March 14 2020,



As the World Health Organization declared the COVID-19 coronavirus outbreak a global pandemic, Canadian stock markets suffered their worst day since 1940, dropping 12% on Thursday alone. This registered in the sector as double-digit declines for all 12 major LPs followed by BNN Bloomberg.
Bloomberg, Twitter--David George-Cosh

This would be bad news at the best of times, but as Bloomberg's Kristine Owram said, this is especially worrisome for post-legalization legal REC, where many companies are already struggling to survive.
Twitter--Kristine Owram

The safety of cannabis-sector employees is on everybody's minds. BC LP Tantalus Labs' CEO Dan Sutton posted his company's COVID-19 policy to Twitter and encouraged others to do the same. Cannabis geneticist Ryan Lee called for all companies to follow Tantalus's lead by posting their COVID-19 policies as well. They didn't.
Twitter--Dan Sutton, Ryan Lee

"portrait of a man" 2004-2006

The Green Organic Dutchman released its Q4 and 2019 year end financials: The company has only seven weeks of cash left, while working capital was down to $15M on December 31--down from $213M a year before.
MJ Biz Daily

  • The company paid key management $13.7M, more than the TGOD's entire year's revenue of $11.2M. The company's annual net loss was $195M.
    Twitter--Matt Lamers
  • The company posted a loss of $144.75M for the final three months of 2019. This was mainly due to a $127.74M impairment on "cash generating assets being built or used in Canada, and the Company's investment in [Jamaican MED producer] Epican Medicinals." The company said the impairment was "primarily due to market conditions," which have forced it to reduce its facilities and abandon plans to develop Jamaican exports.

TGOD may be the only LP to have earned more revenue selling in Europe ($2.56M for Q4, and $9.88M for the year) than in Canada ($690,000, $1.28M for the year).
Twitter--David George-Cosh

Vancouver LP Zenabis had bad news of its own with a corporate update announcing 22% cuts to its total workforce (cutting roughly 175 workers), including 33% of its head office employees.
MJ Biz Daily, Zenabis Press Release, Twitter--YoungGJustin

Tweed Houndstooth & Soda (CNW Group/Tweed Inc.)

Canopy announced the long-awaited launch of its REC beverage line, with the first cases of Tweed Houndstooth & Soda shipping to Quebec's SQDC on Thursday, March 12. (The company did not say whether or how they solved the problem of aluminum can-liners leaching out cannabinoids.)
Press Release, Twitter--Crystal Cannabis

  • Canopy has staked much of its future on the success of its beverage portfolio, and when I interviewed ousted co-founder/CEO Bruce Linton for the upcoming WeedWeek Ontario Report, he told me he still believes REC beverages will reshape cannabis consumption.
  • Cannaylst Craig "GoBlueCdn" Wiggins determined each can of Houndstooth & Soda (containing 2.0 mg THC) will cost $5.45 after taxes (shipping is an additional $5). Consumers can buy a five cans (total 10mg THC) for $24.25 (shipping not included). Since Canadians can only legally carry 2.1 litres of REC beverage at any time, one commentator suggested it was worth buying six.
    Twitter--GoBlueCdn, Aaron W. Anderson
  • By comparison, consumers can buy 100mg 1o-packs of 10mg edibles for under $20.

In January, the Ontario Cannabis Store recorded $569,000 worth of edibles and $3.8M worth of vape products sold via wholesale and online channels.
MJ Biz Daily

  • In a poll undertaken for Organigram, half of non-cannabis-consumers said they'd try edibles if they had enough information about effect, potency, and ingredients. Respondents also said 5 mg THC per edibles serving was ideal.
    Financial Post
  • Vape products are moving, though slower than some retailers expected (see this thread for more). In BC, this may be due to the additional 20% vape tax that makes legal pens even more expensive than other forms of REC.
    Twitter--The Cannalysts
This week on the podcast
Politico Reporters on the State of Weed Politics
Matt Mawson / Creative Commons

48North announced the sudden exit of CEO Alison Gordon, one of only a few female LP CEOs. She was replaced by 48North COO Charles-Alexandre Vennat, a former president of cigarette-maker Bastos of Canada. (Vennat is son of businessman and civil servant Michel Vennat, one-time president of the Business Development Bank of Canada.)
Yahoo Finance, MJ Biz Daily, Twitter--Unity Marguerite, NewsWire

After recently slashing 10% of its staff and posting Q4 revenues more than 15% below the lowest consensus predictions, Tilray announced its plan for a $90M capital raise, including selling shares at a discounted rate. Investors responded by driving stocks down to an all-time low, 17% below the discounted price.
BNN Bloomberg, Bloomberg, MJ Biz Daily, Twitter--David George-Cosh

Extractor Radiant Technologies posted an 805% quarter-over-quarter increase in sales for fiscal Q3 2020, all of which came from Aurora. However, Aurora and Radiant are tightly enough connected that the massive increase in sales between them raised some eyebrows.

Even as some LPs haven't reported their earnings for October through December, the combined loss for Canadian MED and REC producers in 2019 was roughly $6B.
Twitter--Matt Lamers

Canopy loaned $80.5M to LP TerrAscend, and is going ahead with its plan for a hemp production facility in New York State.
Hemp Industry Daily

More and more LPs are getting their EU-Good Manufacturing Practice (EU-GMP) certifications, which are necessary for any company exporting MED to EU markets. However EU-GMP is only the first step: there are also regs and compliance challenges ahead.
MJ Biz Daily

As stocks continue their downward trajectory, The Deep Dive suggested repricing employee stock options so guttering stocks are less depressing to worker morale.
The Deep Dive

Former Ontario deputy premier George Smitherman joined the Cannabis Council of Canada as president and CEO, and immediately pressed federal health minister Patty Hajdu to loosen packaging restrictions, increase export approvals, and adopt a single national excise stamp, among other things.
MJ Biz Daily

LPs are looking for deals on equipment as other LPs shut down, as in this tweet by GTEC Holdings' CEO.
Twitter--Norton Singhavon

Public Domain

The Alcohol and Gaming Commission of Ontario spent the week issuing Retail Operator Licenses (ROL, for people running REC stores) Retail Store Authorizations (RSA, for each new retail location) with increasing speed.

  • On Tuesday, lawyer Matt Maurer noted 45 RSAs had reached the public-notice stage. "Another few days and counting won't make sense anymore at this rate." Of those 45, the majority were in Toronto, with the rest all over the province.
    Twitter--Matt Maurer
  • Seven more RSAs went into public notice the next day, nine more on Thursday, and six more on Friday. That means 67 stores across Ontario await community approval and will be opening soon.
    Twitter--Matt Maurer
  • The AGCO issued 17 new ROLs in a single day, a striking departure from the glacial progress that followed the two REC retail lotteries.
    Twitter--Matt Maurer

The snag, investor/advisor Aaron Salz warned, is that once each store gets public-notice approval, it will need roughly $1M for buildout and working capital, and the market for REC-retail capital will; get more competitive with each new AGCO approval.
Twitter--Aaron Salz

The former chairman of the Alcohol and Gaming Commission of Ontario, Randy Barber, is working on opening a Highlife-branded REC store, "pending a successful RSA."
NewsWire, Calyx+Trichomes


Quebec may be Canada's most cannabis-conservative province, but according to the 2019 Quebec Cannabis Survey (only available in French), our attitudes are changing, and our consumption is increasing slightly.
Quebec Ministry of Health--In French, Radio-Canada International English, TVA Nouvelles--In French

  • Data by Quebec's Institute of Statistics found that 62% Quebeckers older than 15 found "occasional cannabis use" to be "socially acceptable." That's up from 49% a year before.
    La Presse--In French, Quebec Ministry of Health--In French
  • The proportion of Quebeckers who'd used cannabis in the past three months increased to 13% from 11% the year before.

Most of the increase was from consumers aged 35 to 54 (whose consumption was at 13%, up from 9% the year before). There were no increases for the three age groups between 15 and 34.
Twitter--Jean-Sébastien Fallu--In French, GrowthOp

Quebec's crown monopoly, the SQDC, is expected to generate $27M in profits for 2019-2020. That makes it a rare star at a time when Quebec's crown corporations are showing diminishing revenues.
Journal de Montréal--In French

Next door in New Brunswick, Moncton's Cannabis at the Coliseum trade show which expected some 2,000 people, or about 2% of Moncton's population. Whether that many came out, the crowds were heavy, perhaps in part due to Cannabis NB's licensed pop-up selling REC.  New Brunswickers clearly like their cannabis. If only the struggling Cannabis NB could figure out how to sell more of it to them.

Quick Hits

  1. A Calgary pastor (and former teenage stoner) reflected on cannabis, and wondered whether lonely, disconnected people wouldn't want to get high if they only came to church more.
    Calgary Herald

Speaking to the UN's Commission on Narcotic Drugs, Health Canada director general for controlled substances Michelle Boudreau said REC legalization has been a success that's cut the illegal market down 30% without increasing youth consumption.
Market Realist, Marijuana Moment

  • We had to break a number of global drug treaties to do it. The UN International Narcotics Control Board (INCB), in their 2019 report (released last week), frowned on Canadian legalization, saying they were concerned about the "consequences for health and well-being, in particular [for] young people." (Cannabis consumption among young people has remained flat.)
    Insude the Jar, UN-INCB
  • Boudreau (full remarks here) stopped short of recommending other nations follow our lead, presumably in part because that would be a call to break drug treaties.

Quick Hits

  1. American libertarian think tank the Cato Institute assessed Canadian REC legalization and found it inspiring.
    Cato Blog
  2. This year's National Poison Prevention Week will focus on accidental cannabis consumption, and encourage the hashtag #highandlocked to remind consumers to keep their edibles locked up in places kids can't reach.



Stanley Howe / Miniature garden, Drumin / CC BY-SA 2.0

North 40, Canada's first licensed micro-cultivator, has products for sale through REC stores in Saskatchewan, making it the first micro to sell its wares. (Craft Depot CEO Calan Aldred noted some micro products have already been sold through white-label deals.)
Mugglehead, Twitter--Calan Aldred

Quick Hits

  1. The Chief and Council of Siksika First Nation in Alberta have applied for a Health Canada license to produce MED on their territory. This is the first instance of a First Nation seeking a Health Canada license for cannabis (or much of anything: First Nations generally prefer to limit federal government involvement in their affairs).
    Global News
  2. The Northwest Territories' online cannabis store cost $300,000 to open, $200,000 per year to operate, and lost $136,000 last year. Consumers in the territory have bought $3.9M worth of REC since legalization, but only $57,664 of that was online.
    CBC North

Jennawae McLean

If you've got a criminal record for cannabis, you're guaranteed a job interview at Kingston head shop/soon-to-be licensed REC store Calyx + Trichomes.
Twitter--Calyx + Trichomes

  • Owner Jennawae McLean told the Growth Op she wants to help out those who "forfeited a lot of personal freedoms" in order to make legalization possible.
  • She's offering interviews to anyone with a nonviolent criminal record, though she's hoping for those whose charges are cannabis- or activism-related.
  • "We can't guarantee a job, but we can guarantee that you get a fair shake," McLean tweeted.
    Twitter--Calyx + Trichomes

Quick Hits

  1. If you're driving somewhere with cannabis, just put it in the trunk. You may be able to argue it was outside of your reach, but that's an argument you may have to make in court.
    Winnipeg Free Press
  2. The owners of S&M Medicinal Sweet Shoppe in Gibsons, BC, are suing BC's community safety unit (CSU) for raiding their unlicensed dispensary. Their complaints are procedural.
    Coast Reporter
  3. Toronto head shop the Friendly Stranger is now a holding company with REC retail aspirations, but it's existed for 25 years in a variety of other forms.
    Edit Seven
Mat Colombro /

A line of hair-care products called "CBD Infused Inc" from cosmetic company Trade Secrets raised controversy this week, both because they appeared to be advertising CBD in contravention of the Cannabis Act, and also because they contain no CBD. CBD Infused Inc products like "Mary Jane Rinse" and "Black Market Styling Cream" are legal for sale at Toronto's Eaton Centre--but it might mean they're contrary to Ontario's consumer protection laws.
Twitter--Mat Columbro, GrowthOp

  • The products only contain hemp oil, which has no cannabinoids, and they do not list CBD among their ingredients.
  • Lawyer Trina Fraser warned that Ontario law prohibits false, misleading, or deceptive advertising. "I don’t know how [that product display] couldn’t be misleading. [...]Either they’re illegally selling CBD or they’re selling a product that’s making a pretty fundamental misrepresentation about the nature of the product."

Quick Hits

  1. Someone brought infused food to a potluck meal following a memorial service in Greenwood, BC, "the smallest city in Canada," but didn't tell everyone. A number of people inadvertently consumed the food, including some seniors.
    Nanaimo Bulletin
  2. Sun-grown REC brands are popular among the environmentally conscious.
    The Straight