Like the rest of the world, the cannabis sector struggled to make sense of the widening chaos of the COVID-19 pandemic and the worldwide wave of individual isolation tactics and border shutdowns.
Globe and Mail

• Canada Post will no longer deliver MED directly to consumers' doors to limit direct contact between mail carriers and the public. Carriers will instead leave a delivery notice card and ask consumers to go directly to the post office to pick up their packages.
  Leafly
• MED advocates cried foul, noting this forces patients (who may be immunosuppressed and/or disabled) to leave their homes.

Tantalus Labs' Dan Sutton said that for LPs, the crisis will increase crop risks and lost purchase orders, and will eventually require ramping-up in order to make up for lost time. (Shoppify has a list of relief agencies for companies and people affected by the pandemic.)
Twitter--@Dsutton1986, Shopify

• WeedMD CEO Angelo Tsebelis published an open letter to shareholders, outlining (among other things) the company's COVID protocols. Few other LPs have done the same.
  WeedMD
• Health Canada's Cannabis Program employees are working remotely, which may contribute to license processing delays.
  Twitter--@Bdavidson911, @pipedreemzinc
• Health Canada's in-person inspections--just increased following the CannTrust scandal last summer--are being shelved for several weeks, and may return as "paper/video inspections."
  Twitter--@drowbb

NORML circulated guidelines for how to lower COVID transmission risk while using cannabis. The Ontario Cannabis Store posted a similar set of guidelines.

While civilians race to Costco for toilet paper, cultivators are stocking up on grow supplies ahead of possible supply-chain disruption.
Twitter--@ChimeraGenetics

This is a weird time for a happy announcement, but this week WeedWeek added a new member of our reporting team: business columnist Dan Mitchell, whose first piece is about how San Francisco Bay Area businesses are adapting. Welcome aboard, Dan. Let's hope every week that follows is less terrifying than this one.

In a rare piece of good news, the cannabis sector looked healthy for the first time in months as consumers facing isolation and lockdowns flooded into REC stores and provincial websites.

• Alberta and Ontario REC stores reported "unprecedented demand." REC firm Spiritleaf CEO Darren Bondar said sales were up 20% across the 46 stores in his chain, and "the supply chain remains in place." (Similar surges are taking place in US legal states.)
  MJ Biz Daily
• In BC, REC retailers reported sales are up and customers are buying larger amounts than usual. The provincial wholesaler said it's working with industry to prevent supply issues, though at the moment there are no delays or impacts to REC.
  CTV News
• The routine lineups at Montreal's Société Québécoise du Cannabis were a lot bigger over the weekend as locals stocked up on enough cannabis to last them a few weeks at home.
  CityNews, CTV News
  
• At one of the Nova Scotia Liquor Commission's mixed alcohol/cannabis stores, a CBC reporter noted at 10am when doors opened, 10% of the crowd in line headed for beer, 10% headed for wine and spirits, while 80% headed for the cannabis.
  Twitter--@Brett_CBC

Not everyone wants to get cannabis in person: the Ontario Cannabis Store's online orders increased by 80% week over week on Saturday, and by 100% on Sunday. The OCS says it has enough inventory to meet demands.
The Star

• Demand for legal delivery is also spiking, now that people may want to remain home.. David Clement, of Koch Brothers-affiliated Consumer Choice Center, pointed out only two provinces have (unrestricted) same-day delivery, though alcohol delivery is widely allowed. (Some other provinces are testing same-day delivery, as Ontario has been doing in the Greater Toronto Area.)
  MJ Biz Daily, GrowthOp, Twitter--@ClementLiberty
• In response to demand, some areas--including Ontario--are suspending same-day REC shipping and warning deliveries may be delayed.
  BNN Bloomberg

Naturally, some doomsday-minded people are hoarding cannabis.
Vice

Though REC retail sales reports for January showed a continued upward trajectory, this panic-buying sales boost is good news for what Bloomberg called "an industry on the brink," left staggering after months of decline and poorly positioned for global financial meltdown.
Bloomberg, Twitter--@itsdgc

• Stocks actually went up across the sector, including the troubled Hexo, which was up 30%.
  Twitter--@itsdgc

With markets plummeting, the sector opened the week to a report from Tantalus Labs CEO Dan Sutton that a senior official at the federal Business Development Bank of Canada (BDC) told him they are "not authorized to do business with cannabis companies." This means cannabis companies will be shut out of national COVID relief stimulus funds for small businesses, which include $10B in increased loans to "qualifying" businesses from BDC and Export Development Canada.
Twitter--@DSutton1986, GrowthOp, Globe and Mail

• Cannabis Council of Canada CEO George Smitherman stressed LPs "are all new businesses in a fledgling, complicated sector, and [...] badly need support from governments due to the added tumult onset by COVID-19." He added that LPs contributed $8B to GDP. Smitherman pressed this point in a letter to Mary Ng, federal minister for small business, export promotion, and international trade.
  Yahoo Finance, MJ Biz Daily
• BDC appeared to duck specific questions and discussions with figures in the sector, saying only "We are evaluating the situation as it evolves, including the needs of entrepreneurs and the impact on specific industries. We are working on the details on how the program will work, and will share an update in the coming days.
  Twitter--@Ottawa_Cameron, @bdc_ca

The sector reacted with shock, anger, and talk of lawsuits and civil liberties.
Twitter--@TrinaFraser, @MarkHauk, @BeardedGreenly, @AaronWAnderson, @Nick_Laba

• Auxly CEO Hugo Alves noted BDC is a Crown corporation but refuses to do business with an industry created by the federal government.
  Twitter--@HugoAlves1972 

Some federal funds are available--but only through federal agricultural lender Farm Credit Canada, which may only lend to those involved in growing. Processors and those involved in wholesale and retail worry they will have no access.
MJ Biz Daily, Twitter--@ms_janeen_davis

Organigram VP public affairs Cameron Bishop demanded the sector be recognized as a "legitimate economic driver" responsible for "thousands of jobs nationwide" and "hundreds of millions in investments."
Twitter--@Ottawa_Cameron

• Bishop spun his points into a series of potential calls for industry-wide action from the federal government to help LPs struggle through COVID, including lowering excise taxes and moratorium on 2.3% revenue sharing.
  Twitter--@Ottawa_Cameron
• Though 98% of Canadian businesses are small businesses, half of 1% of LPs are small businesses--which many believe reflects federal dismissal of cannabis entrepreneurs.
  Globe and Mail

The three cross-party co-chairs of the  Parliamentary Cannabis Caucus, NDP MP Don Davies, Conservative MP Scott Reid, and Liberal MP Nate Erskine-Smith signed a joint letter to finance minister Bill Morneau demanding cannabis have access to COVID-19 stimulus measures.
Twitter--@DonDavies

As provinces grapple with shut-down orders, one decision no one in the sector ever considered has emerged: Is access to cannabis an essential service, particularly during a time of heightened global anxiety?

Ontario's Doug Ford Conservative government says it is: as part of the state of emergency his government exempted REC stores, the Beer Store, and the LCBO along with grocery stores and convenience stores. Hours may be restricted.
Twitter--@GOPdemocrat, Ottawa Sun, Global News

• Prince Edward Island announced plans to close all PEI Cannabis stores with 24 hours "until further notice." (They also closed liquor stores.)
  Twitter--@PEICannabis, Global News
• Three hours after this announcement, panicked Islanders to line up in large, dense groups for cannabis and alcohol, the province's chief public health officer Heather Morrison announced she was "disappointed in Islanders' response."
  Global News
• The province is looking for alternate ways to allow the sale of alcohol and cannabis, such as online or drive-through, Morrison said, "Perhaps we underestimated that alcohol is considered essential for some people." 

BC's cannabis and liquor stores have no plans to close--for the moment, though that may change as the pandemic evolves. BC's provincially run stores are enacting social distancing measures for customers and cleaning more often. (Victoria compassion club the Victoria Cannabis Buyers Club is reducing the number of days it's open, but extending hours, and offering care by phone.)
Kamloops Matters, GrowthOp

• Nova Scotia's NSLC stores are reducing their hours to contain viral spread, while many private stores in Manitoba are ramping up cleanliness efforts.
  CTV News
• Alberta Gaming, Liquor and Cannabis said that because stores are independently owned in the province, it has no power to force closures.
  Global News

Quick Hits

1. The O'Cannabiz trade show pushed its dates back from April to the last weekend of October.
   Press Release

2. Youth cannabis consumption appears to have fallen since legalization in 2018.
   Calgary Herald

Retailers face a similar choice to provinces, except they have to balance potential revenue losses against the potential disaster of their workforce falling ill. Canopy announced on Tuesday it would temporarily close 23 of its Tokyo Smoke and Tweed stores across Canada.

• Canopy encouraged employees and their communities to "flatten the curve" and said the company was shifting to e-commerce.
  MJ Biz Daily, BNN Bloomberg
• These closures only affect stores owned directly by the company--five independently operated Tokyo Smoke and Tweed franchises may choose to remain open.
  Twitter--MattPMaurer

Fire & Flower quickly followed Canopy's lead and announced closures at seven Alberta locations and reduced hours at other stores. The next day the company announced stores in Ottawa and Kingston will only have products available via click-and-collect: online order and pickup.

• Superette also initially closed its Ottawa store before moving to click-and-collect.
  Twitter--@superette_shop

Independent REC retailer Ryan Roch, of Alberta's Lake City Cannabis, discussed his fear and uncertainty for his store on Twitter and called for the AGLC to allow REC retailers to temporarily move to delivery to reduce transmission risks.
Twitter--LakeCityCanna

• Pineapple Express stressed it had masks, gloves, alcohol wipes, and hand-sanitizer for all its delivery drivers.
  Twitter--PXDelivery, WhatsMyPot

Quick Hits

1. Edmonton police have cracked down on illicit online REC sales and said they have seized and taken down 100 websites. Critics noted that won't do much to prevent illicit online sales.
   CBC Edmonton, Twitter—@WhatsMyPot

This was supposed to be an exciting time for REC retail in Ontario. The provincial regulator is hurriedly approving a new wave of stores at the same time as long delayed licensees from the second August REC retail lottery were finally ready to open. The sector excitedly anticipated the surge of new stores to begin this week--now in the middle of a pandemic and economic crisis.
BisNow, Twitter--@MattPMaurer

• Drive-thru cannabis stores are not allowed, but some business owners who've been delayed for months say they can't wait any longer: they'll open stores and welcome shoppers, pandemic or not.
  Twitter--@CalyxTrichomes
• Province-wide third-party delivery (as is available in Manitoba and Saskatchewan) may be inevitable in Ontario, perhaps on an accelerated schedule due to the outbreak.
  Twitter--@CalyxTrichomes

Quick Hits

1. Want to work for the first micro-cultivator to bring REC to market? North 40 Cannabis in northern Saskatchewan is looking for a trimmer willing to relocate. NB. "Own RV an asset or be willing to sleep on cots. Must have the desire to sever all ties with the outside world. TP and benefits included. Preference given to those who like wild game and fish."
   Twitter—North 40 Cannabis
   

2. The United Food and Commercial Workers Union (UFCW Canada) representing WeedMD workers in Ontario has called the LP to the bargaining table to hammer out a contract with 250 workers at WeedMD's Mount Brydges production facility.
   Street Insider

There are nearly 400,000 MED patients in Canada. Organigram's Cameron Bishop called on Health Canada to designate MED an essential service nationwide.
Twitter--@Ottawa_Cameron

• MED advocates are calling on the government to prevent interruption to patient supplies. Lawyer Harrison Jordan called on Health Canada to temporarily suspend expiry dates for MED LP registration documents and registration certificates.
  Twitter--@harjord
• Human resources consultant Erin Gratton called for the federal government to take the opportunity to abandon excise tax on MED.
  Twitter--@ErinEGratton

Even before the pandemic became the singular focus of the entire country, MED advocates were sounded the alarm that patients were being ignored in the rush for REC profits.
Inside the Jar

Rocker Bif Naked launched an unlicensed CBD company, Mona Lisa Healing, which dangerously claimed its products "help your body defend against COVID-19 Coronavirus."
Business In Vancouver

The U.S. Securities and Exchange Commission's Division of Enforcement told Cronos Group to preserve all records dealing with recognition of revenues from bulk-resin purchases and biomass wholesale for a "confidential and non-public inquiry."
MarketWatch

• In late February, Cronos announced an unexplained delay in its Q4 and full-year financials. The company later announced the delay as the result of an ongoing review by internal audit committee, third-party lawyers, and forensic accountants.
  CBC Business, MarketWatch
• On Tuesday, Cronos announced it would re-state three of the four quarterly financial statements it filed for 2019 due to internal review of bulk resin purchases and wholesale revenues.
  MarketWatch
• The company warned its previous financial statements were faulty and its internal controls on financial reporting were flawed.
  Twitter--@chernandburn

Marlboro parent company Altria owns 45% of Cronos stock and former Altria CFO Jerry Barbato, who became Cronos CFO last April, may be forced out. (C-suite leaders continue leaving their posts at other LPs.)
Twitter--GoBlueCdn, MJ Biz Daily

• A US law firm announced filed a class action lawsuit against Cronos.
  OTC Dynamics

Separately, Hexo announced it would again delay filing its interim financial statements and related documents for Q2 2020.(It did the same thing in October.)

• The company warned of a coming "significant impairment," which Desjardins analyst John Chu suspected was related to Hexo's $263M all-stock acquisition of Newstrike Brands last year.
  La Presse--In French, BNN Bloomberg
• None of this would be good news in a regular week, but coming amid the continuing uncertainty of the COVID pandemic, the news leaves Hexo in a deeply uncertain position.
  La Presse--In French
• Hexo joins CannTrust, Aurora, and Sundial in having to worry about keeping its stock price high enough. If it remains below $1, it could be delisted from the NYSE and the TSX composite index.
  Motley Fool, Twitter--@itsdgc

Hexo CEO Sebastien St-Louis received a 30% raise to roughly $500,000 last year, giving him $8.8M compensation, up from $1.5M the previous year.
Twitter--@matt_lamers

• Hexo had three CFOs in 2019, one of whom was paid $840,000, another more than $700,000, and a third paid $150,000 plus monthly $20,000 bonus for being an interim figure.
  Twitter--@matt_lamers

BMO downgraded Hexo to "underperform" and suspended its target price.
Twitter--@matt_lamers

Aurora co-founder and ex-CEO Terry Booth sold 12.16M shares of company stock for roughly $13.6M. They represented two-thirds of his stake in the company.
NewsWire

• Aurora said the sale was part of Booth's departure from the company, which he announced in February.
  The Star
• Booth told BNN Bloomberg he sold his shares in order to free up cash and reduce volatility during the COVID crisis, and would consider reinvesting, "once the dust settles."
  BNN Bloomberg
  

Elsewhere in the corporate world:

Last week Tilray offered deeply discounted shares (USD$4.76 per share) and was punished for it by shareholders. MKM analyst Bill Kirk warned while Aurora and Hexo have financing requirements coming due, they won't have an easy time of raising money and may have to endure "substantially dilutive terms at below current pricing levels." That is, if they can get funding at all.
MarketWatch

Toronto LP Pure Global Cannabis was granted creditor protection.
MarketWatch

Lift & Co announced it had temporarily laid off staff due to the pandemic, though company reps wouldn't say how many layoffs or how many staff they have. (Lift laid another 13 workers off from its Toronto office in May.)
Twitter--@itsdgc, MJ Biz Daily, Puff Puff Post

• Nonetheless, they said the cuts won't affect Lift & Co trade shows. Lift & Co's massive Toronto show is still scheduled for the last weekend in May.
• Lift CFO Kasia Malz said the company was shutting down Cohesion, the unprofitable "flagship" consumer data program it launched in September.
  Twitter--@itsdgc, BetaKit

The licensed sector has yet to solve its endemic quality problem. After a grim last week for the Green Organic Dutchman, grower Travis Lane tested one of TGOD's organic living soil cultivars and described it as "brutal and tragic."
The Guardian, Inside the Jar

• Lane guessed the flower was so bad due to "post-harvest issues," and Nextleaf president Tom Ulanowski suggested it might be due to TGOD's use of EnWave drying products, which he said can degrade and partially decarb products.
  Twitter--@BeardedGreenly, @canna_tom
• A What'sMyPot review of another TGOD product wasn't as brutal, though noted it the flower smelled like "dirty gym socks [...]used to wipe ashtrays."
  Twitter--@whatsmypot
• Even reviews of tolerable products lament about how expensive they are.
  PancakeNap420
• Consumers continue to complain of products packaged months ago. Here's one item bought in February, packaged 14 months earlier.
  Twitter--@optimom_ca, @hermano_works
• GTEC Holdings' BLKMKT brand has offended many, but reviewers continue saying positive things about the company's products.
  Mugglehead, Rhum Charts

Legal dry flower is still far too dry. Couple reviewers WhatsMyPot announced they'll quantify dryness on receipt as part of reviews, and attempted to set minimum standards for acceptable moisture levels.
Twitter--WhatsMyPot

Quick Hits

1. The Ontario Cannabis Store advertised a sale on products with a picture of a cannabis plant seemingly infested with powdery mildew. They later changed the photo.
   Twitter--@ArkhamSmoke