December 21 2019,

TOGETHER WITH

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TWO POINT OH
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On Monday, without the fanfare and lineups of last year's legalization, Canada legalized cannabis extracts (including vape pens), edibles/beverages, and topicals.
Global News, CTV News, Twitter—Rahim Dhalla

Quebec will not debut its limited, tightly restricted roster of 2.0 products (no vape pens, no sweetened edibles), until January 1. Later in the year, cooking oils and hashish will become available in Quebec.
CTV News, Twitter—David Brown

Some companies—Aphria, Cronos, Organigram—are debuting only vape products, while others—like Tilray, Hexo, and WeedMD—are waiting until later in the year to launch their products.
Bloomberg

“A LANDMARK DAY”
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The Cannabis Council of Canada called 2.0 legalization a "landmark day." Industry is champing at the bit for 2.0 legalization.
Press Release, CBC Ottawa

Health Canada announced it will test the health effects of vape products. The agency is said to be warning REC stores about non-compliant product promotions (eg. those containing people, lifestyles, etc., those improperly age-gated.)
CBC Health, Twitter—Matt Maurer

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2019 IN REVIEW
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PUBLIC DOMAIN

In 2019, Canadians bought 88,876 kg of legal dried flower, spending a total $1.01B in the first full year of legalization. (Here's a helpful graph from the Cannalysts showing sales per province per month.) Sales by weight have nearly tripled since legalization.
Bloomberg, Twitter—David George-Cosh, Cannalysts

After a year of losses that left pot stocks at their lowest levels in more than two years, the New York Times noted, "No one wants to invest in [cannabis] now."
New York Times

Cannabis stocks ended the year with among the most expensive borrowing fees for short selling. Short sellers have gained USD$993M to date in 2019.
Bloomberg

Lift & Co laid off 13 workers from its Toronto office.
GrowthOp

To Russia's delight, Canada remains out of compliance with a number of international drug treaties to which it's a signatory.
CBC Politics

This week on the podcast
Candace Gingrich Steps Into the Sunlight
RETAIL CHANGES COMING TO ONTARIO
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The timeline for the new wave of REC retail in Ontario begins January 6, when the Alcohol and Gaming Commission of Ontario will begin accepting applications for its new supposedly "open-market" approach. As of April, the province is expected to license 20 new REC stores per month.
Global News, Twitter—GoBlueCDN

The Doing Business with OCS webpage shows the price the Ontario Cannabis Store pays for wholesale cannabis—and it's a lot less than it sells it for. One Twitter user proposed possible markup math.
Twitter—WhatsMyPot, Aaron W. Anderson

With farm-gate sales on the way, lawyer Trina Fraser wondered whether cultivators will be able to send their products out for processing, get them back, and then sell them in farm-gate shops, or whether only processors will be allowed to operate such stores.

Northern Ontario only has two REC stores, but is hoping to open 19 in the next year.
CBC Sudbury, CBC Thunder Bay

Dispensary Superette's inaugural Ottawa location made $7M in sales during its first five months. Soon Superette will open a Toronto location.
Now Toronto

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ALBERTA DELAYS VAPES
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Alberta, traditionally known for oil-economy conservatism, surprised a lot of people when it became "Canada's runaway cannabis leader." This week, Alberta surprised the sector again when the UCP government, citing illnesses associated with vaping, delayed the legalization of vape products seemingly moments before they went up for sale in the province.

  • The products won't be available until the province finishes reviewing its Tobacco and Smoking Reduction Act, expected in "Spring of 2020."
  • Materia Ventures CEO Deepak Anand wondered what will happen to vape products already sent to the AGLC.
    Twitter—Deepak Anand

Quebec (population: 8.49M) has likewise banned vape pens. Together with Alberta (4.37M), the two provinces boast nearly half the Canadian consumer market for cannabis.
Bloomberg

The AGLC shut its doors to Micro suppliers, saying, saying they do not produce enough product to meet "AGLC requirements."
Twitter—Kieley Beaudry

  • Trina Fraser responded, "Provincial distributors […] should be working toward establishing quotas to include and support [micros]."
  • Materia Ventures' acting director for Europe, Nick Pateras, said, "So even if micros raise capital, build a facility, and navigate the regulatory labyrinth to licensure, some provinces won't even buy from them as a matter of policy?"
  • Defending the decision, cannabis historian Jamie Shaw argued local zoning issues and federal build-before-application rules are far greater non-provincial barriers to micro.
  • BC says it hopes to buy from Micro licensees once they are approved.
    Twitter—Trina Fraser, Nick Pateras, Jamie Shaw, Matt Lamers

Alberta changed its laws to allow liquor and cannabis stores to open on Christmas day.
The Star

Calgary police reported only a single charge of cannabis-impaired driving in the first year of legalization.
Ici Radio-Canada—In French

If Aurora doesn't open its giant Aurora Sun production facility in Medicine Hat—whose construction it halted in November—it will cost the community 650 jobs.
Financial Post

EX-MONTREAL NARC COMMANDER SELLS REC
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PHILIPPE JACQUES

Yvan Delorme was chief of the Service de police de la Ville de Montréal for five years, during which the force raided the city's compassion clubs, after commanding the Narcotic Drugs and Proceeds of Crime division. Now, as president of LP QC Gold Tech, Delorme hopes his "Quebec Gold" REC brand will put Quebec on the cannabis map.
CTV News, Inside the Jar

  • "It's been a long time that I've distanced myself from the fight against drugs," he told the Journal de Montréal, stressing responsible consumption ("like alcohol") rather than prohibition.
    Journal de Montréal—In French
  • Quebec's new cannabis rules are coming into effect, including a minimum age of 21 and a ban on cannabis in public places unless exempted by the municipality.
    Government Website

Comedian Julien Lacroix, novice REC user, told a story about a greenout while on talk-show Ça Finit Bien La Semaine (and drinking wine: everyone on Quebec talk-shows drinks wine), hopefully helping normalize even bad cannabis experiences for canna-conservative middle-aged Quebeckers.
Facebook—Ça Finit Bien La Semaine—In French

Quick Hits

  1. Upstart news-and-cannabis publication Inside the Jar debuted its home-growing section with a capsule history of Canadian growing laws.
    Inside the Jar
  2. According to a Maclean's survey, 61.4% of Canadian drama students consume cannabis.
    Maclean's
  3. Canada's MED program added 24,000 new licenses in the year following REC legalization, though overall sales for the year declined by 724 kg, with particular decline after May.
    Twitter—Rielle Capler
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HEXO REPORTS $62M LOSS, WILL SELL ILLICIT WEED
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JESSE STANIFORTH

Hexo reported a first-quarter loss of $62.4M, up from $12.8M year over year, while net revenues were $14.5M, up from $5.7M last year.
The Star, MJ Biz

  • A Nasdaq analyst blamed sector underperformance on Quebec and Ontario's "terrible […] execution concerning the licensing process." Nasdaq

Amazingly, Hexo reported it would sell the REC it grew in unlicensed rooms. The Deep Dive wrote, "How this is up to the company, and not the regulator, is anyone’s guess."
Twitter—Betting Bruiser, The Deep Dive

Quick Hits

  1. US cannabis compliance tech company Akerna will acquire Ample Organics for $60M in cash ($7.5M) and stock ($42.5M, plus additional $10M consideration). Only they're not going to hold a conference call about the deal until January 7.
    NewsWire, Twitter—David George-Cosh
  2. 48North's outdoor grow yielded product at $0.25 per gram, far beneath the $2 average cost of growing indoors. But is the quality of outdoor flower good enough? Opinions differ.
    Global News
ZENABIS RECALLS CBD GELCAPS W/THC
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LP Zenabis announced its second recall of the year, of gelcaps labelled as containing 0.19mg THC and 6.13mg THC—which actually contained 2.28mg THC. That's close to a threshold dose to intoxicate a non-THC consumer, while consumers taking multiple gelcaps could very easily have gotten unwittingly impaired.
Health Canada

In the last month, Zenabis shuffled CEOs and lost EU-GMP certification in Malta.
Press Release, Bloomberg

Quick Hits

  1. After fewer than two months as CEO of Beleave, one-time Green Organic Dutchman co-founder and former 48North CEO Jeanette VanderMarel announced she was stepping down. She also admitted there were "seeding issues" at 48North, which was rumoured to have lost some of its outdoor crop to pollination.
    MJ Biz Daily, Twitter—Chris Parry
  2. Legalization was supposed to electrify BC's commercial real estate market. It hasn't (yet).
    Business in Vancouver
INDIGENOUS CANNABIZ ROUND-UP
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JESSE STANIFORTH

The Peguis First Nation partnered with Denver-based MJardin Group to open a large cultivation site in Winnipeg, though many have questioned the wisdom of entering the cultivation space at present.
CBC Manitoba

RCMP and Community Safety Unit (CSU) enforcement officers raided dispensary on Tsleil-Waututh First Nation in North Vancouver, which had been operating with permission from the Nation's band council. That unit also raided Maple Ridge's Hammond Compassion Society.
Inside the Jar, North Shore News,

Quick Hits

  1. Cannabis activist Annie MacEachern suggested a helpful nomenclature distinction: let's call devices prefilled with extract "vape pens" and call dry-herb devices "vaporizers."
    Twitter—Annie MacEachern
  2. New research from McMaster University seems to contradict recent UBC findings that cannabis reduces opioid use, though UBC researcher Stephanie Lake noted the studies are different enough they may not be comparable.
    Vancouver Sun, Twitter—Stephanie Lake
HEALTH MIN HAJDU: JUST SAY NO
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As health minister Patty Hajdu announced the legalization of 2.0 products, she made what many in the industry felt to be an unfair warning about cannabis: "The best way for Canadians to protect their health is not to consume cannabis."

Via email, Health Canada spokesperson Tammy Jarbeau referred me to the final report of the Task Force on Cannabis Legalization, which acknowledged "The harms associated with the use of tobacco or alcohol are greater than those associated with the use of cannabis," but counselled imposing laws "stricter than those that exist for tobacco or alcohol" in order to avoid the "pitfalls" that resulted in lax alcohol regulation.

Quick Hits

  1. This week CTV News instructed readers on how best to cook with cannabis, named cannabis edibles as one of 2020's food trends to watch, and instructed readers on how to avoid consuming too many edibles. Cottage Life, meanwhile, wondered, "Is it time to add curing cannabis to your DIY repertoire?" Normalization seems to be happening first in Canada's pantries.
    CTV News, Cottage Life
  2. A survey by PR firm Hill+Knowlton found many Canadians are eager to try non-impairing cannabis products.
    GrowthOp