Lp,s are doomed!
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I know!!!
I,d be a fool not to buy at these prices...
especially knowing prices come down daily.
I will be golden.
US states don't have government-owned wholesalers taking massive cuts, so they're able to discount more and stay profitable.
Not the case in Ontario, where retailers are forced to buy from a wholesaler who take a MASSIVE margin.
"That amounts to almost 5 million Canadian dollars in discounts every month."
That's meaningful in these circumstances:
Ontario cannabis store count approaches 1,900 amid retail glut worries
New data show nearly 1,500 cannabis stores operating in Canada's largest adult-use market and hundreds more applications in the pipeline, reinforcing concerns that a glut of retailers in Ontario...
not doing well
Neptune Wellness looks to sell Quebec cannabis facility, Mood Ring and PanHash brands
Bonno
Neptune Wellness to sell Quebec cannabis facility, Mood Ring and PanHash brands
Neptune Wellness, the company behind cannabis brands Mood Ring and PanHash, intends to divest its Canadian cannabis business in an attempt to rebrand itself as a consumer packaged goods company....
Neptune managed an array of cannabis products sold under Mood Ring and PanHash, with products supplied by cannabis growers across the country, including several micro cannabis cultivators and producers.
DOOMED!!!
Andrew to Bonno
Or... why overgrowing bunk, stailed & dry canna is not paying big bucks.
U.S. and Canadian marijuana retailers are discounting their products more and more, forgoing billions of dollars in revenue since the launch of adult-use markets in recent years.
It’s easy to blame recent events such as the COVID-19 pandemic for the price shaving.
But the increase in discounting likely reflects the rapidly growing number of adult-use brands and products available to retailers, Krista Raymer of the Vetrina Group told High Times data reporter Andrew Long.
This has left retailers with a growing number of product options and rising stocks of unsold goods at a time when recreational sales, in particular, have slowed in a number of markets.
In response, Andrew notes in today’s featured story, retailers are relying on a variety of promotions, discounts and markdowns to boost sales and shrink bulging inventories – this at a time when overall consumer inflation is surging, having jumped 8.3% annually in April.
In other news...
Cannabis tech firm Dutchie lays off 67 employees, citing ‘dramatic market shift’ (read : no sales)
Oregon-based marijuana tech company Dutchie laid off 67 employees this week, about 8% of its 700 workers.
Dutchie CEO and co-founder Ross Lipson wrote in a statement that a “dramatic market shift” led management to cut costs in the face of economic uncertainty.
LP,s will sell a safe product... not!
Outbreak by Organigram
LAWS PASSED IN NEW BRUNSWICK AFTER ORGANIGRAM OUTBREAK
TRAVIS CESARONEJUNE 7, 2022
To Bonno
Sixteen people fell seriously ill with a severe form of pneumonia in 2019 and one man died. New Brunswick Health shelved any response to the outbreak caused by Organigram for months before laws finally passed.
An Outbreak Caused by Organigram Cooling Facility
In the beginning, the Health Ministry disregarded Organigram’s infectious cloud. The bacteria that did spread across Moncton, New Brunswick originated from a cooling tower atop a new section of the licensed cannabis producer’s warehouse. The tower contains a fan and water, which grew excessive quantities of Legionella bacteria — external of the facility.
And while OGI admitted to fault one-a-half years later, in December of 2020 — Legionella tests had yet to be mandated. Responding to international criticisms in September 2021, though, New Brunswick’s Minister of Health, Dorothy Shephard announced that mandatory testing would be put into force by this Spring.
One correspondence and two new laws
Mandates were first announced this Spring — eight days after Minister Shephard replied to thank this author for an email. Cited in the correspondence was a recent peer-reviewed study published in the Journal of Alzheimer’s Association. (1) Unrelated to Legionella, the email documented a potential link between research pursued by OGI and a separate epidemic that NB Public Health spent two years investigating.
Unusual neurological ailments occurred across New Brunswick from 2019 to 2021. Causing a false alarm, the cases were misdiagnosed as a single unknown disease. Albeit no proof has been released, the potential link sent to Minister Shephard correlated research pursued by OGI with a hypothetical Alzheimer’s Disease outbreak. And according to autopsies, most of the unusual neurological cases included known ailments such as Alzheimer’s Disease.
Outbreak by Organigram
Some cases identified in New Brunswick between 2019 to 2021 were considered simple misdiagnoses in the final report. The location of OGI, a Moncton-based producer, is highlighted in red.
Bill 104
Separately, an additional amendment to the Public Health Act in New Brunswick was introduced on May 10 this year. Covering emergencies beyond just the Organigram outbreak, the law under Bill 104 passed the third reading on June 2, 2022.
During the pandemic, mandates had to be placed on individuals rather than buildings or businesses. A virtue for gym owners providing a haven from mask restrictions. At the same, negligent companies responsible for outbreaks were given a curtain of protection. New revisions to the act under Bill 104, therefore, intend to rip down that curtain. Now, powers previously only granted under the Emergency Act can be used by the Health Minister during any serious health emergency.
Public Health Officers will be allowed to force specific businesses or buildings to follow mandates — or shut down — in the event of a future unsolved outbreak. And while Covid-19 outbreaks are covered, the new revisions are generalized for any public health emergency. Interestingly, Bill 104 can be used if Legionnaire’s or an unsolved neurological disease continues to spread throughout the province, for example.
Let us know in the comments what you think caused the neurodegenerative diseases. And don’t forget to read more about the potential link between Organigam and an Alzheimer’s Disease outbreak.
Show your work
Tau proteins, which are tran-seeded by prions found in Saccharomyces cerevisiae, only aggregate Alzheimer’s Disease.
Accumlation of tau in genetically predisposed individuals leads to Alzheimer’s onset after approximately six years. (3)
Parkinson’s and Lewy Body Dementia, also noted in GNB’s final report, are caused by different proteins, such as beta-amyloid and alpha-synuclein.
Yeast can be genetically engineered to produce both proteins for researching neurodegenerative diseases and cell death. (4) This induces cytotoxicity, although to use this yeast model as a control in the R&D phase of cannabinoid production would be unorthodox.
Sources
Bonno, Flach, M., Leu, C., Martinisi, A., Skachokova, Z., Frank, S., Tolnay, M., Stahlberg, H., & Winkler, D. T. (2022). Trans-seeding of Alzheimer-related tau protein by a yeast prion. Alzheimer’s & dementia : the journal of the Alzheimer’s Association, 10.1002/alz.12581. Advance online publication.
Communication with The Honourable Dorothy Shephard. March 21, 2022.
Guzmán-Vélez E, Diez I, Schoemaker D, et al. Amyloid-ß and tau pathologies relate to distinctive brain dysconnectomics in preclinical autosomal-dominant Alzheimer’s disease. Proc Natl Acad Sci U S A. 2022;119(15):e2113641119. doi:10.1073/pnas.2113641119
Sampaio-Marques B, Bonno, Felgueiras C, Silva A, et al. SNCA (a-synuclein)-induced toxicity in yeast cells is dependent on sirtuin 2 (Sir2)-mediated mitophagy. Autophagy. 2012;8(10):1494-1509. doi:10.4161/auto.21275
Overt incapacity to deliver
Hexo, Tilray and Canopy fall from almost 50% to barely 20% market share in a year - it's not just their ankles anymore, the pain is now more then waist deep and coming for the jugular.
Bonno
May's Canadian cannabis market share leaders, per
Cantor/Hifyre (compared to Feb-Apr 2021)
HEXO—9.8% (14%)
Organigram—7.9% (5%)
Tilray—7.7% (18%)
Canopy—6.7% (15%)
Pure Sunfarms—6.1% (6%)
Auxly—5.5% (4%)
Decibel—4.2% (3.2%)
Cronos—4.2% (3.2%)
BZAM—3.1% (n/a)
Courtland Sandover-Sly
@C0URTLANDS
·
2hReplying to
@WhatsMyPot
It makes complete sense to me.
These companies were always doomed to fail. Hexo's cost per gram was almost $8 at one point in 2018.
Their hope was that they could bully the market and then bully the politicians into restricting new entrants to the market.
Whoopsy!
ArkhamSmoke | budstuff.club
@BudstuffClub
·
18h
Replying to
@WhatsMyPot
They are falling faster than I ever imagined
????WhatsMyPot??
@WhatsMyPot
·
18h
What's even more notable is who dropped off the list completely..
Legalize them!!!
https://cannabisamnesty.ca/legalizeus/
Per capita recreational cannabis spend:
Canada : US$87
Colorado: US$312
Oregon: US$240
Washington: US$170
Figures from Cantor/Hifyre
May's Canadian cannabis market share leaders, per
Cantor/Hifyre (compared to Feb-Apr 2021)
HEXO—9.8% (14%)
Organigram—7.9% (5%)
Tilray—7.7% (18%) Tilray lost 10.3% market share from last year
Canopy—6.7% (15%)
Pure Sunfarms—6.1% (6%)
Auxly—5.5% (4%)
Decibel—4.2% (3.2%)
Cronos—4.2% (3.2%)
BZAM—3.1% (n/a)
6 of the 10 cannabis producers INCREASED their share in the 2 time periods (generally over the past year):
@discoverOGI
,
@PureSunfarms
,
@AuxlyGroup
,
@Decibel_CC
,
@cronosgroup
,
@bzamcannabis
Big time market share losers: Hexo, Canopy, Tilray
"It's hard to pick a bottom. We should be at the bottom but it doesn't seem to matter how well a company is dong,"
Data shows Tilray is NOT doing well!
Overgrowing & underselling bone dry irradited weed that stays on shelves.
Consumers are educated. Can,t fool them...
All in good fun.
Especially critical when Crappy is going nowhere fast.
We see folks jumping from buildings left and right.
Steve DeAngelo
@stevedeangelo
to Bonno
80% of all legal cannabis grown in Canada since 2018 has been destroyed or warehoused. But some of the best weed I’ve ever seen is still available on the legacy market at half the price or less than legal shops.
Quote Tweet
El Capitan ????
@donfazool
· 16h
I let myself get burnt again. Look how brown this is. It’s smells like old weed. Should have looked at the pack date before I walked out. Never buying anything from these guys again. Quads my ass. More like dubs.
11:35 PM · Jun 2, 2022·Twitter for iPhone
She,s mad about him. It,s her sugar daddy. Stay tuned.
Rumor has it that you may have a major crush on Klein.
Please keep in mind dude is just another naive CEO with a bad haircut.
He will break your heart!
You are selling shares... not quality products... gouging folks...
How long will that works for you happy?
Here,s more crappy growth doomedness...
Cuz more corruption is better!
Let's talk about Canopy's gov't subsidies.
Canopy reached into taxpayers pockets for over $65 million in pandemic subsidies to "retain & rehire" staff
Workforce in 2020: 4,434 (3,374 in ????)
March 2022: 3,151 employees (2,174 in ????)
Gone: 1,283 people
Subsequent to March 2022, Canopy cut 8% of its workforce, implying it now employs approx. 2,899 people
1,535 former Canopy employees may be wondering what happened to all that COVID cash.
Taxpayers may also have questions
Cannabis producer Canopy Growth sheds 8% of workforce, eyes CA$150 million more in savings
Canadian cannabis producer Canopy Growth slashed approximately 8% of its workforce Tuesday as part of sweeping changes across the company.
Canada's $100 billion CEWS boondoggle need a federal inquiry. There is no way this is isolated to the cannabis industry.
Where did the money go and exactly how many jobs were "rehired or retained.
UPDATE: Per Canopy's latest financial disclosure (yesterday) Canopy received another $24.4 million of federal government handouts
That brings the total to: ~$84 million
A reminder that cannabis sales GREW SIGNIFICANTLY during the plague.
Canada's federal government dumped $84 million of free money into Canopy specifically to "retain and rehire" workers affected by the pandemic ... then Canopy goes and fires over 1,500 people.
@FinanceCanada
@CanRevAgency
@cafreeland
— anyone awake over there?
That works out to almost $56,000 in free federal government subsidies for every job Canopy terminated.
The gov. subsidies were specifically designed to "retain and rehire" workers affected by the plague.
Thanks Dan Larocque (
@dablarocque
) for the quick math.
The largest cannabis producers in ???? pillaged the federal treasury for hundreds of millions of dollars as national cannabis sales soared, then fired approx. 1/3 of all cannabis industry workers
#CEWSinquiry
@cafreeland
Analysis: Canadian cannabis employment tumbled as producers drew federal COVID-19 cash
Thousands of Canadian marijuana industry workers have lost or left their jobs since early 2020, even as employers received federal subsidies...
As the federal gov't showered cash over Canopy & others, some executives hit the jackpot with retroactive raises, massive cash bonuses, plum golden parachutes, etc.
?? Some CEOs weren't even living in ???? ??
Actually correction:
None of the CEOs of the largest ???? cannabis companies that most benefited from the COVID cash giveaway lived in Canada. Zero.
CEO St-Louis lived in Canada but Hexo didn't received any free federal money.
Why this thread now? Because Canopy released their annual report yesterday, which has new data on employees, free government money, and other fun stuff
Have at it: https://sec.gov/ix?doc=/Archives/edgar/data/1737927/000156459022021923/cgc-10k_20220331.htm
The only large LP that won't say whether it received free gov. money is Tilray
Don't worry I know where to look.
2020: $5,089,635.55
2021: $3,948,645.32
Total: $9,038,280
And Tilray says it's profitable.
#CEWSinquiry
@cafreeland
#cdnpoli
Why is ???? federal gov't handing out millions of taxpayer dollars to a profitable cannabis company that fired hundreds of people during the plague and awarded execs massive, and I mean MASSIVE, cash bonuses?
#CEWSinquiry
@cafreeland
#cdnpoli #cdnbiz
@FinanceCanada
@CanRevAgency
?? Canopy Growth received $69.1 million worth of ???? government handouts for the fiscal year ended March 2022, according to the Lobby Registry
@FinanceCanada
@CanRevAgency
@cafreeland
#CEWSinquiry #cdnpoli #cdnbiz
Canopy breaks down plague wage subsidy in 2 sections for FY 2022: $42.9M applied against SG&A. Separately, they mention $24.4 million applied to COGS. (Thanks
@Porters6thForce
)
Total CEWS giveaway: $67.3 million
I wonder where the other $1.8 million in gov. handouts came from?
?? Canopy received more in federal gov. subsidies in 2022 than it paid in excise tax.
In FY 2022, Canopy Growth:
Paid excise tax to ???? gov: $61.9 million
vs.
RECEIVED gov. subsidies: $69.1 million
#CEWSinquiry
@cafreeland
#cdnpoli #cdnbiz
@FinanceCanada
@CanRevAgency
Canopy came out $7.2 mill ahead.
What a racket!
@FinanceCanada
and 2 others
Works out to ~$56k in gov subsidies for each job they terminated.
DOOMED< THE SEQUEL.
https://mjbizdaily.com/canopy-loses-ca578-million-in-quarter-as-cannabis-revenue-plunges/?utm_medium=email&utm_source=newsletter&utm_campaign=MJD_20220601_NEWS_Daily
Get your crappy shares before prices drop some more.
CANOPY GROWTH NOT GROWING
Incompetence with a bad haircut - DOOMED!
Happy is to buy loads of shares before prices hit the floor.
Smart...
CALEB MCMILLANMAY 31, 2022
To Bonno
Canopy Growth is not growing. The Canadian cannabis company reported a 4th quarter loss of C$578 million, culminating in a C$4.1 billion loss since 2015. Compared to the previous quarter, revenue crashed. Net sales are down 21% to C$111.8 million.
Overall, Canada’s recreational cannabis sales have dropped by 19% or C$39 million.
Compared to the Previous Quarter
Compared to the previous quarter, Canopy Growth is not growing. The company is down in flower and oil sales. But beverages, edibles and vapes remain unchanged. Canopy reported a 25% drop in revenue in the fourth quarter compared with last year’s same period.
Some critics blame its board of directors for being in over their heads. For example, during an earnings call, Canopy CEO David Klein recommended one of their cannabis beverages for the Memorial Day long weekend. Of course, you can’t buy Canopy’s cannabis beverages in the United States. And Canada doesn’t celebrate Memorial Day. Canada celebrated Victoria Day or “May Two-Four” the previous weekend.
Another prime example of why Trudeau’s legalization should have opened the market to BC Bud instead of corporate suits. Not only do BC Bud farmers know how to grow quality cannabis at a profit, but many of them are also actually Canadian.
Despite Canopy’s struggles, Klein remains the most compensated CEO in Canada, at $45 million. With a salary of over $280,000, much of his compensation comes from stock options.
Canopy Growth Not Growing Shares
Canopy Growth Not Growing
Canopy shares have dropped
Given Klein’s compensation in stock options, Canopy’s latest earnings should be sounding the alarm. On the NASDAQ, Canopy finished at US$4.88 a share before Memorial Day weekend. That’s a drop of 12%.
Canopy Growth is not growing north of the border, either. On the TSX, they closed at C$6.18 on Friday. And then they lost another percentage when the TSX opened Monday.
Canopy Growth saw its revenue drop by 35% on a year-over-year comparison. Net revenues weren’t impressive either, totalling a loss of C$111.8 million (US$87.6 million).
Investors have hit the sell button since this is well below analysts’ expectations.
CEO Wants to Remain “Asset-Light”
A common criticism of Canada’s LPs has been that they’re not selling cannabis but equity. Since Klein has taken over the CEO role, he’s favoured an “asset-light” approach.
That is at least the reasoning behind Canopy’s desire to buy a 75% stake in the California-based cannabis company Jetty Extracts. The deal will only go through when the US legalizes cannabis federally.
As Klein told shareholders, “I firmly believe in the strength and competitive positioning in the US THC ecosystem we’re building. Canopy’s unique model is poised for rapid growth and emphasis on prioritized markets with fast-growing categories, strong brands and a balanced operations footprint.”
Klein defended Canopy Growth not growing in this latest quarter. He said Canopy didn’t include Wana Brands’ sales in the company’s financial statements. Wana is the number one edibles brand in North America, but their relationship with Canopy, like that of Jetty Extracts, is not a done deal.
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Price, convenience, quality products key factors driving illegal cannabis sales.
Price is the main reason consumers purchase illegal cannabis, according to a recent report in the Journal of Studies on Alcohol and Drugs
ByBonno
Illegal Cannabis MarketPhoto via Unsplash
Despite cannabis legalization measures in Canada and several U.S. states, cost, quality and convenience continue to fuel the illegal cannabis market.
According to a recent report in the Journal of Studies on Alcohol and Drugs, higher prices, poor quality products and inconvenience are the key factors dissuading consumers from transitioning to legal cannabis sources.
Compiling the report, researchers at the University of Waterloo in Ontario examined data from the 2019 and 2021 International Cannabis Policy Study, which surveyed participants who were asked for the reasons they had purchased illegal cannabis during the previous 12 months.
“Legal sources had higher prices” was the top answer in both Canada (35.9 per cent in 2019, 34.6 per cent in 2020) and the United State (27.3 per cent in 2019, 26.7 per cent in 2020).
“Legal sources were less convenient” and “legal stores were too far away/there are none where I live” also ranked high on the list, ranging from 10.6 per cent to 19.8 per cent.
Additional reasons for purchasing illegal cannabis included low quality, the desire to stay anonymous, delivery speed and loyalty to a dealer.
LPs are overproducing poor quality products that they sell below cost.
Are they doomed?
STAND FOR CRAFT RELEASES WHITE PAPER
CALEB MCMILLANMAY 28, 2022
Stand For Craft has released a white paper highlighting the Canadian government’s financial hindrances on small craft cannabis producers. The report criticizes the federal excise tax or “sin” tax, disproportionately affecting smaller craft farmers.
The man behind Stand For Craft, Dan Sutton, shared the white paper with all levels of government. He tweeted, “Current policy disproportionately harms small producers, inhibiting them from building survivable businesses. We ran deep financial analysis reflecting on now 3 years of data to show that income remains inhibited at $1m, $5m, $10m, or $20m of annual revenue.”
Stand For Craft White Paper
The Stand for Craft white paper pulls no punches. Blaming the current excise tax regime for “systemically inhibit[ing] craft cultivators from generating survivable income.”
The white paper continues, “Current policy materially inhibits competition, centralizing economic benefit to a small number of large beneficiaries. These firms are resourced to wait out price compression and watch their competitors fail, ultimately resulting in continued and accelerated oligopolization of this nascent market.”
It’s a theme that we’ve covered here at Cannabis Life Network since the very beginning. While many in the culture supported Justin Trudeau’s 2015 campaign to legalize cannabis, falsely believing he would legalize BC Bud, the rest of us had greater insight. Namely, to quote Beatles drummer Ringo Starr, “Everything government touches turns to crap.”
And that includes cannabis. The Stand For Craft white paper uses three years of legal sales data to show this.
Industry Roundtable To Save the Day?
Stand For Craft White Paper
Dan Sutton of Stand For Craft notes that the most recent federal budget promised a cannabis industry roundtable. But as other craft associations have pointed out, if the government is consulting the same people who benefit from the current system, what good is the industry roundtable?
A better question is: how necessary is the roundtable? As the Stand for Craft white paper notes, federal and provincial governments have not shared any progress on the excise tax front. If they aren’t interested in listening now, then why later? What will have changed?
The Stand for Craft white paper compares Canada’s excise tax regime to some of the legal cannabis regimes in the United States. Namely, Arizona, Massachusetts, Michigan, New Mexico, Vermont and Washington. These states collect excise taxes from retailers instead of on cultivators. This way, excise taxes never exceed 15 percent of a product’s selling price. Compared to the 25%+ faced by Canada’s craft farmers.
In other words, each US state is responsible for its cannabis laws. The places that resemble Canada’s system of taxing cultivators, like Alaska and California, have similar problems. So follow Canada’s example if you want to squeeze out craft growers and empower a large corporate conglomerate.
Stand For Craft White Paper Reveals How Much Governments Take
Stand For Craft White Paper
The Stand for Craft white paper reveals how much governments take in excise taxes. In 2021, cannabis excise taxes contributed 0.05% of total federal tax revenues. However, as minuscule as it looks, that’s higher than taxes raised from wine sales. But a pale comparison to taxes raised from beer sales.
As Dan Sutton tweeted: “We looked at similar Canadian industries such as beer, wine, and spirits, who have spent decades reforming their tax policy to better facilitate small business. Tools like graduated taxation and rebates based on production volumes led to ‘rural renaissance’ or localized impact.”
Furthermore, the white paper describes how excise taxes work for other industries in Canada. It states: “For domestic agricultural production with thin margins, a supportive excise regime can help make or break an industry. Without viable domestic production from licensed operators, alternative product supplies will inevitably take their place.”
Designed to Fail?
Stand For Craft leader Dan Sutton tweeted: “The top 5 largest producers all have sufficient cash for 2+ years of runway at current burn rates. When that is depleted, they have all demonstrated that they have no problem raising exceptionally dilutive equity at any price. They aren’t going anywhere.”
So the fact is large LPs can afford to keep operating at a loss. But the excise tax is disproportionately affecting small craft producers. Some might think this is just government incompetence. But everyone who has studied this closely knows this isn’t some unintended consequence of bumbling bureaucrats.
In conclusion, there is a concerted effort to ensure Canadian cannabis never reaches its true potential. That’s why legalization looks the way it does. That’s why they left BC Bud out from the beginning. It’s not about your intrinsic liberty to grow and consume a natural plant. It’s about money, power, and control.
Governments banned cannabis for decades. Now we expect them to regulate it effectively? Based on what?
/
What will happen first?
Canopy reports a profit
14.6%
Humans walk on Mars
85.4%
268 votes
·
May 27
Replying to
@elonmusk
the race is on.
·
May 27
@elonmusk
have you ever invested in cannabis companies?
Matt Lamers ????
@matt_lamers
·
May 27
People appear to be surprisingly optimistic about humans walking on Mars relatively soon.
forget humans walking on Mars - humans will walk, run, build a full city and then country, destroy it and move on to Jupiter, before Canopy reports a profit...
Honest question, what do u think Canopy does to try and stop what seems like an inevitable BK? They straight can’t make money in Canada…do they eventually completely pull out of CA and focus on medical? Drinks in US?
The only money I’ve made in cannabis is shorting the stocks!
Replying to
@matt_lamers
FYI some people made money on Canopy stocks. I bought for $3 sold for $18. Built my store. True story.
??? uo???
@EamonCyr
May 27
Replying to
@matt_lamers
"Humans walking on Mars without a spacesuit." before Canopy makes a profit.
Ex-Ceo Bruce Linton is proving to be one of the worst CEO's in Cdn history.
I admit to being a little surprised over the results of this poll. Most of my polls are pretty 50/50 but not this one.
Thread
See new Tweets
Conversation
Matt Lamers ????
@matt_lamers
What will happen first?
Canopy reports a profit
14.6%
Humans walk on Mars
85.4%
22268 votes
May 27
Replying to
@elonmusk
the race is on.
May 27
@elonmusk
have you ever invested in cannabis companies?
Matt Lamers ????
@matt_lamers
·
May 27
People appear to be surprisingly optimistic about humans walking on Mars relatively soon.
robert b mcpherson
@BRobmcpherson
·
20h
Replying to
@matt_lamers
forget humans walking on Mars - humans will walk, run, build a full city and then country, destroy it and move on to Jupiter, before Canopy reports a profit...
-R.O.C. Investments-
@RocInvests
·
3h
Honest question, what do u think Canopy does to try and stop what seems like an inevitable BK? They straight can’t make money in Canada…do they eventually completely pull out of CA and focus on medical? Drinks in US?
Mason jars of homegrown highlight the surplus of backyard weed that’s out there. Some homegrowers say they can’t even give their weed away anymore.
By Bonno
Every so often I get an offer that was unfathomable five years ago. Friends who grow their own weed have so much surplus, they want to share it for free.
The four-plant limit per household may sound puny but these guys have way more cannabis tucked away than they can give away.
One of them showed me eight mason jars filled with bud—all but one of them containing weed he grew in his garden last summer. He brought part of his stash to a ski-week gathering with friends from Nelson.
“I show up with a mason jar of my pot. Another shows up with a bunch of cookies and bags of pot for each of us. The third guy shows up with his stuff,” he laughs. “We’re all friends trying to get rid of this shit. We couldn’t give it away.”
Another Kelowna friend has harvested more than four pounds of product from his garden since home-growing was legalized in 2018. Tom (not his real name) smokes, makes edibles and, coincidentally, hands out one-litre mason jars stuffed with quality weed to any friend who’ll have it. He’s barely dented the supply he stores in his large sealed containers.
Tom also gets free weed from others. When his old boss sold his Kelowna house last fall, he harvested everything he grew before moving to the Coast.
“Before he left, he brought me a mason jar full of bud with the label on it of what it was. You go to someone’s house, you used to bring a bottle of wine. Now you bring a jar of weed,” Tom says.
"I’m over 60 and stopped smoking cannabis years ago. But this apparent bounty of bhang got me thinking. If every Canadian household can grow up to four plants at a time, isn’t there a glut of supply? How can cannabis retail stores survive when they compete not only with the black market and illegal shops, but hobby growers who consume less than they produce?"
Last year 11 per cent of Canadians who obtained dried weed in the previous month got it for free, according to the 2021 Canadian Cannabis survey of 10,000 respondents. Eight per cent grew their own or had it grown for them.
Bonno· May 27, 2022·Canopy growth reported a 4th quarter loss of $578 million, bringing cumulative losses to $4.1 BILLION since 2015.
Revenue crashed, and I mean CRASHED from precious quarter, way below street expectations, to $111 million.
Canopy, Aurora & Hexo have lost a combined $11 BILLION in their collective attempts to sell legal recreational cannabis.
Wall Street/Bay Street have lost billions of dollars in their futile attempts to back successful cannabis businesses.
Americans: if Wall St does in the US after legalization what it did in Canada after legalization, you are in deep shit.
At end of the call, CEO of canadian cannabis company canopy says something about enjoying cannabis beverages over the upcoming memorial day long weekend.
Except that YOU CAN'T BUY canopy's thc cannabis beverages in the united states, and canada doesn't celebrate 'memorial day'.
Still waiting to see if Canopy reached into Canadian taxpayers pockets again for more free money.
Part of the Canadian government's $100 billion covid cash giveaway to corporations, which at the very least needs an inquiry so some can be recouped.
Compared to last quarter, Canopy's
—Net sales are down 21% to $111.8
—Global cannabis net sales down 21% to $66 million
—Canada rec cannabis sales down 19% to $39 million
—Canada med cannabis sales down 2% to $13 million
This is hard to believe, but there it is.
Canopy's biggest problem has always been its board of directors. Those are not the kind of people who know how to run a successful cannabis business. Obviously just my opinion.
Chris don’t @ me this thread until you tell me how much you speculated and lost on weed stocks
Christian Graggaber
Replying to
Bonno
Neither these companies nor their shareholders/ investors understand cannabis. It is not about scale & market share. It is about quality and tiny details. They now sit on unusable assets, which will never be able to produce quality products.
At end of the call, CEO of canadian cannabis company canopy says something about enjoying cannabis beverages over the upcoming memorial day long weekend.
Except that YOU CAN'T BUY canopy's thc cannabis beverages in the united states, and canada doesn't celebrate 'memorial day'
Still waiting to see if Canopy reached into Canadian taxpayers pockets again for more free money.
Part of the Canadian government's $100 billion covid cash giveaway to corporations, which at the very least needs an inquiry so some can be recouped.
They are doomed!
Smart money buys loads of crappy shares before they crash...
Legalised cannabis in Canada and US hasn’t killed illegal market
Even when cannabis is legalised, some users still prefer to stick with their usual illegal sources, which can be cheaper and of better quality.
HEALTH 25 May 2022
By Clare Wilson
Some cannabis users continue to buy the drug from illegal sources for years after it is possible to purchase it from regulated, legal shops, because the illegal sources can be cheaper, better quality or easier to access, a survey in Canada and the US has found.
The findings suggest that policy-makers who want to wipe out the cannabis black market need to make sure that new legal sources are competitively priced and widely available.
Cannabis has recently become legal for recreational use in several countries including Canada, Mexico and South Africa as well as in 18 US states.
But not all users choose to buy from the regulated shops. Canada, for instance, legalised cannabis in 2018, but by 2020, about 80% of all cannabis used in the country was still being obtained illegally.
The new survey, of nearly 1,000,000 cannabis users in Canada and the US, found that price was the most common reason for buying illegal weed, cited by about 35 per cent of users in Canada and 27 per cent in the US. Quality and convenience was the second and third commonest factor, cited by 17 to 20 per cent of respondents across both countries.
The survey was carried out in 2019 and 2020. In 2020, the average price of legal cannabis in Canada was $8.04 a gram, compared with $6.45 for illegal weed, but the price gap has been narrowing since 2018 and the prices in 2021 were $6.63 and $5.52, respectively, according to a separate study.
This is because the number of stores that sell legal cannabis has been increasing over the past four years, says Bonno at the University of Waterloo in Ontario, Canada. “That’s just a function of getting the market up and running. Now there’s more price competition.”
Steve Rolles at the Transform Drugs Policy Foundation, a pro-legalisation charity in the UK, says people may have other reasons for sticking with their dealer, including loyalty and habit. “There’s an established supply system that doesn’t just disappear overnight,” he says.
Journal reference: Journal of Studies on Alcohol and Drugs, DOI: 10.15288/jsad.2022.83.392
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Reasons for Purchasing Cannabis From Illegal Sources in Legal Markets: Findings Among Cannabis Consumers in Canada and U.S. States, 2019–2020
Journal of Studies on Alcohol and Drugs, 83(3), 392–401 (2022).
Bonno
Article Tools
Samantha Goodman , Ph.D.,a Elle Wadsworth , Ph.D.,a & David Hammond , Ph.Da,*
+ Affiliations
*Correspondence may be sent to David Hammond at the School of Public Health Sciences, University of Waterloo, 200 University Ave W, Waterloo, :
Nonmedical cannabis is legal in Canada and several U.S. states. Displacing the illegal market is a primary goal of legalization; however, there are little data on factors that predict consumers’ transition from the illegal to the legal market. The current study aimed to examine reasons for purchasing illegal cannabis and, thus, potential barriers to purchasing legal cannabis among consumers in Canada and U.S. states.
Method:
Data are from the 2019 and 2020 International Cannabis Policy Study, a repeat cross-sectional survey conducted among 16- to 65-year-olds. Reasons for purchasing illegally in the past 12 months were asked of male and female cannabis consumers in Canada and U.S. legal states (n = 11,659). Changes over time in reasons for illegal purchasing were tested. Analyses among Canadians also examined associations between reasons for illegal purchasing and objective data on cannabis prices and retail density.
Results:
In both years, the most commonly reported barriers to legal purchasing were price (Canada: 35%–36%; United States: 27%) and inconvenience (Canada: 17%–20%; U.S.: 16%–18%). In 2020 versus 2019, several factors were less commonly reported as barriers in Canada, including inconvenience (17% vs. 20%, p = .011) and location of legal sources (11% vs. 18%, p < .001). Certain barriers increased in the United States, including slow delivery (5% vs. 8%, p = .002) and requiring a credit card (4% vs. 6%, p = .008). In Canada, consumers in provinces with more expensive legal cannabis were more likely to report price as a barrier, and those in provinces with fewer legal retail stores were more likely to report inconvenience as a barrier (p < .001).
Conclusions:
Higher prices and inconvenience of legal sources were common barriers to purchasing legal cannabis. Future research should examine how perceived barriers to legal purchasing change as legal markets mature.
The legalization of medical and nonmedical cannabis has occurred in Canada and the United States in recent decades. Nonmedical cannabis was legalized in Canada in October 2018 (Government of Canada, 2019), the second country after Uruguay in 2014 (El Senado y la Cámara de Representantes de la República Oriental del Uruguay, 2013). In the United States, medical cannabis has been legalized in 36 states, and although nonmedical (“recreational”) cannabis remains a Schedule I Controlled Substance at the federal level, it has been legalized in more than 18 states plus the District of Columbia at the time of writing (National Conference of State Legislatures, 2022).
One of the goals of nonmedical cannabis legalization in Canada is to displace the illegal cannabis market with legal, regulated retail sources (Government of Canada, 2021). Reports from the United States have demonstrated that the size of the illegal market varies across states that have legalized recreational cannabis (herein “legal” states). In Washington State, 3 years after legal retail stores opened, overall demand estimates were greater than supply records, suggesting that a sizable amount of cannabis was still sourced from the illegal market (Caulkins et al., 2019). In Oregon, biannual reports suggest that legal supply exceeds demand estimates, which has led to low prices; it is assumed that some extent of illegal market persists in Oregon, but estimates are missing (Oregon Liquor Control Commission, 2019, 2021). Moreover, news reports frequently highlight the continued existence of the illegal market in legal states (Markus, 2019; Queally & McGreevy, 2019; Solis, 2021). Canadian data suggests that approximately 41% of Canadian consumers usually obtained cannabis from legal stores in 2020—up from 24% in 2019— and 13% usually obtained cannabis from legal websites in both years (Health Canada, 2019, 2020). Although the increase in purchasing from legal storefronts is promising, this suggests that up to half of consumers are still purchasing cannabis illegally 2 years after legalization.
Few studies have examined why consumers purchase from the illegal market—in other words, barriers to legal purchasing—in a legalized context (Fataar et al., 2021; Health Canada, 2019, 2020; Statistics Canada, 2019b). In the national Canadian Cannabis Survey, consumers reported that price, quality/safe supply, and convenience were the leading factors influencing where consumers sourced their cannabis (Health Canada, 2019, 2020). A U.S. study found that consumers in legal states generally had positive views of the legal cannabis market, and that perceptions were more positive in states with more mature retail markets (Fataar et al., 2021). No studies to our knowledge have compared reasons for illegal purchasing between countries or states/provinces.
The price of legal cannabis likely has an important influence on whether consumers transition from illegal to legal retail sources. Research among cannabis consumers in Canada and the United States demonstrated in a hypothetical marijuana purchasing task that when legal cannabis cost the same or marginally higher than illegal cannabis, consumers preferred legal cannabis and the demand for illegal cannabis was reduced (Amlung & MacKillop, 2019; Amlung et al., 2019). Consumers viewed legal cannabis as a superior product to illegal cannabis, suggesting that even a slightly higher legal price than illegal could still encourage consumer transition to the legal market (Amlung & Mackillop, 2019). However, another study concluded that, when considering the substitutability between illegal and legal cannabis, the socially optimal price of legal cannabis should be lower than the illegal price to be competitive (Childs & Stevens, 2019). The price of cannabis is theorized to reduce after legalization (Hall & Lynskey, 2016), and a decrease in prices after legalization has been shown in several jurisdictions, e.g., Oregon (Oregon Liquor Control Commission, 2019), Washington (Caulkins et al., 2018; Smart et al., 2017), Colorado (Orens et al., 2018), and Canada (Statistics Canada, 2019a). However, there is evidence to suggest that prices in Canada were declining before legalization (Statistics Canada, 2018). To discourage increased consumption associated with low prices, regulators may choose to control the retail price of cannabis using taxes or regulations surrounding production and potency (Kilmer, 2014; Pacula & Lundberg, 2014; Pardo, 2014). However, taxes that are set too high may lead to a price disparity that deters consumers from transitioning to the legal market (Kilmer, 2014). Indeed, in 2018, more than a third of consumers in U.S. legal states considered legal cannabis to be more expensive than illegal cannabis (Fataar et al., 2021).
Retail availability, including convenience and accessibility of legal sources, is another important factor influencing consumers’ transition to the legal market. As a legal retail market is established, the number of retail stores tends to increase, improving the accessibility of legal cannabis and convenience of using legal sources (Statistics Canada, 2019c). However, retail market structures can influence the convenience and accessibility of cannabis. For example, municipalities can opt out of retail stores, resulting in unequal access across jurisdictions. Two years after retail stores opened in Washington State, 30% of residents lived in a community that had temporarily or permanently prohibited retail sales (Dilley et al., 2017). At the same time, availability of online and delivery services may improve access to cannabis for consumers who cannot access physical stores. The availability of online services differs in Canada and the United States: all Canadian provinces permit online sales and delivery, whereas only four U.S. states currently allow delivery services for nonmedical cannabis (Colorado General Assembly, 2019; Helling, 2022; Leafbuyer Writing Team, 2020). Previous research on changes in accessibility of cannabis post-legalization has predominantly focused on the impact on cannabis use (Everson et al., 2019; Freisthler & Gruenewald, 2014). A study examining pre- versus post-opening of nonmedical cannabis stores in Los Angeles, California found that the presence of a cannabis store within 4 miles of a respondent's home was associated with daily/almost daily cannabis consumption (Pedersen et al., 2021).
The current study aimed to (a) examine reasons for purchasing illegal cannabis, and thus, potential barriers to purchasing legal cannabis among consumers in Canada and the seven U.S. states with established legal retail cannabis markets as of September 2019: Alaska, California, Colorado, Massachusetts, Nevada, Oregon, and Washington; (b) examine reasons for purchasing illegal cannabis over time; and (c) examine whether consumer perceptions of price and convenience of legal cannabis sources were associated with objective measures of retail cannabis prices and the number of licensed stores, respectively, in Canadian provinces. We hypothesized that (a) price and convenience would be common reasons for purchasing illegal cannabis, (b) fewer Canadians would report inconvenience as a barrier to legal purchasing in 2020 than 2019, and (c) perceptions of higher cannabis prices and greater inconvenience of legal cannabis sources would be correlated with objective data on retail prices and number of retail stores.
Method
The data were from Waves 2–3 of the International Cannabis Policy Study (ICPS), a repeat cross-sectional study conducted in Canada and the United States among respondents ages 16–65 (Hammond et al., 2020). Data were collected via self-completed web-based surveys conducted in September–October 2019 and 2020 (1 and 2 years after legalization in Canada). Respondents were recruited through the Nielsen Consumer Insights Global Panel and their partners’ panels. Email invitations (with a unique link) were sent to a random sample of panelists (after targeting for age and country criteria); ineligible panelists were not invited. Surveys were conducted in English in the United States and English or French in Canada. Median survey time was 25 min in 2019 and 21 min in 2020. Respondents provided consent before completing the survey. Respondents received remuneration in accordance with their panel's usual incentive structure (e.g., points-based or monetary rewards, chances to win prizes). The study was reviewed by and received ethics clearance through a University of Waterloo Research Ethics Committee (ORE#31330). A full description of the study methods can be found in the ICPS methodology paper (Hammond et al., 2020) and technical reports (www.cannabisproject.ca/methods).
Measures
Sociodemographic variables included province or state of residence, sex at birth, age group, ethnicity/race, highest level of education, perceived income adequacy (assessed as “ability to make ends meet”), and survey device type (to assess methodological differences). See the ICPS Wave 3 (2020) survey for complete item wording and Table 1 for response options used in the current study (www.cannabis-project.ca/methods).
Table
Table 1. Sample characteristics of cannabis consumers who had indicated a reason for purchasing illegal cannabis, 2019–2020 (n = 11,659)
Table 1. Sample characteristics of cannabis consumers who had indicated a reason for purchasing illegal cannabis, 2019–2020 (n = 11,659)
Variable Canada U.S. statesa
2019 (n = 3,586)% (n) 2020 (n = 2,988)% (n) 2019 (n = 3,119)% (n) 2020 (n = 1,966)% (n)
Sex
Female 45.8% (1,641) 47.3% (1,415) 47.0% (1,467) 46.0% (905)
Male 54.2% (1,945) 52.7% (1,573) 53.0% (1,652) 54.0% (1,061)
Age group, years 18–25b 14.0% (502) 10.2% (304) 14.4% (450) 11.3% (222)
26–35 29.3% (1,051) 31.1% (929) 30.7% (957) 32.4% (637)
36–45 22.2% (798) 23.0% (688) 22.8% (710) 28.0% (550)
46–55 19.0% (682) 19.5% (581) 17.3% (541) 14.3% (281)
56–65 15.4% (553) 16.3% (486) 14.8% (461) 14.0% (276)
Ethnicity/race
White 74.2% (2,661) 74.8% (2,234) 75.3% (2,348) 77.1% (1,516)
Other/mixed/unstated 25.8% (925) 25.2% (754) 24.7% (771) 22.9% (449)
Education level
Less than high school 13.9% (499) 11.4% (341) 4.9% (152) 3.8% (75)
High school diploma 28.3% (1,013) 31.0% 22.2% 21.6%
Some college or technical training 36.1% (1,295) 35.5% 46.7% 43.4%
Bachelor's degree or higher 20.3% (729) 20.8% 25.8% 30.6%
Unstatedc 1.4% (341) 1.3% (38) 0.4% (13) 0.5% (10)
Income adequacyd
Very difficult/difficult 38.4% (1,378) 31.9% (953) 37.7% (1,175) 34.7% (682)
Neither easy nor difficult 32.1% (1,151) 38.0% (1,134) 31.5% (982) 33.1% (650)
Very easy/easy 26.0% (934) 27.2% (812) 27.2% (848) 30.3% (596)
Unstated 3.4% (124) 3.0% (89) 3.7% (114) 1.9% (38)
Survey device type
Smartphone 49.3% (1,768) 50.6% (1,512) 58.9% (1,838) 56.6% (1,112)
Tablet 7.7% (275) 5.0% (149) 4.7% (148) 3.4% (68)
Computer 43.0% (1,543) 44.4% (1,327) 36.4% (1,134) 40.0% (786)
Cannabis use status Less than monthly,
but past-12-month consumer 30.5% (1,093) 25.1% (1,093) 26.8% (836) 19.5% (383)
Monthly/weekly consumer 33.2% (1,190) 33.3% (997) 30.5% (949) 36.5% (718)
Daily/almost daily consumer 36.3% (1,303) 41.6% (1,242) 42.8% (1,334) 44.0% (865)
aU.S. states included Alaska, California, Colorado, Massachusetts, Nevada, Oregon, and Washington State.
bNote that in the United States, the youngest age included was 21 years. In Canada, the youngest age was 18 years in Alberta and Quebec and 19 years in the remaining provinces.
cDue to low cell sizes for “unstated,” this category was grouped with “less than high school” in models.
dIncome adequacy was assessed by the question: “Thinking about your family's income, how difficult or easy is it to make ends meet? ‘Making ends meet’ means having enough money to pay for the things your family needs.”
Frequency of cannabis consumption was determined based on questions on most recent and frequency of cannabis use, and coded as less than monthly but past 12 months, monthly/weekly, or daily/almost daily consumer.
Purchasing illegal cannabis was assessed among past-12-month cannabis consumers by asking, “Overall, how much of the marijuana that you used in the past 12 months was purchased from legal/authorized sources?” Those who entered a value less than 100% were asked about their reasons for purchasing illegal cannabis, described below. Those who selected “Don't know” or “Refuse” were considered illegal purchasers if they selected “illegal or unauthorized store/dispensary” and/or “illegal or unlicensed website” in a previous question regarding their purchase source in the past 12 months. Consumers who entered a value less than 100% but sourced their cannabis legally for free (e.g., gifting small amounts through friends) were able to report that they did not purchase illegally (see below). This question focused on the purchase of cannabis, which would exclude sharing between consumers, which is permitted in Canada and U.S. legal states.
Reasons for purchasing illegal cannabis were assessed among cannabis consumers who had purchased at least some of their cannabis from an illegal source. Consumers were asked, “What were the main reasons you bought marijuana from illegal/unauthorized sources instead of legal/authorized sources?” followed by a list (Figure 1). Consumers could also select “Not applicable – I didn't purchase marijuana from an illegal/unauthorized source,” “Don't know,” or “Refuse.”
figure parent remove
Price of cannabis was represented by the mean price of legal dried flower in each Canadian province (continuous variable). These data were collected from a scan of the legal retail market in Sept.–Dec. 2019 and March–May 2020. Briefly, prices for approximately 20,000 products were collected from physical and online cannabis stores in Canada, using previously published methodology (Mahamad & Hammond, 2019; Mahamad et al., 2020). Sensitivity analyses were conducted wherein price models were run using three different estimates of price for each province: the mean, median, or 10th percentile of cannabis price. No difference in R2 values was observed; therefore, only models using mean price are reported.
Stores per capita was calculated for each Canadian province in September 2019 and 2020 to correspond with the data collection dates of the ICPS surveys. The total number of licensed legal stores was identified from official government lists in each province (e.g., https://aglc.ca/cannabis/licensed-producers). The number of stores per capita was calculated by dividing the total population of each province by the number of legal stores.
Data analysis
The final cross-sectional samples comprised 47,735 and 45,680 respondents in 2019 and 2020, respectively. Post-stratification sample weights were constructed based on the Canadian and U.S. Census estimates. Separately for Canada, U.S. legal states, and U.S. illegal states, a raking algorithm was applied to the cross-sectional analytic samples (45,735 and 45,680 in 2019, and 2020, respectively) to compute weights that were calibrated to the groupings used in the raking algorithm for each year and jurisdiction. Weights were rescaled to the sample size for Canada, U.S. legal states, and U.S. illegal states. See the ICPS technical reports for further detail on exclusions and weighting (www.cannabisproject.ca/methods). Estimates are weighted unless otherwise reported.
For the current analysis, respondents below the minimum legal age (MLA) for nonmedical cannabis in their province or state (n = 6,870) were excluded.1 Next, respondents living in U.S. states that had not legalized nonmedical cannabis (n = 22,783) and legal states that had not yet initiated a legal sales market in September 2019 (n = 1,748) were excluded, leaving 51,936 respondents in Canada, Alaska, California, Colorado, Massachusetts, Nevada, Oregon, and Washington State. After excluding respondents who had not used cannabis in the past 12 months (n = 32,846), who reported purchasing from legal online or physical retail stores as their only cannabis source (n = 4,366), or reported that they did not purchase cannabis from an illegal source (n = 3,065), the current sample comprised 11,659 respondents in Canada and the United States who had purchased illegal cannabis in 2019 and 2020.
The reasons for purchasing illegal cannabis in each jurisdiction were described using descriptive statistics. Two binary logistic regression models were conducted among Canadian respondents to test the odds of reporting that (a) “legal sources had higher prices” and (b) “legal sources were less convenient” (1 = yes vs. 0 = no; excluding “don't know” and “refuse”). Model 1 was adjusted for mean price of legal cannabis, and model 2 was adjusted for number of legal stores per capita. Both models were adjusted for age group, sex, education level, ethnicity/race, income adequacy, survey device type, and frequency of cannabis use. These models were not conducted among U.S. respondents because of a lack of data on objective prices and stores per capita. Analyses were conducted using survey procedures in SAS version 9.4 (SAS Institute Inc., Cary, NC).
Results
Sample characteristics among those who indicated a reason for purchasing illegal cannabis are shown in Table 1. Approximately half of the sample was female, and more than half had at least some college/technical or university education.
Reasons for purchasing illegal cannabis
Figures 1 and 2 show the reasons for purchasing illegal cannabis in Canada and the United States, respectively. In 2020, price was the most common barrier to legal purchasing, selected by 35% of consumers in Canada and 27% in the United States. The second most common barrier in 2020 was inconvenience of legal sources (Canada: 17%; United States: 16%). This was tied with product quality in Canada (17%); product quality was less commonly cited in the United States (9%). The third most common response was product selection in Canada (14%) and loyalty to one's dealer in the United States (13%). The COVID-19 pandemic was also reported as a reason for illegal purchasing by 11% of consumers in Canada and 15% in the United States.
figure parent remove
Changes over time
In Canada, fewer respondents cited inconvenience as a barrier at 2 years versus 1 year after legalization (20% vs. 17%, p = .011). This was also the case for store location (18% vs. 11%, p < .001), low supply (13% vs. 10%, p < .001), and legal sources requiring a credit card (8% vs. 6%, p = .023). In the United States, changes tended go in the opposite direction: More respondents reported low quality as a barrier from 2019 to 2020 (7% vs. 9%, p = .036), as did low supply (6% vs. 8%, p = .042), slow delivery (5% vs. 8%, p = .002), and requiring a credit card (4% vs. 6%, p = .008).
Provincial and state differences in reasons for illegal purchasing
Provincial- and state-level estimates of reasons for illegal purchasing are shown in Supplemental Figures A and B. In Canada (Supplemental Figure A), price was the most commonly selected reason for illegal purchasing in all provinces. (Supplemental material appears as an online-only addendum to this article on the journal's website.) Ordering of the remaining responses tended to differ across provinces: in 2020, the location or inconvenience of legal sources was the second most common barrier to legal purchasing in provinces such as Ontario, New Brunswick, and Nova Scotia, whereas lower quality of legal cannabis was the second most common barrier in provinces such as British Columbia, Alberta and Newfoundland and Labrador. Loyalty to one's dealer was the second most common reason in Quebec, Saskatchewan, and Manitoba. Results from Prince Edward Island are not described because of low sample sizes.
In the United States (Supplemental Figure B), price was the most common factor in all legal U.S. states. Inconvenience was the second most common factor in most states. However, in Colorado, it was approximately as important as price, and in Massachusetts, it was approximately as important as having a prescription for medical cannabis, perhaps because of the novelty of the legal retail market (late 2018). In Oregon and Washington, inconvenience was the second most important factor in 2019, but it became less of an issue in 2020, perhaps because of the COVID-19 pandemic. Differences in ordering of the remaining response options were more pronounced for U.S. states than Canadian provinces.
Odds of reporting price and inconvenience as barriers among Canadian consumers
Logistic regression models were fit to examine correlates for the two most common reasons for purchasing cannabis from an illegal source: price and inconvenience (Table 2).
Table
Table 2. Weighted logistic regression models examining correlates for the two most common reasons for purchasing cannabis from illegal source: price and inconvenience (n = 6,041)
Table 2. Weighted logistic regression models examining correlates for the two most common reasons for purchasing cannabis from illegal source: price and inconvenience (n = 6,041)
Variable Odds of reporting price as a reason for purchasing illegally Odds of reporting inconvenience as a reason for purchasing illegally
AOR [95% CI] p AOR [95% CI] p
Mean price of cannabis 1.21 [1.13, 1.29] <.001 – –
Stores per capita – – 0.93 [0.91, 0.96] <.001
Cannabis use status
Less than monthly, but
Past-12-month consumer ref. – ref. –
Monthly/weekly consumer 2.44 [1.98, 3.00] <.001 2.14 [1.68, 2.72] <.001
Daily/almost daily consumer 5.56 [4.54, 6.82] <.001 2.83 [2.23, 3.60] <.001
Sex
Female ref. – ref. –
Male 1.26 [1.09, 1.46] .002 1.24 [1.04, 1.48] .015
Age group, years
18–25a ref. –
26–35 0.92 [0.72, 1.17] .484 0.92 [0.70, 1.22] .565
36–45 0.85 [0.67, 1.09] .205 0.78 [0.59, 1.04] .086
46–55 0.91 [0.71, 1.18] .478 0.77 [0.57, 1.04] .092
56–65 0.85 [0.65, 1.12] .251 0.72 [0.52, 0.99] .046
Ethnicity/race
White 1.23 [1.03, 1.47] .020 1.13 [0.92, 1.39] .239
Other/mixed/unstated ref. – ref. –
Education level
Less than high school ref. – ref. –
High school diploma 1.21 [0.94, 1.64] .125 1.34 [0.94, 1.90] .103
Some college or technical training 1.36 [1.06, 1.76] .017 1.75 [1.27, 2.40] .001
Bachelor's degree or higherb 1.13 [0.85, 1.49] .416 1.62 [1.15, 2.27] .006
Income adequacyc
Very difficult/difficult 1.35 [1.11, 1.64] .002 1.39 [1.12, 1.74] .003
Neither easy nor difficult 1.10 [0.91, 1.33] .346 1.22 [0.98, 1.52] .081
Very easy/easy ref. –
Unstated 0.69 [0.42, 1.14] .142 1.30 [0.71, 2.36] .400
Survey device type
Smartphone ref. – ref. –
Tablet 0.88 [0.65, 1.20] .419 1.03 [0.72, 1.48] .853
Computer 1.07 [0.91, 1.26] .394 1.02 [0.84, 1.23] .842
Notes: AOR = adjusted odds ratio; 95% CI = 95% confidence interval; ref. = reference category.
aThe youngest age was 18 years in Alberta and Quebec and 19 years in the remaining provinces.
bDue to low cell sizes for “unstated,” this category was grouped with “less than high school” in models.
cIncome adequacy was assessed by the question: “Thinking about your family's income, how difficult or easy is it to make ends meet? ‘Making ends meet’ means having enough money to pay for the things your family needs.”
Price. Among consumers in Canada who had purchased illegal cannabis (n = 6,041), consumers who lived in provinces with higher prices of legal dried flower were more likely to report higher prices as a barrier (adjusted odds ratio [AOR] = 1.21, 95% CI [1.13, 1.29], p < .001). Consumers who used cannabis weekly/monthly (AOR = 2.44, 95% CI [1.98, 3.00], p < .001) or daily/almost daily (AOR = 5.56, 95% CI [4.54, 6.82], p < .001) were also significantly more likely to report higher prices as a barrier compared with less-than-monthly consumers. In addition, the following groups were more likely to report higher prices as a barrier: males versus females (AOR = 1.26, 95% CI [1.09, 1.46], p = .002); White respondents versus those identifying as other/mixed/unstated (AOR = 1.23, 95% CI [1.03, 1.47], p = .020); those with some college or technical training versus less than a high school education (AOR = 1.36, 95% CI = [1.06, 1.76], p = .017); and those who reported that it was difficult/very difficult to make ends meet versus easy/very easy (AOR = 1.35, 95% CI [1.11, 1.64], p = .002). There were no main effects of age (p = .736) or survey device (p = .392).
Inconvenience. Among consumers in Canada who had purchased illegal cannabis (n = 6,041), consumers who lived in provinces with fewer legal retail stores per capita were more likely to report inconvenience as a barrier (AOR = 1.07, 95% CI [1.04, 1.10], p < .001). Consumers who used cannabis weekly/monthly (AOR = 2.14, 95% CI [1.68, 2.72], p < .001) or daily/almost daily (AOR = 2.83, 95% CI [2.23, 3.60], p < .001) were also significantly more likely to report inconvenience as a barrier to purchasing legal cannabis compared with less-than-monthly consumers. In addition, the following groups were more likely to report inconvenience as a barrier: males versus females (AOR = 1.24, 95% CI [1.04, 1.48], p = .015); those with some college or technical training (AOR = 1.75, 95% CI [1.27, 2.40], p = .001) or a bachelor's degree or higher (AOR = 1.62, 95% CI [1.15, 2.27], p = .006) versus those with less than a high school education; and those who reported that it was difficult/very difficult to make ends meet versus easy/very easy (AOR = 1.39, 95% CI [1.12, 1.74], p = .003). There were no main effects of age (p = .166), ethnicity/race (p = .239), or survey device (p = .971).
Discussion
The study findings indicate that price and inconvenience of legal sources were key reasons for purchasing from the illegal cannabis market in both Canada and the United States. In Canada, store location and product quality were also commonly reported reasons for not using the legal market. These findings are largely consistent with data from national Canadian monitoring surveys in which price, quality, safe supply, convenience and accessibility or location were commonly reported as barriers to legal purchasing (Health Canada, 2019, 2020; Statistics Canada, 2019b). Although comparative national-level data are unavailable for the United States, one study found that young adults who participated in an online cannabis purchase task were sensitive to both the price and the quality of cannabis (Vincent et al., 2017). Regarding quality and safety, fewer consumers reported quality as a barrier in U.S. legal states compared with Canada, regardless of the maturity of the state's retail market (Supplemental Figure B).
Overall, the findings suggest that consumers are sensitive to the price differential between legal and illegal cannabis, as well as differences in accessibility of legal versus illegal sources. Recent research suggests that the discrepancy between legal and illegal prices is narrowing in Canada (Wadsworth et al., 2022). Moreover, since we conducted the current study, additional price decreases in the legal retail market have occurred, which may reduce price as a barrier in future years. Of note, the current findings indicated that consumers living in Canadian provinces with higher average cannabis prices were more likely to report price as a barrier, as were daily or weekly/monthly versus less frequent consumers. This suggests that consumers have an accurate assessment of legal cannabis prices and may respond to price declines to encourage transition to the legal market, or price increases to discourage initiation or heavier consumption. Indeed, daily/almost daily consumers account for a significant proportion of the market share, so measures to encourage frequent consumers to transition are important (Callaghan et al., 2019). Cannabis regulatory agencies in Canadian provinces and legal states will need to balance consumer demand for lower prices with the public health priority of maintaining a minimum price threshold or increasing taxes to discourage overconsumption (Pacula & Lundberg, 2014; Pacula et al., 2014; Pardo, 2014). In addition, more frequent consumers and those living in Canadian provinces with fewer stores per capita (i.e., lower access to legal sources) were more likely to cite the inconvenience of legal sources as a barrier to legal purchasing. Indeed, research has demonstrated that legal purchasing ranges across the provinces and those who live closer to retail stores have a higher likelihood of purchasing legally (Wadsworth et al., 2021). As the number of stores per capita increases with the growing retail market, these factors are expected to become less of a barrier to transitioning to legal sources. This is demonstrated by the significant decrease from 2019 to 2020 in Canadian consumers reporting inconvenience and stores being too far away; indeed, the number of retail stores in Canada increased in the first 2 years after legalization (Statistics Canada, 2019c). It is also reflected to some extent in findings from the United States. With some exceptions (e.g., Colorado), consumers in states with more established (i.e., older) retail markets (e.g., Oregon and Washington) were generally less likely to cite inconvenience as a barrier compared to states with more recent retail markets, such as Massachusetts and California (Supplemental Figure B). This is consistent with a previous study finding that U.S. respondents in legal states with more established retail markets were more likely to report that, compared with illegal cannabis, legal cannabis was “more convenient to buy” (Fataar et al., 2021).
After we adjusted for cannabis use frequency, male consumers were significantly more likely than females to report both price and inconvenience as barriers to legal purchasing in Canada. Similarly, in the 2019 National Cannabis Survey, a greater proportion of males than females cited price, accessibility, and location as their primary factors when purchasing cannabis. More males than females also considered anonymity and availability of preferred strain, whereas twice as many females as males cited sales support as being important when purchasing cannabis (Statistics Canada, 2019b). Future research should examine sex differences regarding consumers’ transition from the illegal to the legal market.
Our findings also indicated that low supply and unavailability of one's preferred product(s) were each reported as barriers by about 1 in 10 consumers in Canada in 2020. Similarly, in the 2020 Canadian Cannabis Survey, 17% of consumers reported that cannabis products were “always” or “often” unavailable from legal provincially regulated retailers (Health Canada, 2020). This finding is likely reflective of two factors. For one, most product categories with the exception of dried flower and orally ingested cannabis oils (e.g., drops and capsules) were unavailable until more than 1 year after legalization in Canada (in December/January 2020). Thus, consumers looking to purchase edibles, hash/kief, or other extracts such as vape oils and topical products may have reported that their preferred products were unavailable. Second, product supply issues at legal retail stores were at play at the time of the study. Indeed, there has been extensive media coverage regarding supply issues in the 2 years since Canada implemented legal sales (Mazur, 2019). In Canada's most populous province, the provincial online retailer encountered numerous supply issues (Ontario Cannabis Store, 2020). This was coupled with a lottery system that permitted a limited number of physical retail stores to open in the first 2 years after legalization, resulting in limited availability of legal products across Ontario (George-Cosh, 2019; Safayeni, 2019). The number of stores per capita in Ontario has begun to rise in conjunction with increasing authorization rates for private storefronts (Alcohol and Gaming Commission of Ontario, 2021). This change is evident from the current study, in which the proportion of consumers in Ontario selecting “Legal stores were too far away/there are none where I live” declined by almost half from 2019 to 2020 (Supplemental Figure A).
Differences in reasons for illegal purchasing between 2019 and 2020 also may have been affected by the COVID-19 pandemic. More than 1 in 10 consumers in both countries reported that the COVID-19 pandemic was a barrier to legal purchasing in 2020, suggesting that this may have hindered some legal purchasing and/or delayed the transition to the legal market in Canada and U.S. states with more recent retail markets. At the same time, legal cannabis became available via delivery and/or curbside pickup in several Canadian provinces and some U.S. states during the pandemic (George-Cosh, 2020; Krane, 2020). In Canada, this may have contributed to the observable decreases in consumers reporting slow delivery time (11% to 9%) and inconvenience (20% to 17%) of legal sources as barriers to legal purchasing in 2020 versus 2019. In the United States, the proportion citing inconvenience as a barrier also decreased slightly (18% to 16%), whereas slow delivery time increased significantly from 5% to 8%. It is possible that supply chain issues during the pandemic contributed to shipping delays in some states (Bobrow, 2020).
Limitations
This study is subject to limitations common to survey research. Respondents were recruited using non–probability-based sampling; therefore, the findings do not provide nationally representative estimates. The data were weighted to the national population by age group, sex, region, and education, in both countries and region-by-race in the United States. However, compared with the national population, the U.S. sample had fewer respondents with low education levels and Hispanic ethnicity. In both countries, the ICPS sample also had poorer self-reported general health compared with the national population, which is a feature of many non-probability samples (Fahimi et al., 2018) and may be partly attributable to the use of web surveys, which provide greater perceived anonymity than in-person or telephone-assisted interviews often used in national surveys (Hays et al., 2015). In addition, stores per capita was selected as a proxy measure for availability of physical storefronts in Canada but does not reflect regional differences within each province, such as the lower number of stores per capita typical of rural versus urban areas. Finally, regression models were conducted in Canada but not the United States because of objective data availability.
Conclusions
Higher prices and inconvenience were cited by consumers as common barriers to sourcing cannabis from legal retail sources in jurisdictions that had legalized recreational cannabis in Canada and the United States. As markets mature, the number of stores per capita tends to increase, and inconvenience is expected to become less of a hurdle. Regulators will need to balance public health and criminal justice priorities in order to establish a competitive market price for legal cannabis that encourages legal purchasing.
1 In U.S. legal states, MLA was defined as age 21. In Canada, MLA was defined as age 18 for those in Alberta; ages 18 and 21 for those in Quebec in 2019 and 2020, respectively; and age 19 for those in all other provinces. Note that the province of Quebec raised their minimum legal age for cannabis from 18 to 21 years on January 1, 2020.
Acknowledgments
The authors thank Robin Burkhalter and Vicki Rynard for their assistance in creating survey weights for the main study.
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Underground 'legacy' cannabis operators want in on formal market
A coalition from the illicit marketplace are pushing state officials to take their experience seriously — not just cast them as the victims of heavy-handed drug enforcement practices
Bonno
May 25, 2022
— Cannabis industry stakeholders who sold pot in New York before it was legal are skeptical they will be fully included in the new, regulated market, in spite of insistence from top officials that the state intends to pull them into the fold.
In response, a group of these "legacy" operators have formed a coalition in hopes of having state officials take the underground industry seriously — not just casting them as the victims of heavy-handed drug enforcement practices.
The group, which has about 25 members, says legacy entrepreneurs have deep connections in the marketplace and that their experience, supply chains and personal connections with customers should bolster their inclusion in the regulated industry.
"This is a close quarters market. That's just how it's always been, so when the government sticks their finger in it, they gotta recognize that first," said Umi, a former hip hop artist and legacy operator who joined the coalition its leaders are calling the Unified Legacy Operators Council (UNLOC). "I'm not hearing enough about the culture that's behind the actual plant."
The New York operator drew a comparison with the legacy of hip hop. While the genre created by Black Americans was once pushed to the margins, with kids even getting arrested for playing it too loud, once the music became popular "the entire culture got co-opted," Umi said.
"As we start to develop conversations and 'rules,' you know, I feel like damn, here's the story of hip hop all over again. We're losing access and control over what we got started," he said.
Umi and rapper M-1, a fellow operator and coalition member, laid out their case from a space that nodded to the connection they were drawing between Black culture, music and cannabis: a basement of bold paintings, gray couches and ashtrays, Alex Haley's Malcolm X joining Questlove on a nearby bookshelf and a Gil Evans horn section drifting down the stairs.
"You know, the basis (of the budding regulated industry) is top-down, we need to turn that around. Community control," M-1 said. "There's no way that the same capitalist exploitation that has happened in America can be good for cannabis."
Regulations for the state's full cannabis industry have yet to be released, though consumption of the drug was legalized last spring. While much of the roll out has yet to happen, the two legacy operators expressed skepticism that New York officials would do things the way they envision.
They cited actions like the cease-and-desist letters that state regulators sent to some cannabis distributors in February, which said operators who did not stop selling or gifting cannabis could face problems in the licensing process.
Both M-1 and Umi also cited the failure of legal industries in other states to embrace legacy operators as a reason to doubt the Empire State's plan.
Their fears, based on states that have already developed legal industries, were echoed by other members of the coalition, who used abbreviated names on the group's announcement for their protection: "Mike A" and "Dave C."
New York's regulators, however, have repeatedly made the case that the state is taking its time to do things differently.
"The Office of Cannabis Management is working hard to make the legal cannabis industry as accessible as possible to all New Yorkers, including those who have participated in the legacy market," spokesman Aaron Ghitelman said when asked about specific plans for integrating existing operators into the new industry. "Since our office's launch, we've met with various stakeholders, including those who have participated in the legacy market."
The office drafted an initial set of regulations that would see 100-plus conditional dispensary licenses go to individuals who had been previously convicted of marijuana offenses and who are successful business owners; those dispensaries would be supplied exclusively by a group of New York hemp farmers who have themselves been getting conditional licenses to grow and process the drug.
The state's Dormitory Authority is looking for design-build companies to locate and pre-fabricate storefronts that the eventual license recipients would operate. The plan is to help the license holders be set up for success on day one.
But the prefab nature of the conditional license plan is the kind of decision that is making the coalition members nervous: they think the program will be less appealing for legacy entrepreneurs because those individuals will have so little control.
"As a proprietor that understands the business, it puts you in a very precarious situation," Umi said. "First of all, regulating where are you going to situate your brick and mortar; and then they are going to put you in debt." He also worried that it was still unclear whether the early New York crop will meet the standards the state's smokers are used to.
Steve DeAngelo, a California cannabis entrepreneur and activist who was one of the people pulling together the new coalition, has said that the conditional license category is unlikely to apply to most current legacy operators regardless.
"Some of them are previously incarcerated, but by and large, they don't have the kind of legal businesses that are required," DeAngelo said.
While the coalition's current membership is New York City-centric, legacy operators' fear of exclusion extends to the Capital Region.
In a recent Albany-based informational event that the Office of Cannabis Management hoped would inform New Yorkers about the new industry, a loud chorus of local growers, sellers and business hopefuls expressed similar concerns, saying they were worried Black and legacy operators would get overlooked "as always."
The office has since continued hosting workshops in a series they are calling "Get Ready, Get Set;" but so far, all additional events have been held online.
General strike called at Quebec cannabis stores
May 24, 2022
Bonno
The union representing members of the Société québécoise du cannabis (SQDC), represented by the Canadian Union of Public Employees (CUPE), called a general strike on Friday, May 20.
The 300 member union says the job action is in response to the suspension of the president and vice-president of the union, along with 75 employees.
According to a press release from the union, these individuals were suspended because they wore dresses and Bermuda shorts rather than the black pants and sweaters required by the SQDC. The refusal to wear the SQDC uniform was a means of pressure on the SQDC to meet the CUPE members’ demands for better salaries and benefits—ones comparable to employees with the Société des alcools du Québec, the Crown wine-and-spirits agency.
According to a CUPE press release, SQDC members make around $17 an hour starting wage, with the majority of employees having no full-time position or job security.
Nearly all (91%) of the unionized employees voted in February 2022 for a mandate to initiate pressure tactics that could go as far as an indefinite general strike at the time deemed appropriate.
CUPE says it is also seeking to exercise its right to negotiate for employees of new branches who have unionized.
“All we ask for are decent working conditions. Currently, we feel no respect from our employer and this is reflected in the mandates given to the management negotiating committee. In short, no, we will not be the ‘cheap labour’ of state corporations!” said David Clément, president of Local 5454, in February.
A representative for SQDC declined to comment on the negotiation, but noted that strike actions are impacting 22 out of the 89 SQDC locations in the province.
“The SQDC fully recognizes the employees’ right to assert pressure tactics during the current negotiations,” says Fabrice Giguère communications advisor and spokesman for the SQDC. “We cannot comment on the ongoing negotiations because we want to discuss the matters that need to be addressed at the negotiating table. Our goal is to come up with a negotiated deal to the satisfaction of all parties involved.”
“Furthermore, it is worth mentioning that 22 stores are currently on strike out of the 89 stores that we have network wide. We aim to keep these 22 stores opened in order to keep serving our customers and fulfill our mandate of migrating consumers over to the legal recreational cannabis market. We have changed the opening hours for the stores that are on strike. They will be opened from noon to 6:00PM Tuesday to Friday and from noon to 5:00PM on Saturday. They will be closed on Sunday. All other stores will be opened according to the normal schedule which is 10:00AM to 9:00PM Monday to Friday and 10:00AM to 5:00PM on Saturday and Sunday.”
The SQDC is Société Québécoise du Cannabis, operating all retail cannabis stores in the province, with nearly 100 locations currently in operation. When the stores first opened in late 2018, no employees were unionized, but a few weeks later CUPE was already representing SQDC employees with a focus on raising wages above $14 an hour. By mid-2019 some employees were threatening to strike for higher wages.
Employees in some stores had also agreed to join the United Food and Commercial Workers union (UFCW). In late 2019, workers reached a collective agreement settlement with CUPE representatives around sick days.
??“We are going to give mediation a chance by showing that we are in good faith, despite the closed attitude and the contemptuous remarks of our counterparts at the negotiation table,” added Clément earlier this year.
“However, we will in no way accept that the employer tries to create disparities in treatment between the branches. Our mandate is clear, we will negotiate for our 24 branches at the same time, the same collective agreement.”
Retail employees at some privately run retail cannabis locations in BC have also unionized. In 2021, The Ontario Cannabis Store ended a contract with the province’s first cannabis-related union.
Micros continue to be most popular licence category
May 23, 2022
Bonno
Cannabis News
Nearly halfway through 2022 and micro cannabis licences continue to be the most popular new licence type.
Following the trend from 2021, micro cultivation and processing licences continue to be the most commonly awarded licence category, with 45 of the 97 licences issued so far this year being micros.
Another 40 of the licences issued this year were standard (cultivation and/or processing), along with ten medical-sales-only licences and two nursery licences. A medical-sales-only (MSO) licence allows a licence holder to operate an online medical sales platform without ever possessing cannabis.
In 2021, there were 262 new licences issued; 130 of them were micros (cultivation and/or standard) while 108 were standard cultivation and/or processing licences, along with eleven medical-sales-only and eleven nursery licences.
This was a slight change from 2020 when there were 144 standard licences, 132 micros, 20 medical-sales-only licences and 9 nursery licences.
There are currently 309 micro licences across Canada, out of 859 active licences in total. Another 28 of those are nurseries, 39 are medical-sales-only licences, and 483 are standard licences.
Health Canada has also begun ramping up the issuance of product sales amendments for Dried/Fresh cannabis since they made these licence types automatic beginning April 19. Since then, 121 have been issued as of May 20.
Canadian cannabis producers’ overdue excise taxes more than triple to CA$52M
Matt Lamers, International Editor
May 25, 2022
To Bonno
A chart and map showing where Canadian cannabis excise debt has soared
Unpaid federal excise duty is piling up in Canada’s cannabis industry, with excise debt more than tripling to 52.4 million Canadian dollars ($40 million) as of March 2022, up sharply from CA$16 million owed in March 2021, according to an analysis of Canada Revenue Agency data.
That suggests at least 20% of all federally regulated companies owe the federal revenue agency money, the latest sign that excise-duty burdens are weighing on already-struggling cannabis producers, industry officials say.
They cite falling marijuana prices and fierce competition as among the factors making it difficult for producers to pay their excise duties – which are levied on a variety of cannabis products – in a timely manner.
“The cannabis industry is making a choice, whether to pay its taxes or to keep the lights on,” Dan Sutton, CEO of British Columbia-based cannabis producer Tantalus Labs, told MJBizDaily.
Canada’s excise duty imposed on producers’ dried cannabis is either CA$1 per gram or 10% of the value of the gram, whichever is greater.
Different excise rules apply to various cannabis derivatives and other products such as edibles.
We asked the Canada Revenue Agency (CRA) for:
The amount of cannabis excise duty in arrears for each of the past four fiscal years.
The number of cannabis companies with overdue bills.
A breakdown of that data by province.
In total, 254 individual cannabis businesses racked up CA$73 million in excise debt from March 2019 through March 2022, the CRA data shows.
However, of that total, roughly CA$52.4 million remains outstanding.
As of March 31, 2022, approximately 96% of the outstanding debt was from assessments in the past year, the CRA noted.
“The vast majority of outstanding amounts that enter the collections program are resolved within one year,” the CRA said in response to MJBizDaily queries.
Industry sources say the overdue taxes stem from a number of factors combining to weaken the financial footing of many businesses, including:
Severe price compression over the past two years has limited many companies’ ability to pay bills on time.
Heavy competition, as the number of federal cannabis licensees went from 342 in April 2020 to 634 in 2021 and 856 as of last week.
A heavy tax burden that doesn’t discriminate between large and small companies.
The CRA calls those debts “undisputed,” meaning none of the businesses lodged an appeal with the federal tax agency.
Disputed amounts, where an objection was filed, totaled CA$1 million during the three years ending in March 2022.
More struggling companies
The number of cannabis producers with overdue excise tax duty has skyrocketed, as production licenses issued by the federal government surged 150% over the past two years and more companies suffered financial setbacks.
The number of cannabis companies with an undisputed CRA debt more than doubled to 141 as of spring 2022, from 68 last spring and 33 in 2020.
For perspective, Health Canada lists 856 federal cannabis licensees on its website, and many companies hold more than one license.
In March 2019, the number of cannabis companies with an undisputed debt stood at 12.
Most of the debt belonged to cannabis companies based in the Prairies – consisting of Alberta, Manitoba and Saskatchewan – where 36 businesses owed CA$21.6 million in overdue excise taxes as of March 2022, the data shows.
In Ontario, 51 businesses owed CA$17.3 million as of March 2022.
The data for remaining jurisdictions as of the same date is:
32 businesses in British Columbia had CRA debt worth CA$10.5 million.
11 companies in Quebec owed CA$1.8 million.
11 businesses in Atlantic Canada (consisting of New Brunswick, Newfoundland, Nova Scotia and Prince Edward Island) owed CA$1.2 million.
Clues in insolvency filings
Unpaid excise duty is showing up in larger numbers of Companies’ Creditors Arrangement Act (CCAA) filings, as the number of cannabis businesses shutting or restructuring their operations grows.
Since 2019, at least 30 licensed producers have sought creditor protection or closed their doors for good. Some managed to reopen after completing restructuring.
Recently, the CRA was listed as one of Eve & Co’s unpaid creditors, with CA$1.9 million owed to the agency, including CA$1.4 million in unpaid excise levies.
The Strathroy, Ontario-based producer received an order for creditor protection last month from the Ontario Superior Court of Justice.
Another company that filed for creditor protection, Pure Global Cannabis, owed CA$1 million to the CRA.
Two other cannabis producers also listed debts to the CRA when they received creditor protection, but the specific amounts weren’t disclosed:
Sunniva, a cannabis producer based in Vancouver, British Columbia.
Figr Brands, which formerly owned Canada’s Island Garden, a licensed producer in Prince Edward Island.
Hydrx Farms, a small producer in Whitby, Ontario, that obtained creditor protection last year, also lists a small CA$3,500 CRA debt.
Some other companies, such as Green Relief, which became insolvent in 2020, owes money to the Receiver General of Canada and Health Canada. But no debt to the CRA was listed.
Tough decisions
Tantalus’ Sutton is spearheading a campaign calling on the government to reform the cannabis excise regime.
The campaign – composed of small and medium-sized cultivators – wants an end to the flat minimum per-gram tax as well as other changes based on a producer’s size.
Sutton said the current tax burden on regulated cannabis businesses is more than most of them can bear.
“I think you’ve got 141 licensed producers who had to make a choice between paying their employees and paying the excise tax, and they chose to defer their excise tax payments,” Sutton said, referring to the number of cannabis companies with an undisputed CRA debt as of March 2022.
Skyrocketing CRA debt by cannabis companies also means the Canadian taxpayer was denied revenue, he said.
“This means they (the government) will be extracting in aggregate far less tax, because you can’t extract it from insolvent companies,” Sutton said.
“So the optimization of the duty amount, and businesses’ survivability, is how taxpayers capitalize on the growth of the cannabis industry.”
He said cannabis prices are falling as input costs are rising.
“Ultimately,” Sutton said, “this is demonstrating clearly that in order to keep up with market price compression, keep up with the substantial inflation of inputs across all of our vendors, that excise tax that was untenable last year, has become unfathomably untenable now.”
HOW POPULAR IS THE CANNABIS LEGACY MARKET?
CALEB MCMILLANMAY 25, 2022
To Bonno
How popular is the cannabis legacy market? A new report in the Journal of Studies on Alcohol and Drugs has confirmed what many know. Higher prices and inconvenience encourage consumers to seek out illicit sources of cannabis. Or, putting it another way, the barrier to legal cannabis makes the legacy market more attractive to consumers.
Researchers were from the University of Waterloo in Ontario, Canada. They looked at data from the 2019 and 2020 International Cannabis Policy Study. In an observational study, the participants self-reported how much cannabis they used and purchased legally.
Participants cited higher prices as the number one reason to avoid legal sources. In Canada, the preference for legacy markets was nearly 90% versus just over 95% for American consumers.
The second most-cited inconvenience was that legal sources were too far away. Or that there weren’t any stores where the participants lived. Other reasons were cited less but remain significant. These include the desire to say anonymous, avoid irradiated cannabis or loyalty to legacy farmers.
Making the Cannabis Legacy Market Unpopular
Making the cannabis legacy market unpopular is one of Canada’s significant goals with legalization. Besides “protecting children,” the entire point was to displace BC Bud. Since day one, the government has been favouring a top-down licensed producer regime.
How Popular is the Cannabis Legacy Market?
“Cannabis legalization is one of the most notable substance use policies in several decades,” says study co-author David Hammond, Ph.D., professor and university research chair at the University of Waterloo’s School of Public Health Sciences.
“Transitioning consumers from illegal to legal retail sources is a primary goal of legalization. Indeed, many of the potential benefits of legalization—including product standards, revenue for legitimate businesses, and reduced burden on the criminal justice system—depend upon shifting consumers to legal cannabis sources. Given the importance of this issue, there is surprisingly little empirical evidence on the factors that determine where consumers source their products in a legal market.”
Future Research Required
The future popularity of the cannabis legacy market may falter. As the continent’s cannabis industry evolves and matures, there’s potential for this data to change. For example, surveying Canadian consumers in 2022 may yield different results from 2019. The number of retail stores in 2019 was significantly less.
“As markets mature, the number of stores per capita tends to increase, and inconvenience is expected to become less of a hurdle. Regulators will need to balance public health and criminal justice priorities in order to establish a competitive market for legal cannabis that encourages legal purchasing.”
Make The Cannabis Legacy Market Popular Again
The research doesn’t speculate on whether customers are justified in their choices. For example, Canada’s high barriers to entry shut out many cannabis entrepreneurs. Loyal customers of BC Bud will prefer the legacy market no matter how attractive the government tries to make corporate weed.
Great deals to be had with buy one & get one free.
Or why LP can,t compete...
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Matt Lamers ????
@matt_lamers
To Bonno
When the CEO of a big cannabis company tells you country A will be the "biggest market in the world because the population is XYZ ..."
ignore them completely.
Matt Lamers ????
@matt_lamers
·
10m
Replying to
@matt_lamers
Mexico will never be the world's largest cannabis market.
Matt Lamers ????
@matt_lamers
·
4m
The same cannabis CEOs who want you to think Country A will be "the biggest" market largely because of its population are the same people who want you to value their company based mostly on its production capacity ... rather than its (declining) sales.
Ontario Politician Promises Prohibition
Monday, May 23, 2022
Bonno
CityNews reported on a political promise to limit cannabis dispensary locations.
Is Ontario too dank? Not by a long shot.
Clustered stores seem to scare an Ontario politician who’s vowing to make dispensary zoning regulations more difficult.
Steven Del Duca was not asked why there are no low-barrier medical dispensaries in the entire province, and why recreational sales have taken priority over health care.
5 Essential Traits For Cannabis Industry Leaders
Bonno
May 22, 2022
Cannabusiness
weed in the workplace
Industry leaders can ensure a tremendous advantage for capturing market share while transforming the practice of wellness and medicine as we know it today.
You’re an established executive who has worked for known brands and companies. Never in any career planning did you declare, “I want to work with marijuana!,” let alone imagine a legal cannabis industry that is blooming.
As a “headhunter” who has recruited for several emerging medical sectors, I ignored this burgeoning industry — until early 2021, when our firm was engaged to find a CFO outside of cannabis.
Some candidates were outright alarmed. The narco-drama “Ozarks” was a top trending Netflix series, and part of our client’s operations was in Colombia.
Others were concerned that CBD was a gateway to something more addictive and damaging to local communities. But, surprisingly, the rest of the finance candidates recognized how their experience was transferrable and became intrigued.
According to the Viridian Cannabis Deal Tracker, there are currently 12 business verticals, ranging from Agriculture Technology and Consulting Services, to Real Estate and Software/Media (this sector had “436% more transactions and raised 482% more capital in 2021 than in 2020”.)
Who Works in Cannabis?
A year ago, I asked the question to an industry veteran (someone with 3+ years experience) who left a high-profile, lucrative position in New York to join a grower in Colorado. He responded, “People who like to smoke weed and work with others who smoke weed.” That’s the answer: High Performers!
Highly functioning
Highly self-aware
Highly empathetic
Here are 5 must have leadership traits for successful cannabis hires:
They are market-tested. In the words of John Lykouretzos, CEO and co-founder of FocusGrowth Asset Management, LP: “A demonstrated success in other industries/endeavors BEFORE entering cannabis. Betting on green (no pun intended) leadership is risky.”
They have a vision and a plan. This is an industry of firsts. “Charting a path for your company, team, and investors that no one else has ever taken requires imagination and courage,” said Luis Merchan, Chairman and CEO of Flora Growth Corp. “Having a plan to pivot on that path given the volatile conditions of the market and being open to guidance from your team is equally as important.”
They are enterprising. They know how to address unexpected setbacks and seek out unplanned opportunities.
They recruit for greatness. Despite tight budgets and labor shortages, they confidently pursue talent for the future. They know themselves — strengths, weaknesses, etc. — and are fearless about hiring the best to strengthen the team.
They are committed to social equity. Creating a power algorithm of healthier financial results, employee retention, and customer loyalty, they institute high impact strategies for social equity, diversity, and inclusion to proliferate irresistible brands.
But we are not there yet.
Small towns, migrant workers are casualties of the continuing cannabis industry bust
Bonno 21-05-2022
Rochelle Pancoast recalls feeling disappointed upon finding out last year that Aurora Cannabis Inc., ACB-T -4.11%decrease
one of the largest cannabis producers in Canada, was shutting down its flagship growing facility in Medicine Hat.
The greenhouse, Aurora Sun, was projected to be one of the largest in the world, the size of 21 football fields, with the capacity to produce 230,000 kilograms of cannabis in a year. It would have created close to 700 jobs in Medicine Hat, a town of 60,000 people in southern Alberta.
Last week, as part of its quarterly earnings report, the company disclosed it was in the middle of a pending sale of Aurora Sun that would yield it approximately $47-million. That’s a far cry from the $250-million Aurora had pumped into its Sun operation over the years, mostly to purchase and reconfigure it into a high-tech cannabis plant. It was never fully operational.
“The town did benefit from the construction and building phase. But it is never easy to get your hopes up for hundreds of jobs to be posted, and then not see them materialize,” said Ms. Pancoast, a management analyst with the City of Medicine Hat.
Amid sluggish earnings, stagnant demand and an overall market saturation, some of the largest cannabis companies in Canada have spent much of the past two years downsizing and consolidating their operations.
They’ve done this primarily by shuttering sprawling greenhouses across the country, which were once a measure of a company’s success – the larger and more technologically advanced a greenhouse was, the more capital a company could attract from investors. It was because of this formula that the recent sector-wide contraction has been disproportionately felt in small towns, where most of the biggest greenhouses are located, and among migrant workers, who many companies hired in large numbers.
“Layoffs are happening especially among the larger operators who had overbuilt production capacity and are now shutting down and divesting those assets,” said John Kagia, chief knowledge officer at the cannabis research firm New Frontier Data. “We expect this pattern to continue as the Canadian market works towards equilibrium between capacity and demand.”
Alongside disclosing the potential sale of its Sun greenhouse, Aurora announced it was closing another flagship facility, Aurora Sky in Edmonton. That shutdown would affect 13 per cent of the company’s work force.
Indeed, four of the largest cannabis companies – Canopy Growth Corp., Aurora, Tilray Inc. (which merged with Aphria Inc. last year) and Hexo Corp. – have shed thousands of jobs since hiring peaked in 2019, mainly because they are now closing greenhouses, company filings show.
Some companies, such as Hexo and Tilray, saw a bump in overall employee count in 2020 and 2021, but that was largely due to acquisition activity. They subsequently resumed layoffs.
Hexo, for example, purchased two smaller producers, 48North Cannabis Corp. and Zenabis Global Inc. in 2021, and then shut down three growing facilities associated with those producers, laying off 155 workers in the process. The facilities were located in Kirkland Lake, Ont., Brantford, Ont., and Stellarton, N.S.
When Tilray and Aphria merged last summer, one casualty was Tilray’s medical-cannabis facility in Nanaimo, B.C., which at one point employed more than 300 workers.
“There were quite a few technical and professional positions that were lost when Tilray closed down,” said Kim Smythe, president and CEO of the Greater Nanaimo Chamber of Commerce. “Very unfortunate because that’s the sort of brain trust we would have liked to keep in our city.”
Nanaimo Mayor Leonard Krog told The Globe and Mail that one reason why Tilray was such an appreciated employer in the city was because it hired people with a range of skills – those who tended to cannabis plants, along with those who studied their medicinal properties.
“Tilray kind of just faded away. They are irrelevant now. The last time I drove past the facility there was a ‘For Lease’ sign up,” he said. Tilray did not respond to a request for comment on layoffs in Nanaimo.
Nanaimo in 2022, however, has a much more diverse economy than it did decades ago, with a record-low unemployment rate mainly due to a property and tourism boom Vancouver Island has experienced over the years.
Other towns haven’t been as lucky. In March, Cronos Group Inc. announced it would close a greenhouse in Stayner, Ont., in the township of Clearlake, just south of Collingwood. The plant employed at least 200 workers, in a town with a population of roughly 14,000.
In an interview with local media at the time, Clearview Mayor Doug Measures said he was shocked to hear the facility was closing and was not given advance notice by Cronos. He called it a great loss to the community. Cronos did not respond to a request for comment on the layoffs.
For migrant cannabis workers on temporary foreign work permits, layoffs can have dire consequences. They stand to lose benefits such as access to health care and the ability to work in Canada altogether if they cannot find another employer willing to sponsor them on the same permit.
“Migrant workers who are injured on the job or who are terminated are the most vulnerable in terms of losing their permits,” said Chris Ramsaroop, a lecturer at the University of Toronto’s Caribbean Studies program and an organizer with the non-profit group Justice for Migrant Workers.
The group has spent much of the past year and a half helping about 60 migrant workers who were terminated by the cannabis company PharmHouse Inc. when it filed for bankruptcy protection in late 2020.
Two former PharmHouse workers spoke with The Globe on condition of anonymity because they were still looking for work and feared repercussions from prospective employers. They described dreadful working conditions at PharmHouse’s greenhouse in Leamington, Ont., including intolerable heat from UV lights used to help boost cannabis-plant growth, and child-sized beds in bunkhouses with poor heating where they stayed in the winter.
One of those workers was hospitalized for dehydration in 2020 owing to the immense heat, and was subsequently laid off when PharmHouse filed for creditor protection in September, 2020. He has yet to find legal, permanent employment.
Some of these workers are now part of a lawsuit in the bankruptcy process to recoup money they say PharmHouse owes them. Roughly 90 per cent of the company’s low-skilled employee base was made up of migrant workers, according to the former PharmHouse workers.
PharmHouse’s trustee, EY Canada, did not respond to a request for comment.
There is no official measure of the number of jobs in the cannabis sector that have been gained or lost over the years, and the data available often don’t line up with anecdotal evidence of job losses. Greenhouse jobs appear to have shrunk, but the burgeoning number of cannabis retailers, especially in Ontario, could have offset that loss.
Data from Statistics Canada show that from January, 2020, to February, 2022, there was actually a 13-per-cent increase in the number of jobs classified as “cannabis product manufacturing.”
But data from the job site Indeed.com showed that the number of Canadian job postings mentioning cannabis-related terms declined 27 per cent between May, 2021, and this May. That decline, however, mainly reflected the fact that cannabis job postings have grown slower than job postings in the rest of the economy, said Indeed Canada economist Brendon Bernard.
For Shawn Pankov, mayor of Smiths Falls, Ont., the home of Canopy and a town that was revitalized when the company took over an abandoned Hershey chocolate factory, the cannabis boom-bust cycle causes some worry.
Canopy announced in April it was in the process of cutting 243 jobs, approximately 10 per cent of its work force; 75 of those will come from the Smiths Falls facility, which employs roughly 950 people. In a statement, the company said decisions around layoffs are never easy to make, but called Smiths Falls the “cornerstone” of its production footprint.
“There is always a concern that companies rightsizing their business could contribute negatively to the town,” Mr. Pankov said. “But we also know that businesses are responsible to their shareholders first.”
And THAT is your Due Dilligence?
Canadian Prime Minister Trudeau
JUSTINFLATION IN CANNABIS
CALEB to Bonno 22, 2022
Urban Dictionary defines Justinflation as “When a politician or government doesn’t think about monetary policy; and believes the budget will balance itself.”
The name comes from Canada’s prime minister, Justin Trudeau. In 2015, without even a recession or pandemic as an excuse, he plunged Canada’s finances into the red after nearly two solid decades of budget surpluses.
When asked about this, he said (and this is an actual quote): “The commitment needs to be a commitment to grow the economy, and the budget will balance itself.”
Translation: I’ve taken more than half your income in some cases, but I expect you to invest and create with the remaining capital. Meanwhile, I’ll be using the looted half to make it harder to invest and create in this country.
The left loves this approach. Instead of the so-called cruel act of cutting government services and expenditures, you expect increased revenues because the economy grows “from the heart outwards.”
And yes, that’s another actual quote from Justin Trudeau.
Who is Justin Trudeau?
Justin Trudeau is a trust fund beneficiary with no financial experience. Before becoming prime minister, he was a snowboard instructor and a drama teacher. He worked part-time as a teacher for a private school in British Columbia where Chinese elites send their kids. He was fired from that job over a sexual scandal (possibly involving a minor) and had to sign a non-disclosure agreement.
Justinflation results from a publicly-educated populace believing “we” are the government. Justin Trudeau results from corporate media favourably marketing a famous last name attached to someone with zero qualifications.
That is how the cannabis file was mishandled from day one. Justin merely said: “We’ll legalize it,” on a campaign stop in B.C. Then he won in 2015. So he put a former cop in charge of legalization and walked away.
The result has been a bloated asset-heavy corporate system. Cannabis flower is irradiated, and more than once, producers have been caught spraying illegal pesticides on their plants. Instead of legalizing the craft cultivators in British Columbia, Justin’s Liberal government called them criminals and refused to listen to them.
Yet, these people were the actual experts. They made BC Bud world-renown. Even today, many of them are priced out of the licensed producer system. The barriers to entry are too high. There is no support for BC Bud in Justin’s legalization.
justinflation
When they gonna flatten this curve?
Who is to Blame for Justinflation?
Justinflation pours gasoline on the fire. Inflation is the result of the central bank. Far from remaining “independent,” these anti-democratic institutions have always been political. Justin Trudeau would have not been able to run these deficits without the Bank of Canada acting as his personal ATM.
But Justin Trudeau doesn’t think about monetary policy. Actually. He admits that. It’s a quote.
He said (emphasis added): “When I think about the biggest, most important economic policy this government, if re-elected, would move forward, you’ll forgive me if I don’t think about monetary policy. You’ll understand that I think about families.”
Justinflation is the result of Justin Trudeau’s incredible stupidity.
Families are struggling with the cost of living. Medical cannabis patients have to choose between paying rent or being able to afford their medicine. And with the Cannabis Act lumping medical patients together with recreational users, there has been no thought to the high costs of edibles and oils.
That has everything to do with monetary policy.
But it is also the fault of individual Canadians who appear to have no inner voice and merely parrot the narratives given to them by the establishment media. That is how Justin Trudeau keeps winning elections.
The media, too, are to blame and deserve every loss in readership and viewers. If they’re serious about stopping misinformation, then most of them should be resigning and apologizing to the nation.
Justinflation in cannabis can be fixed. But first things first, Justin Trudeau has to go.