Blaming a tepid market that grew "slower than anticipated," Canopy announced it will close its Aldergrove and Delta greenhouses, both in BC, and laid off 500 workers. It also canceled plans to build a greenhouse on the 60 acres it purchased in Ontario.
MJ Biz Daily, Vice, BNN Bloomberg

• Employees at the facilities learned Tuesday of a major meeting scheduled for Wednesday. The next day, one employee said, they were "basically told that everyone’s terminated."
  Global News
• Many of the laid-off employees (a purported 90 at Delta and 160 at Aldergrove) were Guatemalans employed under the federal Temporary Foreign Worker program, designed to help companies fill temporary labour shortages with foreign hires. Many will be forced to return home.
  The Province
• Advocates for temporary foreign workers noted a large group of women just arrived in the country in December after going into debt to get to Canada.
  Twitter--Mark Spear
• BC Independent Cannabis Association president Courtland Sandover-Sly accused Canopy of taking advantage of the Temporary Foreign Worker program at a time when they suffered no "genuine labour market need."
  Twitter--Courtland Sandover-Sly

The Aldergrove and Delta greenhouses were Canopy's largest in BC, with a combined 3M square feet of production space. Closing them will cost the company an impairment of between $700M and $800M in fiscal Q4 2020.

• In November, Canopy had 5.4M square feet of licensed capacity. The cuts reduce that capacity by 55%.
  Twitter--David George-Kosh
• Brock University professor Michael J Armstrong noted prior to legalization, LPs made decisions like greenhouse acquisitions in the hope of dominating an industry that hadn't yet appeared. Now each LP must adjust to "the market share it actually got."
  Mugglehead

• The facilities made products for extraction, which MKM Partners' executive director Bill Kirk said suggested lower demand for extractions-based products like vape pens and edibles.
  BNN Bloomberg
• Canopy stressed its new outdoor production allows for "more cost-effective cultivation." Less that two years ago, in May 2018, the company joined the Canadian Cannabis Council and other LPs in lobbying the Senate to ban outdoor growing.
  iPolitics

BMO analysts estimated Canopy invested $500M in BC Tweed, which they said "highlights the undisciplined capital spending by previous management."
Yahoo Finance

• The decision highlights the risks lingering after many LPs' pre-legalization rush to acquire as many production facilities as they could, often at greatly inflated rates.
  MarketWatch

With the number of applications filed for REC Retail Operator Licenses (ROL, for people) nearing 800, the Alcohol and Gaming Commission of Ontario (AGCO) began accepting applications for Retail Store Authorizations (RSA, for each new retail location). On the first day, they received 450 RSA applications.
MJ Biz Daily, Twitter--Trina Fraser

• The government of Ontario is happy to report its system for REC store applications is "proceeding as planned." During last years' first REC store lottery, demand slowed down the application system.
  MJ Biz Daily
• Lawyer Matt Maurer noted it's amazing that hundreds of ROL applications submitted since January 6 have been processed, "but some second round lottery winners [from last August] are still waiting for ROLs."
  Twitter--Matt Maurer
• Some communities--like Oakville--are standing firm in their refusal to allow REC retail.
  In Halton
• As part of an update to laws on vaping, the Ontario government finally retired its ban on allowing consumers to see or handle dry-herb vaporizers or their packaging before buying them.
  Twitter--Harrison Jordan

The influx of major REC retailers into Ontario continues: Fire & Flower, announced a "significant Ontario expansion." The company sold $16.53M at its two Ontario stores--in Ottawa and Kingston--in its first year, and acquired both those stores from the retail license holders to whom the brand was licensed.
CTV News, New Cannabis Ventures

• BC's Choom Holdings has applied for four RSAs.
  NewsWire

The Ontario Cannabis Store released its first annual report since legalization 17 months ago, for the April 2018 to March 2019 fiscal year. MJ Biz Daily noted financials were ready by last summer, meaning "the CEO and chair took ~7 months to write their brief messages."
Twitter--MJ Biz Daily

• The document also identified the OCS's "core strategic objectives": converting legacy consumers to the legal market, placing education first, "delivering value" for Ontario taxpayers, and offering a variety of products.
  MJ Biz Daily

After being legal for more than two months, REC beverages finally began appearing in Ontario and Quebec.
CBC Manitoba, London Free Press, Journal de Montréal--In French

• Fresh from an upbeat earnings report last week, extractor Valens GroWorks is the first to market with white-label CBD- and THC-infused beverages produced with A1 Cannabis Company.
  The Deep Dive
• Fluent Beverages, a wholly owned subsidiary of Tilray's REC brand High Park and beverage multinational AB InBev, launched three varieties of CBD-infused teabag, and one CBD-infused citrus beverage, in the Quebec market. Here's a review of the citrus beverage.
  Twitter--Michael J Armstrong, SQDC, RhumCharts
• An SQDC spokesperson said it expects Canopy's REC beverages will arrive within the next month. The company delayed their beverage release in mid-January.
  Yahoo Finance

The same beverages for sale in Quebec cost 23% more in New Brunswick.
Twitter--Michael J Armstrong

In other 2.0 product news:

Toronto lifestyle brand ByMINISTRY is trying to edge into the specialty edibles market by offering infused-cooking classes.
The Star

• Here in Montreal, draconian government regulations have banned any sweetened edibles, so startup Sugar-Marie hopes make-your-own edibles kits will meet demands for sweets.
  PatWhite.com--In French, Strategy
• Consumers keep opening LPs' new REC chocolates to discover them melted, despite it still being the dead of winter in Canada.
  Twitter--Calyx + Trichomes

Ahead of this year's growing season, new seeds should be available in BC stores soon. Last year seeds were in short supply.
Business of Cannabis

48North launched its Apothecanna line of topicals, which will include creams and oils for pain relief, skin care, "intimacy," and other things. It will be sold through the REC system, since topicals (which have little REC application) aren't sold through MED channels.
NewWire, Twitter--CBD Mason

Brand strategist Rachel Colic argued brands should focus on specific consumer sets rather than trying to aim for wide appeal.
Cannabis Marketer

Tilray, which laid off 10% of its staff last month, posted its Q4 earnings; Revenue was US$46.9M--missing the consensus estimate of US$55.4M.
BNN Bloomberg, Financial Post, Bloomberg

• Tilray's adjusted EBITDA loss was USD$35.3M. Though 33% lower than the previous quarter, this was far more than the consensus prediction of $21.8M.
  MJ Biz Daily

CEO Brendan Kennedy said Tilray's plan to profitability will rest on 2.0 products--including drinks it will produce out of its partnerships with beverages producer Anheuser-Busch InBev and edibles produced by subsidiary Chowie Wowie.
CTV News

Quick Hits

1. Defence attorneys complained they lack the means to test newly approved SoToxa saliva testing devices, as they are only sold to law enforcement.

It was pretty stressful owning one of the first 25 REC stores in Ontario.
Global News

• One source of stress is REC store break-ins, like this one in BC.
  The Straight

If you tell BC's Liquor and Cannabis Regulation Branch that you owned, operated, financially supported, received income from an unlicensed REC retail on or after March 1, 2020, they're not going to license your REC store. Ditto if you answer yes when asked whether you've been involved in the distribution or supply of cannabis to unlicensed retailers.
Inside the Jar

Dry-flower products--including pre-rolls--sold out in Whitehorse, Yukon's only REC store last week. Next door in Northwest Territories, Yellowknife still has no private REC retail, despite opening the application process last spring.
NNSL, Cabin Radio

Flagrant scofflaw Toronto dispensary chain CAFE, facing likely more than 100 charges for its refusal to shut its stores, announced it joined the Canadian Cannabis Retailers Union and committed to "the highest standards of responsible cannabis sales and employee education and training."
NewsWire

Cannabis stocks sufferedas TSX share prices plummeted in response to panic over the COVID-19 pandemic.
BNN Bloomberg

Organigram's vape hardware producer Feather is facing holdups of two weeks to a month due to COVID-19-related factory shutdowns in China.
Bloomberg

• Producers who have relationships with suppliers in China can expect delays along those lines. Those new to the market who haven't yet developed supplier relationships may be in for a far longer wait.
• That's hardly happy news for a sector where stocks declined 21% last month--making eleven straight months of falling stock values.
  New Cannabis Ventures

The NYSE again warned CannTrust its share prices were too low to be compliant. Shares must be more than $1 over 30 consecutive days of trading to be eligible for NYSE listings. The NYSE issued CannTrust a similar warning in December.
MJ Biz Daily, Stockwatch

• CannTrust is being investigated by not only the Ontario Securities Commission, but also by Health Canada after a whistleblower revealed last summer that the company was growing in unlicensed rooms and deliberately misled regulators.
  Financial Post
• Lawyer Trina Fraser said, "The potential for people to go to jail certainly exists. The potential for significant fines to be levied certainly exists." As well, directors and officers may be stripped of security clearances they need to work within the licensed sector.

The International Brotherhood of Electrical Workers was handing out union cards this week at Aphria's Leamington campus, where numerous workers quit over complaints about heat  in 2018. At the time, Neufeld said Aphria would hire Temporary Foreign Workers.
Twitter--The Cannalysts, Windsor Star

Quick Hits

1. Emerald Health Therapeutics and greenhouse operator Village Farms settled their legal imbroglio with the conclusion Village Farms owns 57.4% of joint venture Pure Sunfarms.
   Hemp Industry Daily

Aiming to discourage youth vaping, Alberta introduced a 20% retail tax on vape products, including cannabis extracts and vaping devices. The tax is modeled on BC's 20% tax on vape products, which was eventually amended to exempt dry-herb vaporizers. What Alberta will tax and what it will exempt will be revealed in the spring.
CBC Edmonton

• Fire & Flower's Nathan Mison, chairman of the Alberta Cannabis Council, said this would raise the combined excise tax on REC vape products to 44.3% and argued the new tax would drive buyers away from the legal market.
  Calgary Herald

Alberta Gaming, Liquor and Cannabis announced last week it projected $26M in losses for the 2019-2020 fiscal year. As commentators puzzled over why "legalization was financial bust" for Alberta. Michael J Armstrong noted the loss was isolated to the AGLC alone: "The treasury collects $70 million in [cannabis] tax; [making this a] net gain [of] $44 million."
National Post, CBC Calgary, Twitter--Michael J Armstrong, Global News

LPs once promised to produce "ultra-premium" flower retailing for as much as $100 per gram. However, it  turns out "Canadian cannabis buyers want mids"--and LPs are in a hurry to release value brands to meet consumer demand.
Marketwatch, CannabisNow, CNBC

• The trend began in October, when Hexo announced its Original Stash value brand, which offered blended flower (12-18% THC) in 28-gram bags priced below the national average of illicit cannabis. The bulk-priced product was designed to lure buyers from the illicit market.
  The Star, Oregon Cannabis Connection
• Aurora is launching its Daily Special value brand (15-21% THC), while Canopy will debut Twd. (13-25%) in coming weeks, and Tilray will launch The Batch (10-16% THC). Most will be sold in larger formats of 28 or 15 grams, though Tilray's largest Batch products will be seven-gram containers.

New Brunswick is considering potential buyers for crown REC retail monopoly Cannabis NB, but in the mean time the money-losing chain has discovered low-price products attract customers and revenue.
CBC New Brunswick

• The Ontario Cannabis Store continues dropping prices on some products. This week it discounted 29 products.
  Twitter--What's My Pot

Quick Hits

1. BC craft growers hope they'll be able to develop regional specificities in emulation of local wine regions.
   Vancouver Sun
2. Health Canada's David Brown is developing a compilation document of information about licensed micro-cultivators. Maybe you can help.
   Twitter--David Brown

The idea of eliminating or dismantling the MED system--debated for years--is being discussed again.

• Arguing licensed home MED growing allows too many plants that create a nuisance for neighbours, Simcoe County columnist Ian Adams argued Health Canada should rewrite MED laws to limit home growing.
  Simcoe.com
• Inside the Jar's Amanda Siebert argued any conflation of the REC and MED systems represents a threat to patient access.
  Inside the Jar
• The BC Compassion Club Society, the country's first Compassion Club, has operated illegally since 1997, but now it's working to become legal without betraying its core goals of low-cost MED access.
  Globe and Mail, Yahoo Finance
• Part of the debate is the question of how much information budtenders should be allowed to provide customers about purported effects or benefits of different cultivars, discussed in this thread.
  Twitter--CBD Mason

Winnipeg's city council demanded the federal government's help in dealing with complaints over MED grow-ops "where hundreds of plants are cultivated within residential homes." City councillors were surprised Health Canada does not share information about the location of patients licensed to grow MED with anyone other than police. Municipalities and provinces have no jurisdiction over MED licensing.
CBC Winnipeg

• Prince Harry and Princess Meghan's new home on Vancouver Island is surrounded by "potential weed farms," but anything's a potential weed farm if you're brave enough.
  Brinkwire

Researchers at McMaster University discovered cannabinoid CBG may be useful in treating antibotic-resistant staph infections (MRSA).
CBC Hamilton

• Researchers published technical details about cannabis drug interactions in the journal of the Canadian Medical Association.
  CMAJ

Quick Hits

1. The next fad investment for law-bending investors is psychedelics. Toronto psychedelic pharma company Mind Medicine, backed by Ousted Canopy co-founder Bruce Linton, began trading on Toronto's "new" stock exchange NEO. (Linton is involved in many other things: such as raising  money for the US cannabis industry.) This week, Field Trip Psychedelics opened a psychedelic-enhanced therapy clinic in Toronto it called the first of its kind.
   Globe and Mail, New Cannabis Ventures, PR NewsWire
2. Police in Montreal suburb Laval raided a MED clinic that offered an on-site smoking lounge, which owners said is operating legally under an existing permit for cigar- and shisha-smoking lounges. The owners are not happy about it.
   CTV News, Growth Op

An eight-year-old won $200 worth of legal REC in a raffle at a youth-hockey tournament in Dawson Creek, British Columbia. Each competing team was invited to put together baskets worth at least $50 as raffle gifts, and the lucky youngster received one full of dry flower, prerolls, edibles, and accessories. Raffle organizers said the basket was in an area for adults only.

• The kid in question didn't collect the prize himself: raffle organizers informed his father, and checked his ID when he picked it up. It remains a mystery how he was able to choose a raffle gift from a restricted area.
• "My grandson thought he won a great prize," said the grandfather. "‘Dad, I won chocolate!’ ‘No, son, there’s bad drugs in the chocolate.’ How do you explain that to a kid?”
• One Twitter wag responded, "Imagine the grandpa is mad cuz it's mids."
  Twitter--Illumenedge

Quick Hits

1. MED data app Strainprint surveyed its users about cannabis and sex. They liked both, particularly together.
   Strainprint, Inside the Jar
2. Brad "PancakeNap 420" Martin reviewed Seth Rogen's Canopy REC brand Houseplant. It wasn't as brutal as grower Travis Lane's shellacking of Pure Sunfarms' Headband last week, but I'm not sure Houseplant survived it.
   GrowthOp, Inside the Jar