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Law Canada MJ News

Canada's Marijuana Industry Has a New Problem


For years, cannabis stocks were the greatest thing since sliced bread on Wall Street. The expectation of ongoing state-level legalization in the U.S., coupled with Canada becoming the first industrialized country in the modern era to give marijuana the green light, was forecast to send pot stock valuations into the heavens -- and for a period of time this is precisely what happened.
However, marijuana stock investors have received a dose of reality since the end of March 2019. Supply issues have been persistent throughout Canada, whereas exorbitant tax rates on legal weed remain problematic in the United States. Though the long-term outlook for the legal pot industry is still very compelling, the near-term appears challenging.
This is especially true for the Canadian marijuana industry.
Canadian pot stocks appeared to have a clear path to outperform in Q2
Canada was expected to be a cannabis leader, but it completely blew its chance to be the industry's blueprint due to regulatory-based miscues and overzealous capacity expansion.
Then again, Canada looked to be turning the corner during the coronavirus disease 2019 (COVID-19) pandemic. According to Statistics Canada, revenue from licensed cannabis stores has been hitting record highs. Here are the latest monthly cannabis store sales figures (all figures in Canadian dollars (CA$)):
  • March: CA$181.2 million
  • April: CA$178.4 million
  • May: CA$185.9 million
For context, January and February generated respective cannabis store sales of CA$154.1 million and CA$151.9 million. With new dispensaries opening in key provinces, such as Ontario, and consumers apparently stockpiling cannabis in advance of stay-at-home orders in Canada that were tied to the pandemic, it was my expectation that Canadian pot stocks would come roaring out of the gate when reporting their May-or-June-ended quarterly results.
Oh how wrong I've been.
A cannabis leaf lying atop a one hundred dollar bill, with Ben Franklin's eyes peering between the leaves.

Image source: Getty Images.
The Canadian weed industry has a new problem on its hands



Through this past week, we've witnessed two of Canada's major licensed producers unveil their latest quarterly operating results. In both instances, even with Canadian licensed pot sales up notably since the year began, the licensed producers delivered underwhelming results.
Last week, it was Cronos Group (NASDAQ:CRON), which reported almost $9.9 million in quarterly sales, $2.17 million of which originated in the United States. Unfortunately, Cronos wrote down more than $3 million in inventory, which, in addition to $9.8 million in cost of goods sold, led to a gross loss of $3 million and an operating loss of $34.8 million for the quarter.
Prior to Cronos Group, it was New Brunswick-based OrganIGram Holdings (NASDAQ:OGI) delivering a dud. OrganiGram's May-ended quarter featured CA$18 million in net sales, down from CA$24.8 million in net sales in the prior-year quarter. On an operating basis, and inclusive of an unfavorable fair-value adjustment on biological assets, OrganiGram produced a loss from operations of a staggering CA$99.3 million.
Though there's plenty of finger-pointing to go around following these abysmal results, one particular similarity stands out with these companies: They both placed some degree of blame on falling net selling prices for cannabis.
In Cronos Group's press release, it was worded as "cannabis product price compression in the Canadian market." Meanwhile, OrganiGram's press release referred to it as "a lower average price driven by increased competition."
The point is, the Canadian marijuana industry has a brand-new problem: Plunging dried flower prices.
A judge's gavel next to a handful of dried cannabis buds.

Image source: Getty Images.
Three reasons Canada's marijuana flower prices are falling
How is it that the net selling price of cannabis could be in free-fall when the Canadian weed industry is still relatively nascent?
To begin with, some of the blame can be assigned to regulators. In Ontario, provincial regulators stood by an ineffective lottery licensing system for dispensaries until Dec. 31, 2019, before abandoning it for a more traditional application and vetting process. This lottery system left Ontario completely unprepared -- a mere 24 stores were open by mid-October 2019 -- and led to significant supply bottlenecks in the region.
Secondly, licensed produces are partly to blame. Without any precedent to a legal marijuana industry in an industrialized country, pot stocks expanded their production capacity and made acquisitions without really understanding the ramifications of their decisions. In recent months, dried flower has flooded a market that simply doesn't have enough dispensaries to sell it.
And third, the black market remains a nuisance for the Canadian cannabis industry. With taxes being levied on legal weed purchases, the only way for pot stocks to be price-competitive with the illicit industry is by producing value-branded product. While these value brands can help lure in legal-channel consumers, they've been absolutely wrecking margins and the push toward profitability (see Cronos and OrganiGram).
At this point, Canadian marijuana stocks are left with a tough choice. On one hand, they could produce a value brand in order to take on the black market and potentially secure a loyal following of consumers. Then again, doing so will wreck near-term margins. On the other hand, they can target premium product and risk not gaining significant market share, but preserve their margins in the process.
The correct path is anyone's guess at this point, which is what continues to make Canadian pot stocks a risky investment.
 
In Maryland we are now seeing daily specials at $30-35 per eighth which is way down from $65 that was unbiqutous when the program opened. Some mid-teens but some high teens very low 20's on percentage THC.

Canadian pot producers take fight to illicit market with cheap cannabis


It took some time, but Canadian cannabis producers appear to have finally embraced selling cheaper pot.
The so-called value segment of the Canadian cannabis market - defined by one analyst as having a retail price below $6 per gram - has exploded in recent months: it accounted for slightly more than 40 per cent of all dried flower sales in July, up from 10 per cent of the market last September, according to industry data provider Headset.

The popularity of these “value" products has helped companies like Aurora Cannabis Inc. and Canopy Growth Corp. report better-than-expected quarterly sales figures, while also providing consumers with a competitively priced product that could lure people away from the illicit market.
"The value segment is really aimed at getting people in [the legal market], but the producer's job is to keep that customer and then trade them up to more expensive products," said Graeme Kreindler, an analyst with Eight Capital, in a phone interview.
But their prevalence may come at a price. By selling more cheap pot, cannabis companies may risk hurting their margins as well as sacrificing additional revenue despite being able to clear out inventory much faster, some analysts say.
There were more than 669,000 kilograms of unpackaged dried flower stored in cannabis producers' vaults across Canada in May, according to recent Health Canada figures. That could take well over a year to clear out assuming no more pot is produced in the country and if inventory isn't destroyed.
"What's been interesting to me was how some of the Canadian producers didn't understand that they could maintain higher prices per volume on flower products," said Stifel Financial Corp. analyst Andrew Carter in an interview.



"With excess capacity, there's always going to be someone that eventually decides to undercut everyone else."

That's what happened in October when Hexo Corp. launched its Original Stash brand, which sold about one ounce of cannabis for approximately $125, a price point that would match similar products found on the illicit market. Now, there is roughly a dozen cannabis producers who are selling similar sized options to the recreational market.
Carter said Canopy Growth recently embraced the value segment with cheaper bulk options after the company lost market share and needed to spur sales.
"If they can focus on growth, then maybe [Canopy] can win back some of its market share," he said.

Bloomberg Markets To win in cannabis, you need to win the recreational market: Canopy Growth CEO

To win in cannabis, you need to win the recreational market: Canopy Growth CEO

Canopy Growth CEO David Klein says his company intends to have top market share in each recreational segment which means improving flower quality and encouraging the entry of non-smoking consumers into the cannabis space through topicals and beverages.

Earlier this week, David Klein, chief executive officer at Canopy Growth, said that the value segment of the market is likely to command about half of the overall recreational market.

However, it might take a few more years for the Canadian cannabis market to show the various distinctive segments of the market such as value offerings or premium brands, he added.

"The consumer is just defaulting to the highest THC for the lowest price right now," Klein told BNN Bloomberg in a phone interview.
"Most of the [consumer-packaged-goods] categories like to define themselves by price points, but I don't know if the price points have been established yet in a meaningful way. We'll only know that once we go through this transition from the illicit market to the legal market."

While B.C.-based Tilray Inc. does offer a value product under its The Batch brand, it hasn't been a strategic focus for the company, said RBC Capital Markets analyst Douglas Miehm, in a recent research note.
"[Tilray] is targeting sales from higher-margin products, which in our view could hinder its revenue and [earnings before interest, taxes, depreciation, and amortization] ramp," he wrote.

Tilray CEO Brendan Kennedy said in an interview that he doesn't see cheaper cannabis on the legal market stopping customers from buying the pot producer's more expensive premium offerings. Indeed, he said people who are more interested in higher-quality products with better terpene profiles or visual appeal aren't the target market for value brands.

"A net new value consumer is coming from the illicit market, generally, and not coming from a premium segment of the market. So I don't see cannibalization," Kennedy said. "If we see the value market growing over time, that's probably a good thing because those value consumers are migrating from the illicit market."
 
Niagara site significant part of $42-million cannabis drug bust

Law enforcement agencies cracked down on what Ontario Provincial Police described as an international “criminal enterprise” last week, seizing an estimated $42 million in drugs, equipment, weapons and other items, and arresting eight suspects.

A Jordan greenhouse surrounded by police Aug. 13 was likely one of 26 locations searched by officers last week that also included places in Niagara Falls, St. Catharines, Welland, Simcoe, Markham, Canfield, Leamington, Scarborough, Richmond Hill and British Columbia, at the culmination of a year-long investigation dubbed Project WOOLWICH.

Police says members of the criminal enterprise had been exploiting Health Canada medical, personal and designate cannabis production, instead growing the plant to sell illegally, including in the U.S.

Det. Insp. Jim Walker, from the OPP’s organized crime enforcement bureau and provincial joint forces cannabis enforcement team, said investigators have learned criminal enterprises are abusing Health Canada registration, using it as a loophole to grow well over what their allotment is.

“They’re flagrantly overgrowing that amount, so now you have these large-scale cannabis farms under the regime of Health Canada that they hide behind,” Walker said in a video released Friday by the OPP.

Investigators say shipments of U.S.-bound illegal cannabis were also seized, as well as two shipments of U.S. currency being shipped to Canada – leading to the involvement of U.S. Homeland Security Investigations offices in Buffalo and Toronto.

Michael Buckley, the Homeland Security Investigations attaché at the U.S. Embassy in Ottawa, called the joint investigation “an excellent example of the ongoing collaboration between the Homeland Security Investigations … the Ontario Provincial Police and Niagara Regional Police.”

“It clearly highlights that the critical sharing of information can successfully lead to the dismantlement of criminal organizations in both countries,” he said in a media release.
 
Medically validating pot: Canada’s first medical cannabis clinical trial

Across the U.S., thousands of medical patients use cannabis to treat their anxiety, chronic pain, sleeplessness, arthritis and even epilepsy every day, as medical marijuana is legal in 24 states.

But because of its federal status as a Schedule 1 substance, medicinal cannabis has not been standardized like other pharmaceutical drugs in this country. It’s stuck in a catch-22: by definition, a Schedule 1 substance has no medicinal value. But its Schedule 1 classification also largely prevents research to prove the medicinal value of cannabis.

Canada legalized cannabis at a national level in 2018, though, so studying and doing legal research on the drug is much easier north of the U.S. border. There, medical professionals like Dr. Hance Clarke are eager to start standardizing medicinal cannabis for patients and physicians everywhere.

The medicinal variability between brands of products and even batches from the same brand makes it challenging for patients and doctors to know exactly what they’re getting or prescribing in an edible, a tincture, a strain of flower, hash or oil, Clarke says. But that’s something he hopes to change.

“Recreational products have a variation of anywhere from 10-22%,” Clarke says. “That’s cool if it’s in the recreational zone. It’s not good if you have a complex medical condition that you’re looking to treat and you want the medication to have the same effect on your symptoms every time you consume it.”

He adds that 10-22% variability is not acceptable in any other type of pharmaceutical product.

Clarke is the director of pain services at Toronto General hospital and a recognized leader in opioid abuse education in Canada. Now, he’s working to validate and standardize cannabis as a medicine in Canada’s medical world.

In a clinical trial, called Medical Cannabis Real-World Evidence (MC-RWE), researchers aim to first test the reliability and repeatability of Canadian cannabis products, and then to create a national repository of cannabis product data for physicians and patients. With the help of 2,000 Canadian trial subjects, they’re going to test products from 12 of Canada’s leading cannabis producers.

“We’ve got to convince [physicians] that what they order or prescribe, they can get the next time, if they see a benefit,” Clarke says. “The real game-changer is going to be that you can search for and find exactly the product that’s going to treat your symptom, without being beholden to the variability of the industry.”

To participate in the study, patients must experience depression, chronic pain, sleeplessness or anxiety. Once accepted, those patients will go to an online portal created by California blockchain company True Trace (MCRWE.ca), and select from products that have been genetically tested and monitored from seed to sale.

Patients will closely track their own symptoms over the course of six months, answering three detailed medical questionnaires on the True Trace portal. Researchers will monitor the patients’ progress through the trial, but won’t interfere in the observational study.

So far, Clarke says the trial only has about 50 out of the 2,000 testers researchers hope to sign up, and they’re accepting applications from any Canadian who would like to participate.

When the six-month trial is over, Clarke’s hope is to have a comprehensive national repository of cannabis products and associated data that physicians and patients can consult. They’ll be able to see exactly what symptoms each product works to relieve and how consistent the relief is. They’ll be able to search for a product by the symptom it relieves, see which top five cannabinoids are present in it, and what people said about the terpene profile.

“If I’m a physician, what products do I want my patients to be taking? Something that I know is validated, something that I know is replicable,” says Clarke. “So as a licensed producer, if you want that type of medical credibility, you’re going to certainly want to consider being part of the platform as well.”

And the more the merrier, as far as Clarke is concerned. The broader the scope of producers, the more researchers will learn about these products and the more useful Clarke’s online repository becomes for patients and physicians.

It’s a service that will undoubtedly help a lot of Canadian patients suffering from different ailments find exactly the cannabis medicine that’s right for them. And it’s a service that will help Canadian physicians get their patients the most reliable, effective and least health adverse medicines.

It’s a service that the U.S. could greatly benefit from. But one which won’t be possible, until the substance itself finds its way off that federal list of Schedule 1 drugs.
 
Manitoba man taking province, attorney general to court over ban on growing pot at home


There is a precedent: Quebec's ban was ruled unconstitutional on Sept. 3, 2019

One man is aiming to make it legal for all Manitobans to grow weed at home.

Jesse Lavoie filed a notice of application on Wednesday against the Manitoba government and the attorney general to strike down a section of the province's Liquor, Gaming and Cannabis Control Act that bans home growth operations.

"I've always wanted to grow my own cannabis plant. I don't drink alcohol or use tobacco, so this is the only thing I use," said Lavoie.

"[I'm challenging the government] really to grow at home and cut down on my personal consumption costs — and I want every Manitoban to have that right."

The case looks specifically at Section 101.15 of the Liquor, Gaming and Cannabis Control Act, amended in October 2018 to include cannabis, which states that a person must not cultivate the drug at their residence.

It also now states that a person cannot possess a total of 30 grams of weed in public, nor can a person possess cannabis that is not packaged, labelled and stamped in accordance with federal requirements, "unless permitted by regulation."

The penalty for breaking Section 101.15 of the legislation is a fine of $2,542.

The provincial legislation stands in contrast to Section 12 of the federal Cannabis Act, which states that up to four marijuana plants can be grown at a residence at one time.

"The pith and substance of the prohibition is to restrict access to cannabis in Manitoba and to establish an absolute criminal ban on residential cultivation of cannabis in Manitoba," the court document says.

"The purpose of the prohibition is to establish an absolute ban of a practice on the bases of moral values and social acceptability, and to replace, stiffen and strengthen the criminal law."

Because the ban is related to criminal law, the Manitoba government overstepped its authority because only the federal government has authority of criminal law, the court document says.

The section should also be stricken from the provincial legislation because it contradicts the federal rules, it adds.

There is precedent for the case. Quebec and Manitoba were the only two provinces to ban growing recreational cannabis at home until Sept. 3, 2019, when Quebec Superior Court Justice Manon Lavoie ruled that the ban was unconstitutional.

Homegrown cannabis makes cents
Lavoie consumes between one and two grams of marijuana per day, and the strain he likes costs $15 per gram at the recreational pot shop, he said.

But were he allowed to grow four marijuana plants at home, they could produce 400 grams every four months, assuming the plants were grown properly, Lavoie said.

"When you times 400 by the $15 per gram that I'm spending, that's impacting me financially massively," he said.

Cannabis can be stored from six to 12 months, so Lavoie could make the homegrown supply last most of the year, he said.

"That's affecting me. I'm sure it's affecting a lot of people financially, for those who want to try to grow. And in times of [COVID-19] when everyone's stuck at home and money is tight for a lot of people, it just makes sense," Lavoie said.

Despite marijuana being legal in Canada, the black market is still thriving, and many people are buying their pot online for four to five dollars per gram, said Lavoie, who has worked in the cannabis industry for three years.

"That's missed tax dollars in general for the government of Manitoba," he said. "But if they legalize growing at home, they can tax seeds, reoccurring. They can tax grow equipment, lights, dehumidifiers. People have more money to spend on cannabis accessories like vaporizers, water pipes.

"I don't see it as keeping the black market away. I see it as letting the legal market flourish in just another avenue."

Ultimately, Lavoie sees homegrown weed as a potential hobby for the public, similar to making beer or wine at home, he said.

Lavoie hired two lawyers from MLT Aikins, a Winnipeg firm, to take on the case. They will have to file an affidavit prior to a hearing scheduled on Sept. 28 in order to move the case forward.

Lavoie launched a GoFundMe campaign to help cover his legal fees. His goal is to reach $80,000 so he can afford to take the case to the Supreme Court, should the need arise.

Any unused funds will go directly to Winnipeg Harvest, Habitat for Humanity and the Manitoba Metis Heritage Fund.

Lavoie hopes the province will respond quickly to his case, so Manitobans won't lose more time on a potential harvesting.


To view Lavoie's Notice of Application please follow title link and scroll to the bottom of the article.
 
Medical marijuana bust in NOTL

It’s one of the largest medical marijuana busts in the country. Niagara police raided a medical marijuana grow on Lakeshore in Niagara-on-the-lake and cut down and seized nearly 900 plants, worth $1.6 million dollars.

Outside and behind the greenhouse police found 843 large marijuana plants growing in the hoop houses and on the grounds. Growing marijuana outside is illegal. 11 people were arrested and the property was seized.

Hans Rannala lives next door and says this marijuana grow op has been here for a few years.

The government tried to shut these types of medical marijuana grows down, but they’ve challenged it in court.

“My hands were tied. Enforcement’s hands were tired. They couldn’t do anything until the grow op did something silly or stupid.”

The old rules wouldn’t allow town officials to check for bylaw infractions, but then they found out they were growing more than their licence allowed and that’s when police, fire officials and bylaw officers moved in.

Angus Footman is the head of Tweed marijuana. Tweed has a 350 000 square foot greenhouse in Niagara-on-the-lake which operates under the new tight regulations. The lakeshore greenhouse operates under the old rules.

“They operate under the old MMAR which has very little regulations, either for security or the way they produce medical cannabis.”

At Tweed every gram is monitored and recorded from seed to sale. Every movement on and around the property watched 24 hours a day.

Under the old medical marijuana rules a designated grower can produce pot for 2 people.

“And there’s no oversight by health Canada to verify the number of plants each grower has.”

The Lakeshore greenhouse had 4 separate legal grow licenses. Not one of the persons who had a licence was there at the time of the raid.

The fire department indicates that 11 people lived in the greenhouse and that has a number of fire code violations, propane and combustibles, with no smoke or CO alarm.
 
Canada’s cannabis concentrate market slowly comes to life, revealing producers’ strategies

As cannabis concentrates become more widely available in Canada’s regulated adult-use marijuana market, new products illustrate the variety of roles such merchandise can fill for producers, including:

  • Premium concentrates aimed at cannabis users accustomed to black-market concentrates.
  • Simple concentrates created to entice consumers at relatively low price points.
  • A path to upgrade production byproducts into in-demand consumer goods such as hashish.
Early sales data from Canada’s concentrates market should be taken with a grain of salt.

Limited product availability in certain categories means concentrate shoppers have far fewer choices than they will when the market eventually matures, particularly versus other, more widely available refined cannabis products such as vape pens.

For example, Vivo Cannabis subsidiary ABcann Medicinals appears to be offering the only shatter currently available in Canada’s regulated market.

Still, Canada’s legal concentrate market is clearly growing, as is the market as a whole: Point-of-sales data from Seattle-based cannabis analytics firm Headset shows category sales in Ontario grew from roughly 43,000 Canadian dollars ($33,000) in February to nearly CA$359,000 in July, not including online sales from the government-operated online Ontario Cannabis Store.

Appealing to experienced consumers

Privately held British Columbia producer Good Buds sees top-notch concentrates as a path to enticing experienced cannabis consumers away from the illicit market.

Canada’s legal cannabis producers haven’t always offered those customers what they want, said Good Buds co-founder and Chief Strategy Officer Alex Rumi.

“I think it largely relates to a lot of the larger public companies having this really highly investor-focused mentality, especially leading into legalization in the early days,” he said.

“I think a lot of them are pivoting now, but it was a lot of focus on things that got investors excited, like vapes and edibles – there wasn’t really much of a focus on products like hash and rosin and even (butane hash oil) extractions, which are more legacy, black-market products that are very popular.”

Rumi said Good Buds’ goal is producing high-quality concentrates that appeal to heavy-using consumers who are accustomed to those illicit products.

To that end, Good Buds’ current concentrate portfolio includes a live hash extracted from fresh-frozen cannabis plants, a hash rosin pressed from that same live hash, and a flower rosin product pressed from hand-trimmed cannabis bud.

“Ours is definitely the connoisseur play,” Rumi said.

“(The target customer is) willing to spend a bit more on it, kind of like people that collect wine and things like that,” he continued.

Rumi believes there’s plenty of room for competition in Canada’s high-end concentrate market, particularly from other small producers.

“All these factors that drive our quality up are things that are hard to scale and hard to do at a really low cost,” he said.

Keeping concentrates simple

A number of Canadian producers have entered the concentrate space with solventless products, including kief and bubble hash.

In Alberta, “BC Kief” from Vivo Cannabis subsidiary Canna Farms has been the top-selling concentrate in terms of unit sales this year, according to market data from Headset.

Privately held B.C. producer Tantalus Labs has kicked off its concentrate portfolio with a dry sift hash, a powdery concentrate that hasn’t been pressed into a brick.

It’s made with dried, cured cannabis biomass, frozen solid and run through a tumbler to separate the trichome heads and capitate stalks.

CEO Dan Sutton described the concentrate as a simple product with high production efficiency.

“It’s easy for us to produce, we get to pass those savings on to the customer and at a price point that’s comparable to a lot of the other kief products in the market,” he said.

Sutton believes the younger generation of cannabis consumers gravitates toward concentrates such as shatter, diamonds and live resin, but he believes solventless products can offer those consumers a competitive value proposition.

“I think we’re converting users on the premise that this is a really low-cost product you can try, you don’t really have an excuse not to try it.”

Strong demand for hashish

Hashish has taken an early lead in the regulated concentrate markets in Ontario, B.C. and Alberta year-to-date, Headset point-of-sale data shows.

Hexo Corp.’s “Original Stash” hash product, sold in 2-gram packages, has become the best-selling concentrate product in all three provinces this year in dollar terms.

Hexo regulatory filings say the Original Stash hash is made using trim as the primary input, part of a “trim management initiative” meant to “systematically reduce this inventory on hand.”

Ontario producer 48North Cannabis launched a pressed-hashish product in B.C. in June and has since rolled it out to other provinces.

CEO Charles Vennat believes hash in its classic brick form benefits from an existing consumer base that has been waiting for it to arrive on the regulated market.

“I think a traditional pressed hash is a safe reintroduction back into cannabis for people who have maybe been sitting on the sidelines for a while and who maybe smoked it in high school and college,” he said.

Vennat believes a successful concentrates strategy can involve “cooking with what’s in the fridge.”

“In essence, what you’re doing is you’re taking what, in many ways, is considered a byproduct of your cultivation practice, and you’re turning it into a commercial consumer packaged good.”

Limited selection, high retail prices

Concentrate prices in the Canadian market remain relatively high: Headset point-of-sale data shows the average price for a gram of concentrate in July was CA$47.84 in Alberta, CA$39.23 in B.C., and CA$31.53 in Ontario, not including the government-operated Ontario Cannabis Store website.

Dan Sutton of Tantalus Labs attributes high prices in part to Canada’s federal excise tax structure for cannabis extracts, which taxes products such as edibles and concentrates based on their THC content.

“So essentially, the higher quality the hash, the more refined the hash … the higher your taxation level is going to be,” he said.

“It’s just one of those things – maybe it’ll change, maybe it won’t – but inevitably concentrates in general and solventless concentrates will have a higher cost profile than their illicit-market counterparts,” he said.

“And perhaps we combat that somehow with cost efficiency and moreover with product quality, over time.”

Vennat of 48North said he expects upcoming price compression in the concentrate market, but he believes that can be offset with new production innovations as demand for regulated concentrates increases and the market opportunity grows.

“The amount of engineering and capital (investment) that you can justify, then, into improving your process and improving your scalability of it, that’s what’s going to drive a lot of cost savings.”
 
Petition Pushes for National Medical Cannabis Insurance For Canadians
Can Canadians soon have cannabis covered by insurance?

A new healthcare technology company, Cannalogue, is launching a petition in their native land of Canada to get the Ministries of Health on board with providing national healthcare coverage for medical cannabis.

The petition, entitled United for Access, was started because of the financial burden the COVID-19 pandemic has had on many Canadians, especially those who are already marginalized or disadvantaged, according to a press release the company sent out. Cannalogue believes Canadian citizens should have access to cannabis health care as well as general healthcare.

“More than 50 percent of Canadians are not able to afford treatment with medical cannabis including CBD for conditions such as chronic pain,” their website states. “Due to COVID-19, Cannalogue anticipates these figures will worsen given the economic challenges facing Canadians. The doctors at Cannalogue believe this will cause a spike in opioid prescriptions, resulting in more opioid related addictions and deaths. When safer medications like medical cannabis and CBD are available, all Canadians should have fair and equal access as part of universal healthcare. Sign the United Program for National Medical Cannabis Coverage petition today and join us as we fight to remove the barriers that prevent access to safer medicines for Canadians.”

Advocating For Cannabis Access
Cannalogue received attention in Canada recently for receiving the first direct-to-sales license for medical cannabis and introducing an online marketplace for cannabis shopping to help streamline cannabis consumption in the age of COVID and shopping from home. The company is physician-led, and they make it a point to advocate for cannabis access and make activism a part of their platform in addition to commerce and sales. They would like to see cannabis considered a viable alternative to opiate treatments in the years to come.


This is not the first time the company has advocated for cannabis access and patient access. The new petition, announced this week, was born from their Compassionate Care Program, a program that can be used to find discounts on medical cannabis products, especially for seniors, veterans, Indigenous people, disabled people, and those on some sort of federal assistance program.

“These are some of the most challenging times for Canadians—especially those who suffer from chronic conditions such as pain or anxiety,” says Dr. Mohan Cooray of Cannalogue. “Removing the barriers that prevent access to medical cannabis is the fundamental goal of Cannalogue and this petition will help us ensure that disadvantaged groups including those below the poverty line get the medications they need.”

“Cost continues to be one of the most substantial barriers facing patients using cannabis for medical purposes, and there is an unmet need for patients to receive expanded access to insurance coverage for their treatment,” says President and Board Chairperson Gerald Major of Medical Cannabis Canada, a cannabis patient advocacy group in Canada. “To address these issues, collaboration across industry, government and the non-profit sector is essential and we are excited to see this petition put pressure towards change.”

If this petition gains traction, Canada could make even more headlines with a comprehensive, cannabis healthcare program.
 

Canadian student-athletes will no longer be tested for cannabis​


The Canadian Centre for Ethics in Sport will stop screening student-athletes for cannabis in U Sports and the Canadian Collegiate Athletic Association, allowing athletes to test positive during in-competition months without penalty.

The summer's new policy change, however, does not extend to U Sports and CCAA student-athletes who also compete at the national level during their collegiate career. So student-athletes included in their sport’s National Athlete Pool, competing in a non-U Sports or non-CCAA event or attending an international event where the CCES does not have jurisdiction can still be screened for cannabis.

“The CCES has long advocated for cannabis not to be deemed a prohibited substance,” said Jeremy Luke, the senior director of sport integrity at the CCES. “We didn't see the performance enhancing benefit associated with [cannabis].”



With the legalization of marijuana in Canada two years ago, Luke said this was an opportune time to make the decision to stop screening for the drug.

The CCES has not received much feedback from the Canadian athletic community regarding the new policy change — however, Luke said the little response they have received has been positive.

The CCES says they'll continue to adapt to the changing sports landscape in Canada moving forward. The organization has informed member teams of U Sports and the CCAA about changes to its drug education courses and other resources the CCES offers for student-athletes.

“The mandatory learning program for student athletes has been revised to inform them of this change,” Luke explained, referring to the pre-season drug education course that student-athletes must complete before the start of the regular season each year. “We've issued advisory notes and some other resources as well so that people are well informed of the change.”

Luke said the CCES will continue to monitor Canadian collegiate sports to see if they will make any further changes.

At the moment, the CCES is not expecting to change the policy for U Sports and CCAA student-athletes who also compete at the national level, as they will continue to be screened for cannabis in-competition.
 

Illegal cannabis market still thriving in Canada two years after legalization​


OTTAWA — It’s been two years since Canada legalized recreational marijuana, but the illegal market is still thriving.

About 40 per cent of the cannabis market share in Canada is still held by illegal producers, according to Omar Khan, the national cannabis sector lead at Hill and Knowlton Strategies.

He said the majority of regular users — people who use daily or every other day — still get their marijuana through the illicit market.

Khan added one of the reasons is because legal stores in places such as Ontario and British Columbia are forced to buy wholesale and not directly from the cannabis producers.

“I think that’s an interesting approach. It allows a lot of the retailers to be a lot more price competitive with the illicit market,” he said.

In Canada, 9,000 people work in legal production and retail sales in the cannabis industry, which is more people than employed by General Motors in Canada.

Combined, the illegal and legal market is worth about $8 billion a year in Canada.

The Cannabis Act was passed by the House of Commons on Oct. 17, 2018. Under the act, people 18 or older are allowed to possess up to 30 grams of dried legal cannabis and grow up to four plants for personal use.

A year ago, chocolate, gummies, sparkling drinks, and products such as hand creams became available at cannabis stores in B.C.

In July, a poll found more B.C. residents are buying cannabis just from licensed retailers compared to last year.
 
"A gram of cannabis can produce about four joints"............. It can? Wow... those are some pinners.... :lol:

Medical marijuana grow licences exploited by criminals to sell weed on the illegal market, police say​


A lack of oversight into who is growing medical cannabis and how much is being grown is allowing criminals to sell pot on the illegal market, according to police and pot activists.

That's creating tension in residential neighbourhoods in Winnipeg where large amounts of plants are being grown and with medical marijuana users who say it's not fair the laws meant to help people who need pot are being exploited for financial gain.

"The lack of oversight by Health Canada has allowed the system to be manipulated and abused by people who are only in it for their own personal benefit," said cannabis activist and medical licence holder Steven Stairs.

There are nearly 34,000 Canadians with a licence to grow medical cannabis, including 11,000 in Ontario and a little more than 1,600 in Manitoba.

Health Canada doesn't limit the amount of cannabis doctors can authorize for a patient's use and Stairs says that opens the door for people to get medical licences to grow marijuana legally to skirt the system and sell it for profit.

"Over time, the allure, I would call it, of having a legitimate or legal protection under Health Canada's medical marijuana access regulations to grow cannabis was a very tantalizing opportunity for organized crime and for those who are looking to profit off a system designed for sick people there," said Stairs.

He says back in 2009 when he first got a medical cannabis licence to use and, in 2010, a licence to grow, Health Canada regulations required a patient see their regular doctor or a specialist to get an authorization.

Stairs says now you can go online and pay a doctor to give you an authorization or walk into what he calls a "pay for access clinic" where you are charged a fee for a prescription — which is against Manitoba regulations.


The average amount of medical cannabis Canadian doctors are authorizing their patients to consume is 2.1 grams a day, according to Health Canada. Using Health Canada's online calculator, that means those patients would be allowed to grow up to 10 plants.

But a simple online search finds companies offering to help Canadians obtain a doctor's authorization for 95 grams a day, which will allow them to grow 463 plants.

"I would be curious to learn more about the people who are growing 500 plants for their own personal use," said Dr. James MacKillop, a clinical psychologist and director of the Michael G. DeGroote Centre for Medicinal Cannabis Research at McMaster University in Hamilton.

"The idea that a person would need 500 plants to me seems extremely improbable … I think what it reveals is a loophole and the peculiarities of medical cannabis."

If a doctor authorizes cannabis for a patient to use, Health Canada will allow that patient to access it. But the regulatory body says it does not supervise doctors. That responsibility falls on provincial laws and professional colleges.

"The determination as to whether cannabis is appropriate for a patient is best made through a discussion between a patient and their health care practitioner. Health Canada does not play a role in this determination," said a Health Canada spokesperson in an email to CBC News.

Neighbours question large grows and who's growing​

CBC News began looking into complaints from residents in several Winnipeg neighbourhoods who say there are medical grow-ops where no one is living in the homes. Health Canada says it doesn't require anyone to live in the homes and it's up to municipalities to regulate, but neighbours wonder if the grow-ops are for legitimate medical marijuana patients' personal use if no one lives there.

Some of the residents took their concerns to Winnipeg city hall this week because there are no regulations against having marijuana grow operations in residential areas.
https://www.cbc.ca/news/canada/manitoba/medical-marijuana-tavares-ross-eadie-city-hall-1.5802195
CBC News knocked on the doors of more than two dozen homes suspected of housing medical marijuana grow-ops. Most appeared vacant, although some owners came to the door, while others responded via video doorbells from different locations. Almost all of the houses had security cameras set up outside, and in some cases, cannabis could be smelled from the street.

CBC also sifted through court documents, land titles and permits for each address and found 34 of the houses had recently upgraded electrical panels. Ten had previous electrical permits in which city inspectors said they were former grow-ops.

In five instances, CBC found medical grow operations in homes where the owners were convicted of marijuana-related offences.

Health Canada regulations do not allow anyone convicted of a marijuana-related crime to have a licence to grow, but there are no rules saying any other family member in the same house would not be able to obtain a licence.

Smelly home in Sage Creek​

"There was months we didn't have our grandkids over here because we just didn't think it was safe for them," said Carmen Nedohin.

She says the owners of a home next to hers in Sage Creek, an upscale neighbourhood in southeast Winnipeg, was converted into a medical cannabis grow-op last year.

"In September of 2019, we realized something was going on because they put in a high-level security system. They added an extra air conditioning unit and put a number of mushroom stacks on the top of the roof. And it was only a couple of weeks later when the smell really, really started," said Nedohin.

She called police, city officials and even Manitoba Justice and later learned the man who owns the home was growing 600 plants on four licences from Health Canada. Nedohin says officials called in the fire department and shut off his gas because the owner didn't have the proper electrical permits. She says the next day, she saw the fire department come in and take the meter right off the house.

Court records show in 2013, the homeowner was convicted of drug production and trafficking after police raided three houses his wife owned, including the one in Sage Creek next door to Nedohin. Police affidavits say officers found more than a thousand cannabis plants at two of the homes. At the time neither the man nor his wife had a Health Canada licence to grow, according to court documents. Neither were charged by police in 2019.

"How can individuals who have criminal records get a licence to grow medicinal marijuana in that kind of quantity? It just makes no sense to me whatsoever," Nedohin said.

Eddie Calisto-Tavares wonders what's going on in three homes in her north Winnipeg neighbourhood where there are licences to grow medical cannabis, according to city electrical permits.

"They have the same three workers going two to three times a day checking on their homes," she said.

She and others complained to Health Canada, the police and Manitoba Justice and were told the owners have licences to grow and there was nothing anyone could do about it.

"We have reported it to Health Canada of the odour. We have e-mailed the so-called inspectors that are in charge of Winnipeg, Saskatoon, Regina, et cetera. No one has gotten back to us," said Calisto-Tavares.

She suspects the grow-ops may be connected to organized crime because there are often high-end vehicles with B.C. licence plates in the driveway.

$560,000 mortgage on uninhabited home​

A woman, convicted of cannabis production and trafficking in 2012, purchased a $373,000 home in Richmond West, a south Winnipeg neighbourhood this past January, and has a $560,000 mortgage with a local credit union, to finance a home no one would reside in.

Her brother told CBC News no one lives in the house and it's just being used to grow medical cannabis. When asked how his sister got a licence to grow with her criminal record, he said her husband is the licence holder.

Winnipeg police would not do an interview but said it has received "numerous complaints" about cannabis grow operations over "odour, safety concerns and the potential for connection to organized crime."

They said they have no authority to investigate any legal grows authorized by Health Canada.

Winnipeg city council's property and planning committee has voted to ask the public service to look at whether the municipality can regulate or ban growing cannabis at home.

Cannabis a lucrative business: police​

"They've seen an opportunity to make a huge amount of money on this," said Det. Insp. Jim Walker, deputy director of the Ontario Provincial Police Organized Crime Enforcement Bureau.

He said when cannabis became legal in Canada two years ago, the OPP created a dedicated unit to crack down on the illegal market and police continue to encounter criminals using Health Canada licences to grow.

"We've known for a number of years and had seen this regime abused by criminals, organized crime, criminal enterprises … and we continue to see organized crime exploit that," said Walker.

In October, Walker's team worked with Winnipeg police to shut down an interprovincial drug trafficking network operation dubbed Project Wonders. Eleven people were charged and police seized cocaine, cannabis, firearms and body armour.

Since July, the OPP says it has dismantled 52 large-scale, sophisticated illegal cannabis production, sale and distribution operations in Ontario and have arrested about 200 people.

There is no maximum amount a patient is allowed to grow under the current Health Canada regulations, and Walker says that is adding to the problem.

"We're seeing registrations in excess of 400 plants for one individual. You take that now and the regulations allow up to four of those registrations under one address … those individuals will subdivide that lot and now they can even double the amount of plants they have there," said Walker.

Not a precise science: cannabis expert​

A gram of cannabis can produce about four joints, and a plant can produce as much as a pound, or 454 grams of cannabis, said MacKillop.

"So the math becomes enormous pretty quickly," he said.

Unlike conventional medication, medical cannabis isn't a precise science, MacKillop said.

"A doctor can't say, 'Take this many milligrams an hour before bed and once in the morning.' It's much more subjective," he explained.

He said Health Canada should impose limits on how much cannabis patients can use for medical purposes.

MacKillop also says the practice of a doctor in one province authorizing cannabis for a patient in another province can be problematic.

"I find it personally troubling to hear about a lot of authorizations happening, you know, from B.C. to Manitoba or cross-country, because that, to me, suggests that there isn't enough involvement in the patient's health care," MacKillop said.

"There should be more oversight of the authorization process," he said.

Lost tax revenue​

A former executive of two Canadian cannabis companies says since legalization in 2018, licensed producers now supply about 50 per cent of the legal market.

"We've come a long way in two years, but there's still a huge area to go," said George Robinson.

He says there will always be an illegal market but it should represent 15 to 20 per cent of cannabis sales, not 50.

Robinson says governments and police need to do more to crack down on illegal growers because that money could be used to help the country get through this pandemic.

"This is a new tax stream that they haven't really touched in many provinces and now you're starting to see some of them jump on it, say 80, 100 million, 200 million dollars is a lot of money relative to the times that we're in right now. Let's go after those dollars," said Robinson.

Conservative MP Raquel Dancho says this problem isn't just in Manitoba, but is happening across the country.

"We're seeing busts of medical cannabis crops in Alberta and Quebec, in Ontario, sometimes in the tens of millions of dollars of illegal activity that's going on. So this is a national problem that requires a national solution. So I would put the fault firmly at the feet of the federal Liberal government. They can easily solve this problem."

Dancho says Health Canada needs to put a limit on cannabis authorizations for medical purposes, and make room for exceptional cases when necessary.

OPP Det. Insp. Walker says the government said it would review legislation three years after legalization. He hopes when they do, they will close the loophole that has allowed organized crime groups, and other criminals exploit the system.

Stairs agrees.

"The simplest thing would be for Health Canada to put a more rigorous screening process in place for the licences that they approved," he said.
 
momofthegoons said:
"A gram of cannabis can produce about four joints"............. It can? Wow... those are some pinners....
Click to expand...
hahaha...we used to call then New York nails.
 

Latest Canadian cannabis recalls include melting vape pens, moldy bud​


Canadian cannabis products recalled in January include defective all-in-one vape pens from Hexo Corp. as well as moldy marijuana from Saskatchewan processor AgroGreens Natural Products and mislabeled bud from Manitoba’s Delta 9 Bio-Tech.

Hexo’s recall, announced Jan. 12 by the Ontario Cannabis Store (OCS) online retailer, impacted three types of disposable vape pens.

Hexo told Marijuana Business Daily the vapes were sold in Alberta, Manitoba, New Brunswick, Ontario and Saskatchewan as well as to medical cannabis clients.

The producer attributed the recall to “a mechanical hardware defect, in which prolonged auto-ignition may lead to excess heat in the battery cell, which in turn may cause melting of the plastic shell.”

“As an immediate corrective action, Hexo has implemented enhanced third-party hardware approval criteria including the use of an independent third-party accredited lab to assess all devices under consideration,” Shannon McCoy, Hexo vice president of quality, wrote in a statement emailed to MJBizDaily.

“Hexo expects the financial impact of the voluntary recall to be minimal, and well within the normal course of business,” McCoy added, without specifying the exact number of recalled vape pens.

The Agro-Greens recall, issued Jan. 7 by Health Canada, affected 752 units of North 40 Black Cherry Punch cannabis bud sold to medical cannabis clients via mail and by recreational cannabis retailers in Saskatchewan.

“The affected product may contain mold,” Health Canada said in its recall notice, adding that Agro-Greens had received four complaints about the lot and one report of an adverse reaction.

Grower North 40 Cannabis flagged the mold issue to the public in a Dec. 27 tweet.

“All environmental conditions were on point throughout the drying and curing,” North 40 noted in its tweet. “It looks like a very isolated incident.”

The moldy bud was initially identified in a late December post on the Reddit message board, said David Purcell, chief revenue officer at Shelter Cannabis, which is in the process of acquiring Agro-Greens.

Purcell said Agro-Greens is investigating the mold issue and is awaiting final test results that will provide more information.

“We want to be proactive, because we want to provide the best possible product and service to our clients that we possibly can,” Purcell said.

Mold recalls have been relatively uncommon, but not unheard-of, in Canada’s regulated marijuana market.

Another recall issued Jan. 8 involved 600 units of cannabis bud with erroneous THC and CBD values.

The 3.5-gram packages of Oceanic Sea Breeze Cannabis, grown by Delta 9 Bio-Tech of Manitoba and sold at stores in Newfoundland and Labrador, had “incorrect cannabinoid values, where the labelled total THC and total CBD are higher than the actual values,” said Health Canada’s recall notice.

Inaccurate cannabinoid labeling has caused the majority of cannabis recalls in Canada since recreational legalization in 2018.

In the past year, labeling-related recalls have affected products such as flower from Aurora Cannabis subsidiary MedReleaf, pre-rolls from Sundial Growers, beverages from AgMedica Bioscience and ingestible cannabis oil from Voyage Cannabis.
 
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