January 4 2020,

TOGETHER WITH

THIS IS 2020
image
HTTPS://WWW.FLICKR.COM/PHOTOS/PHOTOBYSIMON/

Last year was "the cannabis industry's annus horribilis," wrote Bloomberg's David George-Cosh, who lamented overstocked, overpriced products in "unattractive packaging"—and the ongoing corporate reckoning across the sector.
Bloomberg

Is there any good news? There's been no apparent surge of addictive behaviour, impaired driving, or workplace accidents. Legalization doesn't seem to have had much negative social impact.
Winnipeg Free Press

Due to hemp oversupply, US CBD prices are plummeting. This is ominous news for companies like Aurora, which announced major plans to target the US CBD market in November, and Canopy, which launched its US CBD brand First and Free in 31 states in early December.
Globe and Mail, CTV News, Bloomberg

STILL COMING SOON: 2.0 EVENTUALLY
image
NICOLAS VÖLCKER / WIKIMEDIA COMMONS / CC-BY-SA

The rollout of 2.0 products has occurred even more patchily than last year's rollout of legal flower and oils. Within five days of the first products arriving in Nova Scotia stores on December 23, initial shipments of edibles, tea-bags, and vape pens were selling out, with gummies and chocolates selling out first. (Don't worry, reinforcements are on the way.)
Halifax Today, CTV News

To begin with, the 59 new products available in Ontario will primarily be vape pens, as well as a few edibles, and one infused tea-bag. (The Globe's Jameson Berkow noted neither Canopy's Tweed nor Organigram's Edison brands had products on Ontario's list.)
Financial Post, Twitter—Jameson Berkow

Predictably, the cost of legal vape pens is a great deal higher than unregulated vape pens.
Twitter—Travis Lane

  • Legal edibles aren't cheap either, and they're capped at 10mg THC per package. That means consumers with a 40mg tolerance would require four 10mg chocolate bars—roughly priced between $7 and $15—to get their desired effects.
    Vice
QUEBEC AGE INCREASE BECOMES LAW
image
HTTPS://WWW.FLICKR.COM/PHOTOS/26895481@N00

Quebec increased the age for cannabis possession and consumption from 18 to 21 as the new year and decade dawned. The province also legalized a limited selection of REC beverages on Wednesday. (Sweetened edibles and beverages are banned in Quebec.) Those aged 18 to 21 who bought REC legally before the age increase are now subject to laws banning them from possessing/consuming.
CBC Montreal, Montreal Gazette

  • The age increase contradicts the advice of a variety of public health and psychological professionals, who warned it will prompt young people to buy unregulated products of uncertain potency.
    CTV News
  • Quebec is now the only province to have an age of cannabis consumption greater than 19. (Quebec's age to purchase tobacco and alcohol remains 18.) Citing this disparity, the Quebec Bar Association predicted a constitutional challenge related to age discrimination.
This week on the podcast
The Elusive Tribe of Roger Obando
HEXO SLIDES
image
JESSE STANIFORTH

Hexo was forced to take a $2.4M writedown on its inventory of cannabis trim (lower-cannabinoid leaves and stems, collected for processing into extracts for edibles and vapes). Cannalyst Andrew "Mollytime" Udell said, "Producers were accumulating this byproduct for cannabis 2.0. There’s so much of it," which is a problem considering producers may also be holding large stockpiles of high-value, high-cannabinoid buds.
Financial Post

These are the latest signals Hexo is struggling. In late October, it laid off 20% of its workforce, while in early November, the company announced a loss three times greater than analysts predicted.
Bloomberg

Along with Organigram and the Green Organic Dutchman, Hexo has announced plans to reduce production until the market can bear it.
Nasdaq

LP ROUNDUP
image
HTTPS://WWW.FLICKR.COM/PHOTOS/32161280@N06

On Christmas Eve, Aurora confirmed it asked Chief Corporate Officer Cam Battley to resign as part of the company's evolving leadership strategy. For many, Battley . Stocks fell as a result of his departure.
Lexichronic, American Stock Trader, Victoria Times-Colonist, MMP Connect

  • Battley rose to the CCO role after stints as senior and executive VP for the company, He announced he was joining MedReleaf Australia, a MED company in which Aurora owns 10% stake and holds 50% voting rights. MedReleaf Australia is in partnership with MedReleaf Corp, wholly owned by Aurora.
  • Following his severance, Battley tweeted cryptically, "I don’t know enough about General Tso […] but clearly the man knew his chicken. And he apparently outranked Colonel Sanders," followed by a winking happy-face emoticon. Analysts wondered whether this was a reference to the burgeoning market for cannabis products in China, potentially served through Australia.
    Twitter—Cam Battley, Yahoo
  • Braydon Sutton, Aurora's former business development director turned chair of US MSO 1933 Industries, argued Aurora CEO Terry Booth "fired me and hired Cam Battley" […] "because I couldn't say what Cam would," though Sutton suggests he was tired of working for Aurora and didn't want to do the promotional work he was asked to do. "Hype and promotion just wasn’t me. I was too conservative, too introverted and just too real," he writes.
    Cannabis Health

Investor James Hodgins argued regardless of ups and downs in the sector, Canopy will survive.
Cantech Letter

Coca-Cola again quashed rumours it will debut THC or CBD products. "As we have stated many times, we have no plans to enter the CBD market," the company told Bloomberg.
Bloomberg

Of the 52 publicly traded LPs, 25 have six months' worth of cash on their books, or less.
Twitter—David George-Cosh

Though banks in the sector are freezing cannabiz out, TerrAscend increased its oversubscribed USD$24M private placement to USD$30M.
New Cannabis Ventures

Reviewer WhatsMyPot took LP 7Acres to task for selling pre-rolled joints (made by Indiva) containing only sugar leaves, which it called "low end shake [trimmings] hot dogs."
Twitter—WhatsMyPot

 
ROLLING STONED
image
DILARA EDIPBALKIR

An internet-based poll on behalf of the Canadian Automobile Association found 26% of Canadians between 18 and 34 had either driven while high, or had been passengers in the vehicle of a stoned driver.
NewsWire

Cannabis in cars is a problem even if you're not consuming it, as a Corner Brook, NL man found out when he was found guilty of unlawful cannabis in his vehicle. Police caught him allowing a passenger to roll a joint in his seat.
CBC Newfoundland and Labrador

NEW CANNABINOID THCP: NEXT YEAR’S CBD?
image
HTTPS://COMMONS.WIKIMEDIA.ORG/W/INDEX.PHP?TITLE=USER:BRAINSRUSDC&ACTION=EDIT&REDLINK=1

The industry was abuzz with news that Italian researchers isolated a new psychoactive phytocannabinoid called THCP (Δ9-Tetrahydrocannabiphorol), along with a corresponding non-psychoactive CBD homologue, CBDP.
Nature

  • The new phytocannabinoids occur in minuscule measurements, but THCP is some 30 times more potent than THC.
  • BC cannabis geneticist Ryan Lee stressed, "The current methods labs use are not sufficient to identify or quantify these newly identified compounds," which required specialty equipment to discern.
    Twitter—Ryan Lee
  • That means there won't be consumer THCP boom for some time. Lee argued, "We need to trial these molecules for safety before we release them into the world for people to consume. If we don't we get the same problems we're seeing with the synthetic cannabinoids."
    Twitter—Ryan Lee
GENERATE COMPLIANT PUBLICITY: DO NICE THINGS
image
HTTPS://WWW.FLICKR.COM/PEOPLE/38144472@N04

Ontario REC retailer Superette has figured out how to generate free, legal publicity despite Health Canada's stringent anti-advertising regs: doing nice things for their community. Jumping in on a post by cannabis reviewers WhatsMyPot showing a mountain of plastic packaging waste from a year's worth of legal product, Superette offered to pay to ship the containers to be recycled.

  • Additionally, they accepted the containers as part of an ongoing challenge: for every empty container returned, they'll give one can to the Ottawa Food Bank. Maybe they'll take yours too? Nice work, Superette!
    Twitter—WhatsMyPot, Superette

Quick Hits

  1. Any company wishing to submit a proposal to take over the entire REC retail infrastructure of New Brunswick has until January 10 to submit their paperwork for 10 years of control of New Brunswick's province-wide private REC stores (and no competition, as yet).
    Twitter—Matt Lamers
  2. The GrowthOp asked REC retailers which branded strains sell the best.
    GrowthOp
  3. AdCann celebrated their "10 Best Canadian [REC] Store Brands." AdCann
SCHEER DEMOTED PRO-LEGALIZATION MP
image
PUBLIC DOMAIN

Conservative MP Scott Reid said he was sacked from his shadow-cabinet position as Conservative critic for democratic institutions in January 2018 because he voted for the Liberal government's Bill C-45, the Cannabis Act. He stressed he "consulted [his] constituents and [was] given a mandate [55% of 3,100 respondents] to do so."
Scott Reid (Website)

THE NEW ILLICIT
image
PUBLIC DOMAIN

Just before Christmas, Aleafia reported a truckload of its product as stolen, opening a rat's nest of regulatory worries about transportation.
GrowthOp, Twitter—David Hyde

Quick Hits

  1. Durham Regional Police, immediately east of Toronto, charged more than 100 people with impaired driving over the holidays, but charged only seven people with cannabis offences.
    CTV News
  2. Communities across Ontario's Niagara region have voted to freeze licensing of cannabis production sites.
    Niagara This Week