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Refer madness is running high...lol
The BC government has introduced new legislation intended to help them get a handle on online illicit cannabis sales in the province.
Bill 30, the Cannabis Control and Licensing Amendment Act, 2022, tabled on October 4 and read a second time on October 5, will head to committee next for more in-depth debate.
The government says the changes to legislation are needed to address a shift from illicit brick-and-mortar stores to online stores, but some opposition members say there is still more work to be done to address the many illegal, unlicensed brick-and-mortar stores that continue to proliferate, especially in BC’s Interior.
The legislation, introduced by BC Minister of Public Safety and Solicitor General Mike Farnworth, who has been the BC government’s lead on the cannabis file, says one of the purposes of the legislation is to amend the existing provincial cannabis regulations in order to give more enforcement power to the BC Community Safety Unit (CSU) against illicit online cannabis operators.
The CSU is the main provincial enforcement unit for illicit cannabis sales in BC. Under the Policing and Security Branch of the Ministry of Public Safety and Solicitor General, it is responsible for compliance and enforcement under the provincial Cannabis Control and Licensing Act (CCLA), with a focus on the illegal sale of cannabis. CSU investigators are authorized to carry out compliance and enforcement activities against unlicensed cannabis retailers and other illegal sellers across the province.
Although the CSU was initially created to deal with the large number of illicit brick-and-mortar cannabis stores in the province, the government says they are now seeing illicit operators shift into the online market.
“These amendments will improve CSU’s ability to target illicit online stores and production sites by clarifying and, in some places, expanding CSU inspection and seizure authorities. They will also improve CSU’s ability to track online illicit cannabis back to its source by authorizing the director of the CSU, the community safety unit, to be able to purchase illicit cannabis that is online.”
BC MINISTER OF PUBLIC SAFETY AND SOLICITOR GENERAL MIKE FARNWORTH
In tabling the legislation, Minister Farnworth says that these amendments “will improve CSU’s ability to target illicit online stores and production sites by clarifying and, in some places, expanding CSU inspection and seizure authorities. They will also improve CSU’s ability to track online illicit cannabis back to its source by authorizing the director of the CSU, the community safety unit, to be able to purchase illicit cannabis that is online.”
The legislation also includes language that seeks to “clarify” the role of the CSU director around administrative hearings, noting that the director is “not the appropriate decision-maker to consider constitutional arguments, which is the proper role of the courts.”
Mike Morris, the BC MLA for Prince George/Mackenzie, and the official opposition critic for Public Safety and Solicitor General, says he’s happy to see the proposed amendments give the CSU better enforcement tools. He also notes that while the CSU has had success in addressing many illicit brick-and-mortar stores, many in his own community continue to operate very openly.
Morris also questions the need to add a clause about constitutional arguments, arguing that mechanisms to deal with such questions already exist—through the court system.
This is likely in reference to past statements by Farnworth—also questioned by Morris—when the former stated in the House in 2020 that his government has been hesitant to enforce BC’s cannabis rules and regulations on First Nations land out of fear of a court challenge.
“If there’s a constitutional question that arises, there’s already legislation in place that allows government to go to court and get an opinion on whatever that question might be that arises,” Morris said in the House on October 5. “Or they can proceed by way of court proceedings, criminally instead of administratively, through there, and have the situation aired in court. So I’m a little curious as to why this particular section was put in here.”
Although some businesses operating within First Nations communities argue they are not beholden to provincial law, the BC government has disagreed, arguing that BC’s cannabis regulations are a law of general application and are enforceable on First Nations reserves.
“The CSU is working to build positive relationships with Indigenous governments, understanding where they have different perspectives, and, where possible, collaborating to find solutions. These efforts are having results, as positive relationships with some First Nations governments have helped obtain compliance from unlicensed retailers that were operating on First Nations reserve land.”
JENNIFER RICE, MLA FOR NORTH COAST
Despite this, such stores have proliferated, especially in BC’s interior.
Morris says the government has a duty to respect the concerns of legal store owners who are forced to compete with an illicit, unregulated market.
“It must be a devastating blow to them—to see the number of illegal retail cannabis sales outlets proliferated through different parts of the country, of the province, in some of our more vulnerable communities—within metres of a legitimate retail outlet that has gone through the rigours necessary in order to be licensed, and the money that they must be losing in order to compete with the illegal sales that we have,” continued Morris in the House. “This government seems to be doing nothing about it.”
“A lot of these communities that do have these illegal retail outlets are extremely vulnerable to the impacts of organized crime infiltrating these communities—I’ve seen it in my service as a police officer, and we’ve seen it happen in other provinces across Canada—to the point where organized crime will have such an impact on those communities that the quality of life goes down in those communities, and the safety of the individuals in those communities is impacted by having organized crime in such close proximity to the men and women that live in those communities.”
Henry Yoa, the MLA for Richmond South Centre, told the House that the legislation represents the provincial government acknowledging a need to “Step up” enforcement against the online illicit cannabis market.
“If we don’t step up with our important strategy, illegal cannabis will find a way to slip through our system, not just selling at an undercut profit, undermining all required rigorous demands upon a typical small and medium-sized business in BC, but also placing our youth and children in vulnerable circumstances, when they are able to be able to sell items to people that shouldn’t have access to it.”
As of September 28, the CSU has made 308 visits to unlicensed retailers for educational purposes (informing store owners of the law) with 84 unlicensed retailers facing follow-up enforcement action when they chose to continue to operate.
The CSU has seized approximately $31 million worth of cannabis from the illicit market, with 180 unlicensed retailers either closing or completely ceasing illicit cannabis sales.
There have been 58 notices of administrative monetary penalty issued with proposed penalties totalling approximately $39.9 million, with approximately $1.4 million of these penalties having already been collected.
Greg Kyllo, a BC Liberal MLA representing the Shuswap, which he says has over 24 unlicensed retail cannabis sales shops, notes that much, if not all, of their supply, comes from organized crime.
“They’re buying their product from organized crime. We’re seeing organized crime embedding themselves in the communities around the province—a proliferation throughout the Shuswap—where organized crime is now embedding themselves in these communities and actually selling illicit product to these unlicensed stores.”
“That’s a significant number of stores that are set up that are unlicensed,” continues Kyllo. “They have no insurance, no security cameras, many of them. Nobody is monitoring. The Community Safety Unit is not paying any attention. I drive by these stores, and I see young kids well under the age of 19 standing outside smoking marijuana, and nobody is paying attention.”
“You approach the RCMP, and they point to the provincial government. The provincial government are the ones that have the responsibility through the Community Safety Unit. When you call the Community Safety Unit: crickets—absolute crickets. You call them and ask them to actually investigate. Nothing happens.”
GREG KYLLO, MLA FOR SHUSWAP
Kyllo also says that when questioned about these illegal stores, the police and government tend to point fingers at each other.
“You approach the RCMP, and they point to the provincial government. The provincial government are the ones that have the responsibility through the Community Safety Unit. When you call the Community Safety Unit: crickets—absolute crickets. You call them and ask them to actually investigate. Nothing happens.
“The worst part is that the government, the Solicitor General, last year came out with a report that indicated that a lot of the illicit cannabis product that they actually have confiscated and they have found is contaminated. There are carcinogens in it. Many producers put a product into the soil which actually adds weight to the product, and it’s carcinogenic. Fair enough.
“The Solicitor General today references that maybe Health Canada should do something about it. Well, I don’t think it’s Health Canada’s responsibility to actually investigate and sample illegal, illicit product that’s being sold across B.C. This government is doing nothing.”
During the same debate, Aman Singh, the NDP MLA for Richmond-Queensborough, said that as of August of this year, BC had 212 federally licensed cannabis producers, 74 of which are micro-producers, along with 34 public BC Cannabis Stores and 441 licences issued for private cannabis retail stores.
Singh argues that the CSU’s enforcement actions have been successful in disrupting and shutting down online illicit cannabis sales. Singh also told the House that as of September 28, the CSU has made 308 visits to unlicensed retailers for educational purposes (informing store owners of the law), with 84 unlicensed retailers facing follow-up enforcement action when they chose to continue to operate.
Singh also said the CSU has seized approximately $31 million worth of cannabis from the illicit market, with 180 unlicensed retailers either closing or completely ceasing illicit cannabis sales.
Fifty-eight notices of administrative monetary penalty have also been issued with proposed penalties totalling approximately $39.9 million, with approximately $1.4 million of these penalties having already been collected.
More on that enforcement is available here.
In addition, Singh said that over 1,000 illicit cannabis websites have been investigated, and 635 of these were “successfully disrupted” by the CSU and closed.
Jennifer Rice, the NDP MLA for the North Coast, told the House that CSU “continues to maintain dialogue with First Nations communities and governments to address unlicensed retailers operating on Indigenous land”.
“The CSU is working to build positive relationships with Indigenous governments, understanding where they have different perspectives, and, where possible, collaborating to find solutions. These efforts are having results, as positive relationships with some First Nations governments have helped obtain compliance from unlicensed retailers that were operating on First Nations reserve land.”
She says the CSU has also received cooperation and support from several First Nation communities to carry out inspections and seizures of cannabis from unlicensed retail and production facilities that were operating on reserve.
The Bill will now move to a Committee of the Whole, to be considered at the next sitting of the House, which is scheduled for Monday, October 17.
The House debating the bill at second reading can be viewed here, beginning at 14:47:15
Featured image via sookenewsmirror.com/tim-collins/
British Columbia
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Home / Cultivation
Fewer than 10% of Canadian cannabis licensees exited market, government report shows
author profile pictureBy Matt Lamers, International Editor
October 12, 2022 - Updated October 12, 2022
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Image of Canadian cannabis packaging
Just under 10% of federal cannabis license holders in Canada have exited the market since legalization in October 2018, according to new government data.
The data suggests that industry predictions of a “rationalization,” or thinning out, among cannabis producers has not materialized, as new entrants far outpaced those exiting the hypercompetitive industry.
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The data was released as part of the government’s public “engagement paper” for the mandated Cannabis Act review, which was initiated in September after an unexplained one-year delay.
The paper also asks a series of questions pertinent to the industry to collect feedback, which the government says will inform the legislative review of the law.
According to the data, roughly 95 cannabis license holders left the industry, representing 9.7% of licenses issued during that period.
Of those who exited the industry:
15 were micro license holders, a class of license limited to 200 square meters of growing canopy.
13 were sale-for-medical-purposes only.
67 were standard license holders, which face no canopy limits.
There are currently 920 active federal cannabis licenses.
The paper doesn’t say why the licensees left the market beyond “ongoing market corrections.”
But industry experts previously told MJBizDaily that cannabis businesses suffer from overtaxation across the supply chain from almost every level of government.
“In response to downward pressure on wholesale prices, license holders are seeking new investors and are restructuring in order to help them compete in an increasingly competitive market,” the paper says.
“Some license holders are exiting the industry altogether or are reducing the number of sites they operate.”
An MJBizDaily analysis found that the most profitable Canadian cannabis businesses are government-owned.
By contrast, private-sector profits have been few and far between.
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Bigger producers, bigger problems?
The paper presented a rare government snapshot of Canada’s cannabis overproduction.
MJBizDaily reported that Canadian cultivators produced a record 561,459 kilograms – or about 618 tons – of dried cannabis last fall, bringing the total amount stored by licensed producers, wholesalers and retailers to 1.4 billion grams.
Producers also have destroyed roughly 900 million grams of cannabis since 2018.
Until now, data wasn’t available to answer exactly which companies were producing all that cannabis.
According to the paper, only 10 standard license holders accounted for 43% of all dried cannabis production in Canada between October 2019 and December 2021.
Another 56% came from 307 standard license holders.
About 178 micro licensees accounted for less than 1% of all cannabis production in the country.
Recreational cannabis sales reported to Health Canada show a similar trend.
Only 10 companies accounted for 66% of all legal sales, while another 200 accounted for one-third of all sales between October 2019 and December 2021.
Micro license holders accounted for 0.3% for all sales in the period.
Legal-market gains
Canada’s legal market is generally displacing the illicit market, the paper suggests, citing Statistics Canada data.
According to the data, by the fourth quarter of last year, legal sales were twice the size of the illegal market.
Combined medical and non-medical cannabis sales in legal channels reached 1.3 billion Canadian dollars ($950 million) in the fourth quarter of 2021.
“The primary focus of the government’s approach to combating the illegal market is to provide consumers with the ability to purchase cannabis from legal, regulated sources, it was understood that there would continue to be activity outside of the legal framework,” the paper notes.
“The Cannabis Act provides law enforcement with the authority to take action against illegal cannabis activity.”
In other words, it was never expected that the illicit market would disappear quickly after legalization.
Just how much of the illicit market remains?
Statistics Canada survey "guestimates" that consumption from illicit sources totaled CA$2.8 billion in 2021.
Canadian cities have experienced a sharp reduction of unlicensed cannabis stores, which had been prolific in some municipalities before prohibition was brought to an end in 2018.
However, illicit sellers are prolific online.
“Policing online activity is complicated – a website can be created in one country, hosted in another, on a domain name registered in yet a third, while selling a product in multiple jurisdictions,” according to the paper.
“Additionally, websites can be set up with ease, and can replace those that have been seized or shut down by law enforcement.”
The paper notes that “illegal websites are particularly concerning from a public health perspective as they provide an easy pathway for youth to access cannabis.”
Other observations from the paper:
Smoking remained by far the most common consumption method.
Approximately 3,200 cannabis retail stores opened across Canada.
The average price per gram of legal recreational cannabis had fallen to CA$5.66 as of December 2021.
Only six cannabis licenses have been suspended, while three were revoked.
As of December 2021, just under 300,000 patients were registered to access medical cannabis.
Micro license holders account for 38% of all federal licensees. The number grew from 20 at the start of 2020 to 340 as of July 31, 2022.
https://www.canada.ca/en/health-canada/programs/engaging-cannabis-legalization-regulation-canada-taking-stock-progress/document.html
Losing 66 millions per Q…
they can hold another 21 months before bitting the dust.
Happy, load up before prices come crashing down on you!!!
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Matt Lamers ??
@matt_lamers
???? is sitting on 1.4 billion grams of mostly unsellable cannabis.
Another ~1 billion grams was already destroyed.
The 10 biggest producers (all pubcos?) account for 43% of production, and almost all of the $16 billion losses
This is a capital markets trainwreck.
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@MJBizDaily
11:34 AM · Oct 11, 2022
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Matt Lamers ??
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·
2h
???? is sitting on 1.4 billion grams of mostly unsellable cannabis.
Another ~1 billion grams was already destroyed.
The 10 biggest producers (all pubcos?) account for 43% of production, and almost all of the $16 billion losses
This is a capital markets trainwreck.
cc
@MJBizDaily
Matt Lamers ??
@matt_lamers
But this is the biggest impact from the chaos wrought by cannabis pubcos:
They're selling cannabis at a substantial loss to themselves, forcing competitors large and small to match the their lower prices.
Capital markets are bankrolling LPs who sell products at a huge loss.
11:41 AM · Oct 11, 2022
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It's not just an unfair excise tax regime that small or privately owned cannabis producers are up against.
They're also competing vs. irrational capital markets, who made it almost impossible to turn a profit in this industry by bankrolling unnecessary production.
11:46 AM · Oct 11, 2022
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Matt Lamers ??
@matt_lamers
Who else is bankrolling the biggest cannabis producers?
The Canadian federal government.
Canada dumped around $300 million in fee pandemic-era grants to the biggest cannabis producers, amid a MASSIVE production glut, thousands of job cuts, and mass product destruction.
11:54 AM · Oct 11, 2022
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Matt Lamers ??
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???? has a small number of heavily government-subsidized cannabis producers who lost billions of dollars, cut thousands of jobs, unfairly undercut their competitors, compensate executives hundreds of millions of dollars (in total for all of them) ...
12:04 PM · Oct 11, 2022
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Matt Lamers ??
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·
2h
But this is the biggest impact from the chaos wrought by cannabis pubcos:
They're selling cannabis at a substantial loss to themselves, forcing competitors large and small to match the their lower prices.
Capital markets are bankrolling LPs who sell products at a huge loss.
Matt Lamers ??
@matt_lamers
·
2h
It's not just an unfair excise tax regime that small or privately owned cannabis producers are up against.
They're also competing vs. irrational capital markets, who made it almost impossible to turn a profit in this industry by bankrolling unnecessary production.
Matt Lamers ??
@matt_lamers
·
2h
Who else is bankrolling the biggest cannabis producers?
The Canadian federal government.
Canada dumped around $300 million in fee pandemic-era grants to the biggest cannabis producers, amid a MASSIVE production glut, thousands of job cuts, and mass product destruction.
Matt Lamers ??
@matt_lamers
·
2h
???? has a small number of heavily government-subsidized cannabis producers who lost billions of dollars, cut thousands of jobs, unfairly undercut their competitors, compensate executives hundreds of millions of dollars (in total for all of them) ...
Matt Lamers ??
@matt_lamers
These are just some of the things smaller or privately owned cannabis producers are up against. Also some responsible publicly traded ones.
This is also why I have no time for the "too many stores" theory, which seems to be the topic of 90% of mainstream news reports.
Matt Lamers ??
@matt_lamers
Amid all this, Canada's securities regulators, most notably the Ontario Securities Commission, has been conspicuously quiet.
It's bizarre and worthy of further scrutiny, which I will be doing.
12:28 PM · Oct 11, 2022
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Home / Canada
Canadian marijuana industry employment tumbled as producers drew federal COVID-19 cash, analysis shows
author profile pictureBy Matt Lamers, International Editor
November 17, 2021 - Updated December 17, 2021
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A breakdown of the Canadian cannabis job gains and losses
(This is the first in a series examining employment and pandemic-related wage subsidies in Canada’s cannabis industry.)
Thousands of Canadian marijuana industry workers have lost or left their jobs since early 2020, even as their employers received more than 140 million Canadian dollars ($112 million) in federal subsidies to retain or rehire employees amid the pandemic, an MJBizDaily analysis has found.
That raises questions about both the cost-effectiveness of the wage-subsidy program and whether most of the funding went to businesses in need of serious restructuring even before the pandemic hit – instead of businesses struggling to cope with the pandemic’s fallout.
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The job losses also have come at a time when annual executive compensation at certain cannabis companies jumped, in some cases to levels exceeding annual revenue.
These findings and questions emerged after MJBizDaily examined the regulatory filings for 50 of the largest Canadian cannabis businesses by market capitalization.
The analysis looked at the number of people the companies employed before the pandemic versus the number detailed in the most recent regulatory disclosures – or, in some cases, after the pandemic started but before significant mergers and acquisitions occurred that might have resulted in job losses.
All told, roughly 6,000 people lost or left their jobs at licensed cannabis producers since the end of 2019, representing 30% of some 20,000 positions tracked by MJBizDaily.
Cannabis industry veteran Jeannette VanderMarel – who co-founded licensed producer The Green Organic Dutchman (TGOD) – called the job losses “catastrophic.”
Four companies accounted for almost three-quarters of the lost jobs:
Canopy Growth.
Aurora Cannabis.
Sundial Growers.
Tilray, before it merged with Ontario-based Aphria in May.
Of the 50 businesses MJBizDaily analyzed, 25 either gained employees or experienced no net loss in staff.
Most of the layoffs MJBizDaily tracked occurred in 2020, and the data accounts for only some of the cannabis industry job losses this year, because most companies have not yet disclosed their 2021 employment levels.
At the same time, the data shows companies that recorded a net loss in the number of workers received the vast majority of the CA$180 million in grants from the federal government – or about CA$141 million in total.
The grants, mostly from the Canada Emergency Wage Subsidy (CEWS), covered some of the wages for employers whose businesses were affected by the pandemic so they could retain or rehire workers and prevent further job losses.
Approximate wage subsidy and job gains and losses
A list of companies collecting wage subsidies in Canadian dollars along with their job gains and losses. Source: Revenue Canada, Regulatory filings, MJBizDaily research
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10
entriesSearch:
Company Type Wage subsidy applied for or received Pre-pandemic workforce ... as of Current workforce ... as of Workforce net difference
Aurora Cannabis Licensed producer $50,600,000 3,000 Sept. 2019 1,643 9/27/2021 -1,357
Canopy Growth Licensed producer $50,000,000 4,434 3/31/2020 3,259 3/31/2021 -1,175
Sundial Licensed producer $6,100,000 1,064 12/31/2019 394 12/31/2020 -670
Tilray (pre-merger) Licensed producer $5,089,653 1,646 12/31/2019 1,030 12/31/2020 -616
Hexo Licensed producer $0 1,260 7/31/2019 798 7/31/2020 -462
Supreme Cannabis Licensed producer $0 750 9/17/2019 400 9/24/2020 -350
Tilray Nanaimo Licensed producer N/A 300 9/16/2021 0 Projected -200
Organigram Licensed producer $12,152,000 770 8/31/2019 552 11/20/2020 -218
Zenabis Licensed producer $4,924,973 740 12/31/2019 564 12/31/2020 -176
Hexo's (2021 acquisitions) Licensed producer N/A 155 11/9/2021 0 Projected -155
Showing 1 to 10 of 52 entriesPreviousNext
Human toll
The pandemic struck the cannabis industry at a particularly sensitive time.
After spending billions to expand via mergers and acquisitions, the largest LPs collectively lost more than CA$5 billion.
The companies took steps to stem the losses, which ultimately included destroying more cannabis than they were able to sell.
In essence, the largest companies poured billions of dollars into cultivation facilities, with the financial backing of Bay Street and Wall Street, even after MJBizDaily reported in January 2018 that those businesses had already bankrolled more than enough capacity to meet demand.
The gamble apparently backfired and ended up putting the largest companies at a competitive disadvantage, as they soon became too slow to react to the fast-evolving sector.
In the ensuing months, many facilities were closed and sold for pennies on the dollar.
“There is a human toll, and I think that’s clearly been missed,” said VanderMarel, who also helped launch Good & Green in 2018 before it was acquired in 2019 by 48North, where she served as co-CEO.
VanderMarel said that a focus on stock price over customers and quality control contributed to many problems for the large producers.
She suggested that having thousands of employees made some companies look good, “even if it wasn’t really reflective of what the company was doing or what it needed.”
“But showing job growth showed corporate growth, which was the goal to maintain or raise the stock valuation in order to get more investor money.”
Who hired, who fired
A majority of the cannabis businesses analyzed experienced a net gain in employment during the pandemic, as they hired to keep up with demand in an industry that has seen month after month of record national sales.
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That’s consistent with previous MJBizDaily reporting that found smaller, more nimble producers have been taking significant market share from larger rivals throughout 2020 and 2021.
The four companies that experienced the biggest net gain in employment since the end of 2019 were:
Alberta-based retailer High Tide, which added 342 employees.
British Columbia’s Pure Sunfarms, which gained 266 workers.
Aphria, which added approximately 150 employees before its merger with Tilray.
The Valens Co., which grew its workforce by 145.
In all, the roughly two dozen businesses that added to their workforces employed 1,697 more people as of their latest employment disclosures, compared with the respective disclosures they made before the pandemic started.
Twenty experienced a net loss in the number of people they employed. Data was not available for two: Choom Holdings and TerrAscend Corp.
According to the regulatory filings, the four companies with the biggest disclosed net job losses after the pandemic started versus before it began were:
Canopy, which employed 1,175 fewer people as of March 2021, 27% lower than one year earlier.
Aurora, which employed 1,357 fewer people as of September 2021, 45% less than September 2019. (Aurora discloses its workforce data every September.)
Sundial, which employed 670 fewer staffers at the end of 2020 versus one year earlier.
The premerger Tilray, which employed 616 fewer people versus one year earlier.
Tilray did not immediately respond to a request for comment.
An Aurora spokesperson acknowledged the company received CEWS funding amounting to approximately CA$50 million.
“Like other Canadian businesses, we have applied the funds to support the continued employment of Canadians through our business operations in Canada,” the spokesperson said.
A spokesperson for Canopy said via email that CEWS funds allowed the company to partially offset losses compounded by the COVID-19 pandemic and that the company “has strategically hired approximately 1,000 new team members who are critical to the long-term growth of the business.
“We thank the Federal Government for recognizing the value of the cannabis industry as a source of innovation, economic growth, and job creation for Canadians,” the spokesperson wrote.
Scale before sale
Some large, licensed producers shrank their workforces almost as fast as they built them.
Aurora, for instance, had just under 1,000 employees in 2018. That number ballooned to 3,000 employees the following year before falling to 2,380 and 1,600 in 2020 and 2021, respectively.
“Many cannabis companies can benefit from large cuts – and they truly need them,” said Mitchell Osak, president of Toronto-based Quanta Consulting.
The companies that expanded the quickest had to take aggressive rightsizing measures, which at least partly precipitated their respective market-share declines over the past two years.
No one company currently controls more than 14% of the Canadian market outside Quebec, according to BMO Capital Markets.
“Widespread and rapid layoffs really hurt the morale and engagement of the people remaining,” Osak said.
“This will result in lower productivity and create resource gaps and could increase future turnover/complicate growth as the remaining employees disengage and ‘look to jump from the sinking ship.’
“Fundamentally, it’s hard to shrink and grow at the same time.”
Businesses that avoided staff cuts fared much better.
The CEO of Motif Labs, Mario Naric, told MJBizDaily the Ontario-based company has been methodical in its expansion.
“Our methodology to date has really been sales before scale,” he said.
“We designed our licensed (processing) site to be able to scale into a big business, but we started with modest amounts of equipment and people until we can prove out the model.”
Naric suggested that some businesses are resorting to mass layoffs because of a lack of focus or “a shotgun approach of getting into every single category under the sun.”
“Focus permeates through everything we do, from the processes we pursue to the people we employ and how we choose to strategically scale our business,” he said.
“We don’t take any decision lightly, which is why we’ve employed the people we need, right when we needed them, and we’ve kept them through all of COVID and the industrywide layoffs.”
CEO pay skyrockets
Cash compensation paid to executives at large producers has climbed since the start of the pandemic, including at companies that experienced the largest drops in their workforces, MJBizDaily research found.
For example, Canopy Growth awarded executives retroactive raises in 2020 that, in some cases, were between 30% and 100%, according to regulatory filings.
Also in 2020, Aurora executives pulled in cash bonuses worth nearly CA$700,000.
Tilray awarded CEO Irwin Simon a retroactive raise this year, increasing his annual salary by 30% to CA$2.1 million, according to the latest proxy. That’s the highest salary in the cannabis industry.
Simon’s cash bonuses so far this calendar year total CA$16.7 million.
The biggest compensation packages in 2020 went to:
Neptune Wellness Solutions CEO Mike Cammarata, who earned CA$58.7 million. (Cannabis is one of Neptune’s four verticals.)
Canopy CEO David Klein, whose compensation package was CA$42 million from January-March 2020 before falling to CA$3.5 million over the next 12 months.
Aphria CEO Simon, who had total compensation of CA$18.6 million.
In the cases of Neptune and Canopy, a significant portion of the pay was in the form of stock, options and restricted shares, which will only be paid out if the respective businesses see significant reversals in their share prices.
In a statement, a Neptune spokesperson said the business “was grateful to receive this funding which was a vital asset to allow us to continue operations, especially during our transition from a B2B extractor to a diversified CPG company.
“While we do have a cannabis vertical in Canada not all of our businesses fall under that category.”
Regulatory filings show that Tilray’s median worker salary, which does not include the CEO, was CA$18,589 from January to May 2021.
Canopy’s median worker earned CA$58,261 last year.
Not all cannabis CEOs saw a windfall, or a potential windfall, during the pandemic.
Norton Singhavon, CEO of British Columbia-based Avant Brands, deferred his salary.
“I do not believe any of the companies with significant compensation packages have demonstrated the performance required to justify it,” he told MJBizDaily.
“We have cannabis CEOs who have been compensated the equivalent of JPMorgan’s CEO. I think this is something that leaders, board members, compensation committees and executives need to address moving forward, or investors will view the cannabis sector as one that is rifled with self-enrichment.”
Matt Lamers can be reached at matt.lamers@mjbizdaily.com.
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Matt Lamers ??
@matt_lamers
Hexo trumpeted “a significant positive total cumulative return” for its shareholders between 2017 and last July – even though the stock tumbled during that time and was at risk of being kicked off the Nasdaq.
mjbizdaily.com
Marijuana producer Hexo touts 'significant' shareholder return despite tumbling stock price
Cannabis producer Hexo Corp. is trumpeting “a significant positive total cumulative return” for its shareholders despite falling stock prices.
12:38 PM · Oct 11, 2022
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Matt Lamers ??
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Since 2018, almost 900 million grams of unpackaged dried cannabis has been destroyed by licensed producers because of overproduction and quality issues – a weight approximately equal to 650 Toyota Prius cars.
mjbizdaily.com
Canadian growers destroyed a record 425 million grams of cannabis last year
Canada’s federally licensed producers destroyed a record 425 million grams - or 468 tons - of unsold, unpackaged dried cannabis in 2021.
Matt Lamers ??
@matt_lamers
Canadian cannabis producers (the big ones!) have sold less than 20% of output since adult-use legalization
mjbizdaily.com
Canadian cannabis producers have sold less than 20% of output since adult-use legalization
Cannabis producers in Canada have sold less than 20% of their production since the country launched adult-use sales in October 2018,
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"Organized crime hates having the govt as competition."
More BS from a naive don,t know what i,m talking about duder.
Dissorganized crime just don,t care about the govt.
You are the one stuck and doomed with the government.
Legacy have the best weed at ok prices with high traction.
Never stale... always fresh contrary to lps gamma ray stale bunk.
You are re-doomed!
"Organized crime hates having the govt as competition."
More BS from a naive don,t know what i,m talking about duder.
Dissorganized crime just don,t care about the govt.
You are the one stuck and doomed with the government.
They have the best weed at ok prices with high traction.
Never stale... always fresh.
You are doomed!
Home / Cultivation
Marijuana financial restatements show industry still maturing, insiders say
author profile pictureBy Kate Robertson, Writer
October 11, 2022
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Image depicting financial statements
The marijuana industry has an accounting problem, with a number of companies correcting errors in financial statements in recent years through restatements.
Restating financial results is a rare occurrence for most public companies: 2020 had the lowest number of financial restatements by public companies in the past 20 years with only 364, according to a report by Massachusetts-based Audit Analytics.
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But a disproportionate number of them have come from the cannabis industry over the past few years, making it harder for investors to gauge the financial health of a company.
Restatements also can lead to potentially costly class action lawsuits.
In the case of the marijuana industry, the restatements have included high-profile companies:
Florida-based multistate operator Jushi Holdings in September said it filed restated financial results for this year’s first quarter.
Chicago-headquartered MSO Verano Holdings announced in July it would restate five quarters of financial results.
KushCo Holdings, a California-based packaging company now known as Greenlane Holdings, announced in 2019 it was restating results from fiscal 2018 and 2017 to reflect accounting errors stemming from previous acquisitions.
Canadian cultivator and processor Cronos Group, headquartered in Toronto, said in November 2021 it would restate financials for the three- and six-month periods ending June 30 of that year.
Matt Karnes, founder of New York-based cannabis financial consultancy GreenWave Advisors, attributes the problem largely to the U.S. government’s marijuana prohibition.
That has prevented major accounting firms such as the Big Four – Deloitte, EY (formerly Ernst & Young), KPMG and PricewaterhouseCoopers – from servicing the marijuana industry.
He also chalks it up to inexperienced and/or understaffed in-house accounting departments at public cannabis companies.
“Financial reporting is definitely an area that many people overlook,” he said.
Accounting for errors
Jushi announced on Sept. 9 it filed restated first-quarter 2022 results.
The company identified two errors:
Right-of-use assets associated with finance leases, accrued expenses and other liabilities.
Operating, investing and financing activity cash flow.
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“These errors did not impact the cash balance as of March 31, 2022, and there was no net change in cash flows during the three months then ended,” according to a Jushi news release.
Verano said in July that it would be restating five quarterly financial statements dating to March 31, 2021, and that all of its disclosures and investor presentations since then “should therefore no longer be relied upon.”
Stock-based compensation had been understated, according to a news release, affecting the stated tax expenses.
“In this particular case, it seems like it was an error that was overlooked,” Karnes said, “and it seems like a very simple matter that should have been identified.
“And so it really brings home the point that I’ve been expressing for a long time now, that many cannabis companies lack the in-house accounting expertise that other industries have.”
Common pitfalls
John Pelliterri, a partner at New York-headquartered Grassi Advisors and Accountants, said the issues Verano and Jushi have grappled with are common in the marijuana industry, where accounting for the cash-based sector is particularly challenging and equity-based compensation is common.
In addition, he said common pitfalls include:
Inventory, which moves quickly in cannabis.
State taxes combined with issues related to Section 280E of the federal tax code, which prohibits marijuana businesses from taking traditional business deductions.
Convoluted ownership structures.
Some management teams might choose to invest more in the company’s brand rather than key areas such as accounting.
But, Pelliterri said, with time and, perhaps, by learning the hard way, restatements will become less common.
“We’re getting there,” he said. “Once you get in a year, two years, you start to understand the nuances and then you get a handle on a lot of the issues.
“But there’s not that many people that have been doing it that long.”
Legal risks
Toronto-based Cronos Group announced in November 2021 it would restate financials for the three and six months ending June 30, 2021, after failing to report more than $220 million in impairment charges.
“As we move forward, we are committed to improving our internal controls and financial reporting practices, maintaining the highest standards of transparency and accountability, and enhancing our capabilities and resources across functions to support our strategy,” President and CEO Kurt Schmidt said in a statement this past February.
In the meantime, a number of law firms launched investigations to determine whether there were grounds for – and shareholder interest in – filing a class action lawsuit.
“Cronos stock was down more than 15% during intraday trading on Nov. 9, 2021, thereby injuring investors,” according to a November 2021 news release, issued by Philadelphia-based Kehoe Law, soliciting investors who lost more than $25,000 to contact the firm.
“The restating of a public company’s financial statements is like ringing the alarm bell for class action lawyers,” Robert Cohen, a litigation partner at the Cassels law firm in Toronto, told MJBizDaily via email.
“It doesn’t necessarily mean that a class action will ensue or be successful, but it typically means that there is smoke to be investigated, and often when there is smoke, there is fire.”
In another instance, Cronos Group restated its first-, second- and third-quarter financial statements in 2019 after reviewing sales of bulk resin and wholesale products.
That spurred one shareholder to attempt to file a class action lawsuit on behalf of other individuals, arguing that the company had “orchestrated a scheme to inflate its reported revenue figures” and that the errors had ultimately negatively affected the share price.
According to the Ontario Court Appeal’s Sept. 26 decision to allow the class action regarding the 2019 restatements to move ahead, the defendants dispute that the share price drop is attributed to the restatements but, rather, to the COVID-19 pandemic and delayed distribution of a new product in the United States.
Cronos Group did not respond to a request for comment from MJBizDaily.
The Court of Appeal’s decision shows that class actions are the most common way to take action against public companies for alleged misrepresentations that come to light from the restatement of financial statements, Cohen said.
“Starting a class action, obtaining leave of the court to proceed and getting it across the finish lines of both a trial and an appeal is rare in Canada, as many class actions settle along the way,” Cohen said.
“Having said that, just the commencement of a class action which has various badges of merit can prove to be very damaging to a public company, including to its ability to raise funds at critical times.”
Considering the risks and costs associated with restatements of financial statements, both Karnes and Pelliterri advise marijuana companies to invest in accounting and make an effort to stay on top of the latest developments. The industry is still new.
“A lot of the rules are still being written,” Pelliterri said.
“As more people get into the industry and it becomes more mainstream, a larger group will gravitate (toward cannabis) from a financial perspective.”
Ontario sold nearly 64 million grams of cannabis in just three months
Province set several records in fourth quarter
By SAM RICHES
Alternate text to Bonno
Dried flower continued to dominate all product categories, accounting for 50 per cent of total sales. PHOTO BY NICK BRANCACCIO /Windsor Star
?
The Ontario Cannabis Store (OCS) has published its final quarterly report for the 2021-22 fiscal year, running from Jan. 1 to March 31, 2022.
The province set several record highs, including selling 63.7 million grams of cannabis in the quarter and posting more than $405 million in total sales, representing a 1.6 per cent increase from Q3.
According to the report, more than 96 per cent of sales in the quarter were made at brick-and-mortar stores, with the remaining sales occurring online.
Dried flower continued to dominate all product categories, accounting for 50 per cent of total sales. It was followed by pre-rolls (15 per cent), vapes (16 per cent) and edibles and concentrates at five per cent each.
While dried flower has consistently led all product categories historically, it increased in dollar share by one per cent compared to the previous quarter, with that growth attributed to the strong sales of milled (pre-ground) flower.
In retail stores, Pure Sunfarms Corp. led flower sales, with 11 per cent of sales, followed by Organigram Holdings Inc.'s Shred (10 per cent) and Cronos Group Inc.'s Spinach (seven per cent). Pure Sunfarms also held the top spot online, accounting for nine per cent of flower sales from the OCS. It was followed by Aphria Inc.'s Good Supply (eight per cent) and Redecan (four per cent). Tilray and Canopy are way at the bottom.
Shred also had the top two best-selling products in the quarter. Its seven-gram package of Tropic Thunder was the top-selling item, moving 197,000 units, followed by Funk Master seven gram, which was purchased 180,000 times. Good Supply captured the next two spots with its one-gram Jean Guy pre-rolls (162,000) and Grower’s Choice Indica pre-rolls (155,000). The 3.5-gram packages of GMO Cookies from Spinach (150,000) rounded out the top five.
Retail openings slow
The rate of retail store openings slowed from the previous quarter, but still increased 10 per cent overall, with a total of 1,460 stores operating at the close of Q4. Retailers opened up shop in 16 new communities and stores are now available in 233 municipalities across the province. On average, Ontarians now live within four kilometres of a cannabis retail store.
The average number of grams sold per store fell 18 per cent, while the Western and Eastern regions of the province proved the busiest, accounting for $117.1 million and $102.4 million in sales. Sales in Toronto also fell about 1.7 per cent, reaching a total of $86.7 million.
Earlier this year, a report published by Connecticut-based data firm Cannabis Benchmarks found that Ontario could support around 2,000 cannabis stores to reach its “optimal level.”
The OCS report notes that the legal cannabis industry also poached more consumers from the illicit market, with 26.9 per cent of all cannabis sales in the quarter occurring through legal channels.
Ivman, sorry but i can,t answer your many privare messages
and questions on cannabis investing… Best to talk to a broker.
You can go crazy watching that red line.
Best to take a brake before melting down.
One can,t go on without sleep.
I would look at cbd, it may help with your your depression.
Keep buying folks
Tilray lose $$$ every minute of the day
They grow plenty of recalls
They need your dollars
On looking forward for cana world,s legalization
They have BURNED TILRAY<S NAME growing/selling bunk
Great naive canna culture management team
Emperor wears no clothes effect
They have finally realized folks want high THC AAAA flowers
Duders & Suits are to enroll in Hippie Joe,s classes
"How to grow 101" they are to learn how to grow fire
"Traction 101" the challenge is to learn to move that crop quickly
6 years and couting (with a licence to sell)
Lol
TLRY
Tilray Brands Inc
3.08
-0.82 (-21.03%)
Volume: 118,950,360
Day Range: 3.13 - 4.09
Bid: 2.86
Ask: 3.65
Last Trade Time: 7:59:58 PM EDT
Total Trades: 248,496
Keep buying folks
Tilray lose $$$ every minute of the day
They grow plenty of recalls
They need your dollars
On looking forward for cana world,s legalization
They have BURNED TILRAY<S NAME growing/selling bunk
Great canna culture naive management team
Emperor wears no clothes effect
They have finally realize folks want AAAA high THC not Dry Tops
Dude enrolled in Hippie Joe,s classes
In "How to grow 101" they are to learn how to grow fire
In "Traction 101" the challenge is to learn to move it quickly
Lol
Biden.
Tom Angell ?????
@tomangell
·
6h
psssssst: people who *sold* marijuana don't belong in prison, either.
release them, joe.
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Canna World
@CannaWorld4
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9h
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decriminalized, he hasn't legalized, he hasn't rescheduled, he hasn't descheduled. That's putting lipstick on a pig.
East Coast Amsterdam ??
@ECAdmv
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The weed needs to be freed.
To all suckers and bag holders. Tilray has you covered!
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Matt Lamers ??
@matt_lamers
Tilray CEO Irwin Simon just said: “The European market, which is estimated to be worth as much as $37 billion by 2027, has already embraced medical cannabis business and is nearing broad-scale adult-use legalization."
This is a fantasy. What I call cannabis industry fan fiction.
9:01 AM · Oct 7, 2022
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Matt Lamers ??
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Let's skip the fantasies & look under the hood. How did Tilray's actual business do in Q1? Not great.
Loss: $66 million
Sales: $153 million (-9%)
Cannabis sales $58.6 million (-17%)
Distro: $60.6 million (-10%)
Bev alcohol: $20.7 million (+33%)
Wellness: $13.4 million (-10%)
9:08 AM · Oct 7, 2022
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Matt Lamers ??
@matt_lamers
Tilray was hit by some volatile currencies in Q1. The company even has tables in the release stripping out currency fluctuations, in case anyone is curious how Tilray would have done in a world without market-traded currencies. Mars? I don't know where that place exists.
9:17 AM · Oct 7, 2022
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Matt Lamers ??
@matt_lamers
·
Oct 7
Replying to
@matt_lamers
So far none of the stonk analysts are asking about the actual business.
This is the actual business, Q1 2022 vs YoY:
???? medical cannabis sales: $6.5 million (-28%)
???? adult-use sales: $58.3 million (-16%)
Wholesale sales: $392k (-77%)
International cannabis sales: (+1%)
Matt Lamers ??
@matt_lamers
Analyst: 'Congrats on the quarter'
9:41 AM · Oct 7, 2022
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Matt Lamers ??
@matt_lamers
Tilray CEO tells analysts and investors:
"(Cannabis is) a $10 billion industry within Canada."
"It's a $30-$40 billion industry in Europe, so there's big opportunities.
Neither are true, if we're talking about legal, publicly traded businesses.
10:14 AM · Oct 7, 2022
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The CEO also mentioned the "the nearly $200 billion global cannabis market opportunity"
But remember that the vast majority of that figure resides outside federally legal parameters, so it's not an opportunity for Tilray today.
When will it be? No one knows.
12:06 PM · Oct 7, 2022
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[color=red]PIPEDREAM[/color]Tweet
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Chris C
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Went to BC and bought 50kgs of Cowichan Kush grown by an absolute legend and amazing artist Redbeard. Heady glass and weed drops is what this industry needs ????
3:17 PM · Oct 7, 2022
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Followed by some Tweeters you follow
??Kon of the Dead??
@KJeefe
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I bought a nice stash of Glass Alchemy colours off him a while back!
Legacy to the rescue for fresh B C AAAA canna buds rolling...
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Chris C
@ccatlanticnl
Went to BC and bought 50kgs of Cowichan Kush grown by an absolute legend and amazing artist Redbeard. Heady glass and weed drops is what this industry needs ????
3:17 PM · Oct 7, 2022
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Followed by some Tweeters you follow
??Kon of the Dead??
@KJeefe
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Replying to
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I bought a nice stash of Glass Alchemy colours off him a while back!
BonoHead Replying to
@JodieEmery
RCMP have laid 6,259 cannabis-related charges since legalization, they told me.
11:57 AM · Sep 22, 2022
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Jodie Emery
@JodieEmery
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Sharing your details on this thread here for reference:
(And again, thank you sincerely for tracking so much data related to cannabis enforcement and businesses!)
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Matt Lamers ??
@matt_lamers
·
Jun 7
Thousands still being added to this list every year. RCMP laid 6,259 cannabis-related charges since legalization in Canada since late 2018.
2019-20: 3,139 charges
2020-21: 3,120 charges
cc @MJBizDailyCAN twitter.com/CannabisAmnest…
Bonohead Replying to
@JodieEmery
RCMP have laid 6,259 cannabis-related charges since legalization, they told me.
11:57 AM · Sep 22, 2022
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Jodie Emery
@JodieEmery
·
14h
Replying to
@matt_lamers
Sharing your details on this thread here for reference:
(And again, thank you sincerely for tracking so much data related to cannabis enforcement and businesses!)
Quote Tweet
Matt Lamers ??
@matt_lamers
·
Jun 7
Thousands still being added to this list every year. RCMP laid 6,259 cannabis-related charges since legalization in Canada since late 2018.
2019-20: 3,139 charges
2020-21: 3,120 charges
cc @MJBizDailyCAN twitter.com/CannabisAmnest…
Show this thread
Any Canadian cannabis producer that isn't cash-flow positive when the recession starts will be in deep shit.
Quote Tweet
Matt Lamers
Crappy Growth is DOOMMMEEEEDDDDDD!
Conversation
Ian Dawkins
@iandawkins
Imagine if we had just done this sort of "stroke of the pen" pardon, instead of whatever garbage ass half measures Canada went with at the behest of the cops and narcs running our "legalization" task force
Quote Tweet
Craft cannabis and small businesses have materially flipped marketshare from the largest LP's in just one year!
Small business now substantially supplies the growing demands of Canadian legal cannabis. Give the people what they want!
#StandForCraft
There is no money to be made selling weed.
No money, no candies.
Bodies are piling up… ??
The Raid Lobby
By David Malmo-Levine on September 25, 2022
CANNABIS CULTURE – How the Licensed Producer cartel and NORML Canada work together to goad the police into raiding even more unlicensed dispensaries and busting more growers and dealers than ever before.
“Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That’s how it goes
Everybody knows”
“Everybody Knows,” Leonard Cohen & Sharon Robinson, 1988
Don’t These People Know Who We Are?
A few days ago, on September 21st, 2022, I got an email from Dan the editor at Cannabis Culture online.
“Hey David, in to rebut this?”
The “this” in question was a press release sent out by the Cannabis Council of Canada – or “C3” – the spokespeople for the Licensed Producers. The legal pot lobby.
Image #1: Cannabis Act Statutory Review: Backgrounder Draft, Cannabis Council of Canada (C3), September 2022, p. 1
I took a quick look at it – all things I had dealt with before – and fired off a quick email back to Dan.
“Give me a few days. Should not be a problem.”
“Fire at will.” He responded.
The Press Release, titled Cannabis Act Statutory Review: Backgrounder Draft was unavailable online. Someone in their PR department obviously sent it to Cannabis Culture by mistake. It was full of the usual half-truths, bold assertions, self-serving assumptions and outright lies one would expect from the corporate cannabis industry lobby.
For example, they kept promoting the government’s fiction that Canada “legalized” pot back in 2018. Is your community “legalized” if over half your community remains illegal? Any honest evaluation of the Cannabis Act reveals that the government’s stated goals for that set of regulations do not match their actions. (1)
Image #2: “The Cannabis Act Is A Fraud,” David Malmo-Levine, April 18, 2021, cannabisculture.com
Everybody Knows The Good Guys Lost
Everybody knows pot remained illegal for a majority of the growers and dealers, and a large percentage of the users too – the teens.
On page 8 of the document, under the heading “Jobs and economic growth,” C3 boasted of creating “151,414” jobs. Back in 2004, the Victoria Times Colonist estimated that there were 500,000 people employed in cannabis growing in Canada. (2) That’s not including dealers.
Image #3: Cannabis Act Statutory Review: Backgrounder Draft, Cannabis Council of Canada (C3), September 2022, p. 8
Image #4: “MARIJUANA IN CANADA,” Times Colonist, March 14th, 2004, p. 42
What C3 was really bragging about was turning thousands and thousands of independent growers and dealers into poorly-paid employees – some of whom have recently had to go on strike to attempt to gain a living wage:
“The demands of the BCGEU were simple: a raise to match cost of living increases, or a five per cent increase each year for three years, whichever is higher. Everyone deserves a livable wage, especially those who run the services that keep the province running.” (3)
Image #5: Global News, interviewing Jaclynn Pehota of the Retail Cannabis Council of BC, making sure everyone knows the views of the poor, downtrodden owners. Aug. 26, 2022
The workers in the Canadian pot industry that the Licensed Producers weren’t exploiting – those remaining in the legacy market – were the ones the Licensed Producers wanted raided out of existence. C3 was doing their level best to destroy the bulk of the industry – hundreds of thousands of unlicensed growers and dealers – by goading the government/police into more raids.
The Poor Stay Poor, The Rich Get Rich
On page 11 of the document, under the heading “Public Support for Government Action” there were 4 choices available to those polled:
“FED. GOV. APPROACH ON LEGAL CANNABIS:
It should make it illegal again (13%)
It should focus on reducing the illegal cannabis market, but it should not support the legal industry’s growth and campion the industry. (29%)
It should champion the industry to grow, create jobs, and export technology, processes and expertise around the world. (40%)
Unsure (19%)”
Image #6: Cannabis Act Statutory Review: Backgrounder Draft, Cannabis Council of Canada (C3), September 2022, p. 11
By “reducing the illegal market” they mean, of course, more cops pointing more guns in more harmless people’s faces. What wasn’t provided as an option was the activist option: regulate cannabis as a soft drug – like fair-trade organic coffee beans or herbal medicine – and stop all arrests entirely. This is the option favored by much of the activist community, and was recently adopted as the official cannabis policy of the Green Party of Canada. (4)
Image #7: “Federal Green Party Votes To Regulate Pot Like Coffee Beans!” David Malmo-Levine, April 21, 2022, cannabisculture.com
On page 13 of the document, under the heading “Licensed Producers are in crisis,” C3 outlined their three major concerns:
“The financial viability of licensed producers and processors of cannabis is in crisis due to:
Combined impact of excise tax rate, provincial distributor mark-ups and regulatory fees;
Nanny State regulations; and
Unbridled competition from illicit market cannabis”
Image #8: Cannabis Act Statutory Review: Backgrounder Draft, Cannabis Council of Canada (C3), September 2022, p. 13
On page 19 and 20, the “5 Big Asks” were revealed:
“Urgent action is needed to protect the public health and safety successes of legalization and “grow the pie” for governments. The Cannabis Council of Canada is calling on the Government of Canada to:
Address the financial viability of licensed producers and processors –fix the excise tax, mark-ups and fees.
Level the playing field with the illicit market.
Allow licensed producers and processors to communicate with consumers, including about the effects of cannabis.
Eliminate costly “Nanny State” regulations.
Strengthen patient access to medical cannabis.”
Image #9: Cannabis Act Statutory Review: Backgrounder Draft, Cannabis Council of Canada (C3), September 2022, p. 20
By “unbridled competition from illicit market cannabis” they meant there was not enough cops pointing guns at the heads of unlicensed dealers (many of whom were Indigenous or people of colour), (5) and not enough people being killed every year from low-level pot law enforcement. (6) By “level the playing field with the illicit market” they meant more raids, more busts, more small businesses destroyed, more lives ruined than ever before.
Image #10: “Killed Over Pot,” David Malmo-Levine, May 18, 2021, cannabisculture.com
This was not a new call for raids. C3 – and previous incarnations of the pot lobby – have been calling for more raids for years.
Everybody Knows The Fight Was Fixed
In March of 2014, the Federal government’s lawyer claimed – in court – that the LPs would “need a captive market to get established.” They didn’t call it a “captive market” in the press when they first rolled out their new program – they called it a “free market” – the opposite of a “captive market.” (7)
Image #11: “First Nations entrepreneurs are asserting sovereignty and seizing the new cannabis economy: Six Nations cannabis dispensary owner defiant after raid: ‘Stay out of our affairs’,” Jorge Barrera · CBC News · Jan 10, 2018
And at least as far back as 2014, Licensed Producers MediJean and Tweed were encouraging the elimination of their legacy competition, through vocal public support for such policies as mandatory minimum sentences for growers and the elimination of home-growing rights. (8)
The raid lobby kicked into high gear in January 2016 when Liberal Party insiders – including George Smitherman (who is now President and CEO of C3) (9) did their best to make sure their legacy competition was raided away:
“A former high-ranking colleague and friend of MP Bill Blair, the Liberal government’s point man on marijuana legalization, will lobby the ex-Toronto police chief in hopes of ensuring a tightly controlled system in which only licensed firms are allowed to grow the lucrative drug. Kim Derry, a deputy chief of the Toronto Police Service under Mr. Blair, is a promoter of marijuana facility THC Meds Ontario Inc., along with George Smitherman, a former Ontario Liberal deputy premier. Mr. Blair, put in charge of the marijuana file last week, will play a key role in determining who gets to grow the product once it is legalized.” (10)
Image #12: “Traditional Medicine,” David Malmo-Levine, June 9, 2022, cannabisculture.com
One look at the C3 website reveals just how focused C3 is on encouraging more raids.
For example, in 2021, C3 released their Not Done Yet Report Card, which gave the Federal Government an “F” in the “combatting the illicit market” category. Some of the details of C3s concerns in this category were:
“The illicit market which accounts for at least 50% of all cannabis sales in Canada. This means that $4 billion dollars per year of cannabis sales are diverted to the illicit market, resulting in the loss of hundreds of millions of tax dollars and missed opportunities for communities and individuals in the legal industry.” (11)
C3 also gave an “F” grade on “Consumer Education and Awareness,” arguing
“The government has failed to inform Canadians about the dangers of consuming illicit cannabis products and to help Canadians differentiate legal from illicit cannabis.” (12)
Image #13: “Staff members beaten by Police during violent raid at Six Nations dispensary, OCTOBER 21, 2019, dispensingfreedom.com
Helping Canadians Differentiate Legal From Illicit Cannabis
There has been lots of evidence of quality control issues with cartel cannabis, including some evidence of poisoned soil being sold out the back door, (13) hydrogen cyanide – Nazi gas chamber poison-related dangers – from the use of banned pesticides (14) and the media (15) and government (16) hiding these cartel-pot quality control issues from the public.
Image #14: “Health Canada and the Licensed Producers have both hidden dangerous cannabis contamination from the public,” September 9, 2017, pot-facts.ca
The government has admitted to some of these cartel quality control problems, Including but not limited to at least 3 gummy recalls, (17) at least one capsule recall, (18) and at least 16 dried cannabis recalls. (19)
Consider that isn’t 16 different products recalled. That’s 16 lots or batches of products recalled – thousands and thousands of individual packages. But the government considers these problems isolated incidents rather than “corporate agribusiness” “profit before all else” “mega-warehouse” “no organic standards” systemic problems. In both head-to-head, non-LP controlled quality comparisons between LP and legacy cannabis, the legacy cannabis came out cleaner. (20)
Image #15: “Dispensary cannabis is safer than LP cannabis,” September 25, 2018, pot-facts.ca
This focus on raids – and the fraud behind the quality control concerns that justify the raids – isn’t surprising. The Licensed Producers are not part of a free market – they’re part of a captive market. They are a cartel. The cartel was called such by the Financial Post when pot became legal:
“When cops did enforce the country’s no-toking laws, they could plausibly tell themselves they were doing it to protect young people and other innocents. Now when they enforce the laws they’re doing it to protect legally privileged producers against producers who find themselves offside with often arbitrary licensing laws. Protecting kids was one thing. Protecting cartels is quite another.” (21)
Image #16: “Educational Posters for the 4/20 2022 Rally.” David Malmo-Levine, April 17, 2022, cannabisculture.com
The cartel needs the raids to eliminate their legacy market competition and make more profit. Raids is just part of the business plan. Maybe it’s the main part.
Making Raids NORML
What IS surprising is that Canada’s oldest pot consumer advocacy group signed on to their report card. NORML Canada was one of the “co-authors” of this pro-raid Report Card document!
Image #17: https://cannabis-council.ca/files/Not-Done-Yet-Report-Card-Rationale-10.19.21.pdf
Back in February of 2022, after discovering this report card, I emailed Jennawae McLean, then “Retail Inclusion Coordinator” at NORML Canada (22) about their involvement in the Report Card. This was her response:
“That report card, yes…that was done a week or two before I was made ED. So if my memory serves me correctly, the NORML contribution (or at least my contribution) was regarding retail sales barriers and advocating for the inclusion of the unregulated market (which was my personal experience). It is certainly not the position of NORML to advocate about the ‘dangers of illicit cannabis’ . . . at most we advocate for safe adult consumption, knowing your limit and staying within it. I would also agree there is a lack of consumer education and awareness (mostly related to the marketing regulations). I may be able to find the verbatim contribution—it was a few months back but the google doc may be still kicking around. Let me see what I can find.” (23)
A few minutes later, Jennawae sent another email, with NORML Canada’s contribution to the Report Card. What disturbed me was that there was no concern over the many ongoing raids or the continued arrests and punishment of the legacy market – only concerns over the unfair advantages the legacy market had over the Licensed Producers, and perhaps allowing for some tokenism to give the pot market the appearance of inclusivity while still permitting the police to target the majority of growers and dealers. Under “Combatting the illicit market” NORML Canada contributed this:
“-Provincial buyers are not bringing enough diversity in product to the regulated market. While there has been an improvement in offerings there are still limited product drops that don’t allow fair access to all products for all retailers across the country. Discretion to purchase is also privately held resulting in potential bias influencing product availability.
-Limited product drops from the province limits product innovation in the market. The unregulated market has a constant flow of new products and innovation. Retailers are being stifled. The quasi-public nature of the Provincial buyers results in a lack of viable scrutiny of their actions resulting in a lack of clarity on delays for new product offerings.
-The unregulated market is able to market their products with no limitations and can actually make cannabis products seem appealing (which is really no different than how alcohol is marketed). The Federal government doubled down on its enforcement on promotion prohibitions resulting in the stifling of free expression relating to legal cannabis.
-The unregulated market isn’t necessarily charging or paying any tax (let alone paying a SIN tax driving up the price of cannabis unnecessarily). Regardless, the legacy market can modify prices in a manner unconnected to the base tax rate imposed on Licensed Producers ($1 per gram) resulting in superior pricing flexibility in the legacy market.” (24)
While there was some lip service given to removing criminal records and including people of colour in the industry (by both NORML Canada and C3), not one word was said about the cost-barriers to participate in the market – some industry experts argue convincingly that you have to be a millionaire to even have a chance at getting a grow license. (25)
Debunking Reefer Madness 2.0 Might Cut Into Our Profits
And not one word was said about the bogus science behind “cannabis psychosis” – Reefer Madness 2.0 – that justified the hard drug pot regulations and their participation-limiting barriers. (26)
Image #18: “Multiple reports indicate no rise in psychosis accompanies increases in pot use rates,” January 6, 2019, pot-facts.ca
Image #19: “Even more evidence of ‘cannabis psychosis’ being a fraudulent scam,” May 28, 2022, pot-facts.ca
I tried to get these points across in my response to Jennawae:
“My feeling was that the whole Report Card thing was designed to make it appear that NORML Canada signed off on a crackdown on legacy growers and dealers. I would be wary of any future collaboration between NORML and the cartel – your pro-legacy statements didn’t (and won’t) get into the final document. As for attempting to get cannabis regulated more like alcohol, I feel strongly that this is the wrong approach. Cannabis is a soft drug like caffeine, has similar costs to society that caffeine has, and should be regulated like organic, fair trade coffee beans are. The effect of this would be to stop harming harmless people, ending all arrests, expanding the legal market to include teens – (who are dying from drunk driving, suicide, alcohol and opiate overdose and, once in a while, pot arrests gone wrong) – which would then protect them from prohibition-related harms. The evidence for this position is non-controversial – only the stigma needs to be overcome:
https://www.cannabisculture.com/content/2021/05/18/killed-over-pot/
http://pot-facts.ca/multiple-reports-indicate-no-rise-in-psychosis-accompanies-increases-in-pot-use-rates/
https://www.cannabisculture.com/content/2016/04/20/cannabis-vs-caffeine-which-is-safer-a-cup-of-coffee-or-a-puff-of-weed/
http://pot-facts.ca/teens-need-legal-access-to-pot-cafes-to-help-avoid-drunk-driving-suicide-and-drug-overdoses/” (27)
After a few more emails, I suggested NORML Canada put out its own report card, emphasizing NORML’s support for the legacy market and soft drug regulations. Jennawae said she would take my suggestion to the group.
A month and four days went by and Jennawae got back to me. She said the “NORML Canada report card” idea was not accepted, but their website was going to be updated and some of the ideas we discussed would be incorporated. When the website update was posted, it still had support for hard drug/alcohol-esque pot regulations:
“5. That cannabis should be fully legalized, and that its use, production, and distribution be properly regulated and taxed by provincial and local governments, much like alcohol and gambling.” (28)
The NORML Canada website certainly contained nothing that would debunk the “Reefer Madness 2.0” that is used to justify hard drug/alcohol-esque pot regulations.
Image #20: “Cannabis vs Caffeine: Which is Safer, a Cup of Coffee or a Puff of Weed?” David Malmo-Levine, April 20, 2016, cannabisculture.com
Cannabis Isn’t As Dangerous As Alcohol. Or Caffeine
The website revamp had a comment section, so I left this comment as one final attempt at getting NORML Canada involved in reforming Canada’s hard drug pot regulations into soft drug pot regulations:
“Why no explicit mention of protecting the young from punishment or eliminating all barriers to participate in the pot economy? Seems to me like the quickest way to remove the rest of the injustices surrounding cannabis would be to regulate it like organic fair trade coffee beans. This would end the remaining arrests, and remove the red tape from growing industrial hemp for hemp ethanol to replace fossil fuels and to produce cheap CBD to replace many expensive pharmaceuticals. I don’t understand why NORML doesn’t explicitly call for soft drug regulations.” (29)
I got back this vague non-answer:
“Hello, Thank you for your question. We do not believe in the criminalization of cannabis and are working towards removing barriers and making the cannabis industry inclusive. This is detailed in our About Us section as well as our Statement of Principals. Thank you, NORML Canada” (30)
Perhaps the reason why NORML Canada does not concern itself with strategies that would legalize the “still criminalized under legalization” young users and non-millionaire growers and dealers is because there is virtually nobody on their list of directors who represents the legacy market.
Follow The Money
The current list of directors is as follows:
“Jennawae Cavion: Executive Director
Jack Lloyd: President
Derek Mascarenhas: Treasurer
Sarah Mills: Community Outreach
Phil Wong: Media & Events” (31)
As of September 23rd 2022, the updated NORML Canada website does not mention their economic affiliations, but a previous incarnation of their website (32) did reveal some information.
Image #21: https://www.normlcanada.org/team
According to the old NORML website, Jennawae Cavion, (nee Jennawae McLean), is co-founder and CEO of Calyx And Trichomes – a licensed cannabis retail franchise with a couple of shops in Kingston, Ontario. (33)
Image #22: https://www.normlcanada.org/team
Derek Mascarenhas
“. . . runs the cannabis business development firm Mika Ventures, helping to secure funding for cultivation, processing, and retail startups. He is also building Sarriette Co. an edibles startup, dedicated to the art of creating savoury cannabis foods.” (34)
Image #23: exclaim.ca
Sarah Mills
“. . . is the Lead of Customer Experience at Fire & Flower’s location in Kingston, ON.” (35)
Mills is also the Territory Sales Manager at Green Hedge Education and Distribution and Territory Manager at Dycar Pharmaceuticals Ltd. – both of which are non-legacy, licensed distributors or producers. (36)
Image #24: https://deanblundell.com/author/philster18yahoo-com/
Phil Wong was a writer/photographer for High! Canada magazine, (37) and is now a cannabis blogger, who has helped shame and stigmatize the legacy market on at least one occasion. (38)
Image #25: https://www.normlcanada.org/team
The only person on NORML Canada’s executive board that even comes close to a legacy market operative is Jack Lloyd – an excellent pot lawyer, and probably the person I would end up calling if I ever got arrested again for pot activist-related activities. But he’s not technically a legacy market operative – he’s just hired by legacy operatives on occasion. Jack also gets money for helping people “navigate the turbulent waters of Canada’s emergent federal and provincial regulatory frameworks.”(39)
The sad fact of the matter is, if all the Canadian kids that smoked pot got rounded up and forced into treatment for their intelligent preference for cannabis over alcohol and pills, and all the legacy growers and dealers got rounded up and thrown in jail, it wouldn’t affect the executive board of NORML Canada too much – some of them might even enjoy more job stability, more market share and make more money as a result.
The other sad fact is that the “alcohol regulations” that NORML Canada supports are the exact type of regulations that end up killing people from botched cannabis law enforcement. At least two people die every year in North America from low-level pot enforcement.
Hard Drug/Alcohol-esque Pot Regulations = More Deaths
Image #26: “Killed Over Pot,” David Malmo-Levine, May 18, 2021, cannabisculture.com
Image #27: “Killed Over Pot,” David Malmo-Levine, May 18, 2021, cannabisculture.com
Daniel Possee died in a 1992 North Vancouver pot raid over a warrant that specified the cops were looking for “2.2 pounds” of marijuana. (40)
Image #28: “Killed Over Pot,” David Malmo-Levine, May 18, 2021, cannabisculture.com
And on March 31st, 2016 – nearly five months after Justin Trudeau won the 2015 Federal election on the promise of legalizing pot – Bony Jean-Pierre was shot and killed by police in a drug raid (41) where marijuana was the only drug in question. (42)
Image #29: “Pot arrests of black youth went UP after pot legalization in Colorado,” June 8, 2018 pot-facts.ca
Image #30: Instagram
Image #31: nationalreview.com
Who advocates for these low-level dealers? C3 sure doesn’t – they want more guns pointed at legacy grower and legacy dealer heads. And NORML Canada wants to fight for regulations similar to alcohol – making sure Canadians will be stuck with ATF-style enforcement of pot laws until Canadians realize that cannabis is not like alcohol – it’s a soft drug, like coffee beans, which should involve zero arrests, zero punishment, and zero accidental deaths from police enforcing pot laws against growing, selling or using . . . even if the grower, seller or user is a teen . . . even if the grower, seller or user doesn’t have a million dollars to risk in the attempt to get a license to grow or deal pot.
Citations:
1. http://pot-facts.ca/justin-trudeau-lied-about-supporting-pot-dispensaries-in-order-to-get-elected/
See also: “The Cannabis Act Is A Fraud,” David Malmo-Levine, April 18, 2021 https://www.cannabisculture.com/content/2021/04/18/the-cannabis-act-is-a-fraud/
2. “MARIJUANA IN CANADA,” Times Colonist, March 14th, 2004, p. 42
3. “BCGEU strike highlights necessity for cannabis industry to separate from liquor board,” Atum Beckett, September 21, 2022
https://martlet.ca/bcgeu-strike-highlights-necessity-for-cannabis-industry-to-be-separate-from-liquor-board/
4. “Federal Green Party Votes To Regulate Pot Like Coffee Beans!” David Malmo-Levine, April 21, 2022
https://www.cannabisculture.com/content/2022/04/21/federal-green-party-votes-to-regulate-pot-like-coffee-beans/
5. “Traditional Medicine,” David Malmo-Levine, June 9, 2022 https://www.cannabisculture.com/content/2022/06/09/traditional-medicine/
6. “Killed Over Pot,” David Malmo-Levine, May 18, 2021 https://www.cannabisculture.com/content/2021/05/18/killed-over-pot/
7. http://pot-facts.ca/pot-monopolists-lobbied-the-liberals-for-a-captive-market/
See also: “The government argued it was unfounded speculation that patients would be harmed by the new regime. In fact the lawyers said it was the new licensed producers that would be harmed because they would need a captive market to get established.” “Patient’s medical marijuana juice to dry up under new law: Starting April 1, Canadian medical marijuana users have to buy dried buds from licensed businesses,” CBC News · Mar 18, 2014 https://www.cbc.ca/news/canada/british-columbia/patient-s-medical-marijuana-juice-to-dry-up-under-new-law-1.2576678 at 1:33 of the video.
“$1.3B medical marijuana free market coming to Canada – New system will use large indoor marijuana farms certified by RCMP,” The Canadian Press, Sep 29, 2013
https://www.cbc.ca/news/canada/1-3b-medical-marijuana-free-market-coming-to-canada-1.1872652
“Business: Health Canada presides over birth of billion-dollar free market in marijuana,” Vancouver Sun, Vancouver, B.C., September 30th, 2013, pp. 13, 16 (pp. B1, B4)
8. “Boycott Canada’s Medical Marijuana Profiteers,” David Malmo-Levine, June 12, 2014 https://www.cannabisculture.com/content/2014/06/12/boycott-canadas-medical-marijuana-profiteers/
9. https://cannabis-council.ca/about
10. “Ex-colleague will lobby MP Bill Blair to restrict field of pot growers,” DANIEL LEBLANC, PARLIAMENTARY AFFAIRS REPORTER, OTTAWA, JANUARY 10, 2016 https://www.theglobeandmail.com/news/politics/ex-colleague-will-lobby-mp-bill-blair-to-restrict-field-of-pot-growers/article28102506/
See also: http://pot-facts.ca/pot-monopolists-lobbied-the-liberals-for-a-captive-market/
11. “Not Done Yet Report Card,” Cannabis Amnesty, Cannabis Council of Canada, Medical Cannabis Canada, NORML Canada, October 19th, 2021
https://cannabis-council.ca/files/Not-Done-Yet-Report-Card-Rationale-10.19.21.pdf
12. Ibid.
13. “LP Soil Scandal?” David Malmo-Levine, November 10, 2021 https://www.cannabisculture.com/content/2021/11/10/lp-soil-scandal/
14. http://pot-facts.ca/licensed-producers-poisoned-their-pot-with-gas-chamber-poison-28-different-times/
15. http://pot-facts.ca/canopy-ceo-has-a-misunderstanding-on-quality-control-issue-3-different-ways-media-only-calls-him-on-1-way/
16. http://pot-facts.ca/health-canada-and-the-licensed-producers-have-both-hidden-dangerous-cannabis-contamination-from-the-public/
17. January 29, 2021, mould
https://recalls-rappels.canada.ca/en/alert-recall/terrascend-canada-recalls-all-lots-haven-st-rise-no570-wild-berry-thc-infused-gummy
February 10, 2021, mould
https://recalls-rappels.canada.ca/en/alert-recall/thc-biomed-ltd-recalls-one-lot-thc-kiss-gummies-strawberry
March 18, 2021, insects
https://recalls-rappels.canada.ca/en/alert-recall/sugarsin-brand-gummies-recalled-due-presence-insects
See also:
http://pot-facts.ca/corporate-cannabis-companies-haven-st-and-agro-greens-supplied-canadians-with-mouldy-gummies/
18. September 30, 2016, microbial contamination
https://recalls-rappels.canada.ca/en/alert-recall/natural-advancement-canna-master-blend-2016-09-30
19. November 2, 2016, undeclaired, unauthorized pesticide: pyrethrins
https://recalls-rappels.canada.ca/en/alert-recall/recall-cannabis-medical-purposes-mettrum-ltd
January 9, 2017, myclobutanil and/or bifenazate
https://recalls-rappels.canada.ca/en/alert-recall/recall-cannabis-medical-purposes-organigram-inc
January 13, 2017, myclobutanil
https://recalls-rappels.canada.ca/en/alert-recall/recall-cannabis-medical-purposes-aurora-cannabis-enterprises-inc
May 16, 2017, myclobutanil
https://recalls-rappels.canada.ca/en/alert-recall/recall-cannabis-medical-purposes-hydropothecary
May 18, 2017, piperonyl butoxide (pesticided synergist)
https://recalls-rappels.canada.ca/en/alert-recall/recall-cannabis-medical-purposes-peace-naturals-project-inc
August 24, 2017, myclobutanil
https://recalls-rappels.canada.ca/en/alert-recall/recall-cannabis-medical-purposes-broken-coast-cannabis-ltd
November 30, 2018, mould
https://recalls-rappels.canada.ca/en/alert-recall/redecan-recalls-one-lot-bec-dried-cannabis
December 7, 2018, lack of testing documentation
https://recalls-rappels.canada.ca/en/alert-recall/bonify-recalls-2-lots-dried-cannabis-products
January 11, 2019, mould
https://recalls-rappels.canada.ca/en/alert-recall/cannabis-inc-recalls-one-lot-eldo-dried-cannabis
January 7, 2021, mould
https://recalls-rappels.canada.ca/en/alert-recall/agro-greens-natural-products-ltd-recalls-one-lot-north-40-black-cherry-punch-dried
April 9, 2021, mould
https://recalls-rappels.canada.ca/en/alert-recall/natural-medco-ltd-recalls-one-lot-eve-co-indica-blend-dried-cannabis
June 25, 2021, wire
https://recalls-rappels.canada.ca/en/alert-recall/wpcp-ltd-recalls-one-lot-kushkraft-hybrid-blue-iguana-dried-cannabis-pre-rolls
July 8, 2021, mould
https://recalls-rappels.canada.ca/en/alert-recall/atlas-growers-ltd-recalls-three-lots-zour-apples-full-flower-dried-cannabis-pre-rolls
October 14, 2021, mould
https://recalls-rappels.canada.ca/en/alert-recall/joint-venture-craft-cannabis-inc-recalls-one-lot-bud-coast-saltspring-og-shark-dried
October 28, 2021, mould
https://recalls-rappels.canada.ca/en/alert-recall/trichome-jwc-acquisition-corp-dba-jwc-recalls-one-lot-wagners-blue-lime-pie-dried
December 3, 2021, mould
https://recalls-rappels.canada.ca/en/alert-recall/agro-greens-natural-products-ltd-recalls-one-lot-shelter-craft-organic-white-chocolate
20. http://pot-facts.ca/dispensary-cannabis-is-safer-than-lp-cannabis/
21. “William Watson: At least weed dealers catered to customers. Government pot sure doesn’t – The new legal market will clearly operate in the interest of governments,” William Watson, Financial Post, Oct 18, 2018
https://financialpost.com/opinion/william-watson-at-least-weed-dealers-catered-to-customers-government-pot-sure-doesnt
22. https://www.normlcanada.org/team
23. Calyx + Trichomes <hello@calyxandtrichomes.com> Feb 3, 2022, 12:48 PM
24. Calyx + Trichomes <hello@calyxandtrichomes.com> Feb 3, 2022, 12:54 PM
25. “‘But the risk and price tag associated with applying for the licence are immense, and growers can’t make a return with such a small footprint, Hurford said. Anselmo agreed, noting it can cost $500,000 to $1 million with no guarantee of approval. ‘It’s a lot of upfront risk,’ he said.’”
“’Hype, hope and dreams’: B.C.’s craft cannabis industry stunted,” Jan. 31, 2022 https://bc.ctvnews.ca/hype-hope-and-dreams-b-c-s-craft-cannabis-industry-stunted-1.5761132
26. http://pot-facts.ca/multiple-reports-indicate-no-rise-in-psychosis-accompanies-increases-in-pot-use-rates/
http://pot-facts.ca/even-more-evidence-of-cannabis-psychosis-being-a-fraudulent-scam/
27. David Malmo-Levine <malmolevine@gmail.com> Feb 3, 2022, 1:31 PM
28. https://norml-canada.org/norml-canada-statement-of-principles/
29. David Malmo-Levine, Apr 1, 2022, at 7:45 PM
30. NORML Canada <hi@norml-canada.org> Apr 3, 2022, 1:24 PM
31. https://norml-canada.org/about-us/
32. https://www.normlcanada.org/team
33. https://calyxandtrichomes.com/#/menu
https://www.signalhire.com/profiles/jennawae-mclean%27s-email/118567074
34. https://www.normlcanada.org/team
35. https://exclaim.ca/film/article/know_your_budtender_sarah_mills_at_fire_and_flower_in_kingston
36. https://ca.linkedin.com/in/sarah-mills-546602192
37. https://deanblundell.com/author/philster18yahoo-com/
38. https://deanblundell.com/news/cannabis/the-medical-cannabis-system-highly-scammed-by-dealers/
39. https://www.cannpsylaw.com/about/
40. “Killed Over Pot,” David Malmo-Levine, May 18, 2021 https://www.cannabisculture.com/content/2021/05/18/killed-over-pot/
41. Bony Jean-Pierre, man shot during Montreal North drug bust, has died Social Sharing Facebook Twitter Email Reddit LinkedIn 46-year-old shot with ‘intermediate weapon’ while fleeing scene of last Thursday’s police raid CBC News · Posted: Apr 04, 2016 https://www.cbc.ca/news/canada/montreal/montreal-north-drug-raid-1.3520308
42. “A witness recounts the strike where Bony Jean-Pierre died,” Romain Schué – TC Media, July 19, 2016
https://journalmetro.com/actualites/montreal/995340/un-temoin-raconte-la-frappe-ou-jean-pierre-bony-a-trouve-la-mort/
Legacy knows... they have been at it for years.
Constant harrassment by Vancouver police.
Lawyers,court fees, prison.
These guys are passionate and true warriers.
More pumping bs...
How long will it take for Crappy Growth to START making $
They have a licence to kill but they don,t know how.
The cannabis culture WANTS fire for cheap.
LPs Cartel is offering bunk 10$ Gamma rayed bone dry weed.
What else can they eventually sell Dorothy?
Klein?
"However, it framed the agreements as part of its push to reprioritize the premium segment of cannabis and reduce costs, which the company has been tackling through job cuts and facility closures during the COVID-19 pandemic."
Whatch out!!!
Canopy is going for Top Flowers.
Yeah right.
They recently found out that folks only care for fire, not bunk.
Crappy Growth should sell Klein and save 63 millions.
Lol.
LPs Cartel Are Doomed!!!
6 more private messages from ivman.
Dude is emotional.
Depression is a bitch.
Recalls, recalls, recalls… When will it end?
No way to make money.
Anybody home??
Free the weed!
Splurge
IVMAN IS IN LOVE!!!
She sent me another 5 private messages today.
Feels good to know some folks care about you…
Poor girl should consult but…
That red line pops her blood pressure way too high for confort.
Anybody home?
Could Happy or Dorothy look in to it please?
Why would any legacy dude take over a doomed canna biz?
Tilray only exist to sell shares to canna naive suckers.
They are great at growing recalls and losing $$$.
My guess is you,re stuck with Simon until it pops!
Legacy knows...
Arjan Roskam: An Audience With the King
PHOTOS Bonno
Arjan Roskam, the legendary Amsterdam-based CEO of Green House Brands, gets candid. He talks about his dissolution with Canopy Growth, Donald Trump, Thailand, Berner, Damian Marley and, oh yeah, magical new genetics.
BonnoSeptember 23, 2022SHARETWEET
In a world of pot pantheons, one must be exceptional to be crowned “The King of Cannabis.” Arjan Roskam, founder of the Green House Brands empire holds this moniker, thanks to a heady mix of being a passionate proponent for the plant and his tenacity for growing phenomenal phenos that rise well above the norm.
In an exclusive, wide-ranging conversation that covers everything from world leaders to exciting new cultivars, I catch up with the busy Roskam, who’s looking fit and rested from his home in Spain.
Roskam leads myriad cannabis ventures that have flourished for more than three decades and the magnitude of this magnate’s influence and connections isn’t to be underestimated.
The original Green House cannabis club in Amsterdam.
A natural entrepreneur, his kingdom includes Green House Seed Company (GHSC), Green House Coffeeshops, Green House Feeding, Green House Kitchen, GH Medical and the revolutionary Strain Hunters documentary series. He held the Netherland’s first federal grow license for pharmacies for the Stichting Institute of Medical Marijuana. And his quest for the planet’s rarest genetics has enabled scientific research into rare landrace strains—potentially unlocking untold medical advancements. He’s an ardent advocate for legalization and works with governments around the world to achieve that goal.
Born in Holland and raised in Zambia, Africa, Roskam’s journey to reefer royalty began when he was 17 while
backpacking through northern Thailand. There, a medicine man treating heroin addicts with cannabis gave him a handful of seeds and told him, “Keep those seeds. In the future, these seeds will overthrow governments.”
Young Roskam had no idea how prophetic those words would come to be.
Roskam works a cannabis field in South Africa.
In 1992, together with his wife Rose, he opened his first coffee shop, Green House Pijp, also known as The Green House, on The Tolstraat in Amsterdam. Fittingly, the area is known as the city’s Diamond District. Rose, an interior designer, created an airy, artistic space that was deliberately different from the style and vibe of Amsterdam’s existing coffee shops. Today, Green House Pijp continues to be a regular stop for A-list celebrities.
I ask Roskam about the now legendary event that changed everything: the day in January 1993 that High Times, the groundbreaking counter-culture journal of its day, went to Roskam’s coffee shop and asked him to take part in a cannabis competition they were sponsoring.
“Why not?” Roskam recalls saying. “The owners told me they’d come with maybe 100-200 people in November during the Thanksgiving holiday, to celebrate the first cannabis competition. We had totally forgotten about it when, suddenly, November arrived and 500 people appeared at my front door.” Not just customers, but international media, too.
That first year, Roskam won multiple awards, including the top prize in the coffee shop category. Naturally, people began asking for seeds.
In 1995, Roskam launched Green House Seed Company and, together with his team of master cultivators, has continued to produce cultivars with exceptional cannabinoid levels and unique terpene profiles. To date, GHSC has won dozens of worldwide accolades—a testament to the legendary genetics Roskam and his team have amassed in almost four decades.
These accomplishments have made GHSC the crown jewel of cannabis genetics, home to rare and popular varietals including Himalayan Gold and White Widow, the most popular cultivar of the 1990s. By happenstance, White Widow was my favorite strain as a young adult living in London during that decade. I loved its hazy, euphoric buzz that helped me tap into my creative flow when I was at art school.
Super Lemon Haze is, arguably, Roskan’s most celebrated—and what he credits as being “probably the most famous strain ever.” He tells me that he’s a Sativa guy and that his favorite cultivar is Hawaiian Snow—a Hawaiian Sativa x Laos cross with an uplifting high.
Strain: Super Lemon Haze
Our conversation then turns to the hot topic of the last couple of years.
In December 2020, the Dutch government introduced a strict lockdown throughout the entire country following a rapid rise in COVID cases. I ask Roskam about how it affected his businesses and he recalls the events that transpired.
“The prime minister went live on television at 4pm and two hours later, the whole country was shut down,” he says. “Across the whole of Holland, hundreds of people were lining up outside coffee shops and street dealers were handing out pamphlets with prices of cocaine, ecstasy and God knows what to everybody waiting in the line. This was of course, very, very visible to everybody. The Justice Minister panicked and called all the mayors the next day to pull it back. We were told, ‘You’re essential, now reopen immediately.’ So, we reopened for takeaway-only and that went on for a while and then we instituted the one-and-a-half-meters distance policy. We had screens in our shop and all that kind of stuff.”
For Roskam, this period presented an opportunity to really utilize the time and reset his goals—both at home and further afield.
Initially, he took the opportunity to remodel all five of his coffee shops for the first time in 27 years. Roksam explains that his style of coffee shop was still from an era when hash bars had to be at the back of the store “because it wasn’t allowed to be visible from the street under law.” Fortunately, his team included people that were handy with tools, including a plasterer, a carpenter and a plumber. “We had everything in-house,” he says.
Then, he reframed GHSC, which Roksam claims was needed because he’d been working in the Congo, Canada and was busy with other projects for the past decade. Together with Dust Lion, the head grower and breeder for GHSC, he started making new strains by crossing Old World with New World genetics. My pupils almost dilate with heady pleasure as he tells me details of the 20 to 25 new varietals in the pipeline.
Roskam then surprises me by revealing that in March 2022, Green House ended its partnership with Canopy Growth Corporation—Canada’s largest licensed producer of cannabis with globe-spanning operations—that had been in place since 2017. The fact that he quietly did this speaks volumes.
The split from Canopy is seismic news, potentially signaling more downturns for the dominant multiple state operators (MSOs) running in Canada and in the US. Overproduction is choking demand and sending prices, stocks and confidence ever downward. MSOs have been gobbling up the majority market share in newly legal markets including Connecticut, New York and New Jersey, which is proving to be detrimental to smaller, social equity license holders.
Roskam says he decided that it was time to “reset some programs that were running and that we also wanted to be out of the deal because we don’t agree with their doomed business model,” noting, however, that it was “a happy divorce.”
“We came out of this COVID period doing new things, basically with a new wind,” he tells me with a smile and a purposeful tone.
Roskam’s commitment to creating cannabis fit for a king extends beyond cultivation. He has spearheaded advocacy work that’s led to unprecedented changes to draconian laws. He advises many governments around the world—including Colombia, Macedonia and, most recently, Thailand—on how to best move forward with cannabis legalization.
Until recently, Thailand had some of the most stringent anti-drug laws in the world, but in June 2022 it became the first country in Southeast Asia to decriminalize cannabis for medical and other purposes. The Thai government recently gave away one million cannabis plants to citizens so registered households can cultivate up to six plants to sell. Recreational use, however, remains illegal, but the government also aims to release around 4,000 cannabis prisoners.
I’ve spent years in Thailand and we chat freely about our mutual love for the beautiful country—Roskam tells me he attended the very first Full Moon Party more than a quarter century ago in Ko Pha-ngan. When I bring up Thailand’s recent 180-degree turn from lock-up to liberation, Roskam became clearly animated. He pulled out his iPhone and scrolled through a shocking number of messages that he claimed to be between him and Thai government officials.
“I can’t say too much, he tells me, clearly pleased with the role he played in shifting policy so dramatically, “but what I can say is that we’re one of the forces behind this. My team went to Thailand three times and we advised the Thai government on how to take care of this.”
With his global perspective and place in helping to change laws, I ask about his perception of the US and the country’s drawn-out move toward federal legalization. What he said next made me nearly fall off my chair.
“For me, it was a total surprise that Donald Trump didn’t pull the cards eight weeks before the election, because we were lobbying like crazy,” he says casually. “We told him to pull that card because he’d get re-elected, but he didn’t. Through his famous daughter [Ivanka Trump] and son-in-law [Jared Kushner], we had some people there. But I don’t know what went wrong.”
Is the self-proclaimed King of Cannabis saying that legalizing weed could have helped Trump win the 2020 election? Roskam came across as resolute as he has been on everything. But it stopped me in my tracks. Would legalizing cannabis have moved the needle enough to get him reelected? I understand if you need a minute to process. I’ll wait…
After taking a quiet moment to absorb the steady flow of breaking news Roskam is casually dropping, I start to wonder what’s left for him to do, and in a broader context, what’s the lasting legacy of Green House.
He tells me that the company’s impact is much more than great genetics.
“I started making cannabis movies in 2006,” he says. “I’ve traveled my whole life—I grew up in Africa and have been everywhere and I thought, ‘You know what, let’s show the world what’s really going on, with 200 million poor people around the equator, depending on marijuana’. In Africa, kids can’t go to school because they have to guard the cattle, because if they don’t, the cattle will eat the vegetables and the whole family will starve. I thought it was a very important thing to show. At the same time, we were going into countries to show how really ridiculous the system was. One example is Colombia where it’s now legal. After we left, the Colombian president told the BBC: ‘I’m not going to put people in prison anymore for an ounce of weed—it doesn’t make sense anymore.’ Exactly.”
At this point, Roskam’s teenage son—who has just returned from boarding school—comes into the room. Roskam excuses himself from our conversation while he focuses his attention on his son and the two have a brief exchange in their native tongue. Just after his son leaves the room, Roskam tells me about his children’s plan to take over the family business one day—his eldest daughter is currently Green House Brand’s creative director—adding some healthy sibling rivalry.
We get back onto the topic of activism and Roskam’s role in changing the perception of cannabis.
“Being an activist and creating awareness for cannabis, together with great genetics, of course, was our main focus all the time,” Roskam says. “Giving seminars, doing interviews with CNN—it’s actually the package—what we try to show people is what makes us different. Also, our dispensaries are quite different from most dispensaries. It’s more of a smoke experience. We like people to sit down and enjoy themselves. The Dutch coffee shop system is the only system in the world where you’d see a Chinese guy, a Black guy, a white guy and an Eskimo all at one table, smoking a joint and sharing their social life. This, of course, is a really good thing, you know, to bring all these people together. And that’s one of the few places in the world where this happens.”
For more than 15 years, Roskam had an idea brewing for a show that investigated cannabis on a global scale, enlightening viewers while removing those all-familiar, outdated stigmas associated with the plant. Launching in 2008, the show became a series of documentaries called Strain Hunters.
Together with his close friend and GHSC master cultivator, Franco Loja, Roskam would spend the better part of two decades scouring the faraway mountains and jungles of the world, searching for unique and prized landrace genetics. More often than not, they were successful.
Landrace cannabis is distinguished by the fact that it’s unique to its geographical origin and adapts to the land and environment in which it develops. Landraces can be utilized for breeding, cross-pollination and the creation of new genotypes.
For the uninitiated, Strain Hunters remains must-see TV. There are some genuinely sketchy and scary times that show the astonishing lengths Roskam, Loja and their intrepid team have gone to secure those sought-after genetics.
I ask about what his most prized landrace is, and he says, without a moment of hesitation, “Punto Rojo.” Then, he holds up his phone once again, scrolling for a moment before showing me an enormous Christmas tree-like cannabis plant. It’s nothing short of amazing.
“We’re planting 9,000 [cannabis] trees in Sudan and South Africa with our partner,” Raskam says. “Because this variety comes from Colombia, which is humid, this plant has outperformed any other plant in the rainy season. When you harvest there’s a lot of rain, so you need something that’s adaptable. And so yeah, I’d say for now that’s our strongest landrace and we’re crossing that with a lot of really nice plants. As a matter of fact, we’re coming out with one special one very soon—a Watermelon Zkittlez x Cloudwalker (Punto Rojo x Mendobreath)—it’s going to be awesome.”
I was curious if Roskam had ever truly feared for his life on the expeditions over the years.
“Look, it’s very dangerous,” he says seriously. “There are some things I can’t speak about because they’re still extremely dangerous. There are some episodes [of Strain Hunters] that haven’t been broadcast because things went out of control. Anything can go wrong. I always warn my team that guns and drunken soldiers are dangerous, but the most dangerous thing is a very little animal you cannot see. It could be bacteria, it could be Ebola, could be Dengue, could be Malaria.”
The Strain Hunters crew is led down a river in South Africa.
In 2016, the Strain Hunters crew was filming in the Democratic Republic of Congo, searching for new genetics while also learning how CBD can be used to treat cerebral malaria, a preventable condition that kills more than 405,000 people a year when the unthinkable occurred.
Tragically, Loja contracted malaria in the Congo and succumbed to the aggressive disease on January 2, 2017. His passing was a devastating shock to Roskam and the Green House family and the tremors were felt by the cannabis community around the world. In March 2017, VICE on HBO featured Kings of Cannabis: Congo, which was Franco Loja’s last appearance before he died.
“How dangerous is it?” Roskam continued. “Well, Franco died. There are just a lot of things that can go wrong. It’s a mission. It’s always scary. But it’s my goal to create awareness on this planet and I put my life up for it. Franco put his life up for it, and I’ll put my life for it. My kids sometimes say to me, ‘Shut up, Papa,’ but they understand. I say, ‘Listen, maybe I don’t come back (from one of the dangerous expeditions). I wrote a letter to all of my children and they’ll get it if and when I don’t come back. It is what it is, but we—all of us—are fighting for something important. And someone has to do this.”
The late Franco Loja and Roskam stand in front of a building in South Africa.
To honor Loja’s legacy, a tribute appears on the Green House Seed Co. website: “Franco’s high-risk, fast-paced, full-gas career was only just taking off. He had invested all his time, money and passion into building up a future for himself and his children, while helping people in places such as the Democratic Republic of the Congo. His children were everything to him, and he was an amazing father.”
I wanted to know what Roskam thought Loja’s enduring legacy should be.
“Passion,” he tells me, softly. “Passion.”
So, what’s next? Roskam says he’s working on more adventures and what he reveals next is another gem of information—an as-yet-unnamed venture between GHSC and Cookies.
“The most spectacular adventure is the announcement that, with my friend Berner, we’re going to take care of Cookies seeds worldwide,” he says, smiling from ear to ear, referencing the red-hot brand owned by the Bay Area entrepreneur, rapper and newly minted billionaire, Berner. “We’re going to make that in our facilities in the US, Colombia, Denmark—everywhere.”
Oh, but there’s more.
For an episode of Marijuana Mania, Cookies co-founders Jai and Berner, Damian Marley and Strain Hunters’ co-founders Arjan Roskam and Joa Helms swap anecdotes in Nine Mile, Jamaica.
Roksam, Dust Lion and Joa Helms, CEO of Green House Coffeeshops, recently traveled to Jamaica to create a new brand with Damian Marley, youngest son of the legendary Rastafarian singer Bob Marley, called Hurb. Talk about the knights of the roundtable.
Roskam says this important new partnership “will include dispensaries and some very special strains.” The end goal, he says, is to create a breeding project that incorporates strains from Jamaica as well as Cookies’ genetics. Mind officially blown.
“Maybe this is the time for a new era in cannabis,” Arjan Roskam says, with a telling, mischievous smile.
The King of Cannabis is still clearly setting the agenda for the rest to follow. Exactly what leaders do.
https://www.youtube.com/watch?v=CqFiucWKo-8
https://www.youtube.com/watch?v=DQDDvW-uzY0
https://www.youtube.com/watch?v=BMKbNLCmUzw
https://www.youtube.com/watch?v=VwRIZHOHBLE
https://www.youtube.com/watch?v=89RH475eZYc&t=4s
https://www.youtube.com/watch?v=bpujy3Tn-bs
https://www.youtube.com/watch?v=Jsh-iw67Rl8
https://www.youtube.com/watch?v=ipYPLTArkcU
Croptober: Why Observers Say 2022 Feels Different.
With major cannabis companies posting massive losses and investor capital drying up, the fall of fail may be upon us.
Bonno September 23, 2022SHARETWEET
Like California fire season, “Croptober”—the term for the annual flood of sungrown cannabis entering the market during the fall harvest and the subsequent price shock, as supply on hand far outstrips demand—is now a year long phenomenon.
But this year aims to be worse for everyone, as October is due to bring bad tidings for c-suite types and investors in Big Weed. With the third quarter closing Sept. 30 and the next earnings reports for publicly traded companies due beginning Oct. 15, “Croptober” is on track to be “Crashtober,” the autumn of major cannabis companies’ serious problems.
Anticipating this, the #MSOgang appears to be getting ahead of the trouble. Rather than blame consumers for not buying enough cannabis or themselves for growing too much, a parade of executives and investors recently told POLITICO that the real problem is Congress, and that the real reason they have been gushing cash for years now is lawmakers’ failure to pass any number of significant cannabis reform bills.
While federal tax law and federal prohibition no doubt play a significant role, these are also not new problems for cannabis businesses. But as several observers, entrepreneurs and other cannabis business types contacted for this article said, 2022 feels different.
Investors are tired of seeing companies burn their cash. And with more than a half-billion in losses through half of 2022, companies are running out of cash to burn.
The American version of Canada’s great bubble bursting, predicted by Cannabis Now earlier this summer, might be coming sooner than we anticipated.
Just the Feds, Ma’am
Continuing a trend seen all year long—and in defiance of otherwise across-the-board inflation— cannabis prices continue to decline almost everywhere the plant is legal for Americans to buy and consume, according to recent data compiled by Cowen, one of the leading analyst houses tracking the industry. About the only place prices are high(ish) and stable are in states with new adult-use markets with limited competition, such as New Jersey.
Though most every major cannabis company in the United States has a presence in New Jersey as well as New York, where the most recent news is that licensed and regulated retail sales won’t start until 2023, almost a full two years after legalization—and both states have enormous potential measured in the billions of dollars, according to market forecasts—mere promise doesn’t appear to be enough to satisfy the concerns of investors big and small.
Despite revenue from legal cannabis projected to hit $32 billion this year and $72 billion by the end of the decade, big marijuana companies are pleading poverty. So far, the country’s two dozen biggest publicly traded firms lost a combined $550 million on revenues of $4.5 billion, as per POLITICO.
Some observers have said that cannabis companies themselves are at least partly to blame—that, maybe, they invested too much in enormous grow facilities that don’t produce enough good cannabis, or at least produced enough mediocre cannabis to depress prices and encourage consumers to shop on the traditional market. But at least publicly, most investor types are blaming lawmakers.
“The idiots in Washington are causing the problem,” as Matt Hawkins, a private equity veteran and founder of Entourage Effect Capital, which sunk big money into MSOs including Green Thumb Industries, told POLITICO. “They need to understand that in order for this industry to grow and thrive that has to be passed.”
Even advocates of small weed agreed with the general analysis. Everybody is hurt hard by tax code Section 280, which forbids cannabis businesses from making the normal tax deductions—deductions that, for other firms, mean the difference between profit and a loss, or a tiny margin or a fatter one.
“Obviously every business’ situation is different, but I would concur that federal policy is about the most significant impediment to positive cash flow, particularly the impact of 280E,” said Aaron Smith, executive director of the National Cannabis Industry Association, which advocates for small businesses. “The situation is worse for smaller businesses which cannot withstand extended periods of losses.”
That said, Smith’s sympathy is limited for large firms who based revenue projections on assumptions that federal policy would change—and then “didn’t and don’t invest in the effort to change federal policies either,” he said.
Dealing With the Flow
Observers note that cannabis executives appear to be admitting there’s trouble in various ways, sometimes subtly, sometimes very obviously. Companies have already laid off hundreds of workers across the country.
At the recent Benzinga Cannabis Capital Conference in Chicago, Curaleaf founder and chairman Boris Jordan turned heads with the prediction that 50% of cannabis sales “five to ten years out” will be infused beverages, with the other half (presumably) split between flower, edibles and vape cartridges currently dominating the market.
The prediction earned Jordan some headlines in the business press and some mockery on Twitter, but he may also have tipped his hand.
In an interview with Benzinga, Jordan also predicted that significant federal legislation would be coming by the end of the year.
He made a similar prediction—that the SAFE Banking Act, federal legislation that would allow better access to banks and investors for state-legal cannabis businesses, would pass during the lame duck session between the midterm elections and the next session of Congress—back in May.
He may be legitimately hopeful, and he may be right, but by hedging his bets that federal help is coming—or even something better five years down the road—he may also be speaking to anxious and impatient investors, wondering when (if ever) their returns are coming. Something must change, but if it’s not federal policy, cannabis companies will need to make a major correction starting as soon as this fall—the fall of fail.
Best to get someone from legacy.
They know what they are doing.
We should avoid an industry dominated by those who don't understand how the industry itself works.
Bonno
Rolling Stones Magazine
SEPTEMBER 22, 2022
While the War on Drugs didn’t start propaganda against cannabis and other drugs, the movement ran full steam ahead from the 1970s onward. The cannabis community started striking back effectively in 1996, with California passing the first state medical cannabis law. Oregon and Washington State completed a West Coast sweep of medical states in 1998 and cannabis law reformers have been making progress ever since.
The next watershed year for cannabis was 2012 when Colorado and Washington led the way by legalizing and regulating cannabis for all adults, with Oregon and Alaska following suit in 2014.
Now, there are 36 states with medicinal-use laws on the books. Now, 18 states and our nation’s capital have legalized cannabis and there’s been progress in Congress, with the United States House introducing a federal legalization bill twice.
The progress from afar certainly leaves many of us feeling hopeful, but there are still concerns about an overtaxed and overregulated system that shuts out those traditionally harmed by the drug war movement and prices small businesses out of the regulated system. This could potentially lead to more and more people turning to the illicit market.
As a cannabis business consultant in Colorado, I watched this happen firsthand while assisting business owners’ transition into the overregulated system since Colorado passed Amendment 64.
Small business owners have struggled with meeting regulations while big corporations dominate more and more of the market each and every day. An industry once forced into prohibition is now being forced out of prohibition.
Mom and pop stores and small farmers are experiencing burdensome regulations and high barriers to entry, despite being the very people who built the industry.
Further, regulators didn’t build this system for mergers and acquisitions, which typically thrive in overregulation and should be expected. As I traveled the state consulting with business owners, I saw firsthand far too many dispensaries that were just trying to overcome all of the rules and regulations.
Even though some business owners helped change local regulations, they often would be victimized by big corporate stores moving in.
It was heartbreaking seeing original cannabis pioneers and hardworking mom and pop shops forced out of the market.
Do over-taxation and overregulation create a true legal market or does it push too many back into an illegal underground market?
Are we collaborating and sharing our knowledge to create a stable system that will thrive with the prospect of potential full decriminalization or even legalization? We still have time to establish an industry with appropriate barriers to entry, allowing for fair competition.
As leaders in this industry, we need to encourage states and local governments to establish regulations and consult real experts who have been in the trenches throughout the years.
We should avoid an industry dominated by those who don’t understand how the industry itself works.
The cannabis industry, with the interplay between federal, state and local laws, is not like any other business. It is extremely difficult to survive, let alone thrive.
We need to create safe and equitable laws and allocate proper funds to these regulatory programs so they can work effectively for small businesses, the true engines of our local economies.
The cannabis industry is worth the investment, as we all have seen the amount of revenue cannabis commerce brings to states with a legal market. Let’s all work hard to ensure that we rebuild the communities that have been harmed the most.
It is also imperative that we address the needs of small farmers and mom and pops so that license fees, taxes and burdensome regulations lead to big corporations boxing out small businesses.
Regulators and policymakers should convene with those who have years of experience in the industry — and as cannabis leaders, we need to share our expertise, our knowledge gained over time, with the intent of positively shaping the industry to succeed.
Felon Martha is at it again...
Stay tuned!
Lol.
Wyld CBD parent accuses Martha Stewart CBD of copyright infringement
Oregon-based Northwest Natural Goods alleges in a lawsuit that Canopy Growth Corp.’s Martha Stewart CBD product line intentionally copied Northwest’s Wyld CBD brand packaging and marketing designs.
According to the complaint, some stores that carry both brands place them side by side, causing consumer confusion.
ivman loves to send private messages... lol
Best to call a doctor... dude is losing it... can,t take that red line pressure.
Newb.
Aurora Cannabis dropped from Toronto stock index
September 20, 2022 -
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Edmonton, Alberta-based Aurora Cannabis has been deleted from the S&P/TSX Composite Index, according to the latest quarterly review announced by S&P Dow Jones Indices.
The S&P/TSX Composite is the primary gauge for Canada-based, Toronto Stock Exchange-listed companies.
Aurora’s stock was originally added to the index in 2018.
A news release by S&P Dow Jones Indices – a division of S&P Global – doesn’t specify exactly why Aurora and three other companies were dropped from the benchmark index stemming from the routine review.
The other companies were:
Aecon Group, a construction company.
Dream Office REIT, of the real estate industry.
New Gold, of the gold sector.
Oher companies took the deleted businesses’ spots on the index.
Aurora’s stock, which is still traded on the Toronto Stock Exchange and Nasdaq, has fallen approximately 75% over the past 12 months.
The most profitable cannabis businesses in Canada are owned by government
By Matt Lamers
September 20, 2022
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Chart showing that Canada's most profitable cannabis businesses are government owned.
(This is the first in an occasional series on profits, losses and the burgeoning Canadian cannabis industry.)
The most profitable cannabis businesses in Canada are owned by various levels of government, according to MJBizDaily research.
At the same time, cumulative private-sector losses easily exceed 16 billion Canadian dollars ($12.5 billion), led mostly by big producers such as Smiths Falls, Ontario-based Canopy Growth Corp., Edmonton, Alberta’s Aurora Cannabis and Tilray Brands, which has its executive offices in New York City.
The largest companies are yet to become profitable, even though:
Investors poured billions of dollars into the industry before and after legalization in 2018.
The federal government shields Canadian producers against foreign competition in the medical cannabis market.
Canada’s federal government showered the same corporations with hundreds of millions of dollars in federal grants – money that does not have to be repaid – lobbying records reviewed by MJBizDaily show.
MJBizDaily examined financial reports for dozens of publicly traded and government-owned businesses. The research doesn’t include privately owned companies, which generally do not disclose financial statements.
The most profitable marijuana business in Canada thus far has been the Ontario Cannabis Store (OCS), which expects to earn roughly CA$262.8 million ($200 million) over a three-year period ended in the March 2022 financial year, according to the province’s fiscal outlook.
The OCS, owned by the province and whose board is appointed by government, is the monopoly cannabis wholesaler for Ontario’s 1,600-plus privately owned retail stores.
The next most profitable cannabis business in Canada is Société québécoise du cannabis (SQDC), which has earned around CA$168.5 million in net income since legalization.
The SQDC is Quebec’s government-owned monopoly cannabis wholesaler and retailer. Unlike Ontario, Quebec does not allow privately owned cannabis stores, choosing instead to employ a government monopoly over all retail sales, including online.
The BC Liquor Distribution Branch (LDB), whose operations include cannabis wholesale and some retail in British Columbia, is the third most-profitable business.
The government entity has earned roughly CA$36 million in net income from its cannabis business, according to its recent annual report.
New Brunswick’s province-owned cannabis wholesaler/retailer, Cannabis NB, has also reported healthy income.
Cannabis NB is estimated to see cumulative net income reach CA$31.7 million for 2020-21 through 2021-22.
Together, the four government-owned corporations pulled in just under CA$500 million in net income for their provinces.
Where the profits go
The government-owned cannabis businesses remit their profits back to their respective provinces.
In the case of the SQDC, all revenue after costs is entirely remitted to the Ministère des Finances in the form of a dividend.
The dividend is then reinvested, mainly in cannabis-related prevention efforts and research, per SQDC’s annual report.
In addition, SQDC collects consumer and excise tax revenue, which was estimated at CA$195.4 million. About $139 million goes to the Quebec government and $56.4 million to the federal government.
In Ontario, OCS profits also end up back in public hands.
In its annual report, the OCS said it’s “proud of its financial contributions that support important public services, particularly throughout the COVID-19 pandemic, at a time when front-line services have been essential to the economic and social health of our province.”
Amanda Winton, OCS spokesperson, said the organization is a self-funded, revenue-generating government business enterprise whose annual revenues are included in Ontario’s Public Accounts.
“Under the Ontario Cannabis Retail Corporation Act, 2017, net profits from the OCS may be paid into the Consolidated Revenue Fund and made available to the Ontario government to support its fiscal priorities. These revenues help pay for important public services that benefit all Ontario residents,” Winton said.
“Our priority is to divert consumers away from the illegal market, while operating an efficient business that delivers value for Ontario taxpayers.”
Private-sector profits?
Unlike cannabis businesses owned by Canadian governments, private-sector profits have been few and far between.
Cannabis producers face stiff government regulation, but have made numerous mistakes of their own, such as:
Losing hundreds of millions of dollars on bad greenhouse investments, leading to “balance sheet adjustments” worth billions.
Selling less than 20% of their production since adult-use legalization, which is unsustainable for any agricultural business.
Destroying vast quantities of inventory, at least 900 million grams of unpackaged dried cannabis since legalization.
Massive overproduction. The total amount of dried cannabis stored by licensed producers, wholesalers and retailers soared to 1.4 billion grams as of the end of last November.
Not all large producers have faced those challenges.
One of the most successful federally licensed mass producers has been Delta, British Columbia-based Pure Sunfarms, a subsidiary of Florida-headquartered vegetable grower Village Farms International.
Village’s Canadian cannabis business has approximately broken even, on a net income basis, over the past couple of years.
Cannabis producer Redecan reported an annual profit before it was acquired by Quebec-based Hexo Corp. in 2021.
However, Redecan, now a Hexo subsidiary, lost CA$91,000 in its latest quarter ended April 2022, according to financial records.
Decibel Cannabis Co. reported CA$1.7 million in net income in its financial year ended Dec. 31, 2021, compared with a CA$9.2 million net loss in the previous year.
Tilray has reported profitable quarters but not yet annually.
In a recent U.S. Securities and Exchange Commission filing, the company admitted that it “began operating in 2014 and have yet to generate a profit.”
Monopolies needed?
Anindya Sen, an economics professor at the University of Waterloo in Ontario, said the government doesn’t need to monopolize key parts of the cannabis supply chain to extract “rent” from the industry.
He said governments could extract the same amount of revenue from businesses via tariffs and other means, as it is evidently extracting from the industry by monopolizing essential portions of the supply chain, such as wholesale distribution.
“(The government) will still be getting the same amount of profits through a wholesale levy,” Sen said. “Then you still have the benefits of a private market, with innovation and employment opportunities, being an engine of economic growth.
“I can’t say that, in the long run, having a government monopoly is beneficial. In the short run, it might make sense to add market stability.”
If you have leads relating to this story, please email Matt Lamers at matt.lamers@mjbizdaily.com.
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