• Producers—whether craft grower or large LP—won't move their products off-site, but they'll pay the Ontario Cannabis Store in order to get around the provision of the law requiring all REC sold in Ontario to be purchased from the OCS.
• Lawyer Trina Fraser told Global News, "If they are saying they intend to mark it up the same as if we’d taken physical possession, that I have an issue with. […] We’re obviously struggling to displace the illicit market and match pricing, among other things, and you’re now charging for a service you’re not even providing, which is physical distribution."
• Nathan Woodworth, CEO of LP James E. Wagner Cultivation, said he understood the surcharge, because it prevents farm-gate sellers from unfair advantage over those who sell through retail stores and pay for OCS wholesale. Inside the Jar
• Craft breweries with tasting rooms face similar obstacles, as they must pay fees to liquor boards, who manage prices. Twitter—Aaron W. Andersen

• That's to say nothing of the various taxes applied to retail products, broken down here. Twitter—Aaron W. Anderson

• Originally isolated to the centre of Toronto, the project has grown gradually to include more and more of Toronto's suburbs. Hamilton represents the project's expansion outside of the GTA—a major step. Globe and Mail, Twitter—Ontario Cannabis Store

• Ford claimed his government's glacial retail rollout was prudent compared with Alberta, where "when the stores were open, they didn't have any supply."
• Cannalyst Craig Wiggins shot back, "Total Number of Days of [Inventory] at LPs has been greater than 417 all but March 2019 when they shipped to fill the 24 Ontario stores. @fordnation DO THE MATH and quit lying." Twitter—GoBlueCDN

• Counting stores that have been approved and are planned to open in coming months, Ontario has one store per 211,159 residents, the feeblest per-capita REC retail coverage of any province. It's followed by Quebec, which offers one store per 197,326 residents, and Nova Scotia, with one per 107,933. Twitter—Matt Lamers, Jesse Staniforth
• Alberta has one REC store per 10,635 residents, followed by Newfoundland and Labrador, which has one store per 20,862, and Saskatchewan, which has one per 28,634.

• With the AGCO planning to license five stores per week, it would take more than two years to reach 600 stores. Meanwhile, having a lot of stores means sales-per-store naturally go down—as Alberta is experiencing. Twitter—Michael J Armstrong

• Ontario predicted it will take away only a $10M net profit on REC retail in fiscal 2019-2020—not counting the $70M it's set to receive as its share of federal cannabis excise tax. Twitter—David George-Cosh

• West reported court documents allege founders Warren Bravo and Steve LeBlanc (known in southern Ontario for their construction companies Bravo Cement and Unique Restoration) raised $60M from investors—and $14.1M of those funds have gone missing.

• The Bravos are alleged to have paid for renovations to their home and to an AirBnB property using company funds.
• Other funds were allegedly used to pay personal tax debts, and Bravo Cement debts.
• West says, "They used money they raised for Green Relief from investors to buy the land in their own names, and lease the property back to Green Relief, while charging them rent."
• Later, Bravo Cement sued Green Relief for non-payment of rent, and allegedly barred access to the facility after Green Relief seized and sold a Range Rover Bravo Cement had bought with cash from Green Relief investors.

• Bravo didn't respond to Midas' request for comment. LeBlanc, "downplayed his involvement and tried to distance himself from Warren Bravo. 'There were a lot of decisions I didn’t agree with,' he said."

• According to legal documents, Hexo has failed to make payments on the outstanding amount since October. Twitter—Betting Bruiser
• On Hexo's end, the deal involved UP Cannabis, a REC brand from Newstrike Brands, which Hexo purchased for $260M last year.

• Cannabusiness development consultant Michael Elkin reported having heard "it was a take or pay agreement and the LP doesn’t want to take....or pay. Nothing was picked up or shipped." Twitter—Michael Elkin
• One insider suggested this would not be the last take-or-pay contract to go awry, while another noted the deal structure originated in the energy sector. Twitter—Aaron W Anderson, Benjamin A Smith

Quick Hits

1. Germany, Europe's largest MED market, more than doubled its MED flower imports in 2019, from roughly 3,000 kilograms in 2018 to 6,714 last year. Several LPs are already exporting MED to Germany, and many more are angling to get EU-GMP certified in order to join in the fun. MJ Biz Daily

• Cannalyst Craig "GoBlueCDN" Wiggins questioned RBC's math, noting "$250 million is only a +15% bump. Seems very light." Twitter—GoBlueCDN
• In an assessment of Canopy Growth's "major 2.0 flaws," Stone Fox Capital argued "the Canadian cannabis sector is trying to sell edibles at very high costs per mg of THC," while products on the illicit market priced similarly to legal edibles can contain 37 times as much THC, which it would cost $299.63 to consume legally (a 2,3000% increase in THC price-per-milligram). Seeking Alpha

• In an assessment of Canopy Growth's "major 2.0 flaws," Stone Fox Capital argued "the Canadian cannabis sector is trying to sell edibles at a very high costs per mg of THC," while products on the illicit market priced similarly to legal edibles can contain 37 times as much THC, which it would cost $299.63 to consume legally (a 2,3000% increase in THC price-per-milligram).

Quick Hits

1. Most people either love or hate Joe Rogan, so you'll either be enthused or exasperated to hear he's playing a special 4/20 show in Vancouver. GrowthOp
2. Postsecondary cannabis education is moving from training students to work in LPs to teaching retail skills for REC stores. Castanet

• This week, Sundial Growers' director and CEO Torsten Kuenzlen stepped down "to pursue other interests." Board member Zach George becomes CEO. Meanwhile, Sundial executive chair Ted Hellard stepped down (but will still serve on the board), and COO Brian Harriman is leaving the company (Sundial's president of Canadian operations, Andrew Stordeur, will take his place). MJ Biz Daily
• The era of executive departures began in July with Canopy sacking co-CEO and co-founder Bruce Linton, the best known executive in the sector. Recently, Aurora shed two c-suite members, including CCO Cam Battley. The Star, Lexichronic
• Supreme sacked CEO Navdeep Dhaliwal three weeks ago, while Canopy, Cronos Group, Hexo, and Tilray have recently replaced their CFOs. Press Releases
• Flowr lost five executives, including their CFO. Twitter—David George-Cosh

• The same day as Nashat's resignation, TerrAscend's wholly owned online marketplace Solace Health announced it will cease selling and distributing MED effective February 7.
• Solace's patients were encouraged to transfer their files to LP James E. Wagner Cultivation. Twitter—Matthew Columbro
• TerrAscend also announced it canceled a plan to acquire a US vertically integrated company. New Cannabis Ventures

• Tantalus Labs' founder Dan Sutton predicted "Running out the delayed / halted facilities and bankruptcies 12 months alongside market growth in Canada and we are reasonably back to product shortages mid 2021." Twitter—Dan Sutton

• Evolve's cannabis ETF SEED rose from its opening price of $20.48 to $30.66 at its height. On January 27, it was trading for $11.61. Globe and Mail
• Evolve CIO Elliot Johnson said, "Over-regulation in the Canadian market has stifled cannabis sales and dampened the entrepreneurial spirit that originally attracted so many investors." Wealth Professional

• Critics continued to wonder why Canopy, according to Seeking Alpha, "took a month after launch to tell the public the company wasn't ready to produce THC beverages at scale." Seeking Alpha

• Meta CEO Mark Goliger credited the decline to increased REC retail competition in Alberta. Yahoo Finance

Quick Hits

1. Listuguj First Nation, a Mi'kmaq territory located in New Brunswick, reopened shops raided two weeks ago by Listuguj police who were assisted by Quebec's provincial police. Now, the Nation's Band Council has given the shops 12-week licenses to operate while Chief and Council develop a cannabis policy. APTN

Quick Hits

1. Brazen Toronto scofflaw dispensary CAFÉ distributed a press release boasting it "contributed over $350,000 in 2019 to local community initiatives." Some believe the company's owners want to sell its assets and name. NewsWire, Twitter—Overgrown Empire
2. During a traffic stop in Kenora, Ontario Provincial Police arrested a 72-year-old man carrying roughly 50 pounds of cannabis. They charged him and seized his vehicle. Kenora Miner & News

• "Clearly we have a hydration problem when it comes to legal product," he said. "Great cannabis involves curing properly and packaging it properly, then shipping it out. If it's grown and cured properly, and stored and packaged properly, there should be no issue in the products consumers are buying."

• Hirsh said this should work in theory, "Yet the product ends up crunchy." Many REC products are shipped with moisture packs designed to never get palpably dry and crunchy—even as they do run out of moisture, particularly in non-airtight containers.
• A lack of airtightness is the problem, yet LPs are motivated by the desire to ship products as quickly as possible (rather than storing them to cure them). Hirsh said "storage and time" are money losers for LPs.

Quick Hits

1. An American publication said Canada's three greatest "legalization missteps" were stocks traded "on fantasy," Ontario and Quebec's slow rollout of REC retail stores, and the delay in bringing edibles to market. Green Entrepreneur
2. Veterans and retired RCMP officers are now eligible for up to a $300 reimbursement on MED vaporizers from Veterans Affairs Canada. Health Europa