• Police in BC have traditionally left compassion clubs alone, and many saw the raid as a betrayal of trust between police and the MED patient community.
• Mononymous grower Remo (of cannabis nutrients firm Remo Brands) called the VCBC “true medical access. Recreational people need not apply. […] What a devastating day for so many sick people.”
  Twitter—Remo

• The Cannabis Council of Canada argued the tax, chiefly aimed at nicotine vaping products, would make legal products less competitive with illicit ones, and most insiders agreed.
  MJ Biz Daily, Twitter—Tom Ulanowksi, Trina Fraser, GoBlueCDN
• Health Canada said this week it was “actively monitoring” the US Centres for Disease Control and Prevention’s conclusion that vitamin E acetate is “a very strong culprit” behind the VAPI epidemic. The agency acknowledged vitamin E acetate is banned from Canadian vape products.
  CTV News

1. Facing a lot of bad news in the Canadian sector, many are turning their hopes to Europe, which they expect will begin legalizing soon. Business In Vancouver
2. Aleafia said its first outdoor harvest achieved the cheapest cannabis in the legal industry, produced at roughly $0.10 per gram.
   Bloomberg

• Regulators warned they had witnessed cases in which “corporate governance related disclosures were deficient,” meaning some buyers and sellers had not disclosed their financial interests in mergers and acquisitions. The CSA declined to comment on specific cases.
  MarketWatch, Globe and Mail

1. LPs can’t just throw solid cannabis plant waste—or, in the case of CannTrust, $77M in unlicensed product—in their municipal compost bins. The various ways they can get rid of such waste each have their pros and cons.
   Mondaq
2. Four in 10 managers believe they don’t have a duty to accommodate MED use, while 73% believe they can drug-test employees if the CEO approves. Meanwhile, three in 10 workers believe they can automatically consume MED on the job if they’ve disclosed they have a MED license. They’re all wrong.
   Canadian HR Reporter

• Province-wide, Alberta has approved 306 REC stores, and expects to hit 500 by 2021.
• Alberta Gaming Liquor and Cannabis is experiencing chaos following the newly elected provincial UCP government sacking most of the board in August.
  CBC Calgary

Quick Hits

1. Alberta’s UCP government is stripping cannabis producers of agricultural tax exemption ahead of the 2020 tax year. Noting big players like Aurora will be able to take the increase in stride, a Twitter user from MED producer Boaz responded to premier Jason Kenney, “Due to your removal of cannabis from agricultural tax exemptions, our small, family-run LP will pay 3x more property taxes in 2020.”
   CBC Edmonton, Twitter—TheStarTrekGirl
2. BC producers want the province to hurry up and allow farm-gate sales and on-site consumption lounges, with which many imagine they can turn regions of the province into cannabis facsimiles of tourist-friendly wine regions.
   Business in Vancouver, Twitter—Dan Sutton

• City administrators angered councillors by writing to the Alcohol and Gaming Commission of Ontario to formally oppose a planned REC store location. They argued the store was too close to a school and mental-health treatment centre, even though it was located outside provincial buffer limits around schools.
  CBC Windsor
• Councillors accused city administrators of ignoring REC retail criteria they had laid out.
  Blackburn News

• Mayor Bonnie Crombie said she was “very startled” by the number of illicit dispensaries operating in Mississauga. She now believes it would be cheaper to allow legal REC than to opt out of REC retail and be forced to deal with illicit dispensaries.

• Drake announced his partnership with Canopy last week, under which he became 60% owner of Canopy subsidiary LP More Life.
  Globe and Mail
• At the same time, news was breaking that Drake’s company Dream Crew filed a US trademark application to use Health Canada’s THC-stop sign warning symbol on branded clothing.
  MarketWatch
• A Health Canada representative shot back that the symbol was “protected by Crown copyright and intended to be used for public health and safety purposes only and not for private commercial means.” They added using the image without permission was “an infringement of Crown copyright.”

Quick Hits

1. Cirque du Soleil founder and MED user Guy Laliberté appeared before a judge in Tahiti, French Polynesia, accused of cannabis cultivation, possession, and consumption on Nukutepipi, his private Pacific atoll featuring a 21-bedroom, 25 bathroom mansion. Growing MED isn’t legal in French Polynesia.
   CTV News
2. Neil Young has lived in the US since the 1960s, but the Canadian rock legend has only now decided to apply for dual citizenship. Unfortunately, his years of impressive cannabis use mean that even though he passed his citizenship test, he’s going to have to go through a separate test to prove his “good moral character.”
   CBC World, Neil Young Archives

• Aurora’s REC sales declined 33% quarter over quarter to $30M, while the company’s adjusted EBITDA loss of $39.7M more than doubled expectations of a $17.6M loss.
  Bloomberg
• In a move expected to save $190M in the next year, the company suspended construction of its Aurora Nordic 2 facility in Denmark and deferred final construction on the Aurora Sun facility in Medicine Hat, Alberta.
  MJ Biz Daily
• Aurora intends to expand more seriously into the US CBD market.
  CTV News

• Like Aurora, Cronos is focusing on the U.S., breaking its business into “United States” and “rest of the world” segments.
  Globe and Mail

• Tilray’s revenue for the quarter was CDN$67.8M. REC sales represented US$15.8M, hemp products (connected with the acquisition of hemp producer Manitoba Harvest) represented US$15.7M, and international MED sales accounted for US$5.7M.
  Financial Post
• Tilray predicted it would achieve positive EBITDA by late next year.
  Bloomberg

• Net revenue, which was $90.5M last quarter, declined 15% to $76M—while the average analyst estimate for revenue in the quarter was $107M.
  MJ Biz Daily, CBC Business
• Interim CEO Mark Zekulin withdrew his guidance of $250M in revenue by Q4 (ending in March), calling it “increasingly unlikely.”

• He noted LPs should accept responsibility for the initial supply shortage that forced Ontario to shut down REC retail licensing, but concluded, “The fact is: there are not enough stores [in Ontario…] and the inability to get more stores rolled out is dramatically hurting the sector.”
  Bloomberg
• Canopy president Rade Kovacevic said, “The Canadian market is 6-12 months behind where we thought it would be because of (slow) store openings.”
  Twitter—Matt Lamers

• Saying the company believes the province could support 1,000 retailers, Canopy predicted “The number of stores serving [Ontario] consumers could approach 600 within 12 to 18 months.”
  Twitter—Matt Lamers
• BMO Capital Markets analyst Tamy Chen said Ontario could not possibly open enough stores in the next year to accommodate the sector’s expected production.
  Bloomberg

• During the last quarterly earnings report in August, Canopy took an $8M gross revenue adjustment on “oversupply of certain oil and gel-cap formats in certain markets.” Retailers reported they were “just not selling.”
  Financial Post
• Responding to this quarter’s news, the Financial Post‘s Vanmala Subramaniam said, “Those were disaster products for Canopy.”
  Twitter—Vanmala Subramaniam
• Zekulin connected low oils and gelcap sales to the shortage of stores, insisting, “There is still interest in soft gels and oils.”
  Financial Post

• Hexo said in the release that the unlicensed growing took place on the site when it was owned and operated by Newstrike, which Hexo purchased this past summer.
• The company said confusion over licensing paperwork led Newstrike to believe its whole facility was licensed when the company began growing in unlicensed areas.
• Hexo claims it reported the unlicensed growing to Health Canada immediately upon discovering it. The company said Health Canada was satisfied with Hexo’s handling of the situation.

• Trina Fraser worried neither Jimmerfield nor the reporters who covered her case were aware “Processing cannabis for commercial purposes requires a federal licence […] (this article also exposes her).” Twitter—Trina Fraser
• Grower Kev In the Shed argued “Possessing my cannabis to squish it in her tool isn’t the same thing as commercial possession,” while lawyer Kirk Tousaw said if Jimmerfield and her clients only possess the cannabis they’re allowed, it couldn’t be considered illegal production.
  Twitter—Kev in the Shed, Kirk Tousaw
• The question came down to whether it would be possible to operate a “squishing” business like this without possessing more than 30 grams at a time, which Fraser presumed impossible, and Tousaw argued was possible, just not economically viable. Twitter—Fraser, Tousaw

Quick Hits

1. Some think the rash of new CFO appointments is a sign the cannabis sector is getting serious about financial management.
   Globe and Mail
2. The Star profiled outdoor growers like 48North at their first harvest.
   The Star

• The agency lost $16.2M in its first 50 weeks and has not yet achieved profitability, but there are no plans to close Cannabis NB stores. Still, the premier hasn’t ruled out privatizing Cannabis NB.
  Ici Radio-Canada—In French
• REC prices are as much as 46% higher in New Brunswick than even in neighbouring PEI (where REC retail is also a government monopoly).
  Twitter—Patrick Cain
• Cannabis NB opened 20 stores from the first day of legalization (including some in small communities), and the cost of keeping all stores operating during the supply shortage was high.
  Global News

Quick Hits

1. REC retail chain National Access Cannabis changed its name to Meta Growth (pending shareholder approval), and will sell off its MED clinics as it focuses on the REC market.
   NewsWire, Cannabis Retailer
2. Following news it received a Health Canada cultivation license for its gargantuan 1.2M sq. ft Diamond cultivation facility (doubling its production capacity), Aphria interim CEO Irwin Simon said he planned to run the plant at full capacity, in spite of concerns about a supply glut.
   NewsWire, Bloomberg