Lp,s are doomed!
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Home / Finance
Big California marijuana distributor Herbl collapses, brands left unpaid, sources say
Chris Roberts, Reporter
June 20, 2023 -
Herbl, a major licensed California marijuana distribution company, is in receivership after falling behind on a key loan, a source close to the situation confirmed to MJBizDaily on Tuesday.
The collapse of Herbl – which reportedly handled $700 million worth of product sales in 2022 – is the most prominent failure of a cannabis company in the state to date and has major implications across the industry.
Potentially tens of millions of dollars in unpaid invoices are due to brands across the state, which now fear that that revenue, including for product already sold, is lost forever.
The state might also be due millions in unpaid taxes.
Herbl’s financial troubles underscore the upheaval within California’s marijuana industry as brands struggle to collect on unpaid invoices.
The terms of Herbl’s receivership mean that investors and other claimants due money from Herbl might be paid before brands, according to people familiar with the situation.
Mike Beaudry, Herbl’s co-founder and CEO, did not respond to a voicemail and a text message from MJBizDaily seeking comment.
The company’s main lender is East West Bank, which also last week canceled a line of credit it had extended to the company, the source confirmed.
East West Bank did not respond to a telephone message and an email seeking comment.
The company’s other investors include Measure 8 Ventures, Salveo Capital and Silverleaf Venture Partners, MarketWatch reported last year.
As of September 2022, Herbl employed more than 200 – including salespeople and delivery drivers – and worked with 1,000-plus licensed retailers, according to MarketWatch.
Industry aware of Herbl’s problems
Though the company has not publicly confirmed the situation, Herbl’s collapse is common knowledge throughout the cannabis industry.
On LinkedIn, former Herbl employees reported last week that they were seeking jobs.
That has since been followed by a near universal acknowledgment among industry insiders on Tuesday that the company was finished as a going concern.
“The recent receivership of Herbl, one of California’s largest cannabis distributors, should be a wake-up call to policymakers that all is not well, and immediate action is called for to avert a crisis that has already started,” Wesley Hein, president of the Cannabis Distribution Association, a trade group representing distributors, told us.
Herbl remains listed as a member of the group.
“Herbl was well-run, well-financed and stocked with well-known brands,” Hein added.
“However, even with these advantages, it was unable to overcome the structural challenges of operating in California and now finds itself in receivership.
“Herbl’s downfall is a stark reminder that poor quality products don’t make the cut.
California’s mandatory distributor model requires brands to sell products through licensed distributors.
Distributors collect payment from retailers after product is sold and then remit both excise taxes due to the state as well as payment for the original product delivery to the brand.
Payment issues come to a head
Brands started reporting unpaid or partially paid invoices with the company this spring, but the situation appears to have come to a head within the past few weeks.
The company has reportedly laid off nearly all its workforce, leaving behind only a skeleton crew that’s attempting to collect payment from California retailers – who are, in turn, fielding calls from brands that are trying to collect payment that’s owed to them through Herbl.
“We’re trying to collect” on accounts receivable owed by Herbl, Ciencia Labs CEO Ben Mitchell told MJBizDaily on Tuesday.
“But the fact is, unfortunately, we’re not going to get paid through Herbl.”
Mitchell, who co-founded the social equity brand with his wife, Carolina Vazquez Mitchell, a recognized cannabis product developer, did not share how much the brand is owed.
But he said Herbl began falling behind on paying brands about six weeks ago.
The company previously sent out checks a few weeks ago.
In that time, Mitchell added, efforts to find out what was going on at Herbl did not yield answers.
Herbl’s downfall is the latest domino to fall after tax and regulatory burdens hit licensed cultivators and retailers.
“Now it’s cascaded all the way down the brands,” Mitchell said. “I don’t really know how anyone’s going to get out of here, either.”
The interest alone on debts is killing lps.
They are late paying income tax.
Rescheduling Cannabis in the United States
MCMILLAN·JUNE 20, 2023
Rescheduling cannabis in the United States shouldn’t take more than a day. All it takes is a literal stroke of the pen. Or, perhaps, a few clicks on the computer.
The Biden administration says it will happen “this year,” they are working “as quickly as we can.” But what is taking so long? Why does rescheduling cannabis require a comprehensive administrative review?
Why is there no specific timeline? How hard is it to reschedule cannabis? It took no effort to lump the nontoxic herb alongside heroin and LSD.
Of course, critics will say that “the wheels of justice turn slowly,” and that “haste makes waste.” But this is nonsense.
The U.S. government had no constitutional right to schedule cannabis in the first place.
It’s not that the wheels of justice are turning slowly. The wheels of justice have long been abandoned. In their place are brand-new wheels brought to you by Microsoft, Pfizer, BlackRock and other crony-capitalist organizations.
Rescheduling cannabis in the USA is a time-consuming process for the same reason it took Canada three years to legalize.
Fascism requires planning. Reschedule cannabis without a plan, and, heaven forbid, small market players may rise to the top. And big market players may lose their share.
The Biden Administration knows who butters their bread. And it isn’t the average American.
PASSING THE BUCK TO THE FDA
Rescheduling Cannabis
Your enemies are not in Russia.
The Food and Drug Administration (FDA) is engaging in an eight-step “scientific review” to determine whether they should even reschedule cannabis at all.
While many anticipate a descheduling (or, realistically, a rescheduling), we could end up with the status quo by year’s end.
Of course, this talk of “descheduling” or “rescheduling” is unconstitutional. The phrase originates from the Controlled Substances Act. This unlawful statute organized substances into five categories or “schedules.”
Schedule I is supposed to consist of substances with high abuse rates and little-to-no medicinal qualities. Somehow, cannabis ended up in this category.
The FDA told Marijuana Moment they are working alongside the Drug Enforcement Agency (DEA) to “see if we can give the president an answer that’s based on the science and the evidence. Stay tuned. We hope to be able to get there pretty soon—hopefully this year.”
Is there anything more insulting to American liberties than federal bureaucrats making these kinds of statements?
Cannabis prohibition is unconstitutional. Full stop. Having bureaucrats advise the president based on their interpretations of “science and the evidence” is asinine.
And so is the president unilaterally deciding what 340 Americans can do with their bodies and mind. It is antithetical to the American tradition.
States have been correct in flat-out rejecting cannabis prohibition. All Biden needed to do was reschedule cannabis to allow for interstate trade and banking.
But crony capitalism doesn’t occur naturally. A free market tends to equalize in the long run. Therefore, special privileges and new rules that insulate the corporate elite are needed before any rescheduling of cannabis can occur.
(If it occurs at all).
RESCHEDULING CANNABIS IN THE USA: GOD SAVE THE QUEEN
Rescheduling Cannabis
According to current U.S. laws, cannabis is more dangerous than cocaine and fentanyl. The latter is Schedule II.
Obviously, these categories are not reflective of any underlying reality.
Rescheduling cannabis in the USA means turning over enforcement from the DEA to the FDA. While useful idiots may welcome the FDA, it’s not evident this is a better option.
The pharmaceutical industry owns the FDA. It’s a revolving door of crony capitalists. This quip that the FDA will have an answer “this year,” is likely posturing for the 2024 election.
We know the Biden Administration isn’t above this kind of politic. (And I use the term “Biden Administration” because this is the concerted effort of many cronies. Joe Biden himself is senile and incapable of making important decisions).
Rescheduling cannabis is a political act. Consider, before the midterms, the Democrats:
Sat on the myocarditis study
Sat on the FTX money laundering scandal
They lied about student loan forgiveness.
If Americans knew about these issues before the midterms, then maybe that “Red wave” many were projecting would have happened.
But rescheduling cannabis… that’s about “science and the evidence.” Surely, they’re not dangling that carrot to keep people from voting for the other team.
But if you believe what the Biden Administration says, there’s probably no persuading you anyway. As Mark Twain said, “It’s easier to fool people than to convince them that they have been fooled.”
FOOTNOTE(S)
https://www.marijuanamoment.net/feds-aim-to-finish-cannabis-scheduling-review-this-year-top-biden-official-tells-marijuana-moment/
https://www.ctvnews.ca/health/coronavirus/risk-of-heart-inflammation-higher-with-moderna-vaccine-study-1.6153060
https://www.msn.com/en-us/news/opinion/give-it-up-joe-even-some-democrats-know-blanket-student-loan-forgiveness-is-a-raw-deal/ar-AA1ctEQn
https://www.goodreads.com/quotes/584507-it-s-easier-to-fool-people-than-to-convince-them-that
Revoked or expired federal cannabis licences in Canada since 2018:
Revoked at holder's request: 146
Revoked by Health Canada: 3
Expired: 17
Inactivated licences: 166
All in good fun but…
Get more shares before it goes south again.
Not my first rodeo.
More cannabis restrictions.
What about our kids?
DOOMED!!!
Cannabis packaging. Current federal regulations already include steps to limit the appeal of cannabis products to youth through plain packaging and labelling requirements, but Ottawa Public Health wants them to go further. PHOTO BY JEAN LEVAC /Postmedia
Ottawa Public Health wants to see tighter restrictions placed on cannabis products and their packaging to lessen their appeal to children.
Lps are doomed.
These canna naive newbs C.E.O. don,t know what is coming.
It will be devastating when the world wakes up…
You’ll get your bottom.
I know. Trump won the election.
Morocco aims to become a global player in the field of cannabis for medical, cosmetic and industrial purposes. Morocco aims to become a global player in the field of cannabis for medical, cosmetic and industrial purposes. Morocco aims to become a global player in the field of cannabis for medical, cosmetic and industrial purposes.
Le Maroc vise le marché mondial du cannabis après la légalisationInternational
Publié le 20 juin 2023
Le Maroc adopte une loi pour légaliser le cannabis à des fins médicales, cosmétiques et industrielles Maroc. La nouvelle loi a pour objectif d’améliorer le sort des milliers d’agriculteurs qui vivent de la culture du cannabis, ainsi que de créer de nouvelles opportunités d’emploi dans les zones avec lesquelles la culture du cannabis est permise.
Le Maroc est l’un des plus grands producteurs de cannabis au monde. Selon le ministère de l’Intérieur, la superficie sur laquelle la plante est cultivée, a baissé de 134 000 hectares en 2003 à 47 000 en 2015.
La légalisation n’est pas seulement motivée par des motifs socio-économiques, mais aussi par l’ambition de participer au marché mondial du cannabis, en forte croissance. Les recherches montrent que le marché du cannabis médical atteindra 14 milliards de dollars d’ici à 2022.
Cette tendance devrait se poursuivre dans les années à venir. Le marché croît d’environ 22 % par an. Certains experts prédisent que le marché dépassera 16 milliards de dollars d’ici à 2023 et près de 66 milliards de dollars d’ici à 2030.
D’autres prévisions sont encore plus optimistes, estimant que le marché mondial atteindra plus de 230 milliards de dollars, dont un tiers au niveau mondial au cours des cinq prochaines années. L’Europe représenterait 60 % de la croissance du marché.
Source : https://maroc-diplomatique.net/le-maroc-vise-le-marche-mondial-du-cannabis-apres-la-legalisation/
I did say smart money has dropped 100k on day one and sold at 40$.
None of my money has ever gone to this Ponzi but.
Thanks for the invite. Not going anywhere any time soon.
I want to be here when the shit hits the fan.
I don,t like big corporations.
They gauge sick folks with bunk weed.
I,mm a mom and pop duder.
Besides, these clowns C.E.O. simply don,t know what to do with your money. Lol.
Home / Canada
Cannabis producer Hexo’s accumulated losses surpass CA$2 billion
By MJBizDaily Staff
June 15, 2023 - Updated June 16, 2023
Canadian cannabis producer Hexo reported a total net loss before tax of 129.7 million Canadian dollars ($98 million) in the company’s third quarter, bringing accumulated losses since 2016 to more than CA$2 billion.
Quebec-based Hexo disclosed plunging revenue while reporting its fiscal third quarter Thursday.
In the February-April period, Hexo’s net sales were CA$21.6 million, down by approximately 50% compared to the same period last year.
By revenue stream in the quarter:
Recreational cannabis sold at retail was CA$26.5 million, down 46% from last year.
Medical sales were CA$647,000, down 28% from last year.
International revenue fell 90% compared to last year, to CA$649,000.
Cannabis beverage sales were CA$0, compared to CA$4 million one year ago.
The only revenue stream that did not experience a significant year-over-year decline was wholesale transactions.
Hexo’s wholesale sales increased 22% over last year’s quarter to CA$4 million.
In a conference call with an analyst, Hexo CEO Charlie Bowman blamed:
Soft performance in key markets, including Alberta, Ontario and Quebec.
Fierce competition within the industry.
SKU rationalization in which Hexo discontinues poorly performing product offerings.
Another reason was that a subsidiary filed for bankruptcy protection and was therefore deconsolidated from Hexo’s earnings.
That subsidiary, Zenabis Global, contributed CA$8.5 million in net sales in the third quarter of 2022 – revenue that is no longer applicable for Hexo.
Hexo bought Zenabis in 2021 for CA$235 million in stock – one of several acquisitions that ultimately pushed the Gatineau business to the brink of bankruptcy.
Hexo has not generated positive cash flow or earnings since 2016, the company also disclosed.
Also in the third quarter, Hexo said it entered into a definitive agreement for Tilray to acquire all of Hexo’s outstanding shares.
Hexo said its shareholders approved Tilray’s acquisition of the issued and outstanding common shares of the Quebec company.
The final arrangement between Hexo and Tilray remains subject to court approval.
Tilray’s shares trade as TLRY on the Nasdaq and Toronto Stock Exchange.
Hexo’s shares are traded as HEXO on the Nasdaq and Toronto Stock Exchange.
Home / Canada
Cannabis firm Atlas Global selling Alberta facility, laying off 50 people
By MJBizDaily Staff
June 12, 2023
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Canadian cannabis company Atlas Global Brands is ceasing operations at a facility in Gunn, Alberta, and laying off 50 employees.
The company also recently parted ways with a key executive.
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Atlas said in a news release that it continues to focus on cost reductions, savings and production efficiencies.
“Ceasing operations at the Gunn, Alberta facility was an extremely difficult decision, that was not taken lightly,” CEO Bernie Yeung said in a statement.
“We are working diligently to strengthen our liquidity and secure our path for the future in a challenging market and believe ceasing operations in Gunn, Alberta is an important step towards executing on our objective of reducing costs, streamlining operations and increasing margins.”
Atlas said packaging activities are being relocated to its facility in Chatham, Ontario.
The facility in Chatham serves as Atlas’ Canadian hub for the processing of domestic and export-bound medical cannabis flower and oils.
Atlas also said it conducted an end-to-end review of its global operations.
After the review, Alvarez & Marsal Canada was hired as financial adviser to Atlas Biotechnologies and Atlas Growers – both wholly owned subsidiaries of Atlas Global.
Atlas Growers was the operator of the Gunn facility.
“Based on that financial analysis and after careful consideration of available alternatives … it was determined to be in the best interests of the Atlas subsidiaries and Atlas Global as a whole to liquidate the assets of the Atlas subsidiaries, through a court-supervised process, in an orderly fashion so as to maximize recoveries for all affected stakeholders,” according to the Atlas announcement.
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Atlas said its subsidiaries are currently in discussions with a senior lender “to determine the nature of the proceedings that will be commenced to effect this orderly liquidation.”
Citing the number and timing of recent acquisitions and the liquidation of the subsidiaries, Atlas said the forecasted gross profit and available funds noted in the restated Listing Statement dated Dec. 29, 2022, should no longer be relied upon.
Atlas has been on a buying spree of late.
Atlas, which lost 26 million Canadian dollars ($18 million) in the 12 months ended Dec. 31, 2022, has entered into binding agreements to acquire controlling interests in six pharmacies in Israel.
In April, the company completed the acquisition of another cannabis producer, GreenSeal, which has an indoor growing facility in Stratford, Ontario.
Atlas recently made changes to its management team.
In a subsequent news release, Atlas said Chief Operating Officer Jeff Gossain had left the company.
No reason or replacement was shared.
Atlas also said it is launching new products in collaboration with Snoop Dogg under the “D*gg Lbs” brand.
Shares of Atlas Global Brands are traded as ATL on the Canadian Securities Exchange.
Home / Cultivation
Lawsuit accuses California cannabis grower Glass House of illicit activity
author profile pictureBy Chris Roberts, Reporter
June 13, 2023 - Updated June 13, 2023
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Image of the bright sun hovering over a field of cannabis.
More brash attention-seeking behavior?
Or is Catalyst Cannabis Co.’s Elliot Lewis the first cannabis CEO willing to voice what’s been said in private – and actually name names, in court?
The audacious lawsuit filed last week that accuses California cannabis mega-grower Glass House Brands of being “one of the largest, if not the largest, black marketers of cannabis in the State of California, if not the country” could be both.
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But if the recent past is any indication, it could be a long time before anything changes – if anything does at all.
In a complaint filed June 6 in Los Angeles County Superior Court, 562 Discount Med, which does business as Catalyst, alleged that Glass House “knowingly is entering into illicit sales – both inside and outside California.”
Glass House does this, the suit alleges, by selling marijuana in the legal market as well as via a “network” of so-called “burner distros” – licensed distributors set up to be briefly used as conduits for legally grown cannabis to enter the illicit market.
Those distributors then send legally grown flower to illicit markets “as far away as New York and New Jersey,” where illegal marijuana sales are rampant and where many illicit shops do sell cannabis in packaging featuring California branding, the suit alleges.
Reached late Monday, a spokesperson for Glass House Brands said the company was unaware of the lawsuit.
Kyle Kazan, Glass House’s founder and CEO – as well as a former Torrance, California, police officer – did not respond to an email from MJBizDaily seeking comment.
The suit by Southern California-based Catalyst alleges unlawful and unfair business practices and seeks an injunction from a judge.
No hearings are currently scheduled in the case, according to court records. There is also no record of Glass House being served with the suit.
Observers generally reacted one of two ways to the suit: quietly agreeing with Lewis’ argument, or publicly dismissing this latest outburst as a self-centered gimmick.
Critics point out that if Catalyst has any concrete evidence of Glass House’s alleged illicit-market dealing, nothing was offered in the suit beyond circumstantial arithmetic.
“It’s all attention-seeking,” Aaron Edelheit, CEO of Santa Barbara, California-based investment firm Mindset Capital, told MJBizDaily.
“If Glass House was flooding the black market, it wouldn’t be sold in California.”
Axe to grind
Catalyst’s Lewis, first accused Long Beach, California-based Glass House Brands of allegedly engaging in illicit-market activity in a LinkedIn post last month.
Lewis anchored that argument on white-board arithmetic, claiming that – based on Glass House’s reported production and sales, compared to statewide recorded sales – only 25% of the company’s product is sold legally.
“They are the f****** problem,” he said. “The cartel is Glass House. Allegedly.”
That same math appeared in the lawsuit.
Lewis who also filed suit against California’s Department of Cannabis Control in 2021, alleging that regulators were aware of the “burner distro” situation but have been unable or unwilling to curtail it.
That suit was initially dismissed by a judge before it could go to discovery but is currently on appeal, according to court filings.
The current lawsuit, to prove its case, seeks both internal Glass House documents as well as state track-and-trace data via the discovery process.
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Familiar complaints
Lewis’ public crusade against Glass House echoes what’s become conventional wisdom in most cannabis executive circles: At least some licensed cultivators, retailers or distributors are selling cannabis on the illicit market – be it out of greed or necessity, with the badly needed profits available on the tax-free illicit market used to meet payroll or pay taxes.
And it tracks with other, more oblique accusations that do not identify alleged malefactors by name.
In a talk hosted on Twitter Spaces in late May, Boris Jordan, the chair of Massachusetts-based multistate operator Curaleaf Holdings – which recently announced the shuttering of its California operations – also repeated the commonly held belief that legally grown marijuana is ending up on the illicit market via “burner distros.”
“It’s interesting,” Jordan said. “Without naming names, a lot of the legal players are turning to the illicit market by basically saying, ‘OK, we’re selling to legal distros, and the fact that the product is going across the country – that doesn’t bother us, because the counter party we’re selling to is legal, even though they know they’re never entering that product into the Metrc system and they’re selling it across the country and bankrupting that distribution company and setting up a new one.'”
Jordan did not identify any companies or operators by name, and a Curaleaf spokesperson did not respond to MJBizDaily requests for comment on Jordan’s statement.
Whipping boy
Glass House has become a favorite target of many frustrated legal-market operators in California for its ambitious efforts to become one of the largest cannabis producers in the country.
The vertically integrated company opened a 5.5 million-square-foot cultivation complex in Southern California last year.
The company borrowed up to $100 million to retrofit that greenhouse complex suitably for marijuana.
And in addition to distributing cannabis to other licensed retailers, Glass House also operates nine retail locations, three of which it acquired last year in a $22.6 million deal.
Glass House shares trade as GLAS on Canada’s NEO Exchange and as GLASF on U.S. over-the-counter markets.
The company reduced its reported quarterly losses to $100,000 in the first quarter of 2023 on $29 million in sales, down from a $2.6 million loss in the last quarter of 2022, according to its most recent earnings report.
Part of the reason is that Glass House continues to cultivate an immense amount of cannabis even as other cultivators go out of business.
In its most recent earnings report, Glass House estimated licensed cultivation space in California dropped by 21% since last June, a figure based on state data.
In that same time frame, Glass House has continued to grow marijuana and also find higher margins.
The company plans to grow 310,000 pounds of cannabis in 2023, at a cost $140 per pound.
The company also claimed to have sold marijuana at an “average selling price” of $325 per pound in the past quarter.
These low prices and relatively high margins are reflected in Glass House’s average retail prices, with eighths available for as little as $26.50, according to online menus.
“What we think we can do is, we can beat the illicit market just on price,” Kazan said during a recent interview on Cannabis Talk 101.
“We believe very, very soon we’ll be able we’ll be able to provide legal weed at illegal prices.”
Chris Roberts can be reached at chris.roberts@mjbizdaily.com.
Graphic warnings on cannabis packaging have to be the dumbest idea in the world. Canadian legalization already has a problem with the continued existence of the “illicit market.”
The government arbitrarily caps edibles. They also increase the costs of production through unnecessary regulatory hurdles. The plain-packaging rules harm producers trying to differentiate their products from others.
If you want an example of how not to legalize cannabis, Justin Trudeau’s “postnational” Canada is a prime example.
And it might get worse. A CLN inquiry to Health Canada confirmed that – as of now – cigarette-style warnings on cannabis aren’t in the cards. But the local Ottawa Public Health Authority (OPH) is pushing for graphic warnings on cannabis packages.
Many cigarette smokers head to First Nations reserves to buy tax-free smokes free of graphic content. It also helps support First Nation communities. But “contraband” cigarettes are nowhere near as prevalent as the underground cannabis market.
What does the OPH think will happen if they implement graphic propaganda warnings on a benign, nontoxic herb?
GRAPHIC WARNINGS ON CANNABIS PACKAGING
The OPH is pushing for graphic warnings on cannabis packaging. When we say graphic, we mean graphic.
Here are some examples from cigarette packages in Canada:
Graphic Warnings on Cannabis Packaging
Graphic Warnings on Cannabis Packaging
Graphic Warnings on Cannabis Packaging
This was the package that convinced my friend to start buying First Nation smokes. Thanks for nothing, Health Canada
And they want the same thing for cannabis? Are they out of their minds? What possible justification could they have?
OPH IS THINKING ABOUT THE CHILDREN!
In addition to graphic warnings on cannabis packaging, they want fewer cannabis retail stores. They justify this encroachment on our civil liberties by appealing to “the children.”
But only power-hungry authoritarians forbid capitalist acts between consenting adults. Both Nazis and Communists used this “think of the children” fallacy to win over support. It’s a disgusting tactic that has no place in a free society.
That’s not to say appealing to “the children” is always an appeal to emotion. There is indisputable evidence teens are experimenting with hydromorphone because they believe the public health BS that it’s “safe.”
(Of course, the answer is to legalize all drugs and educate children and adults on their effects).
Little girls nationwide go through a tomboy phase and are gaslit by authority figures into mutilating themselves. Objecting to that isn’t an appeal to children.
(The answer is to separate this vast continent into tiny little countries and city-states. If some radical left-wing commune wants to gaslight children, have at it, you freaks. Most places would likely place an age restriction on making decisions such as smoking cannabis, getting a tattoo, or having a sex change.)
But what about “unintentional cannabis poisoning in Canadian children?” Doesn’t that justify graphic warnings on cannabis packaging? Aren’t cannabis-induced hospitalizations “on the rise” since legalization?
No, reports of unintentional cannabis poisonings are rising because no sane parent would have admitted to it during prohibition.
But you can’t expect public health busybodies to understand basic economics.
GRAPHIC WARNINGS ON CANNABIS PACKAGING
Graphic Warnings on Cannabis Packaging
Graphic warnings on cannabis packaging are the dumbest idea we’ve heard this month, possibly all year. Even if we take the OPH at its word, there is a gaping hole in its logic.
The OPH says cannabis companies are appealing to children. They want to ban words like “candies” from packaging. They also don’t want edibles with “shapes, sprinkles and colours,” because they might appeal to children.
But consider what happens when a child accidentally consumes THC. There are psychoactive effects that would likely alarm them. As we’ve discussed, set and setting is paramount to a good cannabis experience.
You can imagine that a parent’s anxiety over accidental ingestion would also reflect on the kid.
But pharmacologically, THC behaves the same way in children as adults. The only difference is that a high THC dose could have an adverse effect on a developing brain and heart.
However, to this date, there has never been a fatal overdose of cannabis. Whether in children or adults.
THE HYPOCRISY OF OTTAWA PUBLIC HEALTH
The OPH says graphic warnings on cannabis packaging and a blanket ban on edibles that “appeal to children” are justified.
But where is the logic in that?
If the OPH cared about children’s health, they’d call for a ban on all foods with “shapes, sprinkles and colours.”
Consider the various ways refined sugar damages a developing brain and body.
Sugar contributes to obesity, insulin resistance and other metabolic issues (like type 2 diabetes, non-alcoholic fatty liver disease, and various cardiovascular diseases)
Sugar is the number one cause of tooth decay and cavities in children.
Refined sugar offers empty calories. It has zero nutritional value. When children consume sugar, they displace nutrient-dense foods from their diet, leading to essential vitamins and mineral deficiencies.
Children get high from sugar. They experience energy spikes and crashes. This can make it hard to focus and concentrate.
The research is conclusive: high sugar intake is linked to impaired cognitive function in children. This includes reduced memory, attention problems, and poorer academic performance.
Sugar creates addict-like behaviour in children. They crave it and get moody when they can’t have it.
Ottawa Public Health – please shut the fuck up. If you want to include cannabis on a list of toxic substances for children, it should be far down the list.
All science and research indicate that refined sugar is public enemy #1.
This absurd crusade against cannabis will only fuel the “illicit” market and confirm that Canada is broken. We’re descending into an all-around bureaucratic nanny state.
Canada used to be a conservative country with liberal values. In the last eight years, we’ve become a liberal country with “progressive” values.
It won’t end well.
FOOTNOTE(S)
https://www.cbc.ca/news/canada/ottawa/cannabis-warnings-rules-canada-health-ottawa-1.6873907
https://theconversation.com/how-does-excess-sugar-affect-the-developing-brain-throughout-childhood-and-adolescence-a-neuroscientist-who-studies-nutrition-explains-173214
Lps are running out of cash…
Please help them.
BIG WEED
Avatar photoCALEB MCMILLAN·JUNE 14, 2023
BUSINESS
CANNABIS CANADA
CANNABIS LEGALIZATION
CANNABIS NEWS
FEATURED
LATEST LEGALIZATION NEWS
LAW
MARIJUANA NEWS
POLITICS
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THC NEWS
Big Weed is no secret. In Canada, the corporatization of the medicinal and therapeutic herb was the entire point of Justin Trudeau’s legalization scheme.
But this phenomenon is not isolated to Canada. States like California have designed the licensing scheme so that Big Weed can use their economies of scale. Long-time small farmers are facing bankruptcy.
Whether by design or simple greed – Big Weed has created a glut in the legal cannabis market. Wholesale flower prices have crashed.
Some say this is the fault of “capitalism,” but all they’ve done is demonstrate their ignorance. In Canada and California, for example, Big Weed results from onerous regulations imposed by bureaucrats who couldn’t tell an indica plant from a sativa.
Far from protecting consumers or creating a level playing field, regulatory bureaucracies set the stage for the corporatization of our life and economy.
Cannabis can be grown on a shoestring budget. But bureaucrats demand capital-intensive grow facilities. They create a maze of rules where only highly-paid corporate lawyers can find and exploit loopholes.
To support small cannabis farmers, you must support free and fair markets. That means rejecting Bernie Sanders for Ron Paul. Replacing Richard Wolff with Murray Rothbard.
BIG WEED IN CANADA
Big Weed
Big Weed has its foothold in Canada. One of two things must be true:
There’s a conspiracy to consolidate power and wealth into the hands of a few
This absurd economic system tends to consolidate power and wealth into the hands of a few
No matter which side of the debate you land on (or perhaps it’s a mixture of both), the results are the same.
Don’t believe me? Consider who invests in these (Big Weed) large Canadian cannabis companies.
AURORA CANNABIS
Goldman Sachs
Morgan Stanley
Bank Of America
Citadel
Vanguard Group
JPMorgan Chase
TD Asset Management
Barclays
Blackrock
CANOPY
Constellation Brands Inc
Vanguard Group Inc
Morgan Stanley
Goldman Sachs
Bank of America
Barclays
Swiss National Bank
TD Asset Management
TILRAY
Vanguard Group Inc
Morgan Stanley
Blackrock Inc
Swiss National Bank
TD Asset Management Inc
Goldman Sachs Group Inc
These are the faces behind Big Weed. Large banks and global hedge funds. As the wise George Carlin once said, “it’s a big club, and you ain’t in it.”
BIG WEED: SO WHAT?
Big Weed: So What?
But so what, some of you are saying. There’s nothing wrong with investing and profiting from cannabis companies. This “Big Weed” boogeyman sounds like the complaints of an economic illiterate.
And, if this were a free and fair market, I would agree with companies like Big Weed. There is nothing wrong with making money. The question is how.
With banks, it’s obvious. It’s not hyperbolic to call their cozy relationship with the nation-state economic fascism. Their practice of fractional reserve banking is fraudulent, especially in Canada, where banks have lobbied for (and been given) zero reserve ratio requirements.
In other words: banks can essentially create money without limit.
As for others, such as Blackrock and Vanguard, we can turn to a more recent episode in our history.
GAMESTOP PROVES THE SYSTEM IS RIGGED
Big Weed
In 2021, a number of small-time investors drove up GameStop’s stock by 1,784%. This was unprecedented since GameStop is basically the Blockbuster of video games.
That’s why large banks and hedge funds had been shorting the stock. They’d bet billions the stock would go down.
But many smaller investors came together on Reddit to push back against these globalists. They piled in, drove up the stock price, and suddenly, banks and hedge funds were taking significant losses.
Some estimate up to $70 billion.
Few were surprised by the reaction from the corporate press. These small-time investors were like an invading “army.” They were leaving a “trail of destruction.” The whole thing was “insanity.”
They falsely claimed that these GameStop supporters were threatening the entire global economy.
CNBC declared the short-squeeze a “fiasco” that was a “threat to the proper functioning of financial markets.”
Meghan McCain, the daughter of a war criminal, compared the Redditors to the Capitol “insurrectionists.”
A LESSON IN ORWELLIAN DOUBLESPEAK: MARKET MANIPULATIONS
A Lesson in Orwellian Doublespeak: Market Manipulations
Those of us who have advanced past tenth-grade civics recognize doublespeak when we see it.
The Inflation Reduction Act fuels inflation. The Patriot Act is unpatriotic.
When a group of small-time investors threatened to topple the crony-capitalist Wall Street system, the corporate press responded with propaganda about “market manipulations.”
The idea is: Wall Street can profit at the expense of Main Street. The Fed’s easy money policy can destroy savings and reward big banks (and thus Big Weed).
That’s “capitalism,” they say. But if done the other way around, it’s market manipulation.
The globalists had to halt the bleeding wound that a rising GameStop stock was causing. The Robinhood app (the trading platform used by small-time investors) prevented any more buys.
That is, to keep the large banks and hedge funds afloat, the Robinhood app stopped users from buying any more GameStop stocks.
If that isn’t market manipulation, then the phrase is meaningless.
HOW TO STOP BIG WEED
How to Stop Big Weed
Wherever there is legalization, Big Weed is there. Tilray believed they would be front row and centre to German legalization. They put a (now deleted) press release that they were part of a “policy roundtable.”
Of course, it wasn’t true. As a German official told Mjbizdaily, “The content of the press release is just not correct. We are not downplaying the meeting, because there is no cooperation and there will be none either with Tilray. On no level to be clear.”
Since then, Germany has embarked on a non-profit cannabis social club model. Much the same way cannabis in Canada used to work before legalization.
Small farmers brought their harvest to a social or “compassion club,” and people were free to touch, smell, and sample.
Now cannabis is irradiated and hidden behind layers of plastic.
German legalization looks to empower small farmers and promote local economies. There is no opportunity for Big Weed to step in and monopolize.
Of course, time will tell. Global elites have ways of infecting every corner of the planet like a bad flu virus.
Until then, Canadians and Americans can do their part by buying from local, small-time farmers. Whether legal or illegal, it doesn’t matter.
Just because something is illegal doesn’t make it unlawful. Likewise, what’s legal isn’t always what’s lawful. Big Weed’s takeover of cannabis markets is a testament to that fact.
FOOTNOTE(S)
https://www.goodreads.com/quotes/964648-but-there-s-a-reason-there-s-a-reason-there-s-a-reason
https://fintel.io/so/us/acb/blackrock
https://www.wallstreetzen.com/stocks/us/nasdaq/acb/ownership
https://www.wallstreetzen.com/stocks/us/nasdaq/cgc/ownership
https://www.wallstreetzen.com/stocks/us/nasdaq/tlry/ownership
https://mises.org/wire/gamestop-rebels-vs-too-big-fail
https://www.goodreads.com/book/show/63986.Towers_Of_Gold_Feet_Of_Clay
https://mjbizdaily.com/cannabis-producer-tilray-news-release-not-correct-german-lawmaker-says/
https://www.sfgate.com/cannabis/article/falling-marijuana-prices-hurt-farms-17651270.php
The following example encapsulates how badly execs botched demand forecasting.
In 2018, Aurora unveiled plans for a Danish facility with a production capacity of 120,000kgs when fully built out.
In 2022, Germany—largest cannabis market in Europe by far—imported only 25,000 kgs. Lol.
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More People Die of Overdoses After Cops Seize Drugs: Study
The study found local drug users were twice as likely to overdose in the weeks following a drug bust.
Manisha Krishnan
By Manisha Krishnan
June 15, 2023, 5:00am
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A police car.
PHOTO BY CAMPBELL JENSEN ON UNSPLASH
A new study has demonstrated what harm reductionists have long been saying: more people die of overdoses after police seize drugs.
The report, published in American Journal of Public Health and funded by the Centers for Disease Control and Prevention, provides the first empirical evidence that cops seizing illicit opioids is associated with increased overdose in the surrounding community.
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The study looked at two years of opioids and stimulants seizure data from Indianapolis police and looked at how those seizures impacted fatal and non-fatal overdoses in the areas where the seizures took place within certain time frames. The results showed that fatal overdoses doubled in the week after an opioid seizure within about 500 metres of where the seizure occurred. They also found that the distribution of naloxone, the opioid-overdose reversal drug, by paramedics doubled in the two weeks following an opioid-related drug seizure within 500 metres of the bust.
While the study was not designed to establish a causal relationship between police drug busts and a spike in overdoses, it did lay out some of the reasons this happens.
Opioid users who are cut off from their supply will go into withdrawal and their tolerance will go down, putting them at higher risk of overdose when they find a new—sometimes unknown supplier—selling drugs with an unknown potency.
“If you take somebody's drugs from them and they have to go find a new supply, they are not able to dose themselves at all on that new supply and their overdose risk increases dramatically,” said Bradley Ray, lead study author and senior researcher at the nonprofit research institute RTI International.
“There's a lot of good work going on right now that is focused on interventions that could prevent overdose deaths. But we also need to think about: what are those practices and those policies that are in place right now that are exacerbating those overdose deaths.”
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The U.S. is dealing with record-breaking overdoses, the majority of them driven by fentanyl, with more than 109,000 people dead in 2022. Dr. Rahul Gupta, director of the White House Office of National Drug Control Policy, recently said that number could rise to 165,000 by 2025 without adequate policy interventions.
While federally, there has been a shift towards embracing more harm reduction strategies, including making naloxone and drug testing strips more easily accessible and syringe exchange programs, cracking down on the fentanyl supply change remains a priority; President Joe Biden’s 2023 fiscal budget included $18 billion for domestic and international law enforcement to try to stop the flow of drugs into the U.S. Safe drug consumptions sites remain federally illegal and there are no safe supply projects providing people with alternatives to street drugs—such programs already exist in Canada and Europe.
In San Francisco, which has one of the highest overdose rates in the country, Mayor London Breed vowed to crack down on open-drug use “bullshit.” Police there recently started arresting people for using and selling drugs in public, a move experts previously told VICE News is likely to drive up overdoses.
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“Overdose is now impacting our national life expectancy, so it's a big deal,” said Ray. “I don't think we're seeing enforcement strategies having any real impact on reducing the number of overdose deaths.”
Overdoses in Oregon have continued to rise, despite the state decriminalizing possession of small amounts of drugs.
“What's missing from the narrative is that they still take people's drugs,” Ray said. “So in Oregon, even where we've decriminalized drugs, this effect that we've observed in Indianapolis may exist.”
News
Cartels Are Using Pharmacies To Sell Fake Pills Laced With Fentanyl and Meth to Unwitting Tourists
DEBORAH BONELLO
06.14.23
Ray said this phenomenon holds true for pharmaceutical drugs too. For example if the Drug Enforcement Administration plans to raid a rural doctor who provides buprenorphine—an opioid used to help people who are addicted to opioids—it could result in patients going back to illicit drugs. But the CDC’s Opioid Rapid Response Program can alert patients beforehand and even direct them towards finding different providers.
“That is literally the exact same thing that's happening in this study, except for instead of it being patients, it's people who use drugs in the community and instead of it being doctors, it's drug merchants,” Ray said, adding that police could adopt a similar approach by alerting drug user communities before making a bust.
Ray said he plans to replicate the study in other cities.
They were in pumping mode back then… April 2023… it becomes difficult to hide the caper now but.
The chips are starting to fall…
Home / Canada
Tilray discloses $1.2B quarterly loss, plan to buy cannabis rival Hexo for $56M
By MJBizDaily Staff
April 11, 2023 - Updated April 11, 2023
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Women, minority execs show few gains in U.S. cannabis industry, according to the latest data from the MJBiz Diversity, Inclusion and Equity Report. Get your copy here.
Canadian cannabis producer Tilray Brands reported a net loss of $1.2 billion (1.5 billion Canadian dollars) for its quarter ended in February and said it agreed to buy troubled rival Hexo Corp. for $56 million.
According to a news release, Canada- and U.S.-based Tilray attributed the quarterly red ink to its declining market capitalization and a net asset reduction resulting from higher interest rates.
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The company, which has offices in Leamington, Ontario, and New York, also booked an inventory valuation write-down worth $55 million.
Tilray said the steep loss has no impact on the company’s compliance with debt covenants, its cash flows or available liquidity.
Sales for the December-February quarter missed analysts’ expectations, coming in at $145.6 million, down from $151.9 million one year earlier.
Cannabis appeared to be a drag on the company’s revenue, with sales from its marijuana business falling to $47.5 million for the quarter, down from $55 million in the three months through Feb. 28, 2022.
By category:
Distribution revenue rose 4.5% over the same period last year to $65.4 million.
Net beverage alcohol revenue gained 5% to $20.6 million.
Wellness revenue decreased 18% year-over-year to $12.2 million.
Tilray said it projects delivering positive free cash flow by the end of the current financial year, which concludes later this spring.
Earnings before interest, taxes, depreciation and amortization for the quarter came out to a positive $14 million.
International sales were another drag on Tilray’s business in the third quarter.
Tilray’s gross revenue from international cannabis products plunged 39% year-over-year to $9.7 million in the third quarter.
By market channel, gross revenue from:
Canadian medical cannabis products slipped 14.4% year-over-year to $6 million in the quarter.
Canadian adult-use cannabis products rose 4.2% to $45.3 million.
Wholesale cannabis products fell to $58,000, down sharply from $2.8 million in the previous December-February quarter.
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Meanwhile, Tilray said in the release that it entered into a definitive agreement to acquire Ottawa, Ontario-based Hexo for an aggregate purchase price of approximately $56 million.
Tilray plans to finance the deal by issuing 0.4352 of Tilray Common Stock for each outstanding Hexo share.
This comes after the two businesses entered a strategic alliance last year.
Hexo has lost just shy of CA$2 billion ($1.48 billion) since 2017.
Details on the acquisition arrangement between Tilray and Hexo are available here and here.
Tilray’s shares trade as TLRY on the Nasdaq and Toronto Stock Exchange.
Hexo’s shares are traded as HEXO on the Nasdaq and Toronto Stock Exchange.
"We are confident we are leaving the company in good hands in Irwin Simon," the Hexo CEO says on the conference call with analysts
Now it's time for analyst questions.
New: HEXO's accumulated losses crossed the $2 BILLION mark
By revenue stream in Q3 compared to last year:
—Rec sales: $26.5 million (??46%)
—Medical: $647,000 (??28%)
—Int'l: $649,000 (??90%)
—Wholesale: $4 million (up 22%)
—Bevs: $0 (??100%)
Q3 net loss was $117 million.
Flashback: on the day Tilray disclosed its plan to buy Hexo, Tilray reported a C$1.5 billion quarterly loss
Now: Hexo's accumulated losses surpassed C$2 billion on the same day its shareholders approved its sale to Tilray.
I like how Decibel Cannabis chief revenue officer Adam Coates put it to me the other day:
“I think they (larger rivals) were fishing where the fish weren’t”
(though he was referring to certain product types, like beverages)
You are welcome sir.
CANNABIS 101
Home / Canada
Aurora Cannabis closing production facility in Denmark
June 14, 2023
Canadian producer Aurora Cannabis is closing its remaining facility in Denmark and moving production to Canada in a bid to lower costs.
Edmonton, Alberta-based Aurora said it had been leasing the facility.
The move comes over one year after the company sold its Nordic Sky facility in Odense, Denmark, for roughly 7.5 million Canadian dollars ($5 million) on March 15, 2022.
That sale resulted in a loss of disposal of CA$1.3 million.
The sold facility “refers to a planned second facility in Denmark that the company did not proceed with opening due to the changes in the market,” a company spokesperson told MJBizDaily.
“This is not a reflection of our European business, as our business there remains strong with healthy margins and growth prospects,” the spokesperson said via email.
Bonno : that is b.s. Europe is flooded with cannabis from Spain, Bulgaria, Morocco etc.
“However, the Nordic site had many unique challenges beyond our control, that despite our best efforts, could not be overcome.”
The spokesperson also noted that, “following a period of consultation with our employees, Aurora previously announced the closure of our Aurora Nordic facility in Odense, Denmark.
“This decision was not taken lightly, and impacted employees will be fully supported by the company. We thank them for their valuable contributions. ”
The exit caps off a troubled spell for Aurora in the Danish market.
In early 2018, Aurora had envisioned creating “Europe’s largest” medical cannabis producer in Denmark when it unveiled plans to become the second licensed cultivator to build a facility in the Scandinavian country.
The fully built-out facility was expected to produce a stunning 120,000 kilograms (132.3 tons) of medical cannabis annually – significantly more than the European market demands.
Germany, the largest medical cannabis market in Europe by far, imported only 25,000 kilograms of cannabis for medical or scientific purposes in 2022, an increase of 19% over the 20,769 kilograms imported in 2021.
Months before Aurora committed to Denmark in 2018, rival producer Canopy Growth Corp. unveiled plans to establish its own 430,000-square-foot production facility in Odense.
Canopy ultimately sold the facility to Australia’s Little Green Pharma in 2021.
In a conference call with analysts Wednesday, Aurora CEO Miguel Martin said the closure in Denmark is part of the company’s plan to achieve roughly CA$40 million in annualized savings.
The CEO said he expects the savings to be achieved by March 31, 2024.
“We made the decision to close our Nordic production facility in Denmark and will supply our very important European business from our Canadian footprint, which has much lower per-unit costs and a much more reliable supply,” Chief Financial Officer Glen Ibbott said.
“We believe this will allow us to compete even more effectively in the growing European market.”
Martin noted three “primary” challenges with the Danish facility.
“The first is the regulations on what would be traditional remediation of pathogens – whether it’s powdery mildew or other things – in that facility made it difficult to achieve the same yield and production that we get out of Canada,” the CEO told analysts.
“Secondly, the size of that greenhouse facility did not really lend itself to the same production efficiencies that we get at our indoor facilities in Canada.”
Lastly, Martin said European markets, “for whatever reason,” value Canadian product as having a higher quality and being more valuable to them.
Bonno : more b.s. big lps purchase weed from small producers. Gouging them.
Most do not grow anymore as they were selling under cost, trying to save time…
Yup! Klein does,nt want to lose that cool 43 million $ a year gig.
It has nothing to do with being smart.
Simple due diligence.
I know the cannabis market really well…
You believe in lps.
I don,t.
I called this Ponzi in my first post here in 2014.
Awesomesound also made this call.
Dude also has a licence to grow and knows this market well.
Got lots of flack for my predictions but it,s fun to speculate on this bubble.
You have 3 kind of buyers.
Due diligence buyers, emotional buyers and your gambler.
Emotional buyers have their own theories…
I.E. if it rains for 3 days in a row its time to splurge on Tilray.
You also have gamblers…
I prefer to do my own research!
Aurora just lost another cool 87 millions by-the-way.
I may be wrong but, so far, so good
Lps are doomed trying to sell bunk weed lower than production cost.
“There are a ton of burned MJ investors.”
Not to worry… there will be tons more. Lol
You should have dropped 100k on day one and sold at 40$ like a smart invester.
Way too late now.
You won’t even find crumbs on that Ponzi. Lol
Good luck
She stormed out just in time. She would have lost it all otherwise…
POWER PLAYERS
One of America’s richest self-made women quit her job to cook edibles—now her net worth is $225 million
Published Fri, Jun 9 20239:34 AM EDT
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Megan Sauer
@MEGGSAUER
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Nancy Whiteman, CEO and co-founder of edible cannabis company Wana.
Nancy Whiteman, CEO and co-founder of edible cannabis company Wana.Courtesy of Wana
Recreational cannabis was still illegal when Nancy Whiteman left her high-paying consulting job to cook edibles in Boulder, Colorado, in 2010.
Four years later, the state legalized retail sales of marijuana, and Whiteman’s gamble paid off. The 64-year-old founder of edible cannabis company Wana is now one of the richest self-made women in the U.S., with a net worth of $225 million, according to Forbes.
“I like to say I went from the most traditional industry to the least traditional industry,” Whiteman told CNBC Make It in 2018. “I wanted a business where I could build value, and it didn’t depend on me. I also love to cook.”
Much of Whiteman’s fortune comes from selling Wana for $350 million in 2021 to Canopy Growth, an Ontario, Canada-based cannabis company. She owned 100% of the company at the time of the acquisition — and was paid an initial installment of $297.5 million in up-front cash, according to the sale announcement.
Whiteman remains CEO of Wana today. It all started with the father of her daughter’s friend, who dropped hints in conversation that he worked in a somewhat illicit industry, Forbes reported earlier this month.
That “got my undivided attention,” Whiteman told Forbes.
The map of the U.S. shows the states that have legalized recreational and medical cannabis.
Initially, Whiteman and her then-husband, John Whiteman, decided to team up with the friend’s father and experiment together in a local commercial kitchen. Within a year, the couple decided to go it alone, investing between $50,000 and $60,000 of their own money to start Wana from their kitchen.
Without outside funding, Wana conducted market research by visiting dispensaries to see what was popular, and the couple often had to cover payroll with their personal cash, Whiteman said. She also picked up occasional marketing consulting jobs to make ends meet, she now tells CNBC Make It.
She and John got divorced at the end of 2011, but decided to remain business partners. Colorado legalized off-the-shelf cannabis sales for dispensaries in 2014, and as nationwide interest in edibles grew, so did Wana’s annual revenue.
By 2017, it had climbed to $14.5 million — up from just $100,000 in its first year, Whiteman told CNBC Make It in 2018. A year later, Whiteman bought John’s remaining shares in the company.
Edibles are becoming increasingly popular, Whiteman said. They now represent 12% of the cannabis industry, Seattle-based data company Headset found last year.
Edibles are becoming increasingly popular, Whiteman said. They now represent 12% of the cannabis industry, Seattle-based data company Headset found last year.Courtesy of Wana
In the 13 years since Wana launched, 23 states and Washington D.C. have legalized recreational cannabis use, according to the National Conference of State Legislatures.
Last year, the U.S. cannabis industry was valued at $13.2 billion, according to Grand View Research. Edibles make up 12% of that market, Seattle-based data company Headset found last year.
Some experts warn the booming growth is slowing, partially because many people are trying to create and sell their own edibles. U.S. cannabis sales skyrocketed during the early days of the pandemic, but revenue stalled and then dropped in 2022.
That’s a challenge for Wana, which is now leaving California — the U.S.’s largest cannabis market — and is in the process of exiting Oregon.
“We happened to enter the market just as wholesale pricing started to really plummet,” Whiteman told Forbes. “We ended up in an unenviable position of being a very expensive product in a market that was experiencing serve price compression.”
It's been 608 days since Canada's @ISED_CA was tasked with forming a group with industry "to identify ways to work together to grow the legal cannabis sector.” Still nothing.
As industry waits for gov't to do something it promised 608 days ago, various levels of gov't collected over $2 billion in cannabis profit and tax revenue, dozens of businesses have gone under, and Canada's mountain of unsold cannabis reached 1.5 billion grams.
No money - no candy.
Home / Cultivation
States act to deny licenses for cannabis companies with debt woes
author profile pictureBy Chris Casacchia, Staff Writer
June 12, 2023
Image of a pink piggy bank drowning in debt
State regulators and government officials nationwide are taking steps to ramp up enforcement against cannabis companies that fail to pay vendors, taxes or business fees.
New Jersey is the latest to take a hard line against delinquent operators, revoking cultivation and manufacturing licenses in early June from a company with unpaid fees.
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It joins California, Michigan and Nevada, New York and Oregon in targeting such companies.
Some of these states are implementing enforcement measures, while others are taking steps to act.
The policy shift comes amid a challenging business climate for most marijuana operators across the country as recreational markets work through overproduction, falling wholesale prices, the tolls of high taxation and compliance as well as competition from unlicensed growers, retailers and manufacturers.
Many cannabis businesses are in a no-win situation, contends Chris Lindsey, the new director of state advocacy and public policy for the American Trade Association of Cannabis and Hemp in Washington DC.
“The federal government and the tax provisions of 280E are being grossly misapplied to state-licensed businesses, which has a real downstream impact,” he said, referring to the section of the federal tax code that bars legal marijuana businesses from taking the same business deductions that mainstream companies enjoy.
“Businesses that are working to comply with regulatory systems face a tremendous squeeze just to find themselves in competition not only with others in the legal market but also the illicit market.
“Our public policy needs work because there is too much of a burden on struggling businesses who want to be compliant but play an unfair game.”
The ramp-up in debt enforcement is chiefly centered in more established marijuana markets and driven by a few mitigating factors, according to Brooke Butler, vice president of partnerships at Simplifya, a Colorado-based compliance service and software provider.
“It’s about public safety and health. And it’s about the state getting their money,” she said.
“Those are the two biggest areas of compliance that people need to worry about.”
Expanding credit crises spurs action
A California lawmaker and New York regulators have introduced proposals to establish credit laws fashioned after the liquor industry, which penalizes vendors for failing to comply with 30-day credit-payback plans.
Under a new law enacted in May, New York’s Department of Taxation and Finance can levy civil penalties against companies that don’t pay taxes.
The legislations also established a new tax fraud crime for businesses that don’t collect or remit required cannabis taxes or sell untaxed marijuana.
Michigan and Oregon have also started the process of expanding regulatory authority to withhold, withdraw or deny licenses for cannabis companies with outstanding debt.
Both of those markets have been rattled by large operators struggling to pay bills.
Michigan marijuana cultivator and retailer Skymint is in receivership and auctioning off assets, which include 23 stores and two cultivation sites, according to Crain’s Detroit Business.
In March, Canadian investment firm Tropics LP, Skymint’s largest creditor, filed a lawsuit claiming the company owed more than $127 million.
In Oregon, Canadian holding company Chalice Brands, which operates as Chalice Farms, filed court documents last month to place five of its state subsidiaries under receivership.
The subsidiaries, part of the third-largest retail chain in Oregon with 17 stores, are $35 million in debt, Willamette Week reported.
La Mota, the state’s second-largest retailer with 37 stores, owes “at least $621,000” in back marijuana taxes, according to the news outlet.
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The company and its top executives are embroiled in controversy, resulting in dozens of lawsuits, liens and the resignation of Oregon’s secretary of state, Shemia Fagan, now the target of a grand jury investigation for accepting a lucrative consulting contract from Veriede Holding, a La Mota affiliate, The Oregonian reported.
Credit and collection issues are magnified in the cannabis industry because vendors have little recourse to settle outstanding debt.
Businesses can’t access U.S. bankruptcy courts, which settle debt disputes, because of the federal government’s marijuana prohibition.
A small-claims filing is typically not an option for cannabis businesses, either, because outstanding bills often exceed the typical $5,000 limit.
And receiverships are also rare in the industry because creditors must take on those expensive processing costs. That option is more geared to settle multimillion disputes, according to legal experts.
New Jersey
The New Jersey Cannabis Regulatory Commission (CRC) on June 1 withdrew Harmony Foundation’s cultivation and manufacturing licenses because the company owes the state $700,000 in licensing fees.
The CRC told MJBizDaily the agency is required to ensure marijuana business applicants comply with state requirements, including the payment of mandatory fees.
“The NJ-CRC has not revoked any licenses, but awards have been vacated and returned to the commission for non-payment,” the agency said in an emailed statement.
“In most cases, applicants can reapply when they are ready to pay the required fees.”
Harmony declined to comment for this story.
As part of the CRC’s decision, Harmony can still sell recreational cannabis at its store in Secaucus but is required to purchase supply from other growers in the state.
Oregon
Cannabis regulators in Oregon are scheduled to meet June 15 to discuss a new plan by Democratic Gov. Tina Kotek to withhold licenses for marijuana cannabis retailers that owe state taxes.
“This will help ensure that all businesses are operating under the same rules and not getting any competitive advantage if they haven’t paid their taxes,” Kotek said in a statement.
The governor’s directive – carried out by the Oregon Liquor and Cannabis Commission and the state’s Department of Revenue – will affect more than 820 licensees annually, according to a news release.
Data from the revenue department shows that cannabis retailers have a higher noncompliance rate in Oregon on tax payments (9%) than other businesses (3%) in the state.
Mason Walker, CEO of Takilma-based East Fork Cultivars, a craft marijuana and hemp breeder, cultivator and product-maker, said he’s skeptical of more regulations beyond addressing legitimate health and safety concerns.
“My worry with this law, it could be used as a cudgel to make it harder to operate in this industry for otherwise good actors that are struggling with unfavorable market conditions,” he said.
In a related development, Oregon’s revenue department on July 14 will start publishing an online list of taxpayers who owe at least $50,000 in taxes, penalties and interest.
The list, which was originally set to publish in March 2020, will include:
Name of taxpayer, business and those liable for business debt.
Current city and state of residence.
Lien identification number, type of debt and amount due.
Michigan
The top regulator in Michigan might expand the scope and penalties for unpaid invoices.
The state’s Cannabis Regulatory Agency has proposed a plan to deny a permit or license renewal based on civil judgments or court orders from “unpaid debt for work, services, products, or equipment provided solely in the cannabis industry.”
The proposal, still in the early part of the rulemaking process, is among several on a 13-page draft that would significantly change business dynamics.
Michigan cannabis attorney John Fraser said the proposed penalties will not address the underlying issues – cash-flow shortages on the retail side and debt collection on the vendor side.
“If you take away this business’ license, how is the creditor going to get paid?” he questioned.
“You’re treating it on the back end instead of actually fixing what’s causing the issue. (Vendors) want recourse, and at the end of the day, that recourse is payment.”
Nevada
State regulators were among the first to take a hard stance against tax delinquencies, warning operators in mid-2020 they would be prohibited from accessing the state’s mandatory track-and-trace portal if they didn’t establish payment plans for back taxes.
The notifications came about a month after the Nevada Cannabis Compliance Board (CCB) took over regulatory duties from the Marijuana Enforcement Division within the state’s taxation department.
The state quickly recouped millions of dollars in outstanding renewal fees, taxes and “time and effort assessments,” or oversight fees.
In a related multiyear initiative, Nevada regulators have uncovered more than $5.5 million in outstanding tax debt from 132 “transfer of interest” investigations, which are carried out before regulators approve any internal corporate transactions such as ownership changes or restructurings.
The investigations assess tax liabilities, payments and obligations, among other areas.
The two-pronged approach helped the state clear most of the industry’s unpaid taxes and fees.
“We don’t really have anything hanging over our head or hanging over the industry’s head at this point because of what we did,” CCB Executive Director Tyler Klimas told MJBizDaily.
Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.
Lps will all go bankrupt. Growing cannabis in Canada is way too costly.
Equatorial countries have the perfect weather, 12 hours day and 12 hours night.
Labor cost is low and they know how to grow!
They will flush lps like there is no tomorrow.
That is if they are still standing.
Those are the one who will succeed.
Faire pousser du cannabis au Canada est un non sens! Ca coute trop cher!
Si les lps ne font pas faillite… les pays équatoriaux vont les décimer!
https://ici.radio-canada.ca/nouvelle/1986649/producteurs-legaux-cannabis-argent
Pas d’argent facile pour les producteurs légaux de cannabis
La rentabilité n’est pas au rendez-vous pour bien des entrepreneurs qui se sont lancés dans la culture du cannabis. Certains s’en tirent mieux que d’autres, mais la plupart en arrachent.
Myriam Fimbry
2023-06-11
« On est quasiment une piasse pour une piasse. Ça vire, mais pour dire que ça vire », dit Alexandre Cloutier-Gagné, un microproducteur de cannabis en Beauce.
Après avoir désinfecté ses chaussures et revêtu une blouse et des lunettes de soleil, on entre dans une petite salle aux murs blancs et sans fenêtres, où poussent 72 plantes de cannabis en pot. Les feuilles bougent doucement sous l’effet du vent créé par 10 ventilateurs accrochés aux murs. Une lumière jaune très vif ensoleille la pièce.
L’homme de 37 ans, père de deux enfants, s’est lancé dans l’aventure peu de temps après la légalisation. Ancien facteur à Postes Canada, il avait toujours eu une passion pour le cannabis. Il en faisait pousser chez lui, à des fins personnelles, précise-t-il.
Des oncles et des frères ont mis la main dans leur poche pour rassembler l’investissement de départ, plus d’un million de dollars. Alexandre Cloutier-Gagné a ouvert une première usine à Saint-Benjamin en 2021, puis une deuxième plus grande à Beauceville en 2022. Les deux installations lui permettent de produire 700 kg de cannabis par an.
Mais les six employés sont au chômage depuis ce printemps, le temps de réorienter l’entreprise, ce qui devrait demander de quatre à six mois, selon le microproducteur.
Car les produits de Teca Canna n’ont pas été retenus par la Société québécoise du Cannabis, après avoir été pris à l’essai sur les étagères. Il fallait performer autant que les gros joueurs qui étaient déjà inscrits depuis longtemps et déjà connus, explique l’entrepreneur. C’est quasiment impossible pour une petite compagnie de percer de cette manière-là.
Alexandre Cloutier-Gagné tient un sac en plastique transparent rempli de cannabis séché.
Le PDG de Teca Canna, Alexandre Cloutier-Gagné, couvre à peine ses frais de production en vendant ce sac de 2 kg de cannabis en vrac.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
Alexandre montre des sacs en plastique remplis de belles grosses cocottes, des fleurs de cannabis séchées, entreposées dans une salle. Il les soupèse, il y a bien 2 kg par sac. Actuellement, le marché est saturé, il y a beaucoup trop de cannabis pour ce qu’on peut revendre.
La réglementation empêche les producteurs de cannabis de faire de la publicité. Même sur leur site web ou sur les réseaux sociaux, ils ne peuvent essayer de mettre en valeur leur produit, par exemple en évoquant des saveurs ou des effets, pour attirer des clients. Au Québec, en dehors du réseau de succursales de la SQDC, il y a peu de manières de se faire connaître.
Teca Canna a trouvé des fournisseurs dans d’autres provinces, en Ontario ou en Alberta, qui ont accepté de lui acheter son stock en vrac, mais à bas prix, parce qu’ils ont l’embarras du choix. Présentement, dans l’industrie, les gros joueurs ne se donnent même plus la peine de produire. Ils peuvent acheter le cannabis pas cher, comme à nous autres, et l’emballer eux-mêmes avec leur licence d’emballage, résume le PDG de Teca Canna.
« Pour nous, un coup tous les employés et les frais payés, il reste très peu de bénéfices. »
— Une citation de Alexandre Cloutier-Gagné, PDG de Teca Canna
À Terre-Neuve, une entreprise artisanale au désespoir
Ce n’est pas qu’au Québec que le seuil de rentabilité est difficile à atteindre. À Corner Brook, dans la province de Terre-Neuve-et-Labrador, la petite entreprise BeeHighVE est au bord du désespoir.
Rita Hall porte un filet vert de protection sur les cheveux, des gants bleus et un masque d'intervention sur le visage. Elle regarde une fleur de cannabis.
Rita Hall examine le cœur d'une fleur de cannabis à son usine de Corner Brook, à Terre-Neuve-et-Labrador.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
La PDG Rita Hall et son mari, Mark German, y ont investi toutes leurs économies et celles de leurs proches. Ils avaient vécu de belles réussites précédemment dans les technologies de l’informatique. Or, depuis quatre ans, ils ne font que perdre de l’argent. Des millions de dollars.
Ils imaginaient ce secteur plein d’avenir et pensaient que la recherche médicale lui donnerait un nouvel élan. Encore aujourd’hui, ils s’investissent corps et âme dans leur usine et, du matin au soir, ne voient que la lumière artificielle éblouissante qui stimule la croissance de leurs 800 plants de cannabis.
Quand on demande à Rita Hall pourquoi elle continue dans ce secteur malgré les pertes, les larmes lui montent aux yeux. Elle montre la clé en forme de médaillon qu’elle porte autour du cou. Elle s’en sert pour circuler dans l’usine et en franchir chacune des portes ultrasécurisées.
Quand j’ai commencé, je la portais avec fierté, dit-elle, la voix étranglée. Maintenant, c’est devenu un nœud coulant.
Elle refuse pourtant de se décourager et de tout arrêter. Trop d’amis, de proches, de membres de la famille ont cru en ce projet. Elle n’a pas d'autre choix que d’y croire encore. De continuer pour leur éviter de tout perdre.
Pas d'argent facile dans le cannabis
ÉMISSION ICI PREMIÈRE • Désautels le dimanche
Désautels le dimanche, ICI Première.
La bulle s’est dégonflée
Au début, lors de la légalisation au Canada en 2018, de nombreuses entreprises se sont lancées dans cette industrie, parfois avec des sommes colossales, atteignant des cotations de plusieurs milliards en Bourse. Aujourd’hui, après bien des fermetures de centres de production, c’est une minorité d’entreprises qui gardent la tête hors de l’eau, qu’elles soient petites, moyennes ou grosses.
Beaucoup à l’heure actuelle sont en train d’essayer de prendre des ententes avec leurs créanciers ou de se restructurer, souligne Pierre Leclerc, directeur général de l’Association québécoise de l’industrie du cannabis (AQIC).
Pierre Leclerc dans un café-restaurant.
Pierre Leclerc, directeur général de l'AQIC, représente 90 entreprises dans l'industrie du cannabis au Québec. La plupart ont des difficultés financières.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
Pierre Leclerc a été directeur de cabinet au sein du gouvernement du Québec. Il a travaillé avec la ministre Lucie Charlebois à mettre en place la réglementation provinciale sur le cannabis. Il s’inquiète maintenant pour la réussite de la légalisation.
Selon lui, c’est impossible de combattre le marché noir si les entreprises légales ne sont pas rentables et mettent l’une après l’autre la clé sous la porte. Je peux rassurer tout le monde, une industrie va survivre, dit-il, un brin cynique. Quand on a voulu prohiber le cannabis, on n’a pas réussi.
Penser comme un agriculteur
L’entreprise 5 points Cannabis, à Pierreville, près de Sorel-Tracy, s’en sort mieux que d’autres dans les circonstances. Au départ, on se lançait dans la production de cannabis avec plein d'ambition : travailler quatre, cinq ans, puis passer le restant de notre vie sur un bateau à la chaleur des Caraïbes, raconte le directeur général Joël Lalancette, avec un bon sens de l’autodérision.
Ce scénario est à oublier. Il n’y a pas – ou plus – d’argent facile dans le cannabis. Même pour une entreprise de taille moyenne comme 5 points Cannabis, qui a réussi à se tailler une place sur les étagères du Québec et de plusieurs autres provinces.
Joël Lalancette tient la porte de la salle où pousse du cannabis.
Le directeur général Joël Lalancette nous invite à entrer dans l'une des salles de floraison de 5 points Cannabis, à Pierreville.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
L’entreprise s’est agrandie une fois et se contente de 20 000 pieds carrés, au lieu des 200 000 envisagés. Et on est très heureux comme ça, insiste Joël Lalancette. C’est notre taille maximale pour les prochaines années. Le marché ne permet plus d’agrandissement. Nous, notre accès limité aux capitaux nous a probablement sauvé la vie.
L’homme de 50 ans met à profit son expérience d’agriculteur pour réussir dans son domaine. Avant le cannabis, il produisait 300 tonnes de fraises par an. Le cannabis, c’est une plante, c’est du vivant. Au final, c’est de l’agriculture. Il faut contrôler le climat et la lumière.
Il pense toujours comme un agriculteur qui veille sur ses plantes et contrôle chaque coût, choisit soigneusement chaque équipement. Il investit dans la recherche et le développement, pour essayer de garder un coup d’avance. Si on s'assied une semaine sur nos réussites, à tous les coups, c'est une claque en arrière de la tête.
Un ménage nécessaire
Selon lui, un certain ménage dans l’industrie est bénéfique, pour sortir du marché ceux qui ne connaissent pas grand-chose en entrepreneuriat ou en agriculture et qui n’arrivent pas à vendre leurs produits.
Elles n’ont pas d'affaire là, mais elles produisent encore, puis font tomber le prix du marché et nuisent aux entreprises qui font les choses correctement, estime Joël Lalancette dans des mots un peu durs. S'il n'y a pas de ménage qui se fait, dans trois ans, il n'y aura plus personne.
L’entreprise de taille moyenne embauche 60 employés et produit 3 tonnes de cannabis par an. Mais elle n’est pas à l’abri non plus de jours plus difficiles.
Une femme en blouse et gants bleus assise à une table en métal devant un grand bol et des fleurs de cannabis séché.
L'entreprise 5 points Cannabis emploie 60 personnes. Ici, la salle de « manucure » des fleurs de cannabis. Chaque fleur est débarrassée de ses feuilles à la main, avec de petits ciseaux.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
Au moment de notre visite, l’un de ses assureurs venait d’annoncer qu’il se retirait du secteur du cannabis. Il ne se passe pas une journée sans devoir régler un problème, soupire l’entrepreneur.
« On peut avoir 50 produits sur les tablettes, puis dans six mois on peut en avoir juste 20. Il faut avoir des plans B, des plans C, des plans D… double Z, je pense. »
— Une citation de Joël Lalancette, directeur général de 5 points Cannabis
Les institutions financières sont aussi très hésitantes à prêter de l’argent, si ce n’est pas carrément à ouvrir un compte en banque à une nouvelle entreprise, ce que l’industrie du cannabis attribue à une image encore négative qui la suit. Un recours collectif à ce sujet, lancé par l’entreprise Origami Extraction, attend d’ailleurs d’être autorisé.
Appel à des aides et subventions
Nous ne sommes pas soutenus par le gouvernement, d’aucune manière, regrette Rita Hall, de BeeHighVE. Alors que c’est une industrie multimilliardaire qui lui rapporte beaucoup d’argent, la plupart des compagnies de cannabis échouent, font faillite ou déposent leur bilan. Le gouvernement doit arrêter de prendre une si grande part de nos revenus.
Elle estime que les différents gouvernements provinciaux devraient au contraire commencer à soutenir cette industrie, par des aides ou des subventions, comme c’est le cas pour les autres cultures et produits de l’industrie agricole.
Fleurs de cannabis.
Stade de floraison des plantes de cannabis à l'usine 5 points de Pierreville, au Québec.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
Selon l’entrepreneure de Terre-Neuve, qui a été la première à obtenir une licence de cannabis dans la province, l’enjeu est que l’industrie légale de cannabis puisse continuer. Parce que l’autre marché, le marché illégal, est encore en train de grossir, je peux le voir. C’est vraiment problématique.
D'après des estimations du Conseil canadien du cannabis et de Statistique Canada, le marché noir accapare encore environ la moitié de la consommation de cannabis au Canada.
La réglementation pointilleuse et les taxes élevées, imposées aux producteurs légaux, sont montrées du doigt.
Un ajustement est nécessaire, selon Pierre Leclerc, de l’Association québécoise de l’industrie du cannabis.
« Il faut ajuster le système de taxation pour permettre aux entreprises de dégager des profits, mais de rester avec des prix de vente qui, au détail, seront compétitifs avec le marché illicite. »
— Une citation de Pierre Leclerc, de l’Association québécoise de l’industrie du cannabis
La taxe d’accise, par exemple, prélève toujours un dollar sur chaque gramme de cannabis vendu, malgré la chute des prix depuis 2018, qui sont passés en moyenne de 10 $ à 3 $ le gramme en l’espace de cinq ans.
Pots de 3,5 grammes étiquetés par des employés.
Chaque pot de 3,5 grammes de cannabis est scellé par un timbre d'accise. C'est une taxe que l'entreprise doit payer au gouvernement fédéral, 1 $ par gramme.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
Les frais pour assurer la sécurité des usines sont aussi astronomiques. Il n’y a pas un pouce carré d'un site qui cultive du cannabis qui n’est pas couvert par une caméra! s’exclame Pierre Leclerc. Et il faut garder ces images-là pendant un minimum d'un an, en cas d’inspection. Pourquoi ne pas se limiter à trois mois?
Pierre Leclerc comprend l’importance de normes très strictes de salubrité et de sécurité. Il fallait commencer de façon très prudente, pour s’assurer d’avoir une industrie d’une probité exemplaire. Mais aujourd’hui, je pense qu’on peut relaxer certaines normes.
Le prix ou la qualité
Ni taxé ni réglementé, le cannabis est moins cher sur le marché noir.
Mais le prix n’est pas le principal critère, selon la chercheuse en économie Tiffanie Perrault. Pour sa thèse de doctorat, présentée l’an dernier à l’Université de Montréal, elle a étudié l’impact de la légalisation sur les marchés illégaux du cannabis, dans certains États américains : l’Oregon, le Colorado et Washington.
« Les gens sont sensibles au prix, mais vont aller se servir sur le marché noir parce qu’ils ne trouvent pas les produits qu’ils veulent sur le marché légal. »
— Une citation de Tiffanie Perrault
Tiffanie Perrault devant des bâtiments universitaires.
La chercheuse Tiffanie Perrault a étudié les marchés illégaux du cannabis dans des États américains qui ont légalisé la substance.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
Elle estime que la qualité va être le moteur pour se débarrasser du marché noir. Par qualité, elle entend le taux de THC (tétrahydrocannabinol), la variété des produits, l’expérience d’achat et même l’attrait des emballages.
On a besoin de laisser les producteurs se différencier et commercialiser leur marque, pour qu’ils puissent s’en sortir, dit la chercheuse maintenant au postdoctorat à McGill.
Un récent rapport du Bureau de la concurrence? (Nouvelle fenêtre)? va dans le même sens. Il invite le gouvernement fédéral à assouplir les restrictions, de façon à mieux concurrencer le marché illicite.
En attendant, Teca Canna, à Beauceville, se tourne vers l’international. On a été capables d’avoir un beau contrat, dit le propriétaire Alexandre Cloutier-Gagné. Pour l’avenir, on va se concentrer sur l’exportation.
D’autant plus qu’une partie de son cannabis dépasse la concentration de THC permise au Québec.
Alexandre Cloutier-Gagné sortant d'un grand bâtiment aux murs gris.
Alexandre Cloutier-Gagné prend un appel en sortant de l'usine de Teca Canna à Beauceville. Rien ne laisse deviner que du cannabis pousse à l'intérieur du bâtiment, comme le demandent les assureurs.
PHOTO : RADIO-CANADA / MYRIAM FIMBRY
Il est déçu et découragé de ne pouvoir vendre ses produits localement. Mais on n’a pas le choix. On a tout mis de côté, tout lâché, changé de carrière, investi beaucoup. Mais c’est une passion encore. Faut pas faire ça juste pour l’argent.
I don,t have a crystal ball. Lol…
But i do know that they have been selling under cost.
The word is lps are running out of cash, and time.
Thailand is the only country who has a good cannabis economy.
Easy cheesy. Get your tax number and start to make casholas.
Shit show everywhere else but.
It’s your money. I’m just an observer.
This Ponzi is worth 0$.
They are not listening…lol
Why Gen Z Is Putting Down The Beer And Picking Up Marijuana
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By:
Amy Hansen
June 7, 2023
CannabisFeaturedWellness
purple and white stick with white background
The Boomer generation grew up with Santa pushing cigarettes for Christmas, smoking on planes and kids able to mix drinks cocktails. Marijuana was seen as evil and the (falsely) road to a “bad end”. There has been significant baggage about a good vice versus a bad vice. Things started changing around the birth of Gen Z. The three martini lunch declined as did afterwards afternoon boozy behavior in the office. Big Tobacco lost a landmark case costing them $206 billion. It is the largest settlement in U.S. history. And marijuana was grudgingly seen by “those in charge” as possibly having medical benefits.
RELATED: Science Says Medical Marijuana Improves Quality Of Life
Gen Z grew up with changing attitudes including a focus on heath, cleaner air, bottled water and a balanced lifestyle. They begin to see marijuana as a staple and not a sin. Around 93% of Gen-Xers agree that cannabis use has many health benefits and can be good for the mind and body.
“Gen Z is the first generation to be of legal consumption age in an environment with widespread adult-use cannabis access,” Amanda Reiman, New Frontier Data’s vice president of public policy research, said in an email exchange. The firm’s study, which included 4,170 current cannabis consumers and 1,250 nonconsumers, found that the preference seems to fade with age, with just 44% of respondents aged 65 to 74 choosing weed over booze.
CBD oil tincture
Photo by CRYSTALWEED cannabis via Unsplash
In states where recreational cannabis products are legal, 65% of Gen Z survey respondents smoke marijuana and 51% consume cannabis-infused beverages, Technomic, the foodservice industry data company, reported in its Adult Beverage Planning Program.
Most of this consumption takes place at home, but 38% of Gen Zers would visit a marijuana lounge or club to partake of the products. Visiting a bar or restaurant for a drink and/or food edges out that number at 41%, but the margin is thin.
Gen Zers are drinking less than young people in past generations with about 20 percent less alcohol per capita than millennials did at their age, according to a report from Berenberg Research. And many are forgoing booze entirely.
RELATED: Pickleball Season is Near – You Might Want Some Cannabis or CBD Near
Contrary to in cannabis industry’s claim that marijuana is going to doom alcohol, rather it is going to be added to the mix and change patterns of behavior. Some claimed bottled water would never work, then it said it would kill sodas, now it is just an separate revenue line for the big soda companies.
Nothing stays the same, but it is interesting to watch the change.
Cannabis is not the enemy…
Hard drugs are.
Let’s not forget that Legacy was the one who challenge the government to legalize cannabis and won at the Supreme Court.
So, government had to legalize. Canadians have a charter of right.
Bill Blair was in charge.
Big police chief who was renowned to arrest you and give you a good beating at the police station, yelling ´´you are ruining your health’´.
So they worked a solution to make legalization obsolete…
And it worked!
Enter the sharks… the Linton,s squad.
Boneheads who where completely cannabis naive but were happy to make millions.
They rode the hype of a 500 billion canna market as long as they could and are still at it, making a killing running the corp. to the ground.
We knew that it was all b.s. but layman did,nt.
Suckers were buying shares as fast as they could.
Greed caper until the balloon burst.
Some do believe in it, still pumping dollars like their is no tomorrow.
Thailand did it right. Folks get a tax licence and go on their merry way growing and selling, making everyone happy.
DRUG WAR AND DRUG POLICY PSYCHIATRY FEATURE JULY 21-28, 2014 ISSUE
The Real Reason Pot Is Still Illegal
Opponents of marijuana-law reform insist that legalization is dangerous—but the biggest threat is to their own bottom line.
Bonno
This story was reported in partnership with The Investigative Fund at The Nation Institute.
Patrick Kennedy, son of the late Senator Ted Kennedy, did several stints in rehab after crashing his car into a barricade on Capitol Hill in 2006, a headline-making event that revealed the then–US congressman for Rhode Island had been abusing prescription drugs, including the painkiller OxyContin. Kennedy went on to make mental health—including substance abuse—a cornerstone of his political agenda, and he is reportedly at work on a memoir about his struggles with addiction and mental illness. In 2013, he also helped found an advocacy group, Project SAM (Smart Approaches to Marijuana), which has barnstormed the country opposing the growing state and federal efforts to legalize pot.
Taking the stage to rousing applause last February, Kennedy joined more than 2,000 opponents of marijuana legalization a few miles south of Washington, DC, at the annual convention of the Community Anti-Drug Coalition of America (CADCA), one of the largest such organizations in the country.
“Let me tell you, there is nothing more inconsistent with trying to improve mental health and reduce substance-abuse disorders in this country than to legalize a third drug,” Kennedy boomed. The former congressman also praised his fellow speakers for standing up to the “extremist responses” from legalization advocates.
Given that CADCA is dedicated to protecting society from dangerous drugs, the event that day had a curious sponsor: Purdue Pharma, the manufacturer of Oxy-Contin, the highly addictive painkiller that nearly ruined Kennedy’s congressional career and has been linked to thousands of overdose deaths nationwide.
Prescription opioids, a line of pain-relieving medications derived from the opium poppy or produced synthetically, are the most dangerous drugs abused in America, with more than 16,000 deaths annually linked to opioid addiction and overdose. The Centers for Disease Control and Prevention report that more Americans now die from painkillers than from heroin and cocaine combined. The recent uptick in heroin use around the country has been closely linked to the availability of prescription opioids, which give their users a similar high and can trigger a heroin craving in recovering addicts. (Notably, there are no known deaths related to marijuana, although there have been instances of impaired driving.)
People in the United States, a country in which painkillers are routinely overprescribed, now consume more than 84 percent of the entire worldwide supply of oxycodone and almost 100 percent of hydrocodone opioids. In Kentucky, to take just one example, about one in fourteen people is misusing prescription painkillers, and nearly 1,000 Kentucky residents are dying every year.
So it’s more than a little odd that CADCA and the other groups leading the fight against relaxing marijuana laws, including the Partnership for Drug-Free Kids (formerly the Partnership for a Drug-Free America), derive a significant portion of their budget from opioid manufacturers and other pharmaceutical companies. According to critics, this funding has shaped the organization’s policy goals: CADCA takes a softer approach toward prescription-drug abuse, limiting its advocacy to a call for more educational programs, and has failed to join the efforts to change prescription guidelines in order to curb abuse. In contrast, CADCA and the Partnership for Drug-Free Kids have adopted a hard-line approach to marijuana, opposing even limited legalization and supporting increased police powers.
A close look at the broader political coalition lobbying against marijuana-law reform reveals many such conflicts of interest. In fact, the CADCA event was attended by representatives of a familiar confederation of anti-pot interests, many of whom have a financial stake in the status quo, including law enforcement agencies, pharmaceutical firms, and nonprofits funded by federal drug-prevention grants.
The anti-pot lobby’s efforts run counter to a nationwide tide of liberalization when it comes to marijuana law. In 2012, voters legalized pot in Colorado and Washington State; this year, voters in Alaska appear poised to do likewise. Since 1996, twenty-two states and the District of Columbia have legalized medical marijuana or effectively decriminalized it, and a contentious ballot initiative in Florida may result in the South’s first medical marijuana law. Meanwhile, legislatures across the country are debating a variety of bills that would continue to ease marijuana restrictions or penalties. On the federal level, a bipartisan coalition of lawmakers has challenged the Drug Enforcement Administration in testy hearings, and many have called for removing marijuana as a Schedule I drug under the Controlled Substances Act, which puts it in the same class as heroin and LSD.
The opponents of marijuana-law reform argue that such measures pose significant dangers, from increased crime and juvenile delinquency to addiction and death. But legalization’s biggest threat is to the bottom line of these same special interests, which reap significant monetary advantages from pot prohibition that are rarely acknowledged in the public debate.
* * *
The CADCA convention featured a roster of federal officials and members of Congress as well as a guest appearance by R&B singer Mario. The speakers talked with energy about the coming showdown over marijuana-law reform.
“We need to apply what Hank Aaron said about baseball to our movement today,” asserted Sue Thau, a CADCA consultant. “We need to always keep swinging!”
Buses were scheduled to ferry the participants to Congress for meetings, and Thau coached the assembled activists to emphasize the potential risks for young people, something that “everybody on Capitol Hill can agree on.” In addition to lobbying against marijuana-law reform, she encouraged everyone to preserve key federal funding streams, to “make sure all the programs that fund our field, every one of them,” are protected in the appropriations process for the coming fiscal year.
Ironically, both CADCA and the Partnership for Drug-Free Kids are heavily reliant on a combination of federal drug-prevention education grants and funding from pharmaceutical companies. Founded in 1992, CADCA has lobbied aggressively for a range of federal grants for groups dedicated to the “war on drugs.” The Drug-Free Communities Act of 1997, a program directed by the White House Office of National Drug Control Policy, was created through CADCA’s advocacy. That law now allocates over $90 million a year to community organizations dedicated to reducing drug abuse. Records show that CADCA has received more than $2.5 million in annual federal funding in recent years. The former Partnership for a Drug-Free America, founded in 1985 and best known for its dramatic “This is your brain on drugs” public service announcements, has received similarly hefty taxpayer support while advocating for increased anti-drug grant programs.
The Nation obtained a confidential financial disclosure from the Partnership for Drug-Free Kids showing that the group’s largest donors include Purdue Pharma, the manufacturer of OxyContin, and Abbott Laboratories, maker of the opioid Vicodin. CADCA also counts Purdue Pharma as a major supporter, as well as Alkermes, the maker of a powerful and extremely controversial new painkiller called Zohydrol. The drug, which was released to the public in March, has sparked a nationwide protest, since Zohydrol is reportedly ten times stronger than OxyContin. Janssen Pharmaceutical, a Johnson & Johnson subsidiary that produces the painkiller Nucynta, and Pfizer, which manufactures several opioid products, are also CADCA sponsors. For corporate donors, CADCA offers a raft of partnership opportunities, including authorized use of the “CADCA logo for your company’s marketing, website, and advertising materials, etc.”
The groups’ approach to marijuana contrasts sharply with their attitude toward prescription-drug abuse. In March of this year, the heads of CADCA and the Partnership for Drug-Free Kids sent a letter to Attorney General Eric Holder and other government officials urging them to keep marijuana listed as Schedule I, a designation indicating that it has no recognized medical use and is among society’s most dangerous drugs. “We are aware of a small chorus in the United States Congress (copied on this letter) who are calling for the rescheduling of marijuana,” wrote Arthur Dean, a retired general and the president of CADCA, and Stephen Pasierb, head of the Partnership. “[O]ur groups agree with the most recent Health and Human Services (HHS) determination that marijuana should remain a Schedule I drug.”
* * *
CADCA’s website makes it clear that the organization—dedicated to a “world of safe, healthy and drug-free communities”—has adopted marijuana as its primary concern. The group’s stated policy priorities are to preserve and expand two federal drug-prevention grant programs and to oppose marijuana-law reform. CADCA has hosted training seminars to instruct community organizations in the best tactics for opposing efforts to legalize even medical marijuana. The group also offers template letters to the editor, sample opinion columns, talking points and other tips for pushing back against reform efforts.
Prescription drugs are another story. In this realm, both CADCA and the Partnership favor educational campaigns and limited pill-monitoring programs—measures that experts on painkiller addiction say are insufficient to deal with the burgeoning problem. CADCA’s site mentions prescription-drug abuse primarily in the context of expanding outreach programs funded through the Drug-Free Communities Act.
In February, the same month that CADCA held its convention, forty-two leading drug-prevention groups sent a letter to the Food and Drug Administration to protest the recent approval of Zohydro. Notably absent from the signatories: CADCA and the Partnership for Drug-Free Kids. A policy paper posted by CADCA regarding prescription drugs doesn’t call for a shift in how the FDA regulates painkillers, arguing instead that federal drug-prevention grant programs should be expanded.
Asked about CADCA’s efforts to combat prescription-drug abuse, Thau replied that the group supports educational programs and drug-monitoring efforts, and also recently signed on to a bill—sponsored by Senator Ed Markey—that offers a civil-liability exemption to those who provide preventative medications to individuals experiencing an overdose. CADCA has also promoted voluntary drug “take-back” events that encourage people to bring their unused pharmaceuticals to a central location for disposal.
It’s important to keep in mind, however, that industry groups haven’t opposed any of these measures. But they do oppose those restrictions that could eat into the industry’s profits. In 2012, for example, a group of doctors and drug-prevention advocates petitioned the Food and Drug Administration to change the prescription labeling of opioids so that they could be prescribed only for “severe pain,” rather than the “moderate to severe pain” stipulated under the current guidelines. Purdue Pharma opposed the plan, calling on the FDA to “maintain that the current indications for long-acting opioids are appropriate.” According to advocates who spoke to The Nation on condition of anonymity, the Partnership refused to join the push for new prescription guidelines. CADCA didn’t sign on either.
CADCA and the Partnership have also failed to call for action on current bills in Congress to crack down aggressively on painkillers, including the Stop Oxy Abuse Act, which would—in keeping with the suggestion of the doctors’ advocates who petitioned the FDA—allow OxyContin to be prescribed only for severe pain. The two anti-drug groups have not signed on to support the Safe Prescribing Act, which would move hydrocodone products like Vicodin and Lortab from Schedule III to Schedule II, making the product more difficult to prescribe. Nor, for that matter, have they endorsed any of the bills introduced by Representative Hal Rogers or Senator Joe Manchin to block the approval of new, stronger pain-killer drugs such as Zohydro.
“I think it’s hypocritical to remain silent with regard to the scheduling of hydrocodone products, while investing energy in maintaining marijuana as a Schedule I drug,” says Dr. Andrew Kolodny, a New York psychiatrist who heads Physicians for Responsible Opioid Prescribing. Kolodny notes that there are legitimate concerns regarding marijuana legalization, particularly how the drug may be marketed and its effect on adolescents, so “I don’t think it’s inappropriate for them to be advocating on marijuana.
“But,” he adds, “when we have a severe epidemic in America—one the CDC says is the worst drug epidemic in US history—it makes you wonder whether or not they’ve been influenced by their funding.”
In some cases, both CADCA and the Partnership have directly promoted certain opioids. In 2010, Marcia Lee Taylor, the Partnership’s chief lobbyist, signed on to a letter with Will Rowe of the American Pain Foundation asking the Office of National Drug Control Policy to continue Medicaid reimbursements for so-called “tamper-proof” opioids, which cannot be crushed or snorted but can still be abused to deadly effect. (The American Pain Foundation has since shut down, following an investigation by ProPublica showing that the group relied heavily on money from opioid manufacturers and played “down the risks associated with…painkillers while exaggerating the benefits.”) In 2012, CADCA joined with Purdue Pharma and other opioid makers in signing a similar letter to the Centers for Medicare and Medicaid Services.
Prescription-drug manufacturers like Purdue Pharma, which made more than $27 billion in revenues from OxyContin alone since 1996, have faced ethical problems in the past. In 2007, Purdue Pharma and its top executives paid $634.5 million in fines for deceptive marketing that played down the addictive properties of OxyContin. Also that same year, the company agreed to pay $19.5 million to twenty-six states and the District of Columbia to settle claims that it illegally encouraged doctors to overprescribe the drug. But the company’s influence over anti-drug advocacy is less known.
Erik Altieri, a spokesman for the National Organization for the Reform of Marijuana Laws, argues that marijuana can provide a “great alternative for treating chronic pain and other types of ailments.” Pharmaceutical companies “don’t want to see another vendor on the market.”
In a written response to queries, retired general Arthur Dean, CADCA’s chair and CEO, said: “The funding CADCA receives in no way impacts CADCA’s policy efforts or strategic direction. Prescription drugs are legal medicines that serve a legitimate and often life-saving purpose in our society. CADCA has utilized some discretionary grants from industry sources, such as Purdue Pharma and several other companies, to develop programs and tools to help community coalitions prevent and reduce youth prescription drug abuse and the abuse of over-the-counter cough medicine.” Asked about current proposals in Congress to rein in the way painkillers are prescribed, Dean replied: “CADCA has not taken a position on the proposed legislations.”
The Partnership for Drug-Free Kids did not respond to a request for comment. Neither did Purdue Pharma and other opioid makers, including Abbott Laboratories, Pfizer and Alkermes. A spokesperson with Janssen told The Nation that the company funds CADCA to support “educational programs about the safe and responsible use of pain medicines.”
In May, CADCA sent out an action alert to its members, asking them to contact Congress and oppose an amendment in the House of Representatives that would block the DEA from targeting medical marijuana operations that are legal under state law. The measure passed later that month with bipartisan support.
* * *
Patrick Kennedy’s Project Sam is arguably the most visible group opposing marijuana-law reform, with the former congressman making the rounds on HBO’s Real Time With Bill Maher and Comedy Central’s The Colbert Report, among other cable and news programs. And yet this group, too, is rife with potential conflicts of interest.
Some legalization advocates have criticized Kennedy’s crusade against pot. Though the former congressman received many second chances in his struggle with alcohol and prescription drugs, he has opposed any move toward marijuana decriminalization that would afford similar leniency to others. After Project SAM began organizing opposition to Alaska’s legalization initiative this year, demonstrators in Anchorage paraded a giant check with the figure $9,015—the amount in campaign money that Kennedy received from the liquor and beer lobby while in office. Critics have also pointed out that Project SAM’s board and partners represent many of the interest groups that stand to profit from marijuana’s continued prohibition.
“Some of the folks active with Project SAM appear to have a financial interest in keeping marijuana illegal and promoting mandatory treatment for adult consumers,” says Mason Tvert, spokesman for the Marijuana Policy Project in Colorado. For example, Ben Cort, Project SAM’s spokesman, leads a drug-treatment program in Aurora, Colorado.
Tvert points out that marijuana convictions often result in court-ordered rehab, which can provide an obvious incentive for treatment centers to oppose reform. In filings with the Securities and Exchange Commission, the Geo Group—a company that manages several for-profit treatment and detention centers—states that “any changes with respect to the decriminalization of drugs and controlled substances could affect the number of persons arrested, convicted, sentenced and incarcerated, thereby potentially reducing demand for correctional facilities to house them.” In short, marijuana-law reform can cut into revenues.
Dr. Stuart Gitlow, president of the American Society of Addiction Medicine, sits on Project SAM’s board of directors and frequently speaks out against medical marijuana. In comments to USA Today in January, Gitlow disputed President Obama’s comment that marijuana is no more dangerous than alcohol. “There’s no benefit to marijuana,” he said. “It’s simply that people want the freedom to be stoned. That’s all it is. And there’s a great deal of risk.”
What the USA Today piece didn’t mention—and what Gitlow hasn’t disclosed during his appearances on HLN TV, Southern California Public Radio and other local media—is that he serves as the medical director for Orexo, a pharmaceutical company that recently produced a new drug called Zubsolv. The product is an opioid substitute along the lines of Suboxone that, while designed to treat opioid addiction, is often abused for recreational purposes. As The New York Times reported, Suboxone has been linked to more than 400 deaths in the United States since 2003.
Last December, Dr. Mark Willenbring, former director of treatment and recovery research at the National Institute on Alcohol Abuse and Alcoholism, raised concerns about Gitlow’s leadership of the American Society of Addiction Medicine, given his relationship with Orexo. “My concern is with the increasing public perception, especially in psychiatry and addiction treatment, that financial interests taint and discredit professional opinions,” Willenbring told the Alcoholism & Drug Abuse Weekly.
Peter Bensinger, a former DEA administrator, and Robert DuPont, a former White House drug czar, now manage a consulting firm that specializes in workplace drug testing. The two work closely with Project SAM and have spoken at events with its leaders. Last year, for example, Bensinger and DuPont signed on to a Project SAM letter pressing the Justice Department to reconsider its decision to defer the enforcement of federal drug laws in states that have legalized marijuana. For that stance, they’ve come under fire from marijuana-law reformers like Howard Wooldridge of Citizens Opposing Prohibition for promoting “policies that line their pocketbook.”
* * *
Marijuana-law reform has created deep divisions within police agencies. A recent poll of officers found that nearly two-thirds believed marijuana laws should be reformed—with 36 percent agreeing that marijuana should be legalized, regulated and taxed; 14 percent supporting relaxed penalties; 11 percent supporting legalized medical marijuana; and 4 percent supporting decriminalization.
Yet strong institutional forces have kept nearly every law enforcement professional association opposed to reform. Starting with the Reagan administration, police departments were encouraged to seize and sell property associated with drug busts, which significantly augmented their revenue. Between 2002 and 2012, law enforcement agencies collected about $1 billion from marijuana arrests, according to Justice Department data.
It was also during the 1980s that federal grant programs requiring police to engage in drug enforcement were expanded, including the Edward Byrne Memorial Justice Assistance Program, which funds multijurisdictional drug task forces. The Byrne grants, which cover a range of drug enforcement actions including marijuana, provided over $2.4 billion for law enforcement agencies this fiscal year.
“It’s money,” says retired Los Angeles Police Department Deputy Chief Stephen Downing, when asked why so many police organizations are lobbying against marijuana-law reform. “In many states, the city government expects police to make seizures, and they expect these seizures to supplement their budgets.” According to The Wall Street Journal, drug task forces in Washington State have predicted that asset-forfeiture revenues will decrease as a result of marijuana legalization.
Others dispute the notion. Bob Cooke, a former president of the California Narcotic Officers’ Association, asserts that “losing money from asset forfeiture is not why we believe [pot] should be regulated.” Instead, he argues, law enforcement agencies oppose legalizing marijuana because its use is inherently dangerous: “One try and it can ruin your life.”
But the fiscal impact on law enforcement has become part of the debate. Earlier this year, when Minnesota State Representative Carly Melin proposed a medical marijuana bill, she faced a backlash from police lobbyists. “There was a concern about losing federal grants tied to drug enforcement laws,” Melin says. “Asset forfeiture was briefly discussed as well.” She adds that law enforcement agencies approached her bill with “absolute opposition” but changed their position after widespread public pressure. Melin’s bill passed in May once patients and the parents of sick children began contacting lawmakers.
“It’s not hard to figure out that there’s a lot of money attached to enforcing marijuana laws,” Melin says. “Marijuana arrests still account for over 60 percent of drug arrests in Minnesota, so it’s still big business for law enforcement.” Minnesota’s numbers reflect the data compiled by the American Civil Liberties Union, which show that marijuana arrests account for more than half of all drug arrests nationwide.
Similar dynamics have played out elsewhere. When Californians debated a legalization initiative in 2010—which was ultimately unsuccessful—the lead organizer of the opposition was John Lovell, a longtime police lobbyist in Sacramento. Lovell has made a career of channeling federal “drug war” grants to law enforcement agencies in the state—including millions of dollars for the California Marijuana Suppression Program, grants for overtime pay for police, and money for additional officers dedicated to marijuana eradication.
In Florida, the state sheriffs’ association, led by Polk County Sheriff Grady Judd, has become the public face of opposition to a medical marijuana referendum on the ballot this fall. Judd has deployed a number of arguments against the referendum, from the dangers of driving while high to increased workers’ compensation claims, to teenage addiction and increased respiratory illnesses.
But the annual strategic plan submitted to the Polk County Board of Commissioners by Judd’s office suggests another major concern. In it, Judd says that his force is “doing more with fewer resources” and that he’s had to cut seventeen deputy sheriff positions due to a lack of funds. Judd describes seizures from marijuana grow houses as a key revenue source for his department: seizing such property helps to “meet eligible equipment or other non-recurring needs that could not be met by local funding, thereby putting forfeited and unclaimed funds to work in crime prevention, for the taxpayer,” according to the document. Plus a Florida law enforcement newsletter describes the state’s marijuana eradication program—which brought in nearly $900,000 last year in forfeitures, and more than $1 million in previous years—as “an excellent return on investment.”
Downing, the retired LAPD deputy chief, notes: “The only difference now compared to the times of alcohol prohibition is that, in the times of alcohol prohibition, law enforcement—the police and judges—got their money in brown paper bags. Today, they get their money through legitimate, systematic programs run by the federal government. That’s why they’re using their lobbying organizations to fight every reform.”
Indeed, alcohol prohibition was ended partly through ethics reform. During Prohibition, the Eighteenth Amendment was enforced through a law called the Volstead Act, which exempted federal liquor enforcement agents from Progressive-era civil service exams. Without these exams, the Prohibition Unit became a vehicle for awarding patronage jobs to political allies. Almost immediately, these 18,000 federal jobs were marked by scandal and corruption. According to one Treasury agent, the “most extraordinary collection of political hacks, hangers-on, and passing highwaymen got appointed as prohibition agents.” They set up illegal roadblocks, killed innocent civilians, and extorted money from bootleggers rather than arresting them. The wet lobby successfully pushed to re-establish civil service exams for the Prohibition Unit in the late 1920s—a shift that embarrassed dry-lobby supporters, because nearly two-thirds of all agents couldn’t pass the entrance exam. Further weakening support for Prohibition, the Supreme Court declared it illegal in 1927 for local judges to pay themselves with a share of the fines collected from Volstead Act cases.
While not a perfect analogy, some marijuana advocates see the fight against Prohibition as a guide, since so many interest groups working to maintain the status quo today are tied to cash flows—whether federal grants or forfeiture revenues—that depend on keeping the drug illegal.
Prohibition provides “an incentive for these interest groups to keep seeking federal money to continue the ‘war on drugs’ [and] their own salaries,” says Representative Steve Cohen, one of the most outspoken proponents of legalization in Congress. Cohen adds that some of the most vociferous opponents of reform appear to be influenced by the money flowing from pot prohibition. “It’s a vicious cycle.”
losses’
A line wrapped around Fire & Flower, a retail cannabis chain in Edmonton and one of six stores that opened in the municipality on the first day of legal recreational sales in 2018. (Photo by Kelsey McMillan)
Fire & Flower Holdings and its cannabis subsidiaries have received an initial order for creditor protection from a Canadian court after raking up significant net losses of more than 200 million Canadian dollars ($150 million) since 2018.
The Toronto-based company said it was granted the order by the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act, allowing it to maintain the status quo and consult with stakeholders with a view to continuing operations.
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WHY CANNABIS CONSUMERS ARE SKINNY
Avatar photoCALEB MCMILLAN·JUNE 8, 2023
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Why are cannabis consumers skinny? Of course, not every connoisseur is slim. Cannabis stimulates appetite, so we tend to consume more calories than the average person.
But in general, cannabis connoisseurs are thinner than, say, recreational alcohol drinkers sporting a beer gut.
Researchers at the University of California, Irvine, think they’ve discovered why. But, they warn, this “pseudo-health” benefit comes at a price.
Is this true? Or is reefer madness sneaking its way into a scientific research paper?
What’s the skinny on perpetually thin cannabis consumers?
DETAILS OF THE STUDY
The “why cannabis consumers are skinny” study is titled, “Adolescent exposure to low-dose THC disrupts energy balance and adipose organ homeostasis in adulthood.”
The researchers gave adolescent mice low doses of THC and compared them to the control group. They found the THC mice were leaner, but they described this state as “pseudo-lean.”
They claim the mice treated with THC suffer from “Molecular and functional adipose abnormalities.”
Adipose tissue is fat tissue. It’s responsible for storing energy in the form of fat. It plays a significant role in regulating metabolism and hormone production.
“Molecular abnormalities” imply deviations from normal genetic processes within the fat tissue. “Functional abnormalities” refers to physiological change, including how fat tissue stores and releases energy or changes in hormone secretion.
Now, this doesn’t sound good. Fat tissue dysfunction is associated with obesity, insulin resistance, and metabolic syndrome. But that’s not what the researchers found when giving adolescent mice low THC doses.
As per the study,
We found that daily low-dose administration of cannabis’ intoxicating constituent, ?9-tetrahydrocannabinol (THC), to adolescent male mice causes an adult metabolic phenotype characterized by reduced fat mass, increased lean mass and utilization of fat as fuel.
Where’s the bad news?
WHY CANNABIS CONSUMERS ARE SKINNY
Why Cannabis Consumers Are Skinny
Let’s break down further why cannabis consumers are skinny. What exactly did the researchers find in THC-treated mice? Is this “pseudo-lean” state just reefer madness masquerading as science?
The researchers found THC-treated mice had less body fat and more muscle mass and changed how their bodies burned fat for energy. But they also found the mice exhibited partial resistance to obesity or abnormal blood lipid levels.
This suggests THC “exposure” during adolescence actually has a protective effect against these conditions.
The THC-treated mice also produced more heat (enhanced thermogenesis), likely associated with their increased lean mass. Additionally, researchers found THC-treated mice had increased production of proteins typically associated with muscle tissue.
THC-treated mice did have impaired lipolysis, which is the breakdown of fat stored in adipose (fat) tissue. This was significant in exposure to cold and with stimulating ß-adrenergic receptors.
This suggests the body isn’t releasing fatty acids in response to the cold. This may also explain why stoners have lower-than-average body temperatures.
Overall, answering why cannabis consumers are skinny requires more than one study on mice. The terms used in the study, “overexpression” and “dysfunction,” also imply a bias.
Why not use the term “increased production” instead of “overexpression.” And how can they use the word “dysfunction” if the study did not establish causality between the observed metabolic phenotype and the changes in the adipose (fat) tissue?
The term “pseudo-lean” is a value statement. If the researchers were testing a weight-loss drug, they likely concluded that it works, albeit with side effects.
So why the reefer madness?
THC AS A WEIGHT-LOSS DRUG
Why Cannabis Consumers Are Skinny
If you’re obese, then smoking cannabis isn’t going to make you skinny. If anything, the munchies may contribute to your condition.
These researchers found that low-THC exposure in adolescent mice reduces fat mass and increases lean mass. These are considered “functional abnormalities in the adipose tissue.”
And thus, this “pseudo-lean” state may not be healthy or optimal. It may be rooted in dysfunction within the adipose tissue. But what’s true for mice isn’t always true for humans.
The researchers use the term “pseudo-state” because they don’t know the long-term implications for metabolic health.
Fortunately, people have been consuming cannabis for thousands of years. And this study used low doses of THC, so critics can’t come back with “today’s potent weed is different from previous generations!”
If there were long-term metabolic health problems from skinny cannabis consumers, then we likely would have noticed it by now.
We didn’t need a study to confirm that long-term alcohol users end up with fatty liver disease. The ancient Greeks thought the condition came from excess phlegm and an imbalance of “humors.” It wasn’t until 1836 that researchers figured out what was happening.
This brings up an important bias in this “Why Cannabis Consumers are Skinny” study.
WHY CANNABIS CONSUMERS ARE SKINNY
Why Cannabis Consumers Are Skinny?
Putting aside the fact that what’s true for mice isn’t necessarily true for humans (and this study didn’t prove any causality), the results are still fascinating.
For example, THC-treated mice had lower fasting plasma insulin, leptin, triglycerides, cholesterol, and serum glucose levels than the control group.
Lower fasting plasma insulin levels suggest that the THC-mice had improved insulin sensitivity. Which means they need less insulin to maintain normal blood sugar levels.
Leptin (a hormone secreted by fat cells) plays a role in regulating appetite and energy balance. The study suggests that low doses of THC in your teen years alter leptin. Likewise, lower levels of triglycerides indicate reduced fat accumulation or altered lipid metabolism.
Researchers associate elevated cholesterol levels with cardiovascular risk. The THC-treated mice had lower cholesterol levels, positively impacting lipid metabolism and cardiovascular health.
The glucose (sugar) concentration in the bloodstream indicates lower blood sugar levels. However, the researchers found no difference in how the body processes glucose between the THC mice and the control group.
DOES THIS STUDY ANSWER WHY CANNABIS CONSUMERS ARE SKINNY?
So does this study answer why cannabis consumers are skinny? Not quite. It sheds some light on the processes, but only through the study of mice.
The scientific conclusions and media headlines may have differed if this had been a weight-loss drug trial. But, as this is cannabis, all benefits are considered “pseudo,” so the researchers caution about long-term unknowns.
And indeed, an obese teenager should clean up their diet and begin exercising before smoking weed for weight loss.
That said, the “pseudo” status attached to cannabis’ tendency to produce skinny consumers is unjustified. For this study, at least.
FOOTNOTE(S)
https://www.sciencedirect.com/science/article/pii/S1550413123001791
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