seeking input from the cannabis industry and related stakeholders regarding plans to eliminate provincial constraints on promoting locations for cannabis consumption and to allowing cannabis consumption on patios, with the latter limited to areas where smoking and vaping are already permitted under provincial regulations.
Currently, BC does not allow anyone to smoke or vape cannabis on a patio, even in places where they can smoke tobacco or vape non-cannabis products. Provincial law also does not allow anyone to promote a place at which to consume cannabis. Municipalities and local First Nations may also have their own restrictions in place that would not be affected by any provincial rule changes.
The proposed changes would not allow for in-store consumption, but are a step towards creating allowances that will allow for the formal marketing of spaces and events that can more directly cater to consumption.
BC has announced that this feedback exercise, available to stakeholders until August 11, is a crucial step in the gradual development of cannabis hospitality and tourism “experiences” in the province.
BC has been increasingly focussing on the issue of consumption spaces and cannabis tourism, launching a province-wide engagement paper last year. The What We Heard report from that engagement process was then released in January 2023. The report showed significant public support for consumption spaces, balanced with concerns from law enforcement and public health agencies.
Industry response is mixed
According to Jaclynn Pehota, the executive director of the Retail Cannabis Council of BC (RCCBC), the organization’s members are supportive of the proposed changes regarding cannabis consumption locations in BC. However, Pehota highlights that the members are primarily focused on several other industry concerns.
“RCCBC’s member retailers are pleased to see the LCRB opening consultation on restrictions around consuming cannabis in outdoor spaces. RCCBC’s members are broadly supportive of leaving decisions specifically related to the appropriateness of cannabis consumption on patios to local governments. It seems reasonable that citizens and their representatives are best equipped to decide how to integrate outdoor cannabis consumption in their communities.”
“Membership welcomes the LCRB regularly revisiting BC’s regulatory framework for cannabis. Regular policy review ensures BC’s framework remains in step with the reality of today’s sector,” she added.
“Encouraging the government to undertake a review of the wholesale fee structure has been a focus of our advocacy since the launch of the Direct Delivery program in August 2022.
Jaclynn Pehota, Retail Cannabis Council of BC
In regard to raising the eight-store cap for cannabis retailers, Pehota says the RCCBC is cautiously supportive as long as the government takes a careful approach that can “safeguard the diverse community of small businesses that has been fostered in BC’s cannabis sector” and avoid the kind of downward price pressure seen in provinces that have a greater number of large discount chain stores.
Still, Pehota says the priority for RCCBC’s members is reducing the LDB’s 15 percent wholesale markup, especially for sales made through the direct delivery program that allows small-scale BC producers to ship products directly to retailers. The LDB charges this “proprietary fee” on products that go through its centralized distribution centre in the Lower Mainland, as well as on products that producers sell directly to retailers, without ever making their way through the central warehouse.
Instead, RCCBC’s recommendation is a reduction to 2.5 percent or lower, which Pehota says would be more comparable to the markup for craft beer
Jeff Curtis, the owner of Boro and Beyond in BC, which offers among its services, dab bars for cannabis pop-up events in the province, says the proposed changes to allow the promotion of locations for cannabis consumption and to allow cannabis consumption on patios, while modest, are a big first step towards what he sees as a more compressive approach to consumption spaces.
“Besides being able to mitigate public nuisance impacts, consumption spaces represent a place where government can concentrate marketing efforts to educate about overconsumption and where trained professionals can give first experiences and education to reduce adverse reactions.
“Aside from these, having licensable, insurable establishments and destinations to promote 19+ events would be huge. We’ve seen how big events and festivals bring in local revenue and generate jobs, and opening up cannabis would be no different.”
15 Percent Direct Delivery fee an industry priority
While many producers and retailers say they are very happy with the direction of the Direct Delivery program, the fact producers still have to pay this fee while also taking on the extra work of distribution has made it less than ideal for others.
“Our member retailers and our associate member producers have delivered the message loud and clear that reducing the 15 percent markup, especially in the context of Direct Delivery, is an advocacy priority,” Pehota told StratCann. “Encouraging the government to undertake a review of the wholesale fee structure has been a focus of our advocacy since the launch of the Direct Delivery program in August 2022.
“A lower whole markup can’t come soon enough for both retailers and producers,” she adds.
The retail organization instead recommends fees comparable to what the LDB charges for craft beer producers to sell directly to retailers. In a memo the organization sent out to members earlier this month, Pehota said they hope to see changes to the fee structure sometime in 2024.
“RCCBC continues to deliver the message that strong sectoral supports, like a reduction in wholesale fees, are desperately needed in BC as licence holders continue to fight to win market share from unregulated operators.”
The priority is saving BC craft cannabis. And in order to do so, this government has to make a substantial reduction or elimination of the wholesale markup on direct delivery.
Ehren Richards, Sunrise Cannabis
BC’s Ministry of Public Safety and Solicitor General, which oversees the cannabis file in the province, says it’s committed to reviewing the direct delivery program and is expected to “include consideration of the 15 percent markup that is applied to products registered for the direct delivery program and the program’s eligibility criteria.”
Some Vancouver retailers StratCann spoke with were somewhat more candid about their concerns over BCs focus on lifting the store cap rather than addressing the direct delivery fees.
Ehren Richardson, the co-owner of Sunrise Cannabis on Kingsway in Vancouver, says he doesn’t see the changes in consumption as particularly significant, and doesn’t understand the call to lift the eight-store cap. Instead, he says the removal of the 15 percent fee that producers must pay to sell into the direct delivery program would benefit retailers like him because it would allow them to carry a greater variety of local products at more competitive prices.
“I think that issue [the eight-store cap] is probably among the lowest priority issues facing the cannabis industry right now,” says Richardson. “The priority is saving BC craft cannabis. And in order to do so, this government has to make a substantial reduction or elimination of the wholesale markup on direct delivery. That’s the only thing that’s going to save us, not lifting the eight-store cap.”.
“There seems to be a disconnect between what the industry needs and what the BC government is doing”
Feven Berhane, KushKlub Canada
Grant Pan, General Manager at La Canapa, with three locations in Vancouver, shares a similar sentiment. While the BC government says it wants to support BC’s small craft growers, Pan is skeptical.
“It seems all their policy changes just benefit the big players. We’re a small store with three locations, and we don’t need the cap lifted. I think that’s just the big chains. That doesn’t help the BC craft industry. I don’t think the government really wants to help the little guys.”
However, Jeff Guignard, Executive Director at Alliance of Beverage Licensees (ABLE BC), which recently launched its own cannabis division to represent industry concerns, says he understands the concerns some retailers have but sees the change, if it happens, being modest in comparison to other provinces.
“I don’t think anybody wants to see a massive, single monopoly chain controlling the retail industry,” Guignard tells StratCann,“ but there are economies of scale that come from scaling up. I’m not suggesting we necessarily remove the cap. I don’t think industry so far says they support that. But there’s definitely some interest in increasing it, doubling it or increasing it to twelve, something like that.”
Feven Berhane, the co-founder of retail store KushKlub Canada, with a handful of locations in BC, Manitoba, and Ontario, says she is also unsure of why BC is prioritizing raising the store cap rather than prioritizing changing the 15 percent fee.
“There seems to be a disconnect between what the industry needs and what the BC government is doing,” says Bernhane. “If they help the micros they help everybody. But I don’t think the BC government understands that. That is what will help independent retailers. Even lowering that fee by a few points would make a big difference.”
Tyson and Justine Wall run the day-to-day operations at Kush Mountain Craft Cannabis, a micro cultivator and processor located about 30 minutes west of Prince George, British Columbia.
The husband and wife team, who were licensed for their indoor grow in January, recently brought their first crop down and are currently sending it to BC retailers through the direct delivery program.
The two-person team covers the daily operations, with Tyson acting as the Master Grower and Justine as the QA. Tyson comes from a long history of cannabis, having grown under the MMAR and ACMPR before transitioning to the recreational market a few years ago. A third partner, and co-founder Chad Chisan, currently works off-site.
Right now our focus is on building our brand and getting great product out there. This allows us to build slowly without spending beyond our budget.
Tyson says they started with a micro licence because it was the easiest and most affordable, but they have plans to expand over time into a standard, depending on the direction of the market.
“We decided to start with the micro licence because we’re privately funded, but as we expand we can put more rooms in if we want to,” he explains.
Kush Mountain is taking that step-by-step process even with their micro licence, with only about 1,200 sq ft of canopy space of the 2,152 allowed under a micro cultivation licence.
“We just want to go slowly, one room at a time,” he adds. “Right now our focus is on building our brand and getting great product out there. This allows us to build slowly without spending beyond our budget. As we can prove this out and bring in more revenue, then we can add another growing room.”
Tyson Wall inside Kush Mountain Cannabis
Tyson says he uses a stadium-style grow and all of Kush Mountain’s cannabis is hang-dried and hand trimmed. They are also focussing their first crops on sales through BC’s direct delivery program, which allows producers to sell directly to retailers, something he says will help ensure they are getting a higher quality, fresher product to retailers much faster than if they went through BC’s central delivery system hours away in the Lower Mainland.
The small team will be hand delivering to a handful of local Prince George retailers, and utilizing a delivery service for retailers outside their immediate area.
Since they have their own processing licence, Kush Mountain is able to package all their own flower, too, which further helps them maintain their brand, says Justine. Rather than being at the mercy of an outside processor who can dictate their own prices, their “few hundred square feet” of processing space allows them to do packaged runs of dried flower and pre-rolls, all in-house.
“It’s definitely not easy to do, but I think a lot of cultivators can do that if they have the right team and can take the time to understand the regulations. By being our own processor, we can really bring what we want to market.
“And brand recognition is so important,” she adds. “You can work so hard to bring something to market, so of course you want to control that and make sure it’s your brand and something you can stand by. We really wanted people to know who we are and how much care goes into our product.”
Although they are also looking at selling into other provinces, the focus for their first few crops will be in BC as they try and get their brand message out to the region’s cannabis stores.
“What we’re really focussing on is building relationships with retailers, bringing them in for tours—anything we can do to stand out and educate retailers so we’re not just another bag on the shelf.”
Featured image of Tyson and Justine Wall, courtesy of Kush Mountain
New Brunswick-based cannabis producer Organigram says its net revenue and margins decreased in the third quarter of 2023 due to the declining price of cannabis flower.
The company also blamed a higher cost of sales, THC inflation, and Health Canada no longer allowing the sale of “ingestible extracts.”
Organigram’s cost of sales also increased to $32.3 million, from $29.4 million in the third quarter of the previous year, an increase of 10 percent.
The cannabis producer blames lower sales of its cannabis flower on “the increasingly common practice of THC-inflation” by “some licensed producers” which it says are taking part in lab shopping and selective sampling.
Citing data from High Tide’s “Cabannalytics” data program, Organigram says that the total number of SKUs ina large national retail chain of cannabis stores that were labelled as having 30% THC or higher increased ten-fold since last year, having a “profound impact” on the sales of their own cannabis flower.
Derrick West, Organigram’s Chief Financial Officer, says the company is working to increase their own THC levels to meet market demand.
“Our results for the third quarter of Fiscal 2023 were impacted by a reduction in sales in two of our higher margin categories of international sales and ingestible extracts,” said West in a company press release.
“Further, to address the impact of THC inflation, which forced us to adjust our pricing to remain competitive, we intentionally accelerated adjustments to growing conditions to increase whole flower THC levels to meet consumer demand. This temporarily reduced our flower yields, negatively impacting our margins on all flower categories.”
Despite these concerns, Organigram’s recreational net revenue was $92.5 million for the nine months ended May 31, 2023, an increase of $8 million over the same prior-year period. International sales for the first nine months of fiscal 2023 were also up considerably, nearly doubling from $9.5 million in 2022 to $18.4 million.
Health Canada is launching a new data-gathering program on cannabis markets in Canada that will include sampling and testing of both legal and illegal products currently in the market.
The federal agency says the new cannabis data-gathering program will allow it to “proactively collect information on the legal and illicit cannabis markets in Canada,” focusing on providing Canadians with more accurate info about cannabis health and safety risks.
The federal government has gathered data on the legal and illegal cannabis markets for several years. This approach represents a new step towards more proactive data gathering on products in the market, both licit and illicit.
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.
The lab will test for THC and CBD levels, “specific analytes of interest,” and chemical or microbiological contaminants such as pesticides, moulds, etc.
The agency will then publish reports on their findings, removing any references to product, brand or license holder names. However, if the program identifies deficiencies with any legal products they analyze, they will “take appropriate compliance and enforcement actions to mitigate health and safety risks if necessary.”
Health Canada says the program will also support their “efforts to ensure that legal cannabis products available on the Canadian market meet the requirements set out in the act and the regulations.”
Health Canada has also begun work on guidance for licensees on cannabis products containing intoxicating cannabinoids other than delta-9-THC, and a consumer information sheet on intoxicating cannabinoids other than delta-9-THC.
Several provinces have released testing results of illicit products shared via law enforcement actions. 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 illicit products.
The industry has also been calling on greater oversight of THC levels.
The C-45 Quality Association, an industry group representing quality assurance professionals and others working in the cannabis industry in Canada, said the announcement is a welcome one.
“The C-45 Quality Association welcomes Health Canada’s new initiate to illuminate the cannabis industry through its new Cannabis Data Gathering Program,” said Tom Ulanowski, Board Chair for C-45. “This proactive approach will improve transparency in product composition for both legal and illicit cannabis products, assuring Canadians of the quality-controlled supply of cannabis in the regulated market. The accountability this program instils will reinforce trust in the Canadian legal cannabis industry, while the insights gathered will help us better understand and address any potential health and safety risks associated with cannabis consumption, particularly when it comes to illicit cannabis products. This is a substantial step towards a more informed and responsible cannabis marketplace in Canada.”
The Cannabis Made Clear campaign, first launched in 2022, is part of the provincial cannabis agency’s mandate to promote responsible consumption of cannabis, and includes marketing campaigns across the province targeting consumers, non-consumers, residents and visitors alike.
The content specifically was designed to be accessible and appropriate for young people, adults, older folks, so I think it’s a great opportunity for the legal sector to demonstrate that we are prioritizing education and we take our mandate around social responsibility very seriously.
Dr. Jenna Valleriani, Senior Manager of Social Responsibility
As part of this new push, the OCS says Ontarians can expect to encounter Cannabis Made Clear campaign motion graphics, broadcast spots, digital billboards, and audio segments in some of their most frequented online and public spaces, including Yonge and Dundas Square in Toronto, as well as sports broadcasts like a recent MLB All-Star Game.
Dr. Jenna Valleriani, senior manager of social responsibility at the OCS, says the campaign is part of the Crown agency’s mandate for social responsibility.
“As a key pillar of the OCS’s social responsibility mandate, we’re committed to advancing cannabis knowledge and promoting responsible consumption, while also ensuring Ontarians have access to the information they need through Cannabis Made Clear,” she said in an OCS press release. “The more you know, the better positioned you are to make the most informed decisions about cannabis—and this campaign helps to share that information.”
“The content specifically was designed to be accessible and appropriate for young people, adults, older folks, so I think it’s a great opportunity for the legal sector to demonstrate that we are prioritizing education, and we take our mandate around social responsibility very seriously,” she added in a follow-up conversation with StratCann.
The OCS also operates the Cannabis Made Clear online education hub to provide access to “unbiased, fact-based, and current resources” to help ensure cannabis consumers can make informed, responsible choices.
Valleriani explains that the OCS is also launching its Summer Guide to Legal Cannabis, an online resource that explains everything anyone consuming, purchasing, or even just travelling with legal cannabis in Ontario will need to know to stay nice and legal.
She says retailers, especially those near the US border that often see American tourists, have found it very useful.
“It’s just an easy, quick reference guide. It explains how to find the authorized store crest, what’s legal, the different products, possession limits, and everything that helps ensure that folks aren’t breaking the law. But it also that they’re enjoying their experiences and can take advantage of all the great things we have to offer here in the province.”
OCS president and CEO David Lobo encourages consumers and industry alike to help promote the campaign and encourage responsible, informed cannabis choices.
“Five years into legalization in Canada, combatting misinformation and presenting the facts about cannabis remains critically important to enabling a vibrant cannabis marketplace,” says Lobo. “Thank you in advance to industry partners, cannabis consumers, and the people of Ontario for engaging with the Cannabis Made Clear online education hub and helping to clear up confusion by sharing these evidence-backed resources.”
Overseeing the warehousing and distribution of cannabis in Canada’s largest province makes the OCS the largest legal, centralized wholesale cannabis organization in the world.
In the most recent annual figures, Ontario sold more than $1.5 billion worth of cannabis in fiscal year 2021.
A cannabis producer in BC is trying to let retailers know they are not affiliated with the BC government.
BC Cannabis Inc. is an Indigenous-owned micro cultivator based in Sooke, BC, licensed in April 2021.
Albert Eppinga, the company’s owner, says he and his team were excited to launch their first products recently in BC. However, they have received feedback that some cannabis retailers are under the impression the company is connected to the BC government.
Because of pent-up animosity some retailers have towards both the BC LDB, which handles distribution in the province, and the government-run BC Cannabis Stores, Eppinga says some retailers have been hesitant to buy their new BC Cannabis Inc products.
“What we were finding is quite interesting,” explains Eppinga. They think BC Cannabis Inc is a brand from the BC Cannabis Liquor Board or the BC Cannabis Store. Since some stores are opposed to the BC LDB and BC Cannabis Store, they don’t want to buy our products because they think we’re a part of the government.”
As an independent, Indigenous-owned cannabis grower in BC, he says he has been working overtime to ensure retailers know more about his company and who they are—and that the BC government does not own them.
“It’s becoming a bit of a controversy. We were all excited to get into the BC LDB, and now we’re finding that people don’t want to purchase from central delivery, and they think we’re a part of the government.”
While some retailers might not be familiar with the brand, two StratCann spoke with said they not only know it, they have gone out of their way to support it because of their appreciation for Eppinga and his unique, small-scale operation.
“I love Albert’s weed,” says Mike Babins of Evergreen Cannabis in Vancouver. “I never thought about the name issue. I really want his company to succeed!”
Andrea Dobbs, at Village Bloomery, also in Vancouver, says she’s been happy to carry the product because she’s familiar with it. However, she can see why some retailers might be confused by the somewhat corporate-sounding name.
“I think Albert is great, he’s a great grower, and I think it would be great if he had a brand that better reflected his expertise, his knowledge, and his personality.”
Laina Yates, who works as the western sales manager at Mercari Agency Limited, which markets cannabis products including those from BC Cannabis Inc., says she can understand the confusion, and agrees that producers need to ensure their brand conveys the unique aspects of their personality.
“Your name really needs to reflect your brand and personality,” says Yates, “and we can see here how that can be very important.”
A man connected to a recently-licensed micro cultivator in Manitoba is part of an ongoing case relating to the illicit production, sale, and distribution of cannabis.
As part of the proceedings, the Manitoba government is also seeking to seize three properties it says are connected to illicit cannabis grows operated by the owner of a micro cultivation facility, including one that is also home to the micro cultivator licensed as Elevated Prairies.
Elevated Prairies was licensed for cultivation by Health Canada in February, 2023.
The three properties in question were raided by the RCMP in June, 2023, with RCMP seizing around 2,000 cannabis plants, along with growing equipment and other items that police allege are proceeds of crime.
Court records show the RCMP first became aware that James Robert McGirr, of Springfield, Manitoba— one of the owners of Elevated Prairies—was an alleged member of a drug trafficking network being invested under the name Project Divergent. This led to an investigation of McGirr and the three properties where cannabis was either grown, stored, or sold.
McGirr told police he grew up to 150 kg of cannabis a month and that he smuggles a cannabis extract into and out of the country via barrels of honey or maple syrup.
Court records also show that during an investigation into McGirr’s activities, he told agents he grows up to 150 kg of cannabis a month and that he smuggles a cannabis extract into and out of the country via barrels of honey or maple syrup. As part of the investigation, RCMP say they purchased 40 pounds of cannabis from McGirr for $40,000.
Two of the properties the province wants to seize had operated under medical production licences from 2021-2022. Court records don’t distinguish if these were personal or designated production licences.
Court records also show that Health Canada had initially denied a security clearance to McGirr “on the basis that he has current family members with links to organized crime, specifically drug trafficking activities”. McGirr was to hold the positions of RPIC, head of security, master grower, director and officer.
Elevated Prairies refiled their application after removing McGirr as an officer and was granted their micro cultivation licence about nine months later.
McGirr is due in court on his criminal charges in July.
The Manitoba government argues that the properties in question are connected to the proceeds of crime in part due to financial records showing McGirr declaring less than $100,000 in income from 2015-2019, despite depositing hundreds of thousands of dollars in cash into several accounts over the same time period. McGrirr was also collecting funds from the Federal Government through CERB payments.
McGirr, Elevated Prairies Inc. and the company’s director, 6440780 Manitoba Ltd., and two credit unions that issued mortgages on the properties were also named as defendants in the criminal property forfeiture lawsuit filed by the Manitoba government.
In other news, CBC News looked at the AGCO’s consideration of an amendment to remove the requirement for window coverings on cannabis stores, and spoke with Elisa Keay, of K’s Pot Shop on Queen Street East in Toronto, and Omar Khan, chief communications and public affairs officer with High Tide Inc. Khan highlighted the safety concerns retailers have resulting from passers-by being unable to see inside the store, in cases of robberies.
Meanwhile, Toronto Policearrested a man this week for a violent cannabis store robbery on Wednesday, June 21 in the Dundas Street West and Burnhamthorpe Road area. Police allege that the armed man attacked an employee to get access to cash and cannabis.
The Canada Border Services Agencyreminded travellers coming to Canada, along with several other pieces of advice, not to bring cannabis into the country. They also reminded travellers not to bring sand to the beach.
Following Canopy’s reported $648-million Q4 loss last week, one BC investor launched a class action lawsuit, saying his shares dropped in value when the company admitted to errors in its financial reporting.
The organizer of an annual cannabis protest on Canada Day in Vancouver said he’s not holding the event this year due to a lack of interest. VIA reports that the event organizer had been selling vendors non-refundable spaces.
BC retail chain Trees released its annual financial results for the fifteen-month period ended March 31, 2023. The Company currently has 14 Trees branded storefronts in Canada: nine in Ontario and five in BC.
Eric Costen was appointed Associate Deputy Minister of Health on June 26, 2023. Costen has worked on the cannabis file in Ottawa almost constantly since 2013.
The Cannabis Regulators Association (CANNRA), a non-partisan, nonprofit association of government officials involved in cannabis regulation from more than 45 US states, opened an international, non-voting membership category this year, and has welcomed Health Canada as its first international member.
Tantalus Labs, a BC-based cannabis grower first licensed in 2017, has announced it’s closing up shop.
Dan Sutton, the company founder, announced today that Tantalus Labs LTD has filed a Notice of Intent for Restructuring (NOI) in Canadian Federal Court.
Sutton says Tantalus is laying off the “substantial majority” of its team, “retaining only a few key employees to navigate the complexity of this restructuring process.” He also says the company seeks to “find a path forward for our brand and winning products to continue to deliver value to customers and distributors nationwide.”
“Despite continued market success by firms like Tantalus, the regulatory and taxation environment is persistently so burdensome that even today, five years into recreational legalization, free cash flow in the Canadian cannabis industry remains systemically challenged,” says Sutton.
“Tantalus is not alone,” he adds, “and in a recent survey of 120 small cannabis cultivators across Canada, 85 percent indicated that they believe their businesses will become insolvent over the next 6 months. No company of any size has been able to consistently demonstrate a sustainable business model given an excise tax rate of 25-45 percent of gross sales.
“This is a difficult day for Tantalus employees, shareholders, and creditors, and our only consolation is the knowledge that each individual on our exceptionally talented team worked tirelessly to persist as long as we could in these challenging conditions.”
Dan Sutton, Tantalus Labs
“This is a difficult day for Tantalus employees, shareholders, and creditors, and our only consolation is the knowledge that each individual on our exceptionally talented team worked tirelessly to persist as long as we could in these challenging conditions.”
Several former employees with the company shared the news on social media, as well.
“I will say that Tantalus was a dream and the people I met and had the pleasure of working with have been some of the biggest blessings!,:” shared Katherine L on Linkedin, a former Ontario sales manager with Tantalus.
The greenhouse cannabis grower, located in BC’s Lower Mainland, operated initially under a medical cannabis licence before expanding into the non-medical recreational market following full legalization in 2018.
With a focus on sun-grown cannabis as a brand, Tantalus was also the recipient of a $2.9 million grant and contribution from the federal government for an expansion of its greenhouse.
Following the rapid expansion of the cannabis market in the lead-up to legalization and the first few years following, the industry has been undergoing some contraction recently, forcing companies to reconfigure business operations to meet current market demands or, in some cases, closing the business entirely.
Last December, MJBiz reported that 40 percent of the CCAA filings in Canada between January and December 22 involved companies operating in the cannabis space, most of them cannabis producers. MJBiz also covered the growing unpaid tax bill from many cannabis producers, including comments from Tantalus CEO and founder Dan Sutton.
Sutton has also been one of the leading voices trying to draw attention to industry challenges regarding high taxation rates and the impact of that on the ability of businesses to maintain profitability.
“It’s no exaggeration to say that, unfortunately, all businesses of any size in the production and processing side of the cannabis industry today….cannot pay (their) own bills and cannot make ends meet,” Sutton said earlier this year.
Canadian cannabis producers work under the same federal laws, but when it comes to provincial jurisdictions, each has a different approach. Some provinces have programs to support local producers, whereas others essentially ignore the industry; some are more protectionist, whereas others have equal access for all providers—no matter their location.
“The Société québécoise du cannabis, or SQDC, is very protectionist,” says Cartel Cutler, Managing Partner at Higher Peaks Agency, a Toronto-based sales and marketing organization that represents over 20 different brands. “With the SQDC, there is no chance of getting a listing unless it comes from a local provider. The SQDC will take product from out of province, but it has to be distributed through an LP in Quebec.”
Quebec is something of an outlier in that other provinces and territories in Canada are nowhere near as protective of local producers. Most, in fact, make little distinction. That said, some have policies that are specifically designed to help the local cannabis industry, such as British Columbia.
“The BC Liquor Distribution Branch (LDB) is committed to supporting local, BC-based producers,” says Kate Bilney, Senior Manager, Communications and Stakeholder Relations at the BC LDB. “The province has implemented two key programs aimed at supporting local producers in the province: the direct delivery program, and the BC Indigenous Cannabis Product (BCICP) program.”
The LDB’s direct delivery program was launched in August 2022, and continues to grow. It helps small-scale producers in BC to enter the market, authorizing them to deliver directly to retailers.
The BCICP, launched in January 2022, aims to highlight cannabis products from BC-based Indigenous producers, and to help consumers identify Indigenous products. The program is available to cannabis producers with at least 51 percent Indigenous ownership and facilities in British Columbia.
Home Grown Pride
The Ontario Cannabis Store (OCS) – the largest centralized wholesaler of legal cannabis in the world – also has programs that support local producers.
“The ‘Ontario-Grown’ curated product list, exclusive to OCS.ca, invites adult consumers to browse and shop a variety of cannabis products grown locally in Ontario,” says Mike Hajmasy, Senior Communications Advisor, Strategic Communications at the OCS. “As well, The OCS’s ‘Craft Cannabis’ designation and product list invites adult consumers to browse and shop craft-designated cannabis products, which are sourced from LPs in Ontario and across the country.”
The OCS, which has a catalogue of 3,000 unique cannabis products and distributes to more than 1,600 brick-and-mortar retail stores across the province, also has a farmgate program to help out local LPs.
“LPs can sell cannabis products to the OCS for sale at the farmgate store without first having to ship that product to the OCS Distribution Centre,” says Hajmasy. “As a result, farmgate stores located at production facilities across Ontario can make their products available directly to adult consumers. There are currently five farmgate stores operating in Ontario.”
Overall, getting products into the OCS is a complex process. When it comes to smaller and local producers, the province’s flowthrough program, which allows retailers to order select products that aren’t stocked by the OCS warehouse, should help with market access.
“The OCS is trying to get to a better place by expanding the flowthrough program,” says Cutler. “Conceptually, it’s a great idea, as it gets products into people’s hands faster. Ultimately, it could replace the product call process, which would be great because right now it’s an onerous and drawn-out process.”
Alberta, which has received some criticism for not supporting local LPs, is making strides in this area, given that 35 of the 147 LPs that the Alberta Gaming, Liquor and Cannabis (AGLC) works with are Alberta-based, and that many of the AGLC’s product listings are made up of Alberta-produced products.
Meanwhile, Saskatchewan and Manitoba, which don’t have a formal product call process or specific programs for local LPs, nonetheless receive praise for their ease of doing business. In Saskatchewan, all LPs ship to one of the approved distributors or directly to retailers. In Manitoba, the Manitoba Liquor & Lotteries Corp (MLLC) coordinates with LPs for direct-to-retail delivery.
“My favourite model is by far Saskatchewan,” says Cutler. “Manitoba as well, because it is easy to get listings and to bring all of the products that you’d like to market.”
Promoting the industry
The cannabis industry in Canada is still dealing with stigma, which some observers claim has resulted in a reluctance to support the sector and indifference to the need for tax reform. At the provincial level, many jurisdictions have been reluctant to promote the industry in the same manner as local wine or craft beer.
“There should be a break for small, local producers, but it has to come at the provincial level,” says Gord Nichol, owner and president of North 40 Cannabis in Nipawin, Saskatchewan. “For example, small craft beer producers in Saskatchewan have successfully lobbied for reduced excise tax. If we were to cut a similar deal for micros, it would really make a difference.”
Nichol is one of the largest employers in his rural municipality, and pays his workers 80% above the living wage. He argues that a break on the excise tax would make a big difference.
“If significant tax breaks were available, we could double our economic output,” he says. “And all of that would go right back into the economy. Sadly, there’s little political interest to do that, perhaps because we are small, or due to ignorance or stigma.”
There are some examples of provinces taking bolder approaches, which suggests that stigma can be overcome. Usually, these programs are promotional, such as in Nova Scotia.
“The best thing about Nova Scotia is the emphasis placed on highlighting local products and producers,” says Cutler. “The Nova Scotia Liquor Corporation (NSLC) stores have dedicated space and signage promoting the ‘Buy Local’ movement that continues to increase in popularity and demand by customers.”
In Ontario, the OCS also helps out with marketing and with sponsorships and grants at industry events. For example, OCS has a new series of written and video spotlights that showcase Ontario-based LPs. There are also ongoing efforts to support grant programs by event organizers that provide Ontario LPs (and retail stores) with access and visibility at industry events.
Clearly, some steps are being taken to support the industry, though cannabis in Canada still doesn’t receive anywhere near the attention or practical support, that is common practice for other economic sectors, with stigma and ignorance being the most likely reasons. Nonetheless, cannabis industry sales continue to increase as production space and headcount plateau, which suggests that now might be a good time for provinces to revisit their policies and find innovative and practical ways to help local producers compete.
In a room located next door to a cannabis store on Yonge Street in downtown Toronto, Lit Research offers producers a way for consumers, store owners, and budtenders to learn about and experience new, up-and-coming cannabis products.
Launched in the fall of 2022, Lit Research bills itself as a hub for the cannabis community, helping cannabis producers and brands to provide a unique, value-added educational experience to anyone looking to learn more about their products.
Al Shefsky, the founder of Lit, as well as the neighbouring business Body and Spirit Cannabis, has been hosting multiple cannabis tasting and sampling events every week at his location just up the street from Dundas Square since first opening.
He’s quick to clarify that Lit Research is not a consumption lounge. The business operates under a federal cannabis research licence that allows for sensory testing of products. Licence holders can conduct organoleptic/sensory testing to evaluate factors such as the taste, touch, sight, and smell of cannabis products with human participants.
A presentation during an event at Lit Research
“The producers come in to educate about who they are, about the product, and then you get a guided tasting opportunity where consumers test cannabis by smoking it. It’s unique. There are no other companies doing it like this to my knowledge. So it’s great for the consumers.”
“Participants value the experience and say it’s a special opportunity for them to see and try new products before and after they reach the market,” he continues, explaining this can then be beneficial for buyers, store owners, and budtenders.
“They also like the idea that their feedback matters. Every participant fills out a Participant Evaluation Form, and then we report that data back to the licensed producer. So they’re feeling empowered.”
In order to get the licence, which he says took about a year, he also had to undertake a significant remodel of the room to be used for research, including installing a high-grade HVAC air exchange system to allow consumers to comfortably smoke or vape products indoors.
Those participating in the study must also fill out information on their experience as a consumer and their thoughts on the products sampled.
Shefsky says Lit Research has held several research sessions every week since opening, with some producers using it as a chance to share products expected to be launched soon in the Ontario market, while others use it as a chance to determine which products they end up bringing to market at all.
“We quickly realized we had more room than we needed and were finding it hard to compete with all the new stores—especially since unlicensed stores continued opening and operating with significant competitive cost advantages in our area. I was looking at all the options, reading the regulations, when we decided a research licence could allow us to create something unique for the community.”
Al Shefsky – Lit Research
The idea for the research centre started as a way to optimize the high rent space occupied by Body and Spirit in the increasingly competitive and saturated retail market in Toronto. Shefsky says his retail store at 361 Yonge St. was the fifth cannabis retailer licensed in Ontario’s second round, following a lottery in 2019 to open the first 50 stores in the province. Body and Spirit opened in May 2020, just as covid restrictions were beginning to come into place, meaning they quickly had to find new ways to stay relevant and economically sustainable.
“We got into the market early,” continues Shefsky,” but we quickly realized we had more room than we needed and were finding it hard to compete with all the new stores especially since unlicensed stores continued opening and operating with significant competitive cost advantages in our area. I was looking at all the options, reading the regulations, when we decided a research licence could allow us to create something unique for the community.”
Anyone over the age of 19 can take part in the sensory testing at Lit Research, although some events are invitation only. Participants are vetted to ensure they understand any potential risks involved. The room itself has a capacity of 48 people. Each table has a vaporizer and various smoking and vaping accessories like grinders and rolling trays, and participants have access to plenty of water as well as games and snacks.
Producers and brands have an opportunity to engage directly with participants, giving not only their brand story but also information about each product or cultivar, and talking points that retailers and producers may be interested in.
Shefsky advises anyone else looking into a similar approach to do their homework beforehand and understand the process, the timelines, as well as the fairly strict parameters around Health Canada’s research licence. Participants cannot be asked, for example, about any medical effects, but can only convey information about sensory attributes such as taste or aroma.
Two and a half years after Yukon issued a recall of jerky due to possible contamination with THC, one man has been found guilty of a single violation of Yukon’s cannabis regulations.
The recall, issued in December 2020, came after several people checked into a local hospital displaying symptoms consistent with cannabis intoxication, despite them all saying they had not consumed cannabis.
The Whitehorse RCMP and Emergency Health Services (EHS) launched an investigation into these reports, finding that the cause of the cannabis intoxication was the consumption of beef jerky from a local company called Off the Hook.
Off the Hook was owned by John Francis Pauch, who was found responsible for the presence of cannabis in the jerky products purchased by dozens of people in at least three provinces. In total, an investigation found thirty-three people, including seven children and two infants, in Yukon, Alberta, and Nova Scotia who reported experiencing symptoms of cannabis intoxication after consuming beef jerky from Off the Hook. Nine people, including one child, visited a hospital emergency department.
The court heard that the investigation led EHS officers to seize 671 bags of jerky from Off the Hook in Whitehorse on December 30, 2020. However, EHS agents left the products in boxes at the business to be picked up the next day. Subsequently, the boxes went missing, and EHS was unable to recover them for testing.
RCMP subsequently seized approximately three hundred unopened bags of Off the Hook beef jerky from seven businesses in Whitehorse. Law enforcement took a random sample of jerky from six stores carrying the products, and all six tested positive for cannabis.
RCMP also seized another twenty-two bags of jerky from individuals and sent twenty for testing. Fourteen of these samples also contained cannabis.
The court heard that John Pauch, his brother Rick Pauch, and adult son Joel Pauch, had plans to begin making cannabis-infused jerky under a federal processing licence.
Joel had been experimenting with recipes for cannabis-infused jerky at home and discussed the idea with his father and uncle. A decision was made to prepare a commercial scale, 25 pound test batch of cannabis jerky at Off the Hook. An employee was tasked with making the batch in early December.
What happened to the boxes of jerky seized by EHC but left on site was undetermined. The judge found the testimony of John Pauch to be “problematic” regarding his explanation of how the infused cannabis made it onto shelves and what happened to the seized products.
In part, this lack of credibility led the judge in the case to find John Pauch guilty of a single count before the Court for the offence contrary to s. 66(1)(a) of the Cannabis Control and Regulation Act.
No sentencing information was yet available as of press time. Yukon’s cannabis regulations call for a fine of not more than $100,000.00 for a first-time offence for such a violation.
The Yukon News reports that he also faces two separate lawsuits filed late last year from people who say they became intoxicated after eating the jerky from his shop.
Retail cannabis sales increased again in April for the second month in a row, following a post-holiday lull in January and February.
Ontario and British Columbia, as well as Alberta and Saskatchewan, helped drive retail cannabis sales up by just over one percent in April compared to March.
Retail cannabis sales in Canada increased by just over $5 million in April compared to the previous month, despite month-over-month declines in sales in the six other provinces. Sales in Yukon were flat, and sales figures from the Northwest Territories and Nunavut were unavailable.
Sales in Canada hit their highest level last December, at $425.9 million, before declining in the post-holiday downturn in January and February. Sales increased again in March to $406.4 million and $411.7 million in April.
Sales across Canada continue to increase year-over-year, although increases in 2023 have been less significant than in previous years. This data correlates with a decrease in new retail stores nationwide and, potentially, consumer saturation among those currently using the legal market.
Retail cannabis sales in Canada since legalization
Atlantic Canada saw the most significant decline in April compared to March, with retail cannabis sales in Newfoundland and Nova Scotia declining by nearly four percent, PEI declining by more than two percent, and New Brunswick declining by less than two percent.
Every province and Yukon (NWT and Nunavut figures are not available) showed a year-over-year increase in sales compared to April 2022, except for Quebec, which saw a slight decline.
Retail cannabis sales across Canada April 2022-April 2023
While cannabis retail sales continue to increase on a year-over-year basis, looking at the trend of sales figures from January 2019, the rate at which sales are increasing is declining, if not levelling off at around $420 million a month.
Sales tripled year-over-year from January 2019-January 2020 and nearly doubled the following year. From January 2021-January 2022, sales increased by about 25 percent. In the most recent year, from January 2022-January 2023, sales only increased by about 14 percent.
Ontario saw a significant spike in retailers from 2020-2022 but has been slowing in the last year. The province has been hovering around 1,700 producers for much of the past year. Alberta has also seen significant retail growth in the first few years of legalization and has settled out around 750. While these provinces still see new retail licences issued, these are often accompanied by other retail closures.
BC is the only province to have seen significant retail expansion over the past year, with around 100 public and private stores added from June 2022-June 2023. Saskatchewan added about 40 stores but has not listed its annual sales report for the past fiscal year.
Despite this slowing in sales, the legal cannabis market does continue to capture more of the overall market share from the illicit market. A survey from late 2022 showed that 67 percent of those who consumed cannabis in the previous year “never” obtained their products from illegal sources. This was an increase from 63 percent in 2021 and 55 percent in 2020.
Folks wanting to enjoy a slice of the vibrant Kootenay cannabis culture, a few days of camping in the woods, and an array of eclectic electronic and acoustic music will gather once again at The Unicorn Music Festival, formerly known as Unicorn Cup, located near Salmo, BC.
Now in its sixth year, this summer’s event takes place August 11-14 as it continues to establish itself as a popular gathering in the region.
Campers will enjoy three days and three nights of music, cannabis, and community, immersed within several hundred acres of BC woodland beside beautiful Rosebud Lake. While there are electric and acoustic music stages (including one floating on the lake), campers will also get to explore new Immersive Camps experiences, and a dedicated “holistic” stage for activities such as yoga, sound healing, wellness talks, and various interactive workshops.
The festival features The Rosebud Bowl, a cannabis comparison where VIPs, or VIUs (Very Important Unicorns), have access to a few extra features, including a kit containing educational cannabis materials and an assessment guide.
Che LeBlanc, one of the founders of the event and a local cannabis grower—whose farm, Rosebud Cannabis Farms is adjacent to the festival—says the event has been steadily growing in size. Around 350 people attended last year’s gathering, and he expects about twice as many this year.
He and his team are taking a slow and steady approach to the festival, with a long-term vision of expanding to something that can serve several thousand annual attendees.
“We’re only going to grow as quickly as we can maintain respect for the land and the environment,” emphasizes LeBlanc. “That’s really a cornerstone of this event, taking care of and working in harmony with the people and land that supports us.”
With Rosebud Farms located right next to the festival grounds, his long-term goal includes integrating farm tours and cannabis sales, once provincial laws allow it.
“I’d love to give tours of the regenerative farm as part of the event,” he continues. “We would love to be able to sell cannabis on-site, that would be a great step in the right direction,” adding that he has heard the province is beginning to look at these rule changes and hopes to hear more soon.
He attributes the festival’s rapid growth to the strength and unique flavour of the Kootenay community.
“There is something for everybody. A lot of the cannabis community is here, a lot of budtenders, a lot of brands. But it’s also a beautiful music and camping festival at the same time. I think that’s part of the reason we’re getting the attention that we’re getting. It’s quite unique to incorporate all of this together, the arts, performance, camping, and cannabis.”
The Unicorn Music Festival offers tickets priced at $220, which includes a camping pass and full access to the three-day festival, along with a three-night camping experience. It’s important to note that camping follows a pack-in-pack-out leave no trace policy.
Those who purchase a VIU (Very Important Unicorn) ticket priced at $420, will have full access to the event, the privilege of car-camping, and the opportunity to engage in a meet and greet with keynote speakers. Additionally, the ticket encompasses a welcome package, complete with directions for participation in the Rosebud Bowl, educational cannabis reference materials, and an official link to the online assessment guide.
The event is 19+ and no alcohol or pets are allowed.
Ontario’s cannabis regulator is launching a consultation on window coverings in cannabis stores as well as advertising and promotion of cannabis.
The AGCO, the Alcohol and Gaming Commission of Ontario,—responsible for regulating Ontario’s alcohol, gaming and horse racing sectors, and cannabis retail stores—is looking to gather feedback on two revisions to the province’s cannabis rules.
The first revision relates to the visibility of cannabis and cannabis accessories from the exterior of stores, while the second relates to inducements for customers to purchase cannabis.
Specifically, the provincial regulator is asking for feedback on two rules in Ontario’s Standards for Cannabis Retail Stores:
The first is a rule that says cannabis stores must ensure that cannabis and accessories are not visible from the exterior of the premises;
The second deals with an existing rule that prevents retailers from giving out free cannabis or providing incentives to purchase cannabis or cannabis accessories.
The proposed changes to the first rule change would mean the “elimination of any provincial requirements related to visibility of cannabis or cannabis accessories from the exterior of the store.”
The proposed changes to the second rule would mean that Ontario’s regulatory framework “would no longer specifically prohibit retailers from offering loyalty programs based on sales or cannabis or accessories, free delivery related to a purchase amount, or other things or benefits in exchange for purchasing cannabis or accessories, assuming compliance with all other regulatory requirements. Retailers would continue to be prohibited from offering cannabis to patrons free of charge.”
The AGCO will be collecting feedback from relevant stakeholders until July 11 through its Engagement Portal. A notice is being sent out to retailers and other stakeholders by the end of day on June 20.
The AGCO also has a call for proposals for a Cannabis Retail Employee Training Program, and is accepting applications until September 1, 2023. Through this process, up to two programs, in addition to the province’s current CannSell program, could be approved by the AGCO Board for a five-year term. Any approved programs will begin offering training in 2024.
Micro cannabis licences continue to grow in popularity in Canada, at almost 42 percent of all licences issued as of March 31, 2023. Just over half (51 percent) of licences were standard, three percent were nursery licences, and nearly four percent were medical-sales only licences.
At the current pace of licensing, the total number of micro licences could surpass standard licences in 2024.
Totals were 151 cannabis production licences in the queue and 913 active production licences in Canada as of March 31, 2023, according to Health Canada’s newest figures.
Of those active cannabis production licences, as of March 31 this year, 470 were standard licences, 381 were micros, and 26 were nurseries. Fifty-five of these licences were Indigenous-affiliated (six percent of all licences), and 158 were outdoor growers.
Of those applications seeking a licence, 44 were Indigenous-affiliated and 37 were for outdoor licences. Fifty-six of the applications were for standard production licences, 84 for micros, and two for nurseries. Most applications were in BC, Ontario, and Quebec. Prince Edward Island, Newfoundland and Labrador, Yukon, and Nunavut had no applications in the queue.
Image via Health Canada
BC is still home to the most micros with 91, followed by Quebec with 87, and Ontario with 76. Micros are the majority of licences in Manitoba, Quebec, Nova Scotia, PEI, and Saskatchewan. Indigenous-affiliated applications—which have access to the Indigenous Navigator program through Health Canada—were also more likely to be for a micro, with 29 out of 55 licences being micros. Thirty-six of these are medical-only sales licences.
As of June 16, another 36 micro licences and another 13 standard licences were issued, along with one nursery and four medical-only sales licences. A medical-sales only licence allows a business to manage cannabis sales, generally through an online platform, without ever producing or touching cannabis.
This represents a decline in applications in the queue compared to the previous update posted in March, covering up to the end of 2022, when there were 175 applications to grow or process cannabis commercially, the majority of them micros.
Of those 175 applications by the end of 2022, 65 were for standard licences, 99 were for micros, and four were for cannabis nurseries. Of those, 44 applications were from Indigenous applicants, and 44 were for an outdoor cultivation licence. Similar to the first three months of 2023, Newfoundland and Labrador, Northwest Territories, Nunavut, Prince Edward Island, and Yukon Territory also had no applicants.
Image via Health Canada
While new applications continue to come in, the number of licences throwing in the towel continues to increase as well. As of March 31, 2023, there were 166 licences either revoked or expired—146 of these were revoked at the request of the licence holder, while three were revoked by Health Canada and 17 expired. Thirty-three of those revocations were in the first three months of 2023.
Between March 31 and June 16, 2023, there were another 24 new licences issued, along with 21 licence revocations, four expiries, and one licence suspension.
The Société québécoise du cannabis (SQDC) will have a new interim President and Chief Executive Officer as of June 26, 2023, as the agency begins the recruitment process for a permanent replacement.
Robert Dalcourt, CPA, CGA, is replacing Jacques Farcy for the presidency of the Société des alcools du Québec (SAQ). Farcy has served as CEO since October 2021 and oversaw a shift for the SQDC from rapid expansion of their retail footprint across the province to one focussed more on refining customer experience in those stores. Farcy spoke recently with StratCann about this shift.
Cannabis sales were flat in the SQDC’s most recent annual report, compared to the previous year Consumers in Quebec bought $601.9 million worth of cannabis in 2022 during the fiscal year that ended March 25, 2023, compared to $600.5 million in the previous year. The estimated share of the total market the province captured declined slightly, from 58.5% in 2022’s annual report to around 56% this year.
Despite that small decrease, according to Quebec’s most recent annual survey on cannabis, fewer consumers bought from illegal suppliers compared to the year prior, meaning while few people use the illicit market, those who do are purchasing more. The SQDC’s target for 2022-2023 was to capture 75% of the total market.
Dalcourt first joined the SQDC in 2018, where he first held the position of Director, before taking the role of Vice-President of the Finance Department. The SQDC notes he is also an active member of the agency’s Management Committee, and provided “significant leadership” in the SQDC’s 2024-2026 strategic plan.
Dalcourt brings over 35 years of management experience to the SQDC, primarily in the manufacturing and food distribution sectors, as well as accounting and finance.
The recruitment process for the next officer will be overseen by the SQDC’s Board of Directors and is expected to begin quickly.
Michael Forbes is a BC entrepreneur who has brought his experience in medicine, business management, production, and retail into several successful cannabis outfits in the province and across Canada.
In addition to an array of businesses outside of the cannabis space— pharmacies in BC and Alberta, a brewery on Salt Spring Island, and a storage facility in Sooke, BC—Forbes has also founded the micro-business park Sitka Weed Works in Sooke, opened numerous cannabis stores across the country, and is the CEO of Adastra Labs, a cannabis extraction facility in Langley BC.
Background
Michael Forbes
With a BSc. in Pharmaceutical Sciences from the University of British Columbia, Forbes is also certified in cannabis plant production and facility management, as well as age management medicine and hormone restoration, and he owns three methadone clinics.
Bringing his array of experience into the cannabis space on both the medical and “recreational” side is as much about his passion for people and plant medicine as it is about developing thriving businesses and navigating a highly regulated industry.
“I am an advocate for helping patients have a better life, and I believe in plant medicine,” says Forbes. “Our bodies have evolved over thousands of years with nature, so the medicines that plants provide typically work better in the body and are safer than alternatives. And more specifically, cannabis has been shown to provide relief for chronic pain, anxiety, and insomnia.
“My decision to enter the cannabis space was informed by this knowledge of its benefits and wanting to enhance the quality of life for patients, as well as my personal passion for solving complex problems.”
Sitka Weed Works
Ever since he started his first pharmacy in his early 20s in the early 2000s, Forbes realized his knack for operating a retail business, scaling up to a workforce of 350 people. This eventually aided in his development of a chain of retail cannabis stores across Canada, and led him to develop a business park for micro-growers on Vancouver Island and a processing facility in Langley.
“Sitka is unique,” he explains. “It was set up to help bring higher-end craft products to market while also working with legacy growers in the micro space. The cannabis market has been constantly evolving, and consumer demands are shifting. We are seeing that the market is now starting to desire (and demand) higher and higher quality cannabis.
“Since Sitka was created to be a high-quality, high-end brand, it is extremely well positioned to provide the products consumers are looking for and play a key role in this niche area.”
Sikta is currently home to several micro producers who can sell through Sitka’s in-house processor or to third-party processors, ideally giving clients a leg up on entering provincial markets.
Avoiding common mistakes
With the number of people investing a lot of their own money to enter the cannabis industry, especially micro producers transitioning from the legacy space, he says his business experience can be an asset.
Grow Facility
“My recommendation for those looking to avoid making common mistakes is to educate yourself or bring on expertise that will help you navigate all the regulations. Ensuring that you’re aware of what the regulations mean will help you make decisions regarding the future of your business that will pay off in the long run.”
While some might think the industry is easy money, the reality is quite the opposite.
“I think a lot of people rushed in thinking it would be easier to operate and make it in this market than it is. Regulation is a convoluted and tricky part of the industry that few have the experience to navigate. On top of that, banking regulations have also made it very difficult. I hope those can be changed to be like any other legal Canadian business.
I recommend others in the industry buckle up, watch overhead, and plan to be in a marathon. It is critical to pace your growth and make sure you stay in positive cash flow. And, of course, try and enjoy the ride!”
Navigating provincial markets
A key to Sitka’s success, he continues, is providing the additional knowledge and infrastructure for smaller growers who may not have the interest or ability to navigate the often complex process of being able to sell into a provincial market.
“I think that producers struggle in this area because there can be a tendency to direct all focus on growing, or alternatively, all focus on business functions like sales and marketing. I think that being a skilled grower is only half the business, and quality assurance, distribution, team management, and sales and marketing make up the other half. Both sides of the business need to be mastered, as they work in lockstep with each other to achieve success.”
Another piece in any business, he says, is building strong, cohesive teams.
“It is imperative to learn how to build teams with individuals that have unique and diverse skill sets. It may sound cliché, but you need to surround yourself with people who share your passion and have specific talents that you don’t have. This has always helped keep me from working in an echo chamber and ensures that different perspectives and considerations are brought to the table.”
Employees at a chain of retail stores in Manitoba have signed a collective agreement with the United Food and Commercial Workers (UFCW), highlighting concerns with safety rates of pay and what they say are unfair penalties.
The new 30-month agreement was signed on June 14 and covers employees at ten The Joint locations in the province. The Joint also has stores in Saskatchewan and Alberta.
The Union first received a province-wide certificate in June 2022 after workers contacted UFCW Local 832 about joining the union.
“I’m proud of our new members who stood up for their rights to join UFCW and worked together on not only organizing their workplace but also working with us to obtain the first collective agreement for Cannabis retail workers in the province of Manitoba”, stated UFCW Local 832 President, Jeff Traeger.
The union says the new 30-month collective agreement addresses numerous concerns that were raised during the organizing drive, such as safety concerns, rates of pay, and “unjust disciplines”.
The union held a meeting for members of The Joint on June 13.
“This is a fairly new industry. Since these workers have joined us, we have heard from numerous other Cannabis retail workers about joining our union. Many of them have been waiting to see what a collective agreement would provide them. We will continue to work on advocating for all Cannabis workers in Manitoba to ensure this industry has the proper protections these workers deserve.”
UFCW Local 832 represents over 19,000 Manitoban workers in food production, food distribution, warehousing, hospitality, security, personal care, assisted living, grocery retail and cannabis retail.
Ariel Glinter, head of business development and regulatory compliance for The Joint, says the company is supportive of their employees’ decision.
“As a company we believe that our employees are responsible for our success and as such have always supported our workforce and ensured our goals are aligned with theirs. We are optimistic in entering this relationship and look forward to working alongside the union.”
Note: This article has been edited to provide comment from The Joint.
Unions and cannabis in Canada
Budtenders and cannabis employees in other provinces have also been unionizing, or seeking to do so. A union representing BC cannabis retail employees has slowly been gathering members since it became the first union to represent budtenders in Canada in 2020.
The SQDC, which manages cannabis sales in Quebec, has been dealing with an ongoing strike, which continues in 22 of their 90 branches. Although these branches are still open, they are operating at reduced hours and face picket line pressures.
In June, members of a different union, the Confederation of National Trade Unions (CSN), voted to accept an agreement with the SQDC for increased wages, hours, and better working conditions.
In 2020, a court ruled a BC cannabis company had unfairly penalized workers for trying to unionize. In September 2020, the union began organizing and soon applied to be certified for 17 employees at a Peachland, BC operation.
Then, on October 5, the company laid off nine employees at the same Peachland operation, citing “the Company’s financial circumstances.” The union argued these employees were laid off for seeking to unionize. The court agreed.
In 2016, UFCW tried to organize workers at a MedReleaf facility in Ontario, but the Ontario Labour Relations Board ruled the workers did not have the right to unionize. The union has appealed that ruling.
Two men from Ontario who operated an illicit cannabis website and delivery service in PEI received conditional sentences from a Supreme Court Justice in PEI in May.
The two men, David Jones and Aaron Jones Braithwaite, aged 48 and 24 respectively, were running what police described as an illicit cannabis delivery company operating online. Charlottetown Police investigated the operation in 2021 following information received about the business.
Police say they arranged several controlled buys from the website in March and April 2021, including several hundred dollars worth of cannabis, hash, shatter, and edibles.
Following the fourth controlled purchase from police in April 2021, the two men were arrested. Police seized 1,901.3 grams of dried cannabis; 218 grams of cannabis edibles; 173.2 grams of shatter cannabis concentrates, nearly $2,500 in Canadian currency, and other materials related to the business.
Unfortunately, it’s been described as a whack-a-mole: We take down one site and two more open up.
Chief Serr, Abbotsford BC Police Chief
The court report notes that Jones had initially believed he could transition his business into a legal, licensed delivery service but has since acknowledged his efforts were not compliant with provincial and federal regulations.
The judge in the case issued a conditional sentence to both men. Jones was sentenced to imprisonment for 18 months to be served in the community, subject to numerous conditions, including house arrest for a period of 14 months, a curfew following the house arrest, and community service. He was also sentenced to probation for a period of two years.
Braithwaite was sentenced to imprisonment for 14 months to be served in the community, subject to numerous conditions, including house arrest for a period of 11 months, and adherence to a curfew following the house arrest and community service. He was also sentenced to probation for a period of 18 months.
The number of illicit online cannabis sites has only increased following cannabis legalization, with some former brick-and-mortar businesses moving online to avoid enforcement.
While there have been some notable instances of enforcement against illicit online retailers, law enforcement says it lacks the resources to target them all.
“Unfortunately, it’s been described as a whack-a-mole: We take down one site and two more open up,” Abbotsford BC Police Chief, Chief Serr told the Globe and Mail at the time.
“If you were to do a simple Google search, you would see numerous sites coming up, and one of the issues for consumers is it’s really difficult to tell online who is a legal seller and who is an illegal seller.”
A popular subreddit geoblocked a forum dedicated to illicit online retailers in Canada earlier this year, although the subreddit is still easily accessible.
Earlier in the year, BC’s director of civil forfeiture announced the province was seeking to confiscate cash and eight properties worth nearly $7 million alleged to be connected to three illicit cannabis websites.
In 2020, Ontario Provincial Police (OPP), along with the Ontario Provincial Joint Force Cannabis Enforcement Team (PJFCET), conducted a raid on an illicit online cannabis retailer.
More than $100 million worth of cannabis was sold in Nova Scotia last year.
Nova Scotia sold $111.1 million worth of cannabis in the fiscal year ending March 31, 2022, an increase of 9 percent compared to the previous year according to the most recent annual report.
Transactions involving cannabis also increased by 12.7 percent. While the average basket size decreased by 3.1 percent to $38.40, this is likely due to a 2.8 percent reduction in the average price per gram of $6.19.
The Nova Scotia Liquor Corporation (NSLC) which oversees cannabis sales in the province also added 11 new cannabis stores, for a total of 48 across the province.
“We continue to look for ways to compete with the illicit cannabis market and offer Nova Scotians an accessible and safe supply of cannabis,” said Greg Hughes, NSLC president & CEO. “This includes finding ways to partner with local cannabis producers and help them bring their products to market.”
The NSLC has also been promoting Nova Scotia-grown cannabis products. These products accounted for over 30 percent of all cannabis sales in the province, an increase year-over-year of nearly 42 percent for a total of $33.5 million in sales.
Revenue from cannabis sales in Nova Scotia goes towards the funding of “key public services”.
New Brunswick’s sixth cannabis farmgate store is opening June 23, located about 45 minutes outside of Moncton.
Greenherb Farms in Saint Joseph-de-Ken is an outdoor cannabis farm processing its flower into solventless rosin on-site. The farmgate licence is one of the final stages of development for the four-person operation that has been building the business since 2020.
Eventually we’re going to have a kind of farmgate belt here, where tourists are going to be able to come out and visit us all and really enjoy the experience
Once open, consumers will have the opportunity to visit the farm and directly purchase rosin made from flowers cultivated and processed on-site. Additionally, they will find a selection of flower products from other local producers such as ECO Canadian, Crystal Cure, and Golden Peak
Greg Claroni, general manager of and one of the owners at Greenherb, says the plan for their farmgate store is to create a more interactive experience for local consumers and tourists alike. He praises the province and CannabisNB specifically for being one of the few provinces in Canada that are allowing producers to get a farmgate licence.
The entrance to the cannabis farmgate store at Greenherb Farms
“Eventually we’re going to have a kind of farmgate belt here, where tourists are going to be able to come out and visit us all and really enjoy the experience. It’s great that we’re able to do all this in New Brunswick, all working together, and hopefully, we’ll see tourists and locals doing a bit of a cannabis hop from our farmgates in the future.”
Claroni says getting licensed was fairly easy, taking only a few months, but it’s the culmination of many years of hard work to get to this point. They received their licence on April 20, but delayed their opening while they put on some of the finishing touches.
“We are thrilled to open our doors to the public and share the fruits of our labour,” said Claroni. “Our Farmgate license represents the culmination of 7 years of dedication and hard work. We are eager to showcase our commitment to sustainable practices, product quality, and community engagement, and we look forward to building long-lasting relationships with our customers and partners.”
Another piece of the puzzle for Greenherb is a private members club and lounge on-site that can be used while visiting the facility for special events, info sessions, and other unique experiences. The lounge will be inside the old agriculture research centre that sits on the property, retrofitted for ventilation.
Cannabis farmgate across Canada
Cannabis farmgate stores in New Brunswick are private retail locations that are owned and operated by New Brunswick licensed cannabis producers. These producers are authorized to sell their own products on-site, directly to customers. There are five other cannabis farmgate licence holders operating in New Brunswick, including one cannabis nursery.
Ontario and British Columbia also issue farmgate licences to producers. Ontario has issued at least four, while BC has two working their way through the licensing process and two currently operating.
A BC cannabis producer has recalled two lots of dried cannabis sold in British Columbia and Manitoba due to a labelling error.
The two lots of dried cannabis from Aarons BCBud—one of Lindsay OG (3.5 and 7 gram) and one lot of Island MKU (14 gram and 28 gram)—were recalled due to incorrect cannabinoid values on the labels and errors in the THC, CBD and Total CBD values.
The Island MKU Dried Cannabis had a printed value of 23.70 mg/g THC and a total THC of 22.10 mg/g. The actual values were 12mg/g and total THC 221 mg/g. The printed value for CBD was 0.10 mg/g and Total CBD of 0.10 mg/g, with the actual value being <1 mg/g and total CBD as <1 mg/g.
The Lindsay OG was listed as having 20.64 mg/g THC and a total THC of 176.8 mg/g, while actual THC was 18.11 mg/g and total THC was 278.94 mg/g. CBD was listed as <0.01 mg/g and total CBD was listed as 0.10 mg/g, while actual CBD was <0.10 mg/g and total CBD was 0.62 mg/g.
Health Canada’s recall notice says that, to date, Aaron’s BCBUD Inc. has received one complaint related to incorrect cannabinoid values on product labels while Health Canada has not received any complaints related to the recalled lots. It also notes that neither Health Canada nor Aaron’s BCBUD Inc. have received any adverse reaction reports for the recalled cannabis product lots.
Labelling errors are the most common reason for cannabis product recalls in Canada. There were 590 units of the recalled product sold between October 14, 2022 to June 7, 2023. Health Canada reminds consumers that they should verify whether their product is affected and to contact the retail store where the product was purchased if they wish to return the product.
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