Law Canada MJ News

[momofthegoons]

Sigh....

Canadian landlords increasingly concerned about effect of cannabis use on rental property

Landlords are increasingly concerned about the effect of cannabis use on a rental property, according to a poll released October 8.

Real estate website Zoocasa surveyed Canadian property owners and renters about how they feel since the legalization of cannabis last October 17.

While homeowners and renters seem to be getting more comfortable with cannabis use and home growing, landlords responding to the survey were much more concerned about the growing or smoking of cannabis in their properties.

Some 85 per cent of respondents who said they own rental properties agreed they would prefer to have tenants who did not smoke weed or grow even legal amounts of marijuana (maximum of four plants).

Landlords have also become increasingly worried about cannabis-related damage to their properties, with 57 per cent citing this as a bigger concern for them since cannabis was legalized. And more than half (55 per cent) said they would consider charging higher rent in future to cover potential cannabis-related damage.

However, renters seemed better-informed than their landlords on the topic. More than half (53 per cent) of renters said they understood their rights when it came to smoking or cultivating cannabis inside their home, while only 43 per cent of landlords said they understood what could and couldn’t be enforced within their rental.

In general, Canadians homeowners (whether owner-occupiers or landlords) and renters all seem to be warming up to the idea of cannabis dispensaries in their neighbourhood — although more than half still aren’t keen on the prospect.

Zoocasa found that 42 per cent of respondents to its nationwide poll said they would be comfortable with having a legal cannabis dispensary near their home, which is up from 33 per cent one year ago. The proportion was higher among renters, with 56 per cent of renters being fine with the idea, compared with just 36 per cent of homeowners feeling happy to have a dispensary close by.

Over the year since the legalization of cannabis, Canadians have also become less likely to think a nearby dispensary would devalue a home. Fewer than one third (32 per cent) of all respondents felt that dispensaries would have a negative impact on nearby home values, down from 42 per cent last year. However, homeowners were more likely to think there could be a negative effect on prices, at 35 per cent, compared with just 25 per cent of renters.

Another devaluation question was on whether smoking cannabis inside a home would affect its resale price and its overall condition. More than half of Canadian homeowners (64 per cent) and renters (53 per cent) agree that smoking weed inside would devalue a home, which comes to 61 per cent for all respondents.

Respondents were still quite divided on whether growing a legal amount of marijuana (maximum of four plants) in a home would have negative resale effects. Just under half (48 per cent) of Canadians said that homegrown pot would dissuade them from buying a property, which is down from 52 per cent in 2018.

Zoocasa’s survey respondents may be overestimating the negative impact of nearby dispensaries on home values. In April, Business in Vancouver reported that in Colorado, which legalized marijuana in 2014, houses within 160 metres of a retail marijuana store were valued 8.4 per cent higher than those outside of that radius, according to a study in the academic journal Economic Inquiry.

Elton Ash, regional executive vice-president for Re/Max of Western Canada, told BIV that concerns about falling real estate prices are unfounded. The reason for the discrepancy between Canadian expectations and relevant data, he said, results from preconceived notions stemming from illegal grow operations that have dominated the black market trade in cannabis.

 

[momofthegoons]

Ontario And Quebec's Cannabis Retail ‘Nightmare’ Threatens Industry, Experts Fear

TORONTO — A year after legalization, the honeymoon is over for Canada’s cannabis industry. Many producers are reporting disappointing earnings; some have seen crop failures; turnover is high in the executive suite; and so far, prices in the legal industry are far higher than in the black market.

And the illicit market is hanging in there: Despite promises by advocates that legalizing marijuana would take the industry out of the hands of organized crime, Statistics Canada data shows the black market shrank by just 21 per centover the past year.

Investors’ faith has been shaken. The North American Marijuana Stock Index —which for now is dominated by Canadian producers — has lost half its value in the past six months.

North American Marijuana Index of stock prices

NORTH AMERICAN MARIJUANA INDEXNorth American Marijuana Index

“It was a bubble and the bubble’s been burst,” said investment analyst Chris Damas, author of the BCMI Cannabis Report.

A number of problems have emerged, not least being a shortage of legal supply, which analysts say was caused by producers having to ramp up production sharply right after legalization. That shortage has driven up prices relative to the black market, and resulted in some retailers, such as Quebec’s SQDC, having to close their doors for parts of the week.

“The retail rollout in Canada has been an unmitigated disaster,” industry analyst Greg McLeish of Mackie Research said in comments to Marijuana Business Daily.

“That is exacerbating a problem, where (companies) who do want to get their product out are having trouble, because the brick and mortar is not built out yet.”

In a recent client note, McLeish looked at the 50 largest publicly-traded cannabis companies in Canada and found that 21 of them have less than six months of cash on hand.

Though McLeish didn’t name the companies, he noted most of them are among the smaller ones, with less than $200 million in market value.

But in Damas’ view, the retail problem isn’t countrywide — he sees “a tale of two solitudes,” with Western Canada’s network of private retailers rolling out quickly and efficiently, while Ontario and Quebec’s more heavily government-controlled networks failed to rise to the occasion.

Quebec needs around 800 cannabis stores to fill market demand, Damas estimates. The website of SQDC, the monopoly retailer in Quebec, lists 21 locations. By comparison, there are nearly 300 private stores in Alberta and more than 80 in British Columbia.

But Damas reserved his harshest criticism for Ontario, where the government has instituted a lottery for issuing cannabis retail licences, one that has so far issued far fewer permits than analysts estimate the province needs.

Even though Ontario has three-and-a-half times as many people as Alberta, its legal cannabis sales are only slightly higher in dollar terms, Damas noted. (At last count, sales in Ontario were $29 million a month, versus $23 million in Alberta.)

“It’s a big disappointment when 40 per cent of the population is not participating in the cannabis revolution,” he said, referring to Ontario’s share of Canada’s population.

Why do they think someone who can afford the lottery entry fee would be the best person to retail a controlled substance? Do they have a lottery to determine who will be a brain surgeon? It seems idiotic.Cannabis industry analyst Chris Damas

Damas described the lottery-permitting system as a “nightmare.”

The province has “single-handedly created a black market for licences,” he said in an interview with HuffPost Canada. “The winners of the lottery are actively selling their licences on the black market.”

Ontario’s rules limit cannabis producers to owning less than 10 per cent of a retail operation, meaning many licenced producers who were counting on retail revenue have been left on the sidelines, Damas noted.

“Why do they think someone who can afford the lottery entry fee would be the best person to retail a controlled substance? Do they have a lottery to determine who will be a brain surgeon? It seems idiotic.”

But Damas does see some good news on the horizon for the industry in Canada. Producers have managed to ramp up volumes, and — like some other analysts — he says the legal cannabis shortage should turn into an oversupply by next year, pushing prices down and making legal pot more competitive with the black market.

In the meantime, the industry could see a shake-out as producers adjust to the new reality. McLeish expects some producers will cut back on staff, as Green Growth Brands recently did.

“We’re going to continue to see that in the industry until the financial results show meaningful growth.”

 

[Baron23]

But in Damas’ view, the retail problem isn’t countrywide — he sees “a tale of two solitudes,” with Western Canada’s network of private retailers rolling out quickly and efficiently, while Ontario and Quebec’s more heavily government-controlled networks failed to rise to the occasion.

Say it ain't so, Joe. I mean, who could have possibly foreseen yet another Government cock up when they try to enter and control open mercantile markets.

I'm gobsmacked, I say.....just gobsmacked (LOL).

 

[momofthegoons]

Cape Breton man not nuts over near purchase at Sydney River NSLC

George Poulain, 67, of Point Edward, holds two containers of cannabis products outside the Nova Scotia Liquor Corporation’s Sydney River store. Poulain said on Friday he was in the process of paying for two identical products when the employee shook the containers leading to discover one contained nuts and bolts and not marijuana. Poulain said the container in question still had the government seal so whatever happened to the product had to have happened at the plant, Canopy Growth Corporation of Smith Falls, Ont. - Sharon Montgomery-Dupe


SYDNEY RIVER, N.S. —
A Cape Breton man wasn’t nuts about a recent near purchase at the Nova Scotia Liquor Corporation’s Sydney River store.

George Poulain, 67, of Point Edward, said he was in the process of paying for two containers of cannabis when one was discovered not to have pot in it, but rather just some nuts and a washer.

“It had the government seal on it.”

Everything began Friday when he visited the store to purchase several grams of marijuana. While at the cash register paying for his two purchases, the cashier shook both containers.

“When you shake them you can hardly hear anything,” Poulain said. “The product is bud form and it’s very light.”

However when the cashier shook the second one, Poulain commented it sounded like marbles were in it.

“I said, “There’s something more than marijuana in that container.”

The cashier called the supervisor who came and opened the product.

“I asked if they minded if I stayed because I was curious of what was in it. “

The government seal was opened and broken by the cashier. The product was opened to find steel nuts inside. There was no marijuana in the container.

Poulain, who is retired, said without question the incident had to have occurred at the packaging plant with the government seal on the container.

Now he is concerned wondering if this is the first and only time this has happened and what would happen if someone actually got home with such a purchase. He wonders if someone found something other than marijuana in such a purchase and returned it to the liquor commission, if they would be believed.

"These are the things that come to my mind and I’m sure anyone else would think about the same thing.”

Two cans of cannabis product, similar to the ones George Poulain was purchasing at the Nova Scotia Liquor Corporation’s Sydney River store on Friday, when it was discovered it contained not marijuana, but rather nuts and a washer.

Although Poulain said this incident won’t affect his future purchases, it will always be on his mind when buying cannabis.

“Next time there could be nothing in the container or feathers in it.”

Beverley Ware, communications for the NSLC, said the package that’s in question was never sold to a customer.

Ware said on Saturday - shortly before noon - a customer came into the Sydney River store and requested two one-gram packages of a product called Houndstooth, which is a Tweed product from Canopy Growth of Smith Falls, Ont.

“The package size he requested was one gram, so he ordered two packages.”

When the employee picked up the product it felt unusually heavy and when she shook it, there was a rattle. Ware said the employee put the package aside and got another one for the customer. After the customer paid for his purchases, the employee opened the package in question.

“She found several bolts and a washer inside the package,” Ware said. “That’s what was making the noise.”

Ware said cannabis products are sealed at the licensed producer’s facility. The product is never opened by the NSLC, it remains sealed until the customer purchases it and then opens it.

The NSLC has contacted Canopy Growth, so the company is aware of the issue and is dealing with it, she said.

All of NSLC’s cannabis products come from federally licensed producers and their production is under strict federal regulations.

“We’re working with Canopy to investigate this situation and to identify the root cause and of course to prevent any future occurrences of this,” she stated.

Ware said they haven’t had anything like this happen before.

“It’s quite clear there was a particular issue with this package and we’re really happy the employee acted proactively and checked the product.”

Officials of Canopy Growth Corporation indicated they would respond but hadn’t by deadline.

On their website, Canopy Growth Corporation, formerly Tweed Marijuana Inc., is described as a medical and recreational focused marijuana company, based in Smiths Falls, Ont.

According to Wikipedia, Tweed was founded by Bruce Linton and Chuck Rifici in 2013 and renamed Canopy Growth Corporation in 2015. By April 2019, Canopy was the world's largest cannabis company, based on the value of all shares, or market capitalization.

Canada's first legal cannabis sale was made at midnight by the company CEO Bruce Linton at a Tweed store in St. John’s, N.L.

 

[momofthegoons]

A year in the weeds: Why the cannabis industry didn't take off the way everyone planned
There is no shortage of answers to the question of what went wrong, but one thing seems certain: there is plenty of blame to go around



In an outdoor parking lot between a shelter and a Tim Hortons in downtown Ottawa, black market cannabis dealer Jay (not his real name) said he can’t think of the last time business has been so good. His pop-up dispensary moves around the capital city from time to time, depending on when he gets tipped off about potential police raids, which he said have tapered off lately. Despite the legalization of recreational cannabis almost a year ago, Jay insists his customer base has remained strong.

“I do my own market research,” Jay said. “I ask people, ‘Why don’t you go to Hobo (a legal cannabis store in Ottawa)?’ They say, ‘Legal product tastes bad. It’s s—t.’ I say, ‘Don’t worry, I got you.’”

Things weren’t supposed to be going this well for the Jays of the world. Dozens of legal cannabis producers, backed by billions in investor capital, were expected to put the black market on its heels, launching Canada to the forefront of an expanding global industry with the promise of mass-produced, high-quality, heavily regulated marijuana.

But scandals, sluggish earnings and executive shakeups have replaced the soaring expectations of a year ago. Government data show that the legal market has only supplanted 14 per cent of the black market since legalization on Oct. 17, 2018, and some are concerned that further inroads may be difficult to come by.

There is no shortage of answers to the question of what went wrong in the cannabis industry’s disappointing first year — among them, mediocre product quality, uncompetitive pricing and a heavy regulatory burden — but one thing seems certain: there is plenty of blame to go around.

In this file photo taken on October 17, 2018 a man smokes cannabis during a legalization party in Toronto. Geoff Robins/AFP/Getty Images files

“One of the first things that comes to mind for me when I think about the last year is a reality check,” said Aaron Salz, chief executive of the boutique investment firm Stoic Advisory Inc., which has been involved in the industry since 2016. “A reality check for everyone: consumers, the government, producers, the public markets. I wish there was something more positive to say.”

In Salz’s view, one of the biggest problems was that the industry’s early focus on scale — something that others agree was largely a symptom of the push to raise capital ahead of legalization — distracted it from other important considerations.

“There had been such a focus on scale over everything else, that quality in particular got left behind,” he said. “I think the first miscalculation that took place was when larger companies presumed that if they got the big supply agreements and they were first to market, they would capture all this early market share and that would be a huge advantage for them in the future.”

"There had been such a focus on scale over everything else, that quality in particular got left behind"
Aaron Salz

But the early days of legalization were plagued by a massive shortage of product. The bigger producers such as Canopy Growth Corp. and Aurora Cannabis Inc. had signed supply agreements promising a consistent stream of products, but were often unable to keep up. Provinces blamed the producers, but producers pointed towards supply-chain challenges such as the delay in obtaining government excise stamps, which had to be pasted on every product.

“In the early days, retailers just wanted product. Any kind of product they could get,” Salz said.

Eventually, more producers entered the market, supply ramped up and product choice grew. But at the same time, customers who chose to buy from the legal market started becoming more discerning of what they liked.

One example is that of Canopy’s Tweed-branded products. In the weeks following legalization, Tweed dominated the online retail space, and Canopy quickly established a market share of more than 30 per cent. But in its most recent quarterly results, the company had to record a revenue adjustment of $8 million to account for unsold product. Management during a conference call acknowledged that although their adult-use oils and gel capsules had initially sold well, demand has been slipping of late.

Tweed-branded cannabis oil at Canopy Growth’s facility in Smiths Falls, Ont., in 2016. Chris Roussakis for National Post files

Craig Wiggins, an independent industry analyst and founder of The Cannalysts, a popular blog and Reddit channel, agreed with the notion that Bay Street was put ahead of the consumer in the first year.

“The industry relied on hype so much to get its stock price up so it could raise capital at an efficient level, that it thumped its chest on metrics like ‘funded capacity,’” he said.

But turning capacity into profitable production was a different story. Problems associated with scaling up led to write-downs, and mediocre sales growth was not enough to offset rising costs.

To date, most major cannabis companies are still unprofitable. In some cases, profitability was promised within a year of legalization, but those goalposts were perpetually pushed back in favour of international expansion, major acquisitions in the name of securing intellectual property and partnerships with larger companies outside the cannabis space.

To appease the market, changes were made. Canopy founder and co-CEO Bruce Linton, the industry’s most prominent leader, was terminated just weeks after the chief executive of alcohol giant Constellation Brands — which had bet billions on the company’s future — expressed disappointment with Canopy’s continued losses.

Former Canopy CEO Bruce Linton with customers at the Tweed store on the first day of legalization. Julie Oliver/Postmedia

The industry’s many scandals didn’t help either. Within two months of legalization, a short seller alleged Aphria Inc., one of the largest licensed producers, was engaging in self-dealing, and inflating the value of its international assets. The company’s stock plunged in the weeks following the report, and several key members of the executive team, including CEO Vic Neufeld departed the company.

Shortly after, Manitoba-based licensed producer Bonify Medical Cannabis Ltd. had its licence suspended by Health Canada, after 200 kilograms of illegal cannabis were found in the company’s vaults.

But it was the CannTrust Holdings Inc. scandal that thrust the industry’s lacklustre corporate governance practices into the spotlight. In an apparent rush to boost output, the licensed producer was caught growing in spaces not yet licensed by Health Canada, apparently with the knowledge of senior management. That led to an Ontario Securities Commission investigation, a licence suspension and an almost complete decimation of the company’s stock.



“When the metric is growth and you’re being rewarded for it by capital markets, governance doesn’t really come into the fold because it is a not a factor in achieving that goal,” Salz said.

But not all the problems the companies faced were self-inflicted. Industry participants argue that achieving profitability would be substantially easier if there were simply more legal stores across the country to compete with the black market.

Jay, the Ottawa-based black market dealer, said the lack of legal stores — there are only two legal operations in his vicinity — has given him an advantage.

“People text and come to me from smaller towns and reserves around Ottawa and they are saying there’s no place to even buy legal weed,” he said. “So I get it to them, you know?”

Although it has been almost a full year since weed was made legal, Canada’s biggest market, Ontario, still only has 25 brick-and-mortar stores and a government-run online store servicing a population of 14 million people. An additional 50 stores, including eight on First Nations reserves in the province are expected to be in operation by the end of the year, according to the Alcohol Gaming Commission of Ontario. There are no official plans for more stores, as yet.

"There’s no place to even buy legal weed"
Jay, black market dealer

Another factor that has prevented the legal market from gaining traction has been price.

Since legalization, the price disparity between legal and black-market cannabis has remained significant. The average price of legal cannabis was $10.23 per gram for the third quarter of this year, compared to $5.59 on the illegal market. In the quarter prior, legal weed cost $10.65 per gram, and black-market weed cost just $5.94.

“I don’t think we’ve had an impact on the black market at all,” said Trevor Fencott, chief executive of cannabis retail chain Fire & Flower Cannabis Co. “The customers we are seeing now are not price sensitive. I think they are brand new to the industry, don’t buy from the black market and that’s why they are willing to pay such high prices.”

The industry, to some extent, has also blamed the government’s role as an intermediary in the retail system. Most provinces, such as Ontario, act as wholesalers between the licensed producer and the retailer, a system that almost all industry participants disparage.

A selection of products ordered from the Ontario Cannabis Store in November 2018. Michel Comte/AFP/Getty Images files

“Our relationship with the Ontario Cannabis Store has been the most trying relationship in the country,” said an executive at a licensed producer who asked not to be named. “There was a honeymoon period after the last provincial elections where we thought there would be a move to a more business-friendly model. That was great for producers, but now for us, it’s important to have more than just an online store and a few private retail stores to get our product out.”

Fencott points out that having the government act as a middleman prevents competition.

“We’re all buying from the same government store. Ultimately, prices will go down if we are allowed to directly purchase from the producer or have direct delivery to the consumer,” he said, alluding to Saskatchewan, the only province that does not act as a middleman.

Wiggins argues that the only way to “elbow out” the black market is to reduce the cost of supply.

“There is so much margin confiscation,” he said. “You have the province getting in between this, then the excise tax on every gram, then HST.”

Health Canada has also come in for criticism due to the extensive rules it has imposed on producers. Its mandate is to ensure legal weed sold to Canadians meets the highest safety standards, but some feel that the regulator is perhaps taking its job too seriously at the expense of the government’s ultimate goal of dismantling the black market.

For example, just weeks before legalization, Health Canada was still dealing with a backlog of hundreds of applications for cultivation licences. Just 221 have been approved so far.

“I wouldn’t say that Health Canada purposely chose to slow down the licensing process. To me, they were just a group of bureaucrats overwhelmed with the number of people seeking a licence,” said the cannabis executive.

“They are not incentivized to move faster because that is not their goal. Their goal is to ensure that the product is safe. It is healthy, from the regulators’ perspective, to be slow, because they are turning dials on a brand new policy that could have massive implications down the road.”

Cannabis plants grown outdoors at a facility in Ontario. Cole Burston/Bloomberg files

But if excessive regulations are proving to be an obstacle in eliminating the black market, then it appears governments still have a long way to go. Cannabis 2.0 — the legalization of edibles, concentrates and topicals that is set to take place on Oct. 17 — is already off to a rocky start.

Health Canada has said that licensed producers will only be able to begin submitting their product applications to the regulator on that date, which means it could be late December or early January before consumers will be able to purchase product, giving the black market yet another reprieve.

A number of analysts, including Wiggins, warn of another problem looming over the industry: a supply-demand imbalance so great that it might lead to the failure of a slew of licensed producers that are unable to deliver the kind of quality product consumers want.

“The biggest problem right now is this massive delta we have between what we are harvesting and what we are shipping,” Wiggins said. His calculations, based on Health Canada data, suggest that the industry scaled up so quickly that it is currently harvesting at a rate of 84 per cent of total overall demand — both legal and illegal.

“Unless we are able to magically sell all that product and get almost the entire black market over to purchase legal product very soon, there is going to be a massive supply glut and plunge in prices,” he said.

"There is going to be a massive supply glut and plunge in prices"
Craig Wiggins, analyst

The vaping health crisis south of the border — which has called the use of marijuana-infused vape pens into question — has thrown the industry yet another curve.

But Graeme Kreindler, an analyst at Eight Capital, suggests there is another way to look at the vaping problem.

“We could say, look, there are structural challenges, but all these additives south of the border that are causing problems with vaping are not even allowed in Canada because of strict regulation,” he said. “I would argue Canadian companies and our regulatory structure are still looked at abroad as an example of how to legalize. Strict regulation is exactly why Canada will still maintain a first-mover advantage in this industry.”

Kreindler is not alone in maintaining his sense of optimism in the face of the industry’s early struggles.

AltaCorp Capital Inc.’s cannabis analyst David Kideckel also notes that the industry is in its infancy and that sounding the alarm bell just a year after legalization is premature.

“What gets me really excited is the next wave of legalization,” he said. “Of course, there’s going to continue to be learning curves, but if the industry gets it right and puts out high-quality products, we think consumers are ultimately going to find brands that they will be loyal to.”

Even Jay seems to acknowledge that the legal industry will begin to get its act together, eventually. But when it does, he’ll be ready.

“I know that once legal product gets good, I’m going to lose business,” he said. “I gotta switch it up.”

 

[Baron23]

There is no shortage of answers to the question of what went wrong in the cannabis industry’s disappointing first year — among them, mediocre product quality, uncompetitive pricing and a heavy regulatory burden

Once again, Government in the middle of a purely mercantile industry and its not working out as planned.

I'm shocked....just shocked. sigh

 

[momofthegoons]

Edibles and Other Cannabis Derivatives Become Legal in Canada This Week

New regulations for edibles and extracts take effect October 17, but products won’t hit shelves until mid-December at the earliest.

For Canada’s recreational cannabis consumers, a long-awaited day is just on the horizon. On October 17, 2019 one full year after Canada’s world-historic legalization of cannabis went into effect, licensed companies will finally be able to produce and sell edibles and other cannabis derivatives, such as extracts and topicals. So far, consumers on the non-medical retail market have only had access to flower. As a result, many consumers have continued to turn to unregulated, illicit retailers for edibles, vape cartridges, and other non-flower products.

Regulations for Edibles and Derivatives Take Effect Tomorrow
Postponing the production and sale of cannabis edibles and other derivatives has always been part of Health Canada’s plan for rolling out the Cannabis Act of 2018. National and provincial regulators wanted extra time to develop specific rules and regulations for non-flower products. They also wanted time to solicit feedback from Canadian consumers and stakeholders. At issue has been the question of THC limits for edibles and derivatives, rules for product ingredients, packaging and labeling and restrictions on anything that might appeal to children.

Health Canada finalized those regulations in mid-June this year and published them shortly after. And in a press release, the agency stated that the new and amended regulations would come into force on October 17, 2019. “However,” the release continues, “it will take time, after that date, before new cannabis products become available for purchase.”

In other words, even though edibles and other cannabis derivatives become legal in Canada this week, it will still take, at minimum, 60 days before consumers can actually purchase them from licensed retailers. So that puts edibles and derivatives on shelves, at the earliest, by mid-December. At least that’s just in time for holiday celebrations.


The reason for the delay, according to Health Canada, is a requirement mandating federal cannabis license holders to provide a 60-day notice to Health Canada of their intent to sell new products. Health Canada also says the lag is needed to give give regulators time to familiarize themselves with the new rules. But regulators have had access to the amended product rules since June.

Quick Rundown of New Product Categories and Their Restrictions
Soon enough, however, Canada’s cannabis consumers will be able to buy cannabis extracts across four categories. There will be edibles, including both foods and beverages, ingestible extracts like oils and capsules, extracts for inhaling, like vape cartridges and dabs, and topicals for applying to skin, hair and nails.

All of the product categories have many rules in common. There can be no added vitamins or minerals, no nicotine or added alcohol and strict limits on levels of caffeine. All products must come in packages that are plain, child-resistant and provide detailed, comprehensive labeling about ingredients, allergens and intended use.


Interestingly, Health Canada is also requiring companies to label their extract and derivatives products with their “equivalency to dried cannabis.” The purpose of that metric is so law enforcement can determine whether someone possesses more cannabis in public than the legal limit, which is set in grams of dried flower. That rule could prove tricky, since extract products often contain very high levels of THC, which means possessing a small amount of concentrate could equate to a very large and thus unlawful amount of dried flower.

Then, there are the THC limits on new products. THC limits were one of the most contentious and criticized issues around the amended regulations. Eatable and drinkable cannabis products will have a 10 mg THC per package limit, which is not very high. Ingestible extracts like tinctures, however, can have 1000 mg THC per package, with individual units (like a capsule) capped at 10 mg.

Extracts for inhaling also have a 1000 mg THC limit per package, so vape cartridges are good to go. Topicals can also have up to 1000 mg THC per package.


Retail Edibles and Cannabis Derivatives Could Shake Up Canada’s Industry
So far, edibles, concentrates and other extract and derivatives products have only been available for medical cannabis patients in Canada. The impending introduction of those products to Canada’s young legal retail market, which is still battling with an entrenched illicit marketplace, could have a dramatic impact on Canadian cannabis companies like Aurora Cannabis and Cronos Group.

 

[Killick]

Interestingly enough Health Canada enforces prescriptions in grams per day. All this mg/ml stuff is nice and all, but you can't measure to that level at home, and so far home growers, and anyone without a license, doesn't have access to testing facilities.

Until a year or two ago Health Canada also enforced a strict 'dried cannabis only' policy, until pediatric epilepsy parents and doctors wondered by a federal health agency would force their 5 year old patient to smoke or vape medications. And then, with a poof, infused oils were available through the LP model. And it's sold in gram equivalents so that patients prescribed 3 grams per day will know how much oil they need to get the same amount of meds.

Interestingly, Health Canada is also requiring companies to label their extract and derivatives products with their “equivalency to dried cannabis.” The purpose of that metric is so law enforcement can determine whether someone possesses more cannabis in public than the legal limit, which is set in grams of dried flower. That rule could prove tricky, since extract products often contain very high levels of THC, which means possessing a small amount of concentrate could equate to a very large and thus unlawful amount of dried flower.

 

[momofthegoons]

Quebec to offer legal cannabis at $4.49 a gram, beating grey-market price

Cannabis plants are seen during a tour of a Hexo Corp. production facility, October 11, 2018 in Masson Angers, Que. THE CANADIAN PRESS

Cannabis company Hexo Corp. says it is aiming to undercut prices in the illicit market with its new 28-gram product, that costs as much as one dollar less per gram than at a illegal dispensary.

Hexo says the product will be on sale in Quebec cannabis stores for $125.70 taxes included, or $4.49 per gram.

Statistics Canada’s latest price analysis based on crowdsourced data showed that the average cost of a gram of cannabis was $7.37 during the third quarter, with the price of legal and illegal weed slipping to $10.23 and $5.59 per gram, respectively.

Hexo chief executive Sebastien St-Louis said the product under the brand name Original Stash is aimed at the half of Canadians who are continuing to buy pot from the illicit market one year after legalization.

He said Hexo is able to offer a one ounce, or 28 gram size, product at this price point for various reasons, such as less plastic packaging required for the larger size, its increased production scale and lower hydroelectric costs in Quebec.

Original Stash will be between 12 and 18 per cent THC, the company said. It will be for sale in Quebec starting Thursday.

28 grams is a far larger container than is usual in the Canadian legal market, though grey-market sellers often sell in bulk and offer bulk discounts.

Hexo said it worked with Quebec’s provincial cannabis corporation on the pricing strategy and is in discussions with other provinces and territories.

Quebec’s monopoly cannabis retailer has several dry flower products for under $6 a gram, but this will be its first under $5.

 

[Baron23]

Original Stash will be between 12 and 18 per cent THC,

Even in MD, flower with those numbers would sell for a discount.

 

[Baron23]

What a surprise. If you want to really fuck something up....I don't mean just mess its hair.....I mean major FUBAR action, then give to Government.

I love this Chair of the Board of a company saying he thinks 10 mg per edible is reasonably. How the fuck would he know? I bet he thinks baby aspirin is probably a reasonable dose to treat cancer, yeah? FFS.

Red tape, regulations hamper Canadian cannabis businesses in first year of recreational sales


A heavy regulatory burden at all levels of government put a damper on legal cannabis sales in the first year of Canada’s adult-use market, but experts are optimistic provincial and federal governments could ease certain rules over time, leading to more business-friendly environments.

Until then, however, businesses say that some rules limit their competitiveness with the illicit market at a time when capital is becoming more constrained.

Greg McLeish of Toronto-headquartered Mackie Research Capital wants regulators to adapt to the current reality so Canada can maintain its early leadership position.

Provincial governments need to loosen their grip on prospective retailers to allow more stores to open, he said.

Most of Canada’s retail stores are located in one province, Alberta, while Ontario is stuck at just 24 physical outlets.

McLeish said the federal government should:

• Raise THC content restrictions to boost the competitiveness of new edibles, extracts and topicals products.
• Loosen strict advertising rules to allow businesses to build stronger brands.
• Kill the excise medical cannabis tax to improve accessibility.
• Address banking issues stymieing the growth of legal marijuana companies across Canada.

“A lot of public companies that have raised capital in order to compete are losing out on opportunity, and it’s destroying equity values in these companies,” he noted.

In the first 10 months of legalized adult-use cannabis, Canadians spent 676 million Canadian dollars ($515 million) in the regulated sector.

However, regulated cannabis sales accounted for only 14% of total demand by volume in June, according to a recent analysis by market researcher TheCannalysts – meaning the legal market still has a long way to go toward replacing illicit sales.

Marketing
Maire Jones, managing director of the RNMKR Agency in Toronto, said strict rules around advertising should be loosened to help businesses communicate with consumers and to promote education.

“We help our clients sell products, but I also believe strongly in helping people make choices,” she said. “I want to give (consumers) as much information as possible, and our pathway is hampered by the current regulations.

“Canada’s Cannabis Regulations make it difficult to help people make informed choices.”

Rules severely limiting advertising mean companies are using other methods to get their message out.

Those include:

• Building a client database.
• Engaging in corporate social responsibility.
• Extending your brands to affiliated products and stores
• Using word of mouth.
• Staying in the news.

Chuck Rifici, chair of international cannabis company Auxly, said the rules essentially lead to an even playing field for businesses.

That ends up being beneficial for smaller companies that wouldn’t have the marketing resources to compete with the likes of Aurora Cannabis or Canopy Growth if advertising was allowed.

“My concern on branding and advertising rules involves Canadian competitiveness and the long-term value of Canadian-based brands, compared to having to compete with U.S. brands on a global scale,” he said.

“Future consumers around the world are going to be much more exposed to U.S. brands because of the rules around what we can do in Canada.”

Packaging
Canada started with a reasonable, regulated approach to adult-use cannabis, Rifici told Marijuana Business Daily.

A co-founder of Tweed, he expects THC limits per package to be eased.

A limit of 10 milligrams of THC will be imposed per package of cannabis edibles when they go on sale later this year – a constraint industry stakeholders say will raise costs and create unnecessary waste.

“One area where I expect to see change is on the limits per package,” Rifici said. “I think 10 milligrams as a dose is reasonable in the rec market, but to have an entire package around a 10-milligram dose is the area I could see coming into play, just mainly because of the packaging waste.”

Rifici said the regulated market has taken a small bite out of the total market, but that’s going to improve as more stores are opened in provinces like Ontario.

“For Year One, I think that’s a great start, and it’s going to keep increasing.”

 

[momofthegoons]

Canadian company to destroy $77 million worth of weed

Canadian cannabis company CannTrust Holdings Inc has announced a plan to attempt to address Health Canada’s concerns about their business.

Back on September 17th its licenses to produce and sell cannabis were suspended. It was one of many setbacks for the pot firm which had been under investigation by regulators for cultivation in unlicensed rooms.

The Vaughan, Ont.-based company said it received a notice of licence suspension from the federal regulator indicating its authority to produce cannabis, other than cultivating and harvesting, and to sell cannabis have been suspended.

In a release today the company said that they continue “to make significant progress on its commitment to take any and all actions required to both bring the Company into full regulatory compliance and seek the full reinstatement of its licenses.”

Their remediation plan consists of:

– Measures to ensure that cannabis will be produced and distributed only as authorized, including measures to control the movement of cannabis in and out of CannTrust’s site;
– Measures to recover cannabis that was not authorized by CannTrust’s license;
– Measures to improve key personnel’s knowledge of, and compliance with the provisions of the Act and the Regulations that apply to CannTrust; and,
– Measures for improving the manner in which records are kept, including a plan to improve the inventory tracking, and any interim measures to ensure that information provided to Health Canada can be reconciled.

Part of those measures include destroying around $12 million of “biological assets” and around $65 million in inventory that wasn’t authorized under their license. Some of which was returned by patients, distributors and retailers.

Interim CEO Robert Marcovitch said their aim is “to rebuild the trust and confidence of our primary regulator, investors, patients, and customers.”

 

[Bcbud]

New edibles regulations: double standard between cannabis & alcohol

edibles - New edibles regulations: It’s ridiculous and only serves to highlight the absurd double standard when it comes to alcohol versus cannabis.

cannabislifenetwork.com

 

[Bcbud]

A sign for a designated smoking and vaping (tobacco and cannabis) area is seen at Vancouver International Airport

 

[Killick]

Potted chicken: Saint John restaurant selling cannabis oil-infused wings
Social Sharing

'I think the market asked for it, basically,' said business co-owner

Philip Drost · CBC News · Posted: Oct 20, 2019 4:39 PM AT | Last Updated: 3 hours ago

The Coop's wings have sauce made with cannabis oil. (Radio-Canada)
A Saint John restaurant is adding a unique ingredient to its menu.

The Coop is adding cannabis oil, minus the THC, to the sauce on some of its wings. THC is the psychoactive compound found in cannabis.

"I think the market asked for it, basically," said co-owner Renee Theriault.

https://www.cbc.ca/news/canada/new-brunswick/cannabis-oil-wings-1.5328254

 

[Killick]

VANCOUVER (NEWS 1130) – Vancouverites say legal cannabis is often old, dry and over packaged — and they’re tired of having to go downtown to get it.

Canada has gone a full trip around the sun since legalization of recreational pot, and one year in, people want to see changes.

Recreational users in East Vancouver say they don’t want to see pot shops on every corner but since things went legit, they say access has been a challenge.

“I have to come all the way from North Vancouver to here,” one man told NEWS 1130 outside UEMCannabis on Renfrew Street in East Vancouver. “So I’ve been using the mail order thing, which is a bit of a bother, and have I noticed? Well, ya, it used to be easier.”

While some people say they’re happy to see illegal shops shut down, most local, provincially-licensed stores are operating in or around downtown Vancouver.

A recent crackdown on unlicensed shops has meant people have had to go further out of their neighbourhoods and cities to find stores.

Some are driving in from places like Langley, Surrey, Richmond, and Burnaby, where there are no options.

MAP: Licensed, non-medical cannabis stores in B.C.

To top it all off, others say government-approved shops have sold them year-old, dried-up weed at a premium.

“Ones that are open now, that have the government licenses, are a lot more expensive than what they used to be,” a customer said. “Sometimes two or three times more.”

Some of the biggest complaints are around the waste created by government-regulated packaging.

“Horrible,” a woman described. “Ridiculous, you know? They’re humongous. And plus, I don’t put it in my recycling bins because I don’t want my neighbours to think, ‘OK, there’s a stoner living here.'”

Fist-sized tins with plastic inserts inside doubled cardboard boxes often contain less than a tablespoon’s worth of product inside. Many say the weed they’re buying appears to even be up to a year old.

“It seems like quality has gone down a little bit, it’s really dry,” others said.

This feedback comes as police across the country note Canada still has a long way to go before tackling the black market, as well as impaired driving.

According to the co-chair of the Canadian Association of Chiefs of Police drug advisory committee, organized crime’s market share and youth consumption of pot haven’t dropped — yet. Police have also flagged concerns about the tools used to detect high drivers, which they say are still lacking, while legal experts say they’re waiting to test the new impaired driving laws in court.

Old, pricey, over packaged: Vancouverites have feedback for gov't-approved dealers one year after legal pot - NEWS 1130

A year into legal pot, Vancouverites say government-approved product is often old, dry and over packaged - and they're tired of having to go downtown to get it.

www.citynews1130.com

 

[Bcbud]

Small-scale outdoor growing is firing up Legalization 2.0 - NOW Magazine

Former outlaws of the cannabis industry are stoking the next reefer revolution to show consumers what the business of bud could have been and could still be

nowtoronto.com

 

[Bcbud]

Mmmm government weed.

Microwaved Weed: How LPs can steal Cannabinoids

Curing is a vital process for quality, beyond simply removing moisture. A method that can be eliminated on a commercial scale - with microwaved weed.

cannabislifenetwork.com

 

[Baron23]

Cannabis producer Hexo shutting down facilities amid deep staff cuts

Cannabis producer Hexo Corp. will shut down several facilities it operates near Niagara Falls, Ontario, as a result of 200 layoffs it announced Thursday, according to people familiar with the matter.
Hexo HEXO, -1.59% HEXO, -5.70% did not respond to phone and email requests for comment. It was not immediately clear what the impact of the Ontario facilities’ closure will be on the company’s operations. The Ontario facilities were once operated by Newstrike Brands, which Hexo acquired in the spring. Hexo had 822 employees as of April 30, according to its last quarterly filing, and added about 250 more when its Newstrike acquisition closed in May.
The shutdown and layoffs at Hexo arrive amid a broad downturn in the sector, as cannabis companies in Canada struggle to meet investor expectations and, in some cases, their own — as in Hexo’s case. The dearth of retail weed stores remains an ongoing issue in Canada as the first anniversary of legal, recreational pot rolled by on Oct. 17. Wall Street analysts have also tamped down expectations for the past several weeks, issuing a wave of price target reductions.

Hexo stock closed down 6.3% in regular trading and fell 2% during the after-hours session.
U.S. traded shares of Hexo have dropped 41% in the past three months, as the benchmark S&P 500 index SPX, +0.19% has fallen 0.5%. The ETFMG Alternative Harvest ETF MJ, +1.14% has fallen 29% in the past three months and the Horizons Marijuana Life Sciences Index ETF HMLSF, +0.66% dropped 33.5% in the same period.
The closure was also reported by The Hamilton Spectator, which said the layoffs occurred at a site with two greenhouses in production in Beamsville, Ontario, and another two greenhouses under construction. The newspaper said 100 layoffs occurred at the site.
Hexo’s layoffs announced Thursday included the chief manufacturing officer, Arno Groll, and the chief marketing officer, Nick Davies.
The facility shutdown occurred the day after the Quebec-based licensed cannabis producer said it was raising C$70 million ($53.5 million) in convertible debentures through a private placement and that it was postponing its earning call until Tuesday.
Hexo is now expected to report July-quarter results Monday, with a conference call scheduled for Tuesday at 8:30 a.m. Eastern.
According to analysts polled by FactSet, Hexo is expected to report losses of C$0.06.
Hexo is expected to report sales of C$15 million, up from C$1.4 million in the year-ago period. Earlier in October, Hexo issued a revenue warning, telling investors that it now expected revenue for the July quarter of C$14.5 million to C$16.5 million, well below the then-consensus of C$24.8 million. Hexo also rescinded its fiscal 2020 financial outlook and did not offer a replacement.
Hexo’s chief financial officer resigned at the beginning of October.

 

[momofthegoons]

Hexo isn't the only one...

Major Weed Companies Are Cutting Hundreds of Jobs as the Industry Struggles
Mass layoffs, executive firings, and scandals suggest Canada's weed honeymoon might be coming to an end.

HEXO'S CANNABIS FACILITY IN MASSON ANGERS, QUEBEC. PHOTO BY THE CANADIAN PRESS/ADRIAN WYLD

The Canadian weed company that’s going to destroy $77 million worth of illegal cannabis plants and inventory, is slashing the jobs of a quarter of its workforce. It is the second major cannabis company to announce hundreds of layoffs this week amid a big downturn in the weed industry, a year after recreational pot was legalized.
CannTrust Holdings today announced that it is temporarily cutting 140 positions as it works to comply with Health Canada regulations. The licenced producer is dealing with an illicit weed scandal that forced out its CEO and raised questions about how the legal cannabis industry operates.

The scandal involved illegal grow rooms hidden behind fake walls, which produced at least five metric tons of pot, some of which was exported outside Canada. High-ranking CannTrust employees reportedly knew about the illegal grow op and didn't stop it.

Robert Marcovitch, interim CEO, CannTrust, told VICE via email that downsizing was a “difficult decision.” He wrote that “reducing the company's current operating expenses supports our financial sustainability, and places us in the best position to fully resume production upon the reinstatement of our licenses. We look forward to rehiring at that time, and once again delivering high-quality, innovative products to both our customers and patients."

The CannTrust cuts will happen in phases until the end of the year. The layoffs will result in monthly savings of about $400,000 and cost as much as $800,000 in severance payments if employees aren’t called back within the next 9 months. These are estimates though, because it all depends on when, or if, Health Canada reinstitutes CannTrust’s licences, which were suspended after the discovery of its illegal weed production.

Quebec-based licensed producer Hexo this week announced that it is laying off 200 people, roughly 20 percent of staff, including executives. In a press release Hexo’s CEO Sebastien St.-Louis described the move as something the company has to do to be profitable in the long-run.

He also said that the day of the announcement was his “hardest day” at Hexo and it was “extremely difficult to say goodbye to trusted colleagues.”

Many of the affected employees were originally part of the Newstrike Brands company, which was backed by The Tragically Hip. Hexo bought Newstrike in May in a $260 million deal.

Cannabis stocks—which were on a tear between 2016 and the first few months of this year—have been beaten down over the past six months.

It’s not all bad news though. Cannabis stocks across the board are struggling, but there are some companies that are growing as Canada’s edibles, drinkables and topicals market starts to roll out. On Tuesday, James E. Wagner Cultivation Corporation (JWC) held a job fair for the 400 positions it’s looking to fill; an estimated 800 people attended.