HOW DOES ONTARIO REC RETAIL WORK NOW?

Ontario’s REC Retailers were overjoyed they’ll be able to operate during the pandemic, as the first private stores in Canada allowed to deliver their own product. Then came the details: like every other set of regulations in the industry, they’re demanding.
Twitter–@trinafraser, AGCO, Harrison Jordan Blog, Venngage

  • Products must not be picked up inside existing stores (which remain closed to customers), meaning only retailers with access to an outdoor area in which to set up a curbside pick-up station will be able to offer curbside pickup. Lawyers recommend REC retailers consult with their landlords and insurance brokers.
    MJ Biz Daily
  • All products must be fully paid, without cash, online by phone prior to delivery or pickup. This may present a challenge for some platforms.
    Twitter–@WhatsMyPot
  • Deliveries may only serve residential addresses.
  • Retailers must hire their own delivery staff (who have completed the $65 CannSell certification program), and may not hire a third-party delivery service.

Reducing COVID-19 risks to employees and customers is also a critical consideration.
New York Times

  • In a Twitter thread, security expert David Hyde laid out a series of security priorities and concerns REC retailers may need to consider.
    Twitter–@davidhyde2

HOW DO YOU REVIEW A VAPE PEN?

Reviewer Brad “PancakeNap 420” Martin attempted his first ever review of a vape cartridge, “Drift #440” by TerrAscend‘s REC brand Haven St.
PancakeNap

  • It went about as well as expected: a reviewer used to measuring freshness, odours, terpenes, colours, and flavours up against a vape pen resulted in lines like “the taste has an industrial feel,” though Martin acknowledged ease-of-use as a desirable feature to the product.
  • Still, Martin concluded, “Do you enjoy cannabis flower? […] Drift #440 will take you 15% of the way.”

Complaints have emerged about the quality of both disposable pens and screw-on vape-pen cartridges. Concerns: they simply don’t work, or if they do, they clog easily or leak.
Twitter–@MattPMaurer, @AshleighSheCann

Grower Travis Lane reviewed Seth Rogen’s Canopy REC brand Houseplant “sativa” flower (actually a variant of Chemdawg), which he found overpackaged and unimpressive to smell and taste, but offering pleasant enough effects to merit the judgment of “low mids.”
Inside the Jar

WILL LOCKDOWN SPUR HOMEGROW?

This year’s planting season for outdoor crops is occurring as the country is largely locked down, leaving many to wonder if home growing will be even more popular this year than last.

One reason it might is the grassroots 4 Plants Cup just announced the winners of its collectively judged inaugural home-grown cannabis competition (entirely judged by its entrants).
Twitter–@Rudy187, @4PlantsCup, MailChimp (4 Plants Cup)

Quick Hits

  1. Even before the COVID crisis began, it was fair to presume Canadians should forget about cannabis tourism for a while.
    Inside the Jar
  2. If you aren’t sick of people fighting over whether or not we should use the terms “Indica” and “Sativa,” Canopy Growth‘s Adam Greenblatt argued the terms will be in place as long as consumers demand them. Naturally, some disagreed.
    Twitter–@adam_greenblatt

 

QUEBEC LIGHTS JOINT, UNDOES PANTS

In springtime,  Quebeckers enjoy the tradition of gathering with family and friends to visit the “cabane à sucre” (sugar shack) to enjoy a rustic meal of pea soup and beans, pancakes, bacon, ham, the pork-fat spread known as “cretons,” and crispy pork jowls called “oreilles de crisse” (“Christ’s Ears”), all drenched in maple syrup. This is ideally enjoyed followed by a slice of tarte-au-sucre (sugar pie), and fresh tire-d’érable (maple toffee) poured on snow. Youtube–Montreal Gazette, Breakfast Television

None of us can do any of that this year. Instead, Quebeckers have increased our consumption of cannabis and junk food.
Eater Montreal

Naturally, 31% said their junk food consumption had increased, while only 17% said they’d reduced their junk food intake.
Journal de Montréal–In French

  • Some 20% said they were drinking more alcohol, but 17% said they were consuming less. That nearly-stable number is striking compared to the clear increase in cannabis consumption.
    CTV News

MED AFTER CHARLOTTE

Charlotte Figi, the 13-year-old Colorado MED patient who helped normalize CBD, died last week likely of COVID-19. Many Canadian MED patients and advocates were shaken by her death.
The Star, Twitter–@AshleighSheCann, @TrinaFraser,

  • Cannabinoid treatment for pediatric patients remains controversial in Canada, with few doctors willing to prescribe MED (even CBD) to children.
    Calgary Journal

Ahead of next year’s scheduled review of the federal MED program, patients say they want faster access, pharmacists dispensing, lower prices, and more guidance. Others complain MED products are sometimes more expensive than REC equivalents.
Twitter–@SheCannCannabis, @ErinProsk

A team of scholars affiliated with the BC Centre on Substance Use published a paper on harm-reduction programs distributing cannabis to drug consumers in Vancouver’s Downtown East Side (DTES). It found cannabis helped consumers use fewer opioids, and to take the edge off lower doses or withdrawal. Cannabis also helped with pain, appetite, and sleep problems.
Science Direct

  • Study co-authors Prof. Ryan McNeil and Dr. Jenna Valleriani each have threads worth reading about the research, while co-author Dr. Rielle Capler stressed the programs remain illegal and require political pressure to change laws.
    Twitter–@rs_mcneil, @jennav5, @RCapler,

NEW CUSTOMERS AND OPPORTUNITIES VS “EXTINCTION-LEVEL EVENTS”

As COVID-19 is reshaping everything else, so it’s changing the way people buy legal REC in Ontario. Jameson Berkow, editor-in-chief of new cannabis publication The Rise, pondered the 30% of new customers ordering from the Ontario Cannabis Stores and guessed hopefully they’d been won over from the legacy market due to its reliance on potentially COVID contaminated cash.
Twitter–@JamesonBerkow

  • Other analysts suspect COVID may make legacy consumers uneasy enough about health concerns to shift to the legal market. Meanwhile, they note, isolation is likely to increase REC consumption.
    Wealth Professional

US conservative magazine The National Interest reported “Canada Only Has Good News to Share After Legalizing Marijuana,” noting evidence has disproven nearly all arguments for prohibition.
The National Interest

Some analysts believe cannabis will be less likely than other sectors to suffer as hard in the economic aftermath of the pandemic.
Benzinga

There’s also bad news:

MJ Biz Daily, which furloughed 30% of its staff last Thursday, analyzed 33 companies and found eight had less than ten months’ of funding.
Bloomberg

  • MJ Biz analyst Craig Behnke said the COVID-related economic crisis is “going to be an extinction-level event for some companies.”
  • Canadian companies still have average inflated valuations of 5x sales and 11.3x EBITDA, meaning they have room to continue falling.
  • The collective 80% decline in cannabis stocks over the past 12 months means more bankruptcies will be coming, analysts predict. After that, we can expect consolidations.
    Mugglehead

Prince Edward Island reported since they closed all cannabis stores, sales via crown retail monopoly P.E.I. Cannabis’s online portal have declined to roughly 30% to 35% of the crown corporation’s usual revenue.

AURORA SHARE ROLLUP & HEXO DEEP DISCOUNT

Aurora–facing delisting by the NYSE after more than 30 days trading for less than $1– announced its intention to consolidate shares in a board-approved 12-to-1 reverse split scheduled for May 11. The deal will give shareholders one share for every twelve they presently own.
New Cannabis Ventures, The Deep Dive

Hexo announced it raised $46M in an underwritten public offering. It did so by selling shares at $0.77, discounted 20% from the previous day’s closing price of $0.96. The company described the discount as “priced in the context of the market.”
MJ Biz Daily, Ottawa Business Journal, BNN Bloomberg

In Other Corporate News:

Organigram posted its fiscal Q2 earnings, showing net revenue declining to $23.2M from $25.2M in Q1, following declines in revenue from MED, wholesale, and international streams.
MJ Biz Daily

Aphria–related Alberta investment firm Green Acre Capital led one of two private placements for REC firm Fire & Flower, which raised a total $25M.
New Cannabis Ventures, MJ Biz Daily

James E. Wagner Cultivation‘s assets are up for sale, against a low (stalking-horse) bid of $11.95M, as part of its restructuring by Trichome Financial.
MJ Biz Daily, Trichome Financial

Sundial is scaling back its cultivation and harvesting to cut costs during pandemic, while continuing processing and relying on its available inventory. They also temporarily laid off 65% of their workforce (roughly 700 layoffs).
The Deep Dive, Twitter–@itsdgc

COVID: WAITING FOR THE PEAK

Cannabis and COVID paranoia have paired well for many this pandemic, with sales increasing and more people than usual reporting recent consumption.
Bloomberg

The Nova Scotia Liquor Corporation (which largely sells REC in separate sections of its liquor stores) began opening liquor/REC stores one hour early for seniors and those at risk.
GrowthOp

Extractor Valens began producing hand-sanitizer at their Kelowna extraction facility, aiming to generate 40,000 bottles for frontline health care workers.
Valens Blog

Wildfire Collective CEO Mark Spear called on any LPs that took over vegetable greenhouses to grow cannabis to revert back to vegetable production to offset potential fresh food shortages during a period of cannabis overstock.
Twitter–@Spearster55

 

ONTARIO PAUSES NEW REC STORE APPROVALS

The Alcohol and Gaming Commission of Ontario (AGCO) froze approvals on new stores for the duration of the provincial Emergency Order opening temporary delivery and curbside pickup.
MJ Biz Daily

Additionally, all Ontario cannabis licenses will have their terms extended by three months.
AGCO

Ottawa chief medical officer of health Dr. Vera Etches (among public health officials who’ve become pandemic celebrities) opposed a call for REC consumption sites, saying because legalization is less than two years old, “Unintended consequences are not yet known.”
Ottawa Citizen

 

ONTARIO RE-OPENS FOR REC BUSINESS

As we went into production last week, the Ontario government had just announced its decision to reverse its plan to close all private REC business in Ontario. While stores remain closed to customers, retailers are allowed to continue offering click-and-collect orders (as curbside pickup), and are even being allowed to offer delivery services for 14 days (subject to potential extension), provided drivers have CannSell certification.
AGCO, Financial, Post, Ottawa Citizen, MJ Biz Daily, The Star, Global News, BNN Bloomberg

The Ontario Cannabis Store’s online portal is processing between 8,000 and 13,000 orders per day, four to seven times more than normal, with 30% of the customers first-time buyers.
Inside the Jar, Twitter–@narbe87