Quick Hits

1. Lawyer Trina Fraser warned Cannabis Act licensees and applicants not to neglect to get a license from Canada Revenue Agency. “If you start operations with no CRA licence this is a serious offence. CRA intends to start taking action in these cases. This will not slip through the cracks on their end. They get notice of new HC licensees and they follow up!”
   Twitter

2. The Globe profiled the three (and only three) microcultivators who have been licensed by Health Canada since the program opened last October.
   Globe and Mail

• Tim Barnhart, owner of Tyendinaga Mohawk Territory dispensary Legacy 420, said he has no use for the Ontario government’s REC licensing appeal to First Nations. He said, “My dream has always been self-efficiency for our people, and I see this [Mohawk cannabis industry] as a mechanism to get many out of poverty, without the aid of the government.”
  Global News
• In Millbrook First Nation in Nova Scotia, three dispensaries have opened. Saying cannabis is subject to treaty rights regarding medicinal plants, Sma’knis Trading owner Michael Stephens said, “I feel like [Indigenous communities] were intentionally dismissed, and left … out of that whole [legalization] process.”
  Truro Daily

• A company that lends to Indigenous entrepreneurs plans to fund cannabis stores in First Nations by working with Popcann, which designs pop-up REC stores in shipping containers.
  Bloomberg

• In a statement refusing to answer questions about the case, an RCMP representative said only, “This particular case serves as an excellent reminder to those members of the public who choose to cultivate, possess or consume cannabis to be mindful of the full legislation enacted in October 2018.”
• According to the search warrant, after spotting three plants in the garden of couple Anna Minten and Emmanuel Levesque Dupere, Constable Faron Ling returned to the scene to “[photograph] the property from a distance with a telephoto lens, while concealed by a forest across the street from the residence.”
  Revelstoke Mountaineer
• Both Anna Minten and BC Lawyer Paul Doroshenko expressed surprise police didn’t simply knock on Minten and Dupere’s door to ask about the plants before raiding the property.
• Doroshenko predicted this case will eventually lead to a court decision clarifying BC’s law about cannabis plants within “public view.”
  Infotel

Quick Hits

1. The 109th Grand Forks & District Fall Fair will add cannabis to the crops up for judging. Dried and cured buds will be considered based on their look, smell, and “how well they smoulder.” Grand Forks Gazette

2. After considerable delay, the BC Liquor Distribution Branch finally opened its call for LPs that wish to supply extracts, edibles/beverages, and topicals.
   CTV News

• Tilray president and CEO Brendan Kennedy said that in a once-in-a-lifetime legalized industry emerging out of nothing, “if you want to dominate that global industry, you’d be constraining yourself if you were focused on profitability at this point.”
  Bloomberg
• Saying “Globally, now’s the time to invest,” Kennedy signalled his intention to continue building the corporation.

Quick Hits

1. Cronos reported a Q2 2019 loss of $17.8M, even as net revenue spiked from $3.39M to $10.24M, quarter over quarter. Bloomberg

2. Supreme Cannabis predicted its Q4 2019 revenue will increase 97% over the previous quarter, and 449% year over year. CEO Navdeep Dhaliwal said the green rush is over and the industry is at “an inflection point. We’re entering a stage where people are really looking at… who’s operating good businesses.” Bloomberg

3. Because early enthusiasm over acquisitions boosted prices, many LPs are carrying loads of goodwill (value applied to the company beyond that of its physical assets) that could lead to writedowns.
   Marketwatch

• Between April and June last year, 3.4% of seniors reported cannabis use. For the same period this year, the number is up to 5.5%, likely driven by those seeking relief from age-related aches and illnesses.
  The Leaf, Globe and Mail
• Men (21%) are almost twice as likely to have consumed cannabis in the survey period than women (12%), while among cannabis users, women were nearly three times more likely (14%) to consume non-smoking methods than men (5%).
  CBC Business
• Six months into legalization, the number of consumers buying illicit cannabis is at 42%.
• Global reporter Patrick Cain noted consumption has increased in places legalization increased access, such as Atlantic Canada and the Prairies. Twitter

• Nearly twice as many REC stores were located in Canada’s poorest neighbourhoods as in its wealthiest.
• In many provinces—particularly Quebec—and municipalities, government officials have demanded REC retailers be located in undesirable neighbourhoods and away from well-traveled spots.
• Private REC stores were also twice as close to schools as government-run stores, though all stores remained outside buffer-areas determined by government.
  CBC Ottawa

• Based on survey results, the authors predicted there would be 750,000 new consumers of extracts (3% of present-day non-consumers), 1.5M consumers of edibles (6% of non-consumers), and 2.25M new consumers of topicals (9% of non-consumers).
• Authors believe many potential new customers will be seeking low-dose edible products.
  Canadian Manufacturing
• The report says suspiciously little about extracts and vape pens, which insiders believe will become the most popular product compared with dry flower.

Quick Hits

1. Pollster Dimitri Pantazopoulos launched a blog about cannabis numbers, beginning with this breakdown of the year’s statistics.
   Margin of Error

2. Numerous Canadian workplaces demand their employees not use cannabis at any time—including in their spare time. However, such strict policies are only legally applicable in safety-sensitive heavy industry. Calgary Herald

• During inspections between July 10 and July 16, the federal regulator found the company stored cannabis in operational rooms not licensed for storage, built two areas of the facility without approval, employed insufficient security, kept poor records, and had inadequate quality-assurance protocols.
  Financial Post, Bloomberg
• Health Canada says it cannot provide guidance about how or when it will make a decision about the company.
• Supreme founder John Fowler noted “Secure storage amendments have been a [pain in the ass] for many.”
  Twitter

• The Ontario Securities Commission approved a management cease-trade order, which the company requested earlier in the month.

Quick Hits

1. Former Prime Minister Kim Campbell said the Canadian cannabis sector must have integrity—and medical operators musn’t overestimate what their products can’t cure—in order for it to last.
   MJBiz

2. Gene Simmons parted ways with LP Invictus, for whom he’d served as Chief Evangelist Officer since March of 2018, for unspecified reasons.
   Leafly

• The loss was connected with the extinguishment of $1.2B in warrants held by Constellation brands. In late June, Canopy and Constellation restated terms of their investment agreement, extending some warrants, replacing others, and generating the loss.
  Financial Post
• High expenses and operational costs contributed to losses.
  Bloomberg
• Last Q1, Canopy reported only a $91M loss.
  CBC Business

• Ousted co-founder Bruce Linton bought Canopy stocks during what he called “this August sale.”
  Bloomberg
• With Linton out, Canopy’s headquarters of Smith’s Falls, Ontario wonders how long the company will continue to operate in the small town Linton championed.
  Canada.com

• Canopy partner Acreage Holdings plans to open Tweed-branded REC stores in California.
  Bloomberg
• The company harvested 40,960 kilos in the three months ending June 30, the largest quarterly harvest ever by a Canadian LP. Between January and March, the company only harvested 14,500 kilograms.
  Ottawa Citizen
• Quarterly results included an $8M gross revenue adjustment related to “oversupply of certain oil and gel-cap formats in certain markets.” REC retailers reported Canopy’s Tweed brand REC oils and gel-caps are “just not selling.”
  Financial Post

• Simmons said many believe drivers aware they’re high will slow down and increase the distance between themselves and the car in front of them. This disregards many other factors on the road that cannabis may worsen, including detection and response to hazards, ability to keep the vehicle straight in its lane, and control in general.
• Crash-risk doubles with cannabis in one’s system, Simmons said, but she noted the relationship was only an association, not a determination of cause and effect.
• As well, neither legal nor medical experts have agreed upon a single definition of “cannabis impairment.”
• Calgary has laid only one charge of cannabis-impaired driving since legalization.
  CBC Calgary

Quick Hits

1. AdWeek celebrated the Government of Ontario’s “Barely High is Still Too High to Drive” PSAs for being charming and nonjudgmental. They’re actually really sweet: click through and have a look.
   AdWeek

2. Botaniq profiled ace-cannabis reviewer Brad “PancakeNap” Martin. In a ballsy move, Martin used the recognition to encourage Twitter fans to follow his favourite Canadian cannabis reviewers.
   Botaniq, Twitter—PancakeNap

• When news broke of the $11.7M loss, Progressive Conservative premier Blaine Higgs said he was open to major changes, including privatizing REC retail, scaling Cannabis NB down, or bringing in outside experts to run the organization.
  CTV News
• This time, government officials did not say what they might do. Finance Minister Ernie Steeves said there would be no final decision until next year.
• A Cannabis NB spokesperson blamed the loss on competition from “up to 40” illicit dispensaries, which they called ” the biggest risk and threat to a safe, legal cannabis retail industry.”
  CTV News

Quick Hit

1. Recently, Health Canada issued licenses to its 200th licensee—but in Quebec, there remain only 14 LPs. Part of the reason is that Quebec venture capital comes from government-backed institutional investors, who until recently flatly refused to support cannabis projects.
   Ici Radio Canada—In French