Another Alberta cannabis producer is shutting its doors. On November 3, Calgary-based OGEN Cannabis closed its facility, laying off 87 people as a result.
Applicants wanting to sell their cannabis in Alberta, for example, must pay the AGLC $3,000 for a process that can take five to six months, Jeff Karren, President of Joi Botanicals, a standard producer in Calgary, explained to StratCann earlier this year.
“We just went through our second round. The maximum licensing period before a registrant must resubmit due diligence info is 6 years, but for some reason, the AGLC decided that we needed to resubmit after about 4 years. You pay the $3,000 upfront, and if additional work is required, they might charge you more.”
In a recent online post in reference to OGEN closing, Karren also estimated the loss in tax revenues could be in the tens of millions.
“How much tax revenue will be lost in Alberta before changes are enacted?” Karren asks in his LinkedIn post.
Just three weeks ago, the company was hiring for a position in Calgary.
The AGLC even requires the full names and birthdays of all children—dependent or not, including step-children. (A PDF of the 61-page Cannabis Registration Representative application can be found here.)
“It’s the same level of scrutiny that a casino owner gets,” says Tim Mallett, CEO and master grower at Alberta Bud, a micro producer in Edmonton. “It’s painful, time-consuming, and expensive. We’ve been through it three times in two years.”
There are currently 949 federal licences listed as active by Health Canada. Ninety-one of these are located in Alberta. Health Canada also lists recent licence revocations (on request of the licence holder), eight of which are producers in Alberta.
British American Tobacco (BAT) announced today that it will invest nearly $125 million into New Brunswick’s Organigram, more than doubling its equity position in the cannabis company from about 20% to 45%.
The move still requires the approval of Organigram shareholders.
Since 2021, BAT, the British multinational that manufactures and sells cigarettes, tobacco, and other nicotine products, has made several minority investments in the cannabis space, including its 19.9% equity in Organigram in their “Beyond Nicotine” campaign.
Jupiter, the strategic investment pool, is expected to accelerate Organigram’s ambitious growth plans, enabling further geographic, technological, and product expansion.
Beena Goldenberg, CEO of Organigram
Organigram sells an array of cannabis products in Canada under brands like Edison Cannabis Co., SHRED, Big Bag O’ Buds, Holy Mountain, and others. Organigram’s most recent quarterly report said SHRED products, one of the more popular in Canada, have made nearly $190 million in retail sales in the previous 12 months.
Despite these concerns, Organigram’s recreational net revenue was $92.5 million for the nine months ended May 31, 2023, an increase of $8 million over the same prior-year period. International sales for the first nine months of fiscal 2023 also increased considerably, nearly doubling from $9.5 million in 2022 to $18.4 million.
In a press release, BAT says its increased investment in Organigram is due to the company’s performance and “careful financial governance” in an economic downturn.
Most of BAT’s investment will be used for Organigram to establish a “strategic investment pool, intended to be applied for emerging opportunities within the cannabis space to accelerate Organigram’s growth and to support geographic, technological and product expansion.”
Organigram says the majority of the $124.6 million investment will be used to create a strategic investment pool named Jupiter, focusing on “emerging cannabis opportunities,” including “geographic expansion”.
“We are excited to bring this transformative transaction to Organigram’s shareholders, reinforcing our commitment to delivering shareholder value,” says Beena Goldenberg, CEO of Organigram, in a press release.
“This investment bolsters an already strong balance sheet and solidifies our position as a leading cannabis company. In addition, this deepens the strategic partnership between Organigram and BAT, and we look forward to continuing to leverage BAT’s global capabilities and scientific expertise. Jupiter, the strategic investment pool, is expected to accelerate Organigram’s ambitious growth plans, enabling further geographic, technological, and product expansion.”
The brief appearance of ingestible extracts on cannabis shelves and their subsequent disappearance has potentially introduced more consumers to cannabis oil capsules, say some BC cannabis retailers.
So-called ingestible extracts or “edible extracts”, sold with much more than the 10mg THC per package allowed in cannabis edibles, have become very popular with some consumers over the past year. Organigram’s introduction of their Edison Jolts, a 10mg THC lozenge sold with up to 25 each per package (250mg THC), first released in summer 2021, was soon followed by products like Aurora Glitches and several others in 2022 with similar high THC offerings per package.
Sales of these products shot up over the last few quarters in BC before Health Canada put a stop to the fun earlier this year, declaring them to be non-compliant with federal regulations. In early January 2023, Health Canada sent a notice to producers highlighting their concerns. Companies had until May 31, 2023, to cease sales and distribution.
Although some retailers were able to stock up, many stores have since run out, and BC’s most recent quarterly report for Q2 2023 shows sales dropping significantly.
However, their disappearance from shelves has given at least some retailers an opportunity to tell consumers about another similar product that has been available since the beginning of legalization: cannabis oils and cannabis oil capsules.
While sales of cannabis capsules in BC slightly declined as ingestibles increased, their rapid decline in Q2 2023 was matched by a slight increase in the sale of cannabis oils.
Kayla DeFazio, an Assistant Manager at Spiritleaf in Maple Ridge, one of the top-selling stores in the province, says she has seen that trend play out in her store, often guided by herself and other employees.
Like the ingestible extracts, cannabis capsules offer consumers a similarly larger quality of THC per container, in individual servings of up to 10 mg THC, explains DeFazio, listing off one popular product in their store that offers ten, 50, and 100 capsule bottles with each capsule containing 10 mg THC.
“A lot of people really, truly think that it works best in a gummy. Maybe everyone else is finally catching on and realizing that is not the case.”
She points out that while these types of cannabis capsules have long been available, she thinks the conversation about the lack of these ingestible extracts has helped introduce them to many consumers who weren’t familiar with them. Consumers come in looking for ingestible extracts that they no longer carry, and they tell them about these other, similar products.
“We’re just trying to find a better solution for people. A lot of them have a higher tolerance, and they definitely need a higher dosage, so when we weren’t able to give them that with the (ingestible extracts), we tried to move them on to something as a different option. “
“A lot of people just really like the idea of having an edible, having a gummy, having different flavours,” she continues. “But then a lot of people were also turned off by the excess sugar. So once we showed them that there was a better price point and something maybe a little bit healthier, they had an easier time moving on to something new.”
“…a lot of people were also turned off by the excess sugar. So once we showed them that there was a better price point and something maybe a little bit healthier, they had an easier time moving on to something new.”
Trevor Pewarchuk, District Manager for Trees Cannabis, with multiple locations on Vancouver Island, says he’s also seen evidence of a similar trend in his stores.
Products like Edison Jolts and Aurora’s Glitches were “insanely popular,” says Pewarchuk, but he notes they quickly sold out once Health Canada told producers to stop shipping more to retailers.
Instead, some consumers have gone back to buying edibles or gummies, he says, but some are discovering they can get a similar product with the same effect without the added sugar and at a lower cost when they buy cannabis oil capsules.
“Generally, we would direct them in that case to an oil or a capsule option just because they tend to be the closest equivalent they can purchase with the max amount of active ingredient per dose,” explains Pewarchuk.
However, he says most of the customers who were interested in those higher potency items were edible consumers already, and they are now just purchasing multiple packs to get the same effect.
“Some are going to oils, but many are just shifting to buying multiple edibles or multiple beverages.”
“Generally, we would direct them in that case to an oil or a capsule option just because they tend to be the closest equivalent they can purchase with the max amount of active ingredient per dose.”
Meanwhile, in Vancouver’s first licenced cannabis store, Evergreen Cannabis, owner Mike Babins says this is a conversation he’s been having with consumers since edibles first began appearing in late 2019 or early 2020.
“As soon as edibles came in, anyone coming in looking for (a large amount), we immediately say to them that we’re happy to sell you that, but you can buy a jar of (capsules) that are the same thing. You can then go next door and get a pack of gummy bears if you really need candy. And you can save a lot of money.”
Babins says he thinks there’s still a lot to do to educate consumers about products like cannabis oils and capsules, with some consumers believing that being in an “edible” form somehow increases its potency.
“A lot of people really, truly think that it works best in a gummy. Maybe everyone else is finally catching on and realizing that is not the case.
“Maybe the public is finally getting informed and starting to understand that there are other higher THC options for edibles. The more people who understand that, the easier it’s for us to guide them in that direction and help them decide.”
The number of stores and the amount of cannabis sold in BC has continued to increase while the price of cannabis products continues to drop.
Dried flower and pre-rolls combined still dominate sales, but inhalable extracts, especially infused pre-rolls and vape carts, continue to eat into their market share. Consumers are also continuing the shift to larger volume dried flower offerings, while 3.5 and 7-gram SKUs remain the most popular overall.
The BC LDB’s newest quarterly report for 2023, covering July, August, and September, shows a 40 percent year-over-year increase in wholesale grams, for a record of 33,879,347 grams and a 24 percent increase in wholesale sales for a total of $137,126,714.
The price of cannabis again dropped to its lowest ever, at $4.05 a gram for all cannabis product categories and $3.33 a gram for dried flower. There were 490 stores, an increase from 452 in the same quarter in 2022, and 483 at the end of the first quarter of 2023.
Chart via LDB.com
Following trends in previous quarters, single grams and eighths selling at more than $5 a gram saw significant declines in year-over-year sales as consumers continued to shift purchasing habits to higher-value and larger volume SKUs like 7, 14, 28, and (a handful of) 30 gram.
Reversing a trend in the previous quarter, though, consumers are showing an interest in paying more than $5 a gram in these larger volume SKUs. In Q1 2023, sales for 7 and 14 gram SKUs were down 46 percent, and 14 percent year-over-year, respectively, but were up 15 and 18 percent this quarter. This can relate to consumer preference or to product availability.
via LDB.com
While eighths and 28-gram SKUs were still the most popular overall, the less expensive 7, 14, and 28-gram offerings saw the most significant increase in sales compared to Q1 2023 and, where applicable, Q2 2022. (Some SKUs were not available one year ago).
As in Q1 2023, inhalable extracts sales outpaced dried flower sales (excluding non-infused pre-rolls) at $46 million compared to $44 million. ($42 million and $41 million Q1). While flower sales year-over-year were up just under seven percent and four percent in units, inhalable extracts—dominated by vape pens and infused pre-rolls—grew nearly 58 percent in sales and 68 percent in units sold.
Cartridges and infused pre-rolls dominate the inhalable extracts category, with 48.5 percent and 38.4 percent of sales, while products like shatter, resin and rosin, and Hash were each under three percent of sales. Still, these latter categories saw significant year-over-year and quarterly growth as the product category became more competitive.
Pre-rolls (non-infused) came third in sales at $31.7 million, a 20 percent increase year-over-year and a 19 percent increase in units.
via LDB.com
Sales of cannabis edibles and beverages came in far behind with $7.4 and $2.7 in sales, respectively. For edibles, this represented a 17 percent increase in sales year-over-year and a 24 percent increase in units sold. Beverages saw a 40 percent increase in both dollar sales and units sold.
Topical sales increased 26 percent year-over-year to $748,087 and 29 percent in units sold. Sales of cannabis seeds declined 25 percent to $12,929, a decrease of units sold compared to the same quarter last year of 24 percent.
Sales of ingestible extracts, which includes products Health Canada declared non-compliant earlier this year, saw declines of about one percent in sales and six percent in units sold. The category still had $4.3 million in sales. The decline was driven by a 73% year-over-year decline in the sale of the types of lozenges and other products Health Canada deemed non-compliant and an eight percent decrease in oils and tinctures, but was buoyed by a 29 percent increase in capsules and pills.
Overall, the province gained three retail stores since the previous quarter and 38 since the same quarter last year. The largest market in BC, the Greater Vancouver area, had 140 stores in this most recent quarter, up three from Q1 2023 and up from 113 in Q2 2022.
The second largest retail market, Vancouver Island, has 121 stores, a decrease from 123 in Q2 2022. The third largest region, the BC Interior, saw an increase in the number of retail cannabis stores, from 161 in Q2 2022 to 168 in the same quarter in 2023, and an increase of three stores from Q1 2023. The number of stores in Northern BC increased from 58 in Q2 2022 to 64 in the most current quarter, up from 61 in this year’s previous quarter.
Figure prior to Q3 2022 were not reported in units sold
The amount of cannabis sold through the program—limited to small-scale BC producers and therefore a fraction of total provincial sales by design—continues to grow, although this could potentially be reaching a plateau as sales in the last two quarters were relatively steady.
While the program is popular among retailers and producers taking part, many of the small producers the program was built to assist say the baked in provincial fees make it challenging.
Despite the costs to sell into the program—which not only include added logistics to handle multiple deliveries, but still come with a 15% “proprietary fee” to the province—the cost per gram sold in the program continues to decline. This is good for consumers, but not good for producers or retailers who hope the program can act as a lifeline.
The average price per gram of cannabis sold in the program is just $4, while the average price of all cannabis products sold through the program is $4.60 a gram.
The amount of dried cannabis flower sold through direct delivery stayed about the same compared to Q1 2023 while edibles and beverages declined significantly and inhalable extracts grew.
Health Canada says it is currently in the “redetermination process” regarding its initial ruling on Edison Jolts from Organigram, following the recent announcement by the New Brunswick producer that it was re-releasing the products into several provincial markets.
In early January 2023, following the release of several “ingestible/edible extracts” by a handful of cannabis producers, Health Canada sent a notice to producers highlighting their concerns with these products. Companies had until May 31, 2023, to cease sales and distribution.
Organigram challenged this ruling in March, filing for a judicial review of Health Canada’s decision to require an end to sales of ingestible extracts that exceed the federal 10mg THC packaging limit.
The filing, posted March 31, 2023, as Organigram Inc. v. Minister of Health et al., falls under Section 18.1 Application for Judicial Review. Judicial review is a process by which the courts can ensure that the decisions of administrative bodies like Health Canada are fair, reasonable, and lawful.
In August, that application for judicial review of the ruling was approved. Organigram had also hoped to see Health Canada’s order quashed or set aside, but the court required Health Canada to determine that Edison Jolts lozenges are a cannabis extract and do not constitute edible cannabis under the Regulations.
While cannabis edibles are limited to 10mg THC per package, extracts are limited to 1000 mg THC per package.
In an email to StratCann, Health Canada maintains that it considers any product intended to be consumed as food cannot be considered an extract.
“Edible cannabis is cannabis that is intended to be consumed in the same way as food and is excluded from the definition of a cannabis extract,” wrote a media representative of the federal health authority.
“Health Canada is continuing to assess edibles and extracts in accordance with the promotion statement that we issued to federal licence holders in March of this year. The factors for determining whether a cannabis product is correctly classified remain the same.
“The department has identified a number of edible cannabis products marketed as cannabis extract products and is working with licence holders to resolve these issues. We continue to communicate with licence holders to make sure they understand the federal rules relating to edible cannabis and cannabis extracts.”
“Health Canada has acknowledged that it accepts the decision of the court, and that it considers its initial classification decision on JOLTS to be void. As such, pending the final redetermination by Health Canada, Organigram has reinstated the commercialization of JOLTS,” a representative with Organigram told StratCann via email.
“Organigram remains of the view that Edison JOLTS are properly classified as a cannabis extract.”
The products, the spokesperson says, are being sold in New Brunswick now, and Organigram expects Jolts to be in retail stores in Manitoba, Saskatchewan, and Ontario soon.
The BC Community Safety Unit has seized $3 million worth of cannabis so far this year, for a total of $38.18 million since it began enforcement actions in 2019.
BC’s Community Safety Unit (CSU) is the provincial agency charged with monitoring and enforcing the province’s retail cannabis rules and regulations. CSU investigators can conduct compliance and enforcement activities against unlicensed cannabis retailers and other illegal sellers across the province.
The agency began with a mandate of education in 2019, in many cases first visiting stores and informing them of provincial cannabis laws and regulations before moving on to issuing fines, seizing products and equipment, or shutting down unlicensed businesses.
It has undertaken four enforcement actions so far in 2023, for a total of 95 seizures since 2019. The most significant number of product seizures was in 2020, worth $13 million, following 227 educational visits in 2019.
There have been 230 stores that have closed as a result of those education visits, nine of them in 2023.
The number of seizures and correlating value has been declining since then, with $10 million worth of cannabis products seized in 2021, $7 million in 2022, and $3 million in the first ten months of 2023.
In Parliament earlier this year, BC Minister of Public Safety and Solicitor General Mike Farnworth said that the CSU has also conducted nine enforcement actions on First Nations reserves in the province, seizing about $12 million worth of products.
The province also issues fines to illicit cannabis stores if they refuse to close after several warnings and/or seizures. So far, the CSU has issued at least 58 notices of administrative monetary penalty with proposed penalties totalling approximately $39.9 million, with only about $1.45 million of these penalties already collected.
Under BC’s Cannabis Control and Licensing Act, there are three types of orders issued by the Director of the Community Safety Unit (CSU) with respect to the issuance of administrative monetary penalties (AMPs); Concession Orders, Compliance Orders, and Reconsideration Orders.
Administrative penalties are generally twice the value assigned to the products seized.
If the Director proposes to impose a monetary penalty for a contravention of the CCLA, the Director must serve the person with an NAMP. Unless the person signs a waiver and admits to the contravention (Concession Order), the monetary penalty (AMP) is an amount equal to two times the retail value of the cannabis that the person, in contravention of the Act, sold, possessed for the purpose of sale, or produced. If they do sign the waiver (Compliance Order), their penalty is equal to the retail value of the cannabis sold, possessed or produced.
Cannabis sales continue to climb in Canada, with more than $460 million sold by the 3,600+ cannabis retailers nationwide.
Total retail sales of cannabis in August 2023 were over $464.2 million, up from about $390 million in August 2022. From July to August, sales increased in every province except for Manitoba, which saw a slight decline to pre-March 2023 levels. (This is possibly due to lower data quality for the Keystone Province’s figures for August, which Statistics Canada rates at a lower quality than those figures available for previous months.)
Like many retail sectors, cannabis sales have dipped in the months following the Christmas shopping seasons over the last three years before building again on an ongoing, upward trend.
The number of retail stores across Canada also continues to grow, although the pace has slowed considerably compared to the first four years of legalization. As of October 2023, there were 3,640 cannabis stores in Canada, excluding provincial online stores.
British Columbia: 508 public and private stores either open or “coming soon”
Nearly one year into the launch of BC’s cannabis farmgate program, some growers say the current cost to participate is too high for them.
The program, launched in late 2022, has only seen three companies apply so far—one in the interior, one on Vancouver Island, and one in the Greater Vancouver area or Sunshine Coast, these few out of more than 100 eligible growers in the province.
Only one of those has been licensed so far, ShuCanna in Salmon Arm, while another on Vancouver Island, the Victoria Cannabis Co, is in the final stages of licensing as it awaits final approval from the city. A third, identified by BC only as being in either the Vancouver region or Sunshine Coast, only recently applied and is still making its way through the approval process.
BC’s official name for a farmgate licence is a Producer Retail Store (PRS). The province previously licensed two other farmgate stores through special arrangements with two First Nations-owned cannabis producers, both approved in 2022, although these are not listed by the province as a PRS.
This low number of applicants indicates a policy failure, say some growers in the province. The licence category is impractical for their location or business model, especially with the high costs involved, including application fees and adhering to all the building and security requirements.
In addition to the nearly $10,000 in provincial application fees for the farmgate licence, Alannah Davis at Dabble Cannabis on Vancouver Island says another hurdle is the need to spend significantly more to build a full-time store that would adhere to provincial rules.
“We really want Farmgate,” says Davis. “So the low number of applications, in my opinion, is not indicative of the number of farmers wanting to sell directly to customers. That’s the dream.
Alannah Davis, Dabble Cannabis Co.
Dabble Cannabis is a federally licensed cannabis cultivator and processor with its own highly secured storage areas, something she says should more than satisfy provincial concerns around security rather than building a new store.
While the provincial regulations require a Farmgate store to essentially operate as a full-time retail store, she sees the model making more sense on a seasonal and case-by-case basis.
Instead of running a full-time retail cannabis store on her farm, Davis wants the province to allow her to get a more scaled-down licence that would enable her to sell products to visitors at her farm.
“We really want Farmgate,” says Davis. “So the low number of applications, in my opinion, is not indicative of the number of farmers wanting to sell directly to customers. That’s the dream.
“We definitely want to, but the way it is now, it has the same requirements as a cannabis retail establishment, which means that the cost of creating an entirely new full-fledged retail environment, at this point in time, I don’t believe we’ll see a return on the investment that is required.”
“The cost to get there is too prohibitive right now,” she continues. “I want an interim fulfilment step, either via mail or in-person click-and-collect, using my existing infrastructure. Then that allows for any producer with a secure storage area to complete a transaction online and deliver it to that person. It is really an over-engineering of the policy to prohibit producers from selling direct to customers.”
“People love the product, they keep coming back. They love how fresh it is. But now it’s a matter of letting more people know we are here. There’s so many restrictions on advertising that it’s hard to get the message out.”
Terry Robinson, ShuCanna
ShuCanna’s farmgate store located at 2321 Trans-Canada Hwy, Salmon Arm.
Katy Connelly, the co-owner of Seadog Farm, another outdoor cannabis grower on Vancouver Island, echoes Davis’ concerns, especially regarding the costs of building a store.
If there were a more affordable and streamlined program, she says she might consider taking part—her business already operates a small farmgate stand for other products from her farm, such as fresh seasonal produce. But as it stands, the process is too costly and onerous. Instead, she says she would rather focus on good relationships with those who already have retail.
“I would need three licences, and each licence is $2,500 a year. I would have to report on each of these licences,” she says. “I would also need at least a million in excise bonds and a special business licence from the BC government. I would have to build a store to sell cannabis from; I would have to hire an employee to sell the cannabis. I only have one thing to sell; I don’t have a huge storefront.”
“It’s not worth the paperwork, and there’s a system already in place to sell my product,” adds Connelly. “There are processors who will process my cannabis into pre-rolls, so why would I want to do that myself? And there are stores that are looking for products and enthusiastic about selling our product. So why would I not sell through them?
Connelly says she’s explained these issues to the government and does think they are hearing and understanding them but hasn’t seen any policy changes yet. Instead, she thinks they are listening to those who want a system that won’t ever be viable for a regulated product like cannabis.
“I think the people who are advocating for Farmgate want to sell like they used to sell in the old days and not have to do all the paperwork and insurance and all of that. They just want to put their cannabis in jars and sell like they used to, but that is not the way of the world.”
Back at Dabble, Davis says the ideal model is something more resembling the seasonal tourism of wineries.
“It really comes down to an ROI and the upfront cost. The running of the entire retail operation has tons of costs associated with getting it up and operational. “
Like Connelly, she has engaged with the government’s policymakers on the issue but has been told their focus now is on event licensing and consumption spaces, not refining Farmgate. While these could tie into her vision of Farmgate, until the province makes it more viable and practical for smaller growers like herself, she says she expects there won’t be more applying.
“Three licence holders out of a hundred plus, that’s an obvious failure in the policy, and I think that given the taxpayer funds already spent on this program, I think it is their responsibility to take the feedback of those who actually want to do it and work together to make the changes to make it attractive for us. Otherwise, who is this for? It is a failure. It was designed for farms like us, and if we don’t want to do it, who will?
Sugar Cane Cannabis’s farmgate store in Williams Lake, which includes an in-store window into their grow room. Image via William’s Lake First Nation.
BC’s first official farmgate store licensed in BC, ShuCanna, located on the Trans Canada Highway in Salmon Arm, opened recently. Terry Robinson, owner of the facility, says he was eager to apply as soon as BC announced its licensing program in late 2022. While it was a lengthy and pricy process, including the nearly $10,000 in provincial fees—not to mention municipal licensing fees and the cost of renovating and then stocking and staffing the store—Robinson says it was fairly easy.
The challenge he says he faces now is getting the word out about their store. ShuCanna currently carries their own dried flower and pre-rolls, as well as an array of products from the LDB, such as concentrates vape pens, accessories, and more.
“People love the product; they keep coming back,” says Robinson. “They love how fresh it is. But now it’s a matter of letting more people know we are here. There are so many restrictions on advertising that it’s hard to get the message out.”
Although their “soft launch” was in late August, ShuCanna’s grand opening will be Friday, October 27.
Cannabis Farmgate across Canada
Ontario and New Brunswick are the only other provinces with any formal Farmgate program in place, both launched in 2021. Five locations are currently open in Ontario and six in New Brunswick.
Nova Scotia saw an 8.7 percent increase in cannabis sales in its second quarter of 2023, to $31.4 million.
Retail customer transactions for cannabis also increased by 13.8 percent, while the average dollar value of each transaction decreased by 4.4 percent to $37.04. The average price per gram for cannabis also decreased by 3.5 percent to $6.03, one of the lowest average prices in Canada.
As in the previous quarter, growth in cannabis sales was led by a significant increase in sales of local cannabis products, for a total of $10.3 million in Q2. This brings the sale of locally-grown and produced cannabis products in Nova Scotia to nearly one-third of all cannabis sales.
The same time period saw alcohol sales increase by only 0.1 percent, although the total sales still significantly surpassed cannabis, at $210.7 million.
Sales increases for cannabis are potentially related to the opening of a new retail cannabis store in Halifax by adding cannabis to an existing liquor store location on Young Street. Nova Scotia is one of the few provinces that allows the co-location of cannabis and alcohol.
“Over the past five years, we have worked hard to increase the opportunity for our customers to access cannabis safely,” explains Greg Hughes, President & CEO of the Nova Scotia Liquor Corporation (NSLC). “We started with 12 cannabis locations, and now we’re up to 49 stores across the province.”
Carleen Roth, the COO at CannGroup, a cannabis processor in north Okanagan, is launching a petition calling on the provincial government to provide relief to cannabis growers and processors struggling to survive.
CannGroup, she says, paid more than $1 million in excise taxes last year, noting that most of that—three-quarters of every dollar—goes back to the provincial governments, including BC.
Not only are they taxed at a high rate on any cannabis products they sell, but they also face steep increases in their property taxes (from $1,200 a year to $49,000) and have even had to refinance their mortgage to a high-interest private lender because of their connection to the legal, regulated industry.
“We just want to run a business. If we can’t survive, then the government doesn’t get anything from us.”
With the BC government bringing in more than $225 million in their share of federal excise taxes since legalization (as of September 1, 2023), she says she would like to see the province use a portion of that revenue to help the local cannabis industry which the province says it likes to support.
“I’d love it if they could even take ten percent, 26 million from the last three years and grant that to producers to assist with their business development. That would help.”
“Some things they could do is they could rebate some of the tax to us so we can buy our packaging, machinery and materials,” she adds. “That’s something they do for other industries. They could give us low-interest loans to purchase equipment or hire people. They do that for farmers. They could treat us like farmers, which we are, or like other similar industries.”
“We’re not asking for much,” continues Roth. “We just want to run a business. If we can’t survive, then the government doesn’t get anything from us.”
In addition to the federal excise tax, which amounts to $1 for every gram sold (where wholesale prices can be as low as $1-3 a gram or less) and typically $8 per vape pen or gram of concentrate, she notes that producers operating in BC have seen their property taxes increase several hundred or even thousands, plus the BC government takes an additional 15 percent fee for any products sold into the provincial system, even if producers deliver it directly to retailers themselves.
Roth says her hope with the petition is to try and rally more producers in the province to lobby not only the federal government to address the issue of the federal excise tax but also her own provincial government to acknowledge how much they are receiving from that tax.
“We’re just a small company, and we’re paying more than a million dollars a year in taxes to the government. This can’t continue, or we’re going to see a lot of businesses fail. And then no one wins, and the government loses out on all that money, forever.”
The BC government is providing funding to support the creation of a tool to monitor THC and CBD in commercial cannabis.
To the tune of $77,411, the funding comes from the provincial government’s BC Knowledge Development Fund (BCKDF), part of $2.5 million allocated to support infrastructure for 16 research projects at five universities in BC.
Thompson Rivers University in Kamloops is the recipient of the grant related to cannabis research for Capillary Electrophoresis for Characterization of Pharmacologically Relevant Compounds in the Cannabinoid Industry, led by researcher Kingsley Donkor.
StratCann spoke with Donkor about the project, which he says is about providing another tool for the industry to test levels of cannabinoids and terpenes. While the industry generally uses High Performance Liquid Chromatography (HPLC), Donkor says capillary electrophoresis offers some benefits, such as a high level of accuracy with smaller sample sizes than HPLC.
A recent announcement from the BC government explains the project will provide an analytical tool that regulatory agencies and cannabis companies can use to monitor the content constituents “in commercial and advanced cannabis formulations” using specialized Capillary Electrophoresis methods.
Shannon Wagner, Vice President of Research at Thompson Rivers University, says the goal of the research is to help create a better-regulated cannabis industry.
“Thompson Rivers University is proud to lead the way in cannabis research thanks to the support of provincial government funding,” says Wagner. “Our groundbreaking Capillary Electrophoresis project promises safer and more responsible cannabis use in B.C. by providing regulatory agencies and companies with precise tools to monitor cannabinoid content. Together, we’re shaping a safer and more informed cannabis industry.”
Federal and provincial governments have been looking more into the issue of cannabis testing, especially with concerns about the accuracy of product labels in the legal and illegal markets.
Several provinces have released testing results of illicit products shared via law enforcement actions, and more recently, provincial governments have begun looking at the THC testing of legal, off-the-shelf products.
In 2022, Ontario shared a study that showed illicit edibles have significantly less THC than advertised and high levels of pesticides. New Brunswick and British Columbia have also released similar testing results from unregulated products.
A cannabis producer in New Brunswick is scaling down to a micro licence, a move they hope will help save money in an increasingly competitive market.
Crystal Cure Inc., a cannabis producer in Shediac Cape, announced today that it has successfully downgraded its licences for cultivation and processing to micro licences.
Jonathan Wilson, CEO of Crystal Cure, says the decision was something he and others at the company had discussed for years, both as a way to lower the regulatory fees associated with their licences, as well as an acknowledgement of a shift in the market from large scale to small scale production.
Crystal Cure was being formed at a time when extremely large, publicly traded companies were setting the tone for facility design. Since then, many of these larger cannabis facilities have shut down, while the number of smaller micro producers has skyrocketed.
“There are many reasons why we made the change now, some that are positive, some not so much, Wilson tells StratCann. “For one, we acquired standard licences for cultivation and processing because originally, the company had huge, ambitious goals for expansion, like many others. But, like many others, those goals weren’t realistic on many fronts, so this is making things right in that regard.
“Secondly,” he adds, “like many producers, we’ve had to make some difficult decisions in order to survive the current market conditions. There are some savings to the operation that come with this change, allowing us to eliminate some costs that aren’t helping us, one of the biggest ones being the $23,000 annual regulatory fee that we will now save. Finally, being a micro fits our ideologies and methodologies far better than the term ‘standard’. Not to mention, most people already think we are a micro due to our size.”
While the annual regulatory fee for a standard cultivator or processor is $23,000, a micro is only $2,500.
Wilson says he wants to see more support for small producers, both from the government and the market in general. But despite the challenges the industry faces, he is still positive about the future.
“Although we’ve had to make very difficult decisions and sacrifices in order to survive, we are still here,” Wilson said in a company press release. “I know others that can’t say the same, unfortunately. We’ve taken this time to continue to perfect our craft and make some incredible changes to our strategy for the future that we wouldn’t have made if we had expanded as planned, years earlier. This change in licence type is the catalyst for exciting developments to come that will help the smaller end of this industry.”
Crystal Cure sells an array of cannabis flower as well as seeds.
A restaurant in Edmonton is now serving cannabis-infused food and drink on an invitation-only basis through a partnership with a local licensed cannabis producer.
CBD CBN is the name of a new business offering infused products, utilizing a Health Canada research licence held by Token Naturals, a licensed cannabis producer located in Edmonton.
Co-owner of CBD CBN (Catering By Day, Catering By Night), Stacey Mison, says it’s a small restaurant space with room for about 20 guests to sit at a long family-style table or the bar. Their menu is created based on input from their guests, focusing on the different flavours of cannabis more than any intoxicating effect.
“We get to know who our guests are—their tolerance levels, if they’ve been consuming a while or if they’ve never consumed at all—and just figuring out how to usher them through an experience that they’re going to enjoy,” she explains to StratCann.
“A lot of what we’re doing is looking at it more from a flavour perspective of the different cannabis plants and terpene profiles they offer. So looking at it as a culinary ingredient, not just something that gets you stoned.”
Guests to the restaurant need to sign a waiver before enjoying any of the dishes at CBD CBN. They can also complete a questionnaire afterward about their experience, a process similar to other research licence holders in Canada.
“It allows for education,” Mison told City News recently. “It allows for conversations. It allows a place for people to gather and have the conversations that haven’t been happening so we can keep moving forward and show the rest of the world, as more of the world becomes legal, that this is what we can be doing and this is the way forward.”
Keenan Pascal, CEO of Token Naturals, says he and his team were first approached by Stacey and her partner James Mulholland earlier this year, an opportunity Pascal was eager to participate in.
“We were approached by Stacey and James in June of this year. We had attended some of their previous infused dinners and were connected through the general industry. When the opportunity arose to expand the cannabis landscape in our hometown with capable partners, we jumped on it.”
Pascal explains that Token first received their research licence for cannabis in late 2021. Then, at the end of August, their licence amendment was approved, expanding their research licence area into the restaurant space, which allows the company to possess cannabis for the purpose of research and to transport, send, or deliver cannabis between the facility and the restaurant.
“As a manufacturer of drinks and edibles and more, we’re specifically looking at research on palatability and taste, along with qualitative information on the experience of ingesting cannabis-infused beverages and food,” he tells StratCann.
“This is under the larger umbrella of human sensory analysis. The pairing of culinary and alcohol-free beverages aligns perfectly with Token’s lines of cannabis products and with the mocktails of our sister company, Token Bitters. We’re also looking at this as less formalized research around cannabis consumption venues and how they might add to the larger landscape of Edmonton.”
On October 17, Cannabis NB celebrates its five-year anniversary and five years of cannabis legalization in Canada. This is a pretty big milestone for our new industry, and it’s almost hard to believe we’re here already. The day has us reflecting on what this milestone means to our customers, how far the business has come, and the successes we’ve had. It also has us looking forward to what is sure to be an exciting future.
There was a lot of anticipation for cannabis legalization in 2018. The Provincial Government made Cannabis NB responsible for legal cannabis distribution in New Brunswick, and the team was tasked with a unique challenge: open an entire network of stores across an entire province, operated by a brand new team, in a brand new industry. There was no precedent for this, but the challenge was accepted and the team set out to have an e-commerce website and the first 20 stores ready to open their doors on October 17, 2018.
A lot of assumptions had to be made about product, customers, and operations. We knew there would be challenges and flexibility would be key. The lead-up to legalization was fast, with lots to do, but in the end we were ready to take our first online order at midnight on October 17, and our brand new, highly trained team was ready to open 20 store doors across the province that morning in sync, and welcome customers of every type for their first legal cannabis retail experience. That first day was filled with excitement, learning, and connections.
As with any new business in a newly legal industry, challenges were to be expected. Across the country, Cannabis retailers faced supply issues, illicit market confusion, and diverse customer needs. The first year of legalization was very much focused on learning and stabilizing the new business. Despite the challenges, the CNB team continued to focus on providing customer service and education and shifting consumers to the legal market.
Despite a rocky start, by December 2019, very early in its operations, CNB became profitable, and shortly afterwards, in February 2022, it returned all the money used for its startup and began delivering net income back to the Province of New Brunswick.
Celebrating Success
After spending the first few years strengthening the foundation of the business, CNB advanced its model evolution strategy.
This began in 2021 with the launch of our FarmGate program, allowing licensed producers based in New Brunswick to sell their products at their own retail stores on-site at their facilities. In 2022, we expanded our store network, opening new formats and more streamlined stores in underserviced areas of the province.
In the current phase of its model evolution, Cannabis NB launched a private retail channel. These stores are owned and operated under private retailers’ own brands. They are legal and licensed to sell cannabis in New Brunswick, and offer a full portfolio of legal, regulated products across all categories, sourced from Cannabis NB.
We now boast 25 corporate stores, 5 Farmgate partners, and 9 private retail partners (6 open) with a goal of improving visibility and access to safe legal products. We employ over 230 New Brunswickers across the province.
Additionally, over the past five years, CNB has been an industry leader when it comes to cannabis innovation. We have been lucky to drive several firsts like:
Being recognized by the Retail Council of Canada for our training program with an Excellence in Retail Award nomination
Through its growth and innovation, CNB has focused on promoting safe practices around cannabis consumption, with the core focus of its retail model being youth protection, reducing the illicit market, education, and safety.
Looking to the Future
We hope to continue evolving our model by continuing to expand our private retail channel. We want to provide increased opportunities for private sector participation in the legal cannabis market in NB. We also plan to pursue all available avenues for providing consumers with safe, responsible, on-site consumption opportunities that increase legal access and meet the needs of customers.
As Cannabis NB continues to evolve, it remains committed to ensuring the thriving cannabis industry that develops in New Brunswick is safe and responsible, all while providing the best possible experience for our customers every time.
Cannabis NB’s five-year milestone is a huge accomplishment, and I am so proud of the people who have been a part of this journey. I want to thank the incredible CNB team, our partners, and our customers. We would not be celebrating the success of the past five years if it weren’t for their dedication and support.
Also, Tether’s Holiday Showcase takes place at Millworks Creative Studios in Dundas, ON, on November 1.
In other cannabis news this past week…
Several major media outlets also covered the What We Heard Report, including the Canadian Press, which ran a story on the five-year anniversary of legalization, with a focus on the winding down of the stock market bubble, with comments from Abi Roach, Vivien Azer, a managing director and senior research analyst at TD Cowen, and Canopy CEO David Klein.
CTV carried a similar story on the persistence of stigma with comments from Kate Grimmell from Greentown Cannabis in Ontario.
The Canadian Medical Association Journal also released a report on the five-year anniversary of cannabis legalization. The key takeaways are that cannabis use and its associated harms have remained steady or slightly increased (but more data is required), and there have been substantial reductions in criminal arrests and charges related to cannabis use.
Researchers from the University of Quebec at Trois-Rivières (UQTR) are launching a survey with the goal of “a better portrait of cannabis consumption among parents” of children under 12 years old. This would be one of the first studies of its kind to be carried out in Quebec.
A would-be Whitehorse cannabis shop has again lost its bid to get a retail licence—this time, in front of the courts. Community Cannabis Inc. applied for the licence last year after signing a lease and beginning renovations at a space on Second Avenue in downtown Whitehorse. The board held a public hearing on the application before denying it in February.
Some residents in Drummondville, Quebec, have launched a petition complaining about what they say is the smell of cannabis from nearby indoor and outdoor producer Canna-Culture.
Radio Canada ran a story on Quebec producer Sumo, whose first batch of products will be available in the SQDC in November.
Joi Botanicals and Freedom Cannabisannounced that Freedom will be taking on processing and distribution for Joi.
Greenway Greenhouse Cannabis Corporation announced it was engaging cannabis distributor Green Hedge to act as an outside sales force, providing coverage to licensed cannabis retailers and provincial wholesalers across Canada.
Eurofins CDMO Alphora Inc. announced that it had received its Health Canada Cannabis Drug License for its Oakville, Ontario operations in September 2023. This complements the Institutional Research License obtained through Health Canada in June 2021 for its Mississauga development site, and a Standard Processing License obtained for the Oakville manufacturing operation in May 2022.
The Laval Police Department in Quebec carried out three searches and three arrests on October 3 in connection with the production, processing, distribution and sale of cannabis, seizing 1,453 plants as well as dried cannabis.
Licensed in late 2022, Alberta’s Wildwood Weed is finally ready to bring its first crop to market, launching in Saskatchewan in November.
Located just west of the Alberta/Saskatchewan border town of Lloydminster, Wildwood Weed is a micro cultivator and processor taking the sales channel into their own hands: growing, processing, and distributing their cannabis all themselves.
Initially, the company was only licensed to cultivate and had planned on selling to other processors, but they quickly decided to take more control over the entire process.
“We were initially looking at doing B2B sales,” explains Casey Tulloch, who handles business development and sales for the small owner-operated company, “but having the ability to bring it to people fresh, it just makes for a much better product.”
Although they are located in Alberta, Tulloch says they chose their first sales to go into nearby Saskatchewan as a way to ensure they can get a fresh product directly to retailers.
“We’re really excited about the opportunity to do direct sales in Saskatchewan, direct to the stores and get them some fresh flower,” he says.
“Saskatchewan is structured well as far as being able to do direct sales. I really wanted to stay away from something like the AGLC if we can—having to package it, book it to be sent to the warehouse, then, by the time they get it, turn it around and get it back out to the store. It just makes it tough to get good flowers out there.”
The entire team at Wildwood is not new to cannabis, and they know what they like. Between the core team, they have decades of experience growing and consuming the plant, which also guides their decision on what they want to grow. It also helped inform how they built out their state-of-the-art, purpose-built micro facility, which took into account their team’s past experience building and advising on grow facilities.
“We spared no expense,” says owner Kevin Jack, who also helped select their location and worked with the local government for approvals.
Wildwood Weeds’ current ounces from this facility will be Gelato Animal Mints, Jelly Breath, and Galactic Cake, all choices owner Kevin Jack and Master Grower Jack Tomashiro both wax poetically about as some of their favourites.
“It’s a balance of what the market wants and what grows well, but we always want to offer a few different flavours, and we want to bring people what we know we love, as well,” says Tomashiro.
As a small business, Tulloch says they have kept their approach to processing and packaging their own cannabis flower as simple as possible. The choice to start with ounces is not only about an already over-saturated market for smaller SKUs like 3.5 grams but also because ounces are less work to hand package.
“It’s a lot less time,” he says. “That means we can spend extra time getting a good, clean hand trim, and then we can sit down at the end of the day and spend a few hours packaging it up. We have to be efficient with everything we do.”
As they refine their systems, Tulloch says Wildwood also plans to begin processing their own pre-rolls and ice water hash.
Still, he knows the first few crops into the market are important, so he remains focussed on sales: first serving the Saskatchewan market, then beginning to look at Manitoba, taking advantage of their own direct-to-retail sales channels before potentially looking to other provinces.
“One step at a time,” he says. “We know there is a demand for quality flower, and every step we take as a small business needs to be ensuring we can meet that demand.”
This profile is brought to you by Life Cycle Botanics, the preferred cannabis nursery supplier for Wildwood Weed. Images via Wildwood Weed.
Tether, a leading name in the Canadian cannabis industry, is thrilled to announce its much-anticipated Holiday Showcase. The Hamilton-based event promises attendees an opportunity to engage with industry-leading brands, network with other professionals, and gain valuable insights into the latest trends shaping the Canadian cannabis market. The holiday season is a prime time for consumer spending, and by participating in Tether’s Holiday Showcase, cannabis brands are increasing their visibility and creating awareness among potential customers.
Tether’s Holiday Showcase is set to take place at Millworks Creative Studios in Dundas, ON, on Wednesday, November 1, 2023, from 6:00 to 8:00 PM ET. Bringing traditional holiday PR tactics to the cannabis industry breaks down the stigma of this highly regulated and emerging industry. Tether is sending the message that cannabis can be part of a responsible and enjoyable holiday experience, just like other traditional products.
Tether has held events of various sizes, ranging from intimate 30-40-person gatherings to high-profile events of 200+ people. Where permitted, Tether gets product directly into the hands of Budtenders so that they are able to relay their experience directly to cannabis consumers and serve as valuable brand advocates. Guests at Tether’s Holiday Showcase will have the opportunity to explore an array of products, ranging from top-quality flower to delectable edibles and wellness offerings.
“Whether you’re looking to surprise a cannabis connoisseur or introduce a curious newcomer to the world of cannabis, the holiday season is the perfect way to pair your favourite brands with your favourite people,” says Amy Weinstein, Co-Founder of Other People’s Pot. “Tether is the ultimate place to discover unique cannabis gifts for the people you love most!”
Esteemed media partners of the event include Cannabis Prospect Magazine, StratCann, ADCANN, and Cannabis Retailer. Media representatives and cannabis influencers are encouraged to be part of this unique event. To secure your complimentary media pass and schedule interviews with participating brands, please contact Brooke Russell at brussell@marigoldpr.com.
Attendance at Tether’s Holiday Showcase is strictly limited to individuals aged 19+. Pre-registration is required to guarantee your spot.
Sampling opportunities will be reserved exclusively for Budtenders and Retailers.
To stay up to date with event details and brand announcements, follow @tetherbuds on Instagram.
For more information and ticket purchases, please visit Fannatickets.
A First Nations-owned cannabis producer and retailer is now taking what they say is a “hybrid approach” to cannabis sales on their reserve lands.
Williams Lake First Nation (WLFN) is the signatory of the first government-to-government agreement with the Province of British Columbia under section 119 of BC’s Cannabis Control and Licensing Act and owns and operates cannabis retailer Unity Cannabis as well as the cannabis producer and brand Sugar Cane Cannabis on WLFN reserve land on a large lot just south of downtown Williams Lake. The two businesses share a large parking lot.
The First Nation also recently opened a new retail store in that same parking lot that sells edibles that are otherwise not available through the BC LDB’s supply chains. Kirk Dressler, the Director of Legal and Corporate Services with the Williams Lake First Nation and the CEO of Unity Cannabis and Sugar Cane Cannabis, says the new “hybrid” retail model is one born of both economic necessity, and as a response to a recent BC court ruling.
According to Dressler, the new store will initially carry a limited selection of edibles that have demand in the WLFN community and in other indigenous communities. He also decries the amount of plastics and other packaging required for edibles under federal regulations, saying that the products sold at the WLFN sovereign store seek to address the issue.
From an economic standpoint, Dressler says both Sugar Cane and Unity Cannabis are facing challenges, with slim profit margins and increasing price compression, making it difficult to compete. WLFN has engaged the province on the issue multiple times to address the issue, and to push the government on the Cannabis-related commitments in its DRIPA Action Plan, but Dressler says the response from the government has not been satisfactory.
Since the province has in the past said they are not seeking to actively enforce their own provincial retail rules on First Nations land, WLFN is utilizing this new “hybrid” retail space to exercise what they say is their sovereign right to sell cannabis on their own land without provincial oversight.
“WLFN is in a position where it might be one of those that is forced to exit [the industry],” Dressler explains. “That is not acceptable. We’ve invited the province to look at fair and reasonable solutions. The province has refused to collaborate in any meaningful way, despite the fact the province has an obligation under DRIPA to do so and has agreed that it must do so. We’ve advised them that this leaves us with no option but to contemplate what steps we can take to utilize our jurisdiction to make our operation more viable. The province has nodded their head and acknowledged that that seems to be a reasonable response. That’s the inference we’ve drawn. So, we are in fact proceeding to do so.”
He says WLFN is taking steps to ensure they are still adhering to the rules of their Section 119 agreement, and the Unity Cannabis and Sugar Cane Cannabis operations are entirely unaffected by the establishment of the new store.
“What we are contemplating at this point is a hybrid system that would continue to respect the commitments we have in our 119 agreement, but it would also allow Williams Lake First Nation to utilize its jurisdiction to develop a cannabis-related enterprise that might generate revenue sufficient to sustain our global cannabis operation.”
The store bills itself as an “edibles store” and promises the “cheapest edibles in town.” Dressler says all products sold within the store will come with COAs.
In Manitoba on October 3, Canadian history was made when Wab Kinew of the New Democrat Party was elected to become one of the first Indigenous premiers in Canada. The son of an Anishinaabe chief from the Onigaming First Nations, representing Fort Rouge, will be replacing the Progressive Conservative Party’s Heather Stefanson, who has represented Manitoba since November 2, 2021. Stefanson also made history when she became the province’s first female premier.
As much as the Manitoba government has made waves in the last four years through equitable representation with the first female premier of the province and now an Aboriginal premier of Canada, many cannabis industry workers, advocates, and government leadership believe there is still a large gap to be filled for cannabis legislation.
With this upcoming change in leadership, people in the cannabis industry are beginning to buzz on the news, predicting that significant changes will occur in the foreseeable future. In the past, Kinew criticized the Progressive Conservative government’s shift away from focusing on the federal cannabis regulations and the province’s choice to keep a firm stance on restricting many aspects of recreational cannabis.
Kinew’s Stance on Cannabis Regulations
In the summer of 2019, it was reported that Kinew did not seek to change cannabis legislation for retailers. However, there was contemplation of whether there would be refinement to Manitoba’s consumption laws.
“I think the (ban in) provincial parks, we’d take a look at, just because—let’s be realistic—people are smoking weed in provincial parks as it is right now,” Kinew said.
He also continued stating that consumption in public could also be revisited, as well as the high taxes placed by the provincial government on cannabis products, with the intention to revisit changing the amount previously established.
Manitoba’s Harsh Restrictions
Currently in Manitoba, cannabis cannot be consumed publicly in any capacity without raising a $672 fine, whether in city parks or 6 meters away from the door. Also, the four-plant limit for recreational consumers, established under federal law, is prohibited in Manitoba, which can result in a $2,542 fine.
Cannabis Industry Looks Forward to Change
Steven Stairs, the Chairperson for the Cannabis Business Association of Manitoba, shared his team’s excitement with StratCann on the change in government and the expected impact on cannabis laws. He wrote to the newly elected official stating his eagerness to show support for their future goals.
Stairs reached out to the media, saying that “the NDP were key allies In supporting the cannabis industry’s fight to end the Social Responsibility Fee (SRF). As such, we believe they will be a key working ally in the provincial government. Legislative changes are still needed for the industry.” He continued highlighting the much-needed progression in areas such as farmgate, private and public cannabis consumption lounges, home grow restrictions, and medical consumption in provincial parks and public spaces.
Adrienne Guillou, Store Manager from Flint & Embers Cannabis Co, an Indigenous-owned cannabis retail store on urban reserve land, shared their team’s excitement at the escalation of indigenous rights and representation with Kinew’s recent win.
Guillou says her team is on par with the NPD’s current stance on cannabis policies in the province. She continued, stating that “we are celebrating this win two-fold. We believe that consumers should be allowed to grow four cannabis plants in the comfort of their personal homes. There has been a long-standing fight to lift the ban on personal growing in Manitoba, and it looks like there’s finally going to be some headway made.”
The most exciting aspect of this scenario for Guillou is the much-needed leadership from indigenous individuals and communities in the country; she also expressed immense gratitude towards the generational impact and importance of the upcoming change in and out of the cannabis sector.
Melanie Bekevich, Owner of Mistik Cannabis Co. alongside Peace Pipe Cannabis Co., also expressed a positive response and anticipation. “As an Indigenous-owned store, we are very proud of Wab Kinew’s historic win in this election as Canada’s first Indigenous premier. The NDP has been very responsive and accessible to the industry, especially small businesses. Now that they are forming government, we believe there may be a review of the cannabis portfolio, emphasizing levelling the playing field for small independent retailers. I believe the new government will be open to reviewing requirements for window coverings and re-evaluating the controlled access licensing tier that permits corner stores and gas stations to sell cannabis. We’re excited to see what Premier Wab Kinew and his team will do.”
AKB is a biracial indigenous writer & strategy consultant based out of Kelowna, BC.
On September 22, 2023, Harris & Partners Advisory was appointed as the receiver (the “Receiver”) of all the assets, undertaking and properties of Wabi Sabi Brands Ltd. (“Wabi Sabi”) pursuant to an appointment of the secured creditors.
Wabi Sabi operated a premier, artisanal, chocolate cannabis edibles production facility in Calgary, AB. The facility boasts several pieces of manufacturing equipment of recent age and in very good condition, including a complete processing line, x-ray machine, lab and packaging and labelling equipment.
On October 3, 2023, the Receiver commenced a Sales Process (“Sales Process”). The Sales Process is being conducted in accordance with the procedures, which can be located on the Receiver’s website: www.hpiadvisory.com/wabisabi.
Interested parties who wish to pursue a potential acquisition are required to execute a Confidentiality Agreement to receive access to the data room.
Per the Sales Process, bids must be submitted by no later than 12:00 pm (Calgary Time) on October 27, 2023.
The OCS posted a cannabis product recall on October 4 for Port North’s Lemon Z Rosin solventless gummies.
The reason for the recall was that the product may contain mold. The package date for the product is September 14, 2023, lot number 0Z-03-08-07.
Health Canada has not listed a recall for this product as of publication of this article. OCS also issued two cannabis recalls in September due to labelling errors.
Health Canada increased the number of inspections it conducted in the most recent fiscal year compared to the year prior, especially of personal and designated medical cannabis growers.
According to the newest annual report covering April 1, 2022, to March 31, 2023, Health Canada’s regulatory branch conducted 662 inspection activities of regulated parties under the Cannabis Act and its regulations. Included were 170 registered personal and designated production of cannabis for medical purposes inspections.
This number increased from 549 inspections in 2021-2022, which included 89 inspections of personal and designated cannabis growers. In-person inspections were mostly paused from 2020-2021 due to pandemic-related closures.
The increase in inspection of those with licenses to grow cannabis for medical purposes, either for themselves or as a designated grower for others, is part of Health Canada’s efforts to reduce what it refers to as “misuse” of the medical cannabis program, while still maintaining access to the medical program for those who need it.
In addition to inspections of these personal and designated growers, Health Canada’s inspectors also conduct compliance verifications with federally licensed commercial cannabis producers. Of the 492 inspections conducted of commercial licence holders, Health Canada issued 15 non-compliant inspection reports, 163 major observations, and 358 minor observations. Sampling was conducted in five of these inspections.
Of the 15 non-compliant reports, Health Canada issued two formal warning letters, one partial licence suspension, along with product seizure and detention.
Issues that resulted in a non-compliant rating included conducting unauthorized activities with cannabis, insufficient record keeping, lack of appropriate inventory control and oversight, unsatisfactory cannabis packaging or labelling, insufficient security measures in place, and non-compliance related to good production practices (GPP).
The majority of inspections (286) were regularly scheduled inspections. Another 115 were compliance verifications, 31 were concerning sales, and 18 were targeted inspections. There were also 42 inspections related to industrial hemp licence holders.
A regular inspection is conducted as part of Health Canada’s normal activities. A targeted inspection looks at specific issues with the licence holder, and a sales inspection relates to the sale of product a licence holder is not authorized to sell.
Of those inspections of hemp licence holders, only one instance of non-compliance was reported, relating to “insufficient record keeping and the licence holder not meeting the conditions of their industrial hemp licence.”
In the most recent year, Health Canada conducted 353 compliance activities related to promotions, which led to 93 actions, either compliance or promotional emails, letters, or calls, highlighting the agency’s guidance-based approach towards compliance.
Personal and Designated Grows
The significant increase in inspections was of the personal and designated medical grows, expanding by 40 percent compared to the previous year. Of the 170 completed inspections, 78 resulted in no observations, and 92 resulted in at least one for a total of 165 observations.
The inspections resulted in Health Canada revoking or refusing 16 of these registrations, with “additional actions” currently ongoing or under consideration at the time of publication.
Most of the licence holders inspected in the past year were in Ontario or BC (115, 29), but a handful were also in Alberta (5), Manitoba (10), and Quebec (11). In the previous year, Quebec saw the majority of these kinds of inspections.
In addition to these inspections, Health Canada continues to communicate with municipalities and law enforcement and share information with provincial and territorial health professional licensing authorities (such as provincial colleges of physicians) in instances of potential abuse by medical professionals authorizing access to the medical program such as authorizing a large quantity of cannabis.
The average daily amount authorized by health care practitioners for individuals registered to access cannabis for medical purposes from federally licensed sellers in Canada is just over two grams a day. Still, some have been authorizing more than 100 grams a day. The average daily amount authorized by health care practitioners for individuals registered with Health Canada for personal or designated production was 35.5 grams per day.
According to Health Canada’s most recent figures as of March 2023, the number of individuals registered for personal and designated cultivation of cannabis for their own medical purposes decreased 6 percent from 20,448 in December 2022 to 19,076 in March 2023, mainly from BC, Ontario, and Quebec.
In 2018, there were just under 26,000 active personal/designated production registrations. That number grew to more than 47,000 by September 2021 before rapidly dropping to just over 19,000 as of March 2023.
Law Enforcement and Politics
Police in Quebec recently shared information on a string of busts they had conducted on licence holders they say are using the designation to feed into large-scale distribution and trafficking activities outside the scope of the licence.
The amount of these inspections conducted by Health Canada has been growing annually. While there were 170 inspections in the most recent year and 89 the year prior between April 1, 2019, and March 31, 2020, Health Canada conducted 82 inspections associated with 82 personal or designated registrations. In 2019, there were only nine inspections related to such registrations.
Beginning October 1, Alberta Gaming, Liquor and Cannabis (AGLC) is reducing the SKU listing fee for cannabis producers.
Previously $1,500, the reduced fee to list a new SKU to sell into the Alberta market is now $250.
The changes were shared with producers on September 29 as part of an ongoing effort by what ALGC says is its focus on “removing legislative barriers and red tape that impede producers and retailers, and support business.”
Terri Blooms, CEO of Almanac Grow Corp, an Alberta-based producer that sells under the Plaid Trout brand, says this change is a good start, but the AGLC needs to do more to help a struggling industry, including lowering more province-level taxes applied to cannabis in Alberta.
“This 83 percent reduction in listing fees is a good start. It’s a shame so many Alberta-based licence holders are struggling in their home province. Hopefully, this is just the start of changes. We’re hopeful direct delivery is next, and, critically, they’ve got to reconsider the 16.8 percent additional tax applied on top of the federal excise tax. It’s unsustainable, and in business-friendly Alberta, it’s not right that the provincial government collects more revenue per gram than the grower.”
It’s better that producers only have to pay AGLC $250 to list a new product instead of $1,500. But that fee is irrelevant if AGLC won’t let you list a new SKU. It would be better if producers were permitted to offer whatever products they like, and were paid on a consignment basis once those products are purchased by retailers.”
Tim Mallett, the CEO and master grower at Alberta Bud and a board member with the Alberta Cannabis Micro Licence Association (ACMLA), says the lower charge will help, but he still has concerns with challenges on selling into the centrally-planned Alberta market, calling it “too little, too late.”
“It’s better that producers only have to pay AGLC $250 to list a new product instead of $1,500. But that fee is irrelevant if AGLC won’t let you list a new SKU. It would be better if producers were permitted to offer whatever products they like and were paid on a consignment basis once those products are purchased by retailers.”
Alberta currently lists about 750 cannabis retailers, with more than 200 producers and brands approved to sell in the province.
A sergeant with the Sûreté du Québec is currently under criminal investigation related to alleged false statements she made while investigating a medical production licence.
As covered recently in Le Journal de Montreal, Sergeant Dany Lafleur was found by a court in 2020 to have allegedly misled the court about her contacting Health Canada to determine the validity of a Health Canada document authorizing cannabis possession for medical purposes. She is now subject to a criminal investigation following a civil suit filed against her and her colleagues earlier this year by Christian Lanthier, who provided the Health Canada document.
Court records show that the document was presented to law enforcement by Lanthier during the execution of a search warrant at a residence in Repentigny, Quebec, related to a fraud investigation with an associate of the Hells Angels.
While searching the residence, officers say they smelled cannabis and then later discovered cannabis inside a vehicle they were searching under the original warrant. Lanthier presented the document to officers, telling them he was authorized to possess up to 150 grams of cannabis based on a 30-gram-a-day allowance.
Ultimately, the document made its way to the officer responsible for evidence, Dany Lafleur, who, along with other police officers, say they suspected the document was not legitimate. Court records also document that police ultimately secured a second search warrant to search the residence for drugs prior to learning of the authorizing document.
Lafleur told the court she had called Health Canada’s helpline—one set up for these types of requests from law enforcement—but did not hear back. She argued that this led her to conclude the document was invalid.
There are also conflicting statements from several officers regarding how the document was discovered and by whom.
The court initially ruled that the search was a valid one because the document was not valid. In a follow-up ruling in November 2020, the court found that Lafleur had likely misled the court about contacting Health Canada to determine the document’s validity.
This was partly supported by a lack of evidence showing that the Sergeant had contacted Health Canada at the time she claims.
This was also supported by looking at the helpdesk registry maintained by Health Canada, which was presented as evidence, along with call records from Lafleur’s personal and professional numbers.
No evidence was found of a call made by Lafleur to Health Canada’s call line on the day of the search or to a number beginning with the same area code as the assistance line. Lafleur’s first call recorded in the Health Canada register was made a month after the search.
The court also found that the officers who determined the Health Canada authorization was false had limited drug investigation experience and were unaware of medical cannabis regulations or the document type they were provided.
The court also disputed officers’ claims of how the document was discovered.
Translated from the court ruling: “The Court must therefore conclude that these police officers were not candid and transparent when they participated in preparing the telewarrant request, and when they testified before the Court, on points directly affecting the legality of the authorization requested and executed. Furthermore, when it comes to the verification call to Health Canada on the day of the search, the Tribunal can only think that an attempt was made to mislead it.”
Lanthier filed his civil suit in June of this year, leading police to consult with the Director of Criminal and Penal Prosecutions (DPCP) to determine whether there were grounds for an investigation into the actions of Lafleur.
The document in question was a Document for the Access to Cannabis for Medical Purposes Regulations, signed by Dr. Lawrence Fremont of Markham, Ontario, prescribing Lanthier the use of 30 grams of cannabis per day. According to Linkedin, Fremont operates a hair loss recovery centre.
The BC Liquor and Cannabis Regulation Branch (LCRB) has updated its regulations to allow cannabis retail store licensees and their employees to accept samples from a federal licence holder.
These changes will apply to Cannabis Retail Stores (CRS) and Producer Retail Stores (PRS ie farmgate).
A sample can not be used for any type of inducement. The LCRB has no limit on the size of a cannabis sample, but notes that samples are expected to be “of reasonable size and quantity and should have little retail value”. The retailer must provide a “nominal fee” for the sample.
A representative with BCs Ministry of Public Safety and Solicitor General says that while a the nominal fee/value is not defined in legislation or regulation, the amount can be negotiated between the licensees. An example of a nominal fee could be $2, says the representative.
Although retailers are not allowed to supply cannabis samples to other cannabis licensees, the LCRB says they are exploring this possibility in the future, along with allowing all marketing licensees to accept and provide samples to other licensees.
The change is based on industry feedback. Earlier this year, BC confirmed they were engaging industry on the issue.
Randy Rowe, the owner of the Grow Up industry conference, taking place October 1-3 in Victoria BC, says he was one who worked closely with the BC government to push for these changes. Grow Up’s Victoria event has been structured to allow for samples, which will be carefully tracked.
“This is a game changer for brands in BC,” says Rowe. “Being able to get in front of retailers gives producers a stronger opportunity to educate retailers on their product. For cannabis events like ours, this gives us the opportunity to bring a large number of retailers and brands together to be able to provide samples.”
CRS and PRS licensees will be required to keep records relating to cannabis samples that contain the following information (handbook section 3.4.17):
a) the unique excise tax identifier from the original packaging of the cannabis sample;
b) the date the licensee received the cannabis sample;
c) the federal licence holder and name of the representative that provided the cannabis sample;
d) the nominal purchase amount that the licensee paid for the cannabis sample; and
e) the amount or quantity of cannabis sample received.
Some other provinces allowed such samples from the beginning of legalization, like Ontario and Saskatchewan, while Alberta recently began allowing them this past March.
Earlier this year, a spokesperson for the Cannabis Cultivators of BC, representing a handful of producers, told Stratcann that its members would love to see the province create an accessible cannabis sampling program. This would allow producers to inform retailers of what is already on the market and what is coming soon.
“Allowing cannabis sampling gives retailers the ability to touch, see, and feel the products they plan on bringing into their stores, increasing transparency in the process and instilling confidence in what they recommend to their consumers.
“Items for consideration could include making sampling available for products prior to provincial launch by BCLDB and allowing producers to distribute samples directly from their own facilities: aspects which would help our sector improve speed, remove administrative burden, and remain responsive to changing consumer and retailer needs.”
Jaclynn Pehota, the executive director of the Retail Cannabis Council of BC (RCCBC), told StratCann her organization has been lobbying the BC government to make such changes, as well.
“Product sampling is critical to making informed wholesale purchasing decisions for licensed retailers. Sampling is also an important sales tool for producers,” Pehota tells StratCann. “RCCBC made a formal recommendation in April 2023 that representative samples of any cannabis product in the market should be allowed on a B2B basis in BC.”
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 mike.arneja@trugreens.ca 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.
Unlocking Insights for a Thriving Cannabis Industry – Actlabs Leading the Way
Actlabs, founded in 1987 by Dr. Eric Hoffman, a pioneering Canadian geochemist, has emerged as a global leader in analytical testing services. Expanding its footprint to include 15 state-of-the-art laboratories across Canada and worldwide, Actlabs offers comprehensive solutions for diverse markets and industries.
From geochemical exploration to life sciences, pharmaceuticals, agriculture, environmental, materials testing, and since mid-2019, cannabis, Actlabs is at the forefront of innovation and reliability.
One of the significant challenges in the cannabis industry is the lack of a cohesive testing standard in Canada, leading to ambiguity in methodologies and key performance metrics.
With a visionary approach, Cassidy Weisbord, Actlabs’ dedicated National Account Specialist, in partnership with an industry-leading team of committed professionals, is driving the company toward new heights in the evolving cannabis industry. Actlabs recognized the burgeoning potential of cannabis testing and leveraged its well-established divisions in agriculture and life sciences to quickly engage in this market.
Today, the Actlabs cannabis division supports domestic and export-focused producers, processors, extractors, and manufacturers commercializing a wide array of medical and recreational products and services.
Unlocking Excellence through Knowledge and Experience
One of the significant challenges in the cannabis industry is the lack of a cohesive testing standard in Canada, leading to ambiguity in methodologies and key performance metrics. At Actlabs, we thrive on over a decade of experience, not only in cannabis testing but also in related industries such as pesticides, heavy metals, and microbial contaminants. Our rigorous and validated testing methods, coupled with easily understandable reporting formats, provide our clients with the highest level of confidence in their products.
Empowering Cannabis Growers of All Sizes
Cassidy believes in driving key factors that matter most to our cannabis testing clients: compliant and knowledgeable testing, competitive pricing, and rapid turnaround when required. Actlabs stands as a trusted partner for cannabis growers, from large LPs to start-up micros & processors and individual growers. We take pride in offering equitable pricing for all services, ensuring that affordability does not compromise quality.
Rapid Turnaround with Unmatched Precision
Understanding the dynamic nature of the cannabis industry, Actlabs commits to a 7-10 business day delivery for comprehensive testing to facilitate Certificate of Analysis (C of A) release. Additionally, we offer expedited 1-2 business day turnaround for specific requests like potency, terpene profiles or pesticide screening, crucial for making time-sensitive decisions during harvest, phenotyping, or product labelling.
Equipped for Tomorrow’s Cannabis Landscape
At Actlabs, we recognize that the cannabis industry’s future lies in new product formulations and complex research. As the industry moves beyond its current stage, the need for advanced testing regimes will become apparent. Our extensive and well-equipped privately-owned contract labs in Canada are poised to cater to regulated development, research, and investigations tied to product formulations, customer complaints analyses, contaminant identification, and more.
Join Us in Pioneering the Future of Cannabis Testing
With a commitment to excellence, Cassidy Weisbord and the entire Actlabs Team are determined to lead the way in shaping the cannabis industry’s future. Explore our cutting-edge services and technologies at Actlabs.com or contact us at HannahProkop@Actlabs.com to discover how we can unlock insights and provide solutions for your success.
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.
Note: The case was closed in April 2024 following the death of one of the defendants, the other six men charged having their proceedings stayed. In August 2024, Elevated Prairies was listed as having their licence revoked.
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.
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