• By Wednesday, all nine dispensaries in question had closed.
  GrowthOp
• Activist Dana Larsen announced he would be closing his Downtown Eastside dispensary, which opened in 2008, but would continue fighting for another one he said was legally open.
  Twitter
• Hamilton police announced they had raided and closed the city’s last remaining unlicensed dispensary. Shortly thereafter, they arrested two for selling illicit REC in the parking lot of one of the closed dispensaries. CBC Hamilton, Global News

Quick Hits

1. The Globe profiled Toronto’s budtenders and their relationships with customers.
   Globe and Mail
2. After the Globe suggested the Ontario government would soon allow 50 more REC stores to open—and Lift & Co repeated the suggestion—provincial finance minister Vic Fedeli’s assistant said, “It’s not true. We do not have any plans at this moment in time to offer more licences.”
   Globe and Mail, Lift, Vice
3. Health Canada isn’t considering legalizing psilocybin mushrooms just yet, though a representative acknowledged the agency has issued a formal “no objection” letter to a clinical trial on medical psilocybin.
   GrowthOp

• US producers are undervalued compared to Canadian LPs, and the Canopy–Acreage deal is focusing investors’ attention upon the disparity in values between U.S. and Canadian companies. With the backing of Canopy, the deal allows Acreage to benefit from lower cost of capital. GMP Securities analyst Rob Fagan said US producers have always been undervalued, and remain more so than ever.
  Bloomberg
• Canopy CEO Bruce Linton said the company’s merger with Acreage is “a complex transaction to achieve a simple goal, and the goal is we want to have exposure to the U.S., and we want to do it in a way that we [do] not break the federal laws,” while also providing Acreage access to Canopy brands when REC becomes “federally permissible” (either legalized federally, or given to U.S. states to decide) in the United States.
  Financial Post
• Analyst Andrew Carter, launching coverage of large-cap Canadian stocks, gaves Canopy, and no-other company, a “buy.” rating.
• Linton incorrectly told Fox Business that illicit cannabis may be contaminated with fentanyl. Faced with protesters online, MED activist–turned–Canopy figure Adam Greenblatt reported he had spoken to Linton and corrected him, saying it was a mistake and not a deliberate lie. Linton acknowledged his error, but said his main point stood—any unregulated cannabis may contain potentially harmful additives.
  Vice, Twitter, The Leaf

Quick Hits

1. Newfoundland’s Liberal attorney general will investigate the province’s supply deals. Opposition Conservatives have suggested the Liberal government displayed favouritism toward Canopy (a company started by two former Liberals). The decision has proven popular.
   CBC Newfoundland, CityNews
2. MJ Biz Daily published a list of Canada’s Most Reputable Cannabis Producers, but the most striking takeaway is that even Aurora, ranked number one, was unknown by 76% of respondents—while 89% didn’t know CannTrust, ranked number three.
   MJ Biz Daily
3. WeedMD launched a REC brand called “Color,” with the American spelling, which for some reason drives me absolutely crazy, but might also suggest plans for eventual U.S. expansion.
   An anonymous source close to the company told me, “I think it honestly started as a spelling mistake, but they’ll say it’s to help prepare for the U.S market.”

• With supply shortages clearing up, Calgary’s 29 REC retailers are set to nearly double in the coming weeks with 25 more set to open.
  CBC Calgary
• Alberta is expected to become Canada’s largest per-capita cannabis-consuming province.
  CBC Calgary
• Calgary physicians warned the demand for MED is much greater than anyone expected, and may exhaust both MED supplies and overwhelm MDs.
  Calgary Herald
• Cannabis law enforcement has dropped by nearly 100% in some areas of Calgary since legalization, though crystal meth enforcement is up.
  Calgary Herald

Quick Hits

1. During the Canadian Cannabis Summit in Calgary, Lift & Co VP Strategy Nick Pateras predicted “dramatic oversupply in two to three years.”
   Calgary Herald
2. Anishinabek Police Service said a REC retailer on Fort William First Nation, near Thunder Bay, would be breaking Ontario’s REC retail law if it opens as planned.
   Thunder Bay News Watch
3. Vancouver law firms are eager to find cannabis clients.
   Business in Vancouver
4. As is the case in neighbouring Saskatchewan, which I mentioned last week, Manitoba laws forbid cannabis smoking or vaping in public places, including provincial parks. That means no one going to the Winnipeg Folk Festival will be able to legally smoke cannabis.
   The Leaf
5. So far, Quebec has only charged one person for growing cannabis at home. Finance minister Lionel Carmant said his government would close loopholes that prevent the laying of further charges.
   Global News, Journal de Montréal—In French
6. Gatineau, Quebec residents near Hexo‘s enormous Masson–Angers production site complain of strong cannabis odours from the facility. Hexo told GrowthOp their greenhouses are on agricultural land and meet all regulatory requirements for odour reduction. GrowthOp

• Lawyer Trina Fraser warns the vast majority of companies have zero experience producing any of the coming products, which in Canada have only been available on the grey market.
• Auxly Cannabis CEO (and Canopy co-founder) Chuck Rifici said, “We’ve made a very conscious effort to delay revenue” by stockpiling products ahead of Legalization 2.0.
• Compounding the coming problem is the limited number of extraction facilities, which are widely believed to be heading toward a bottleneck, as companies like Valens GroWorks have been warning for several months now.
• Contrary to Deloitte’s predictions, Rifici—and Aphria interim CEO Irwin Simon—are betting on vape pens, and Valens is offering white-label (ready-to-be-branded) vape pens in 196 different options.

Quick Hits

1. Lisa Campbell, of Lifford Cannabis and the newly established Cannabis Beverage Producers Alliance, said she wanted to see cannabis beverages treated equally to alcoholic beverages, and called the Health Canada requirement of a second site for all cannabis-related production the biggest obstacle for the cannabis beverage sector.
   Cannabis Canada Buzz
2. Trying to figure out whether that cannabis promotion you’re planning is Health Canada compliant? There’s a flowchart for that now, courtesy of cannabis brand manager Rachel Colic and lawyer Chad Finklestein.
   Google Docs

• Alcohol producers may lose customers to the 35% of cannabis consumers who consider it an alternative to booze.
• The Canadian sector is well-positioned to grow globally before eventually losing its advantage in cultivation to nations in warmer climes.
• The number of Canadian LPs will be reduced by half as the industry expands. MJBiz Daily‘s Matt Lamers noted this could be bad for the 579 pending standard applications waiting for Health Canada approval, though in a response, a commentator noted the prediction anticipated “some LPs may be going to exit through acquisition.”

• The report calls the impending legalization of extracts, ingestibles, and topicals “Legalization 2.0,” and predicts that market alone will eventually be worth $2.7B, with edibles representing $1.6B.

• Topicals will be a $174M market, concentrates will be a $140M market, and tinctures and capsules will represent $116M and $114M respectively.
• Infused beverages will dwarf them all, with a $529M annual market.
• That prediction stunned some, as it is dramatically out of keeping with the market shares of the same products in California, whose population is slightly larger than Canada’s.
• Burnstown Farms CEO Mark Spear asked, “In what universe will beverage sales more the triple concentrates? Not a chance. I’ll take friendly bets it’s the opposite.” Other critics echoed his disbelief.
  Twitter
• Lincoln Johnson, CEO of extraction company EnCann, told me he shared Spear’s incredulity. “If we look at other developed markets like CO/WA/OR/CA,” he said, “It’s not unreasonable to expect that edibles/beverages/etc. will take up substantially less than 20% of sales, with other concentrate types taking up 30-40%, and flower the remainder and declining over time. Vape pens aren’t going anywhere and will likely dominate the concentrate/extract market as they do [in the U.S.]… Of course, the Canadian market might turn out to wildly different but I wouldn’t be putting money on that bet.”
• Edibles sales are growing, argued Visual Capitalist, so it may not be fair to base future numbers on present consumption trends.
  Visual Capitalist

Quick Hits

1. US LP Charlotte’s Web announced it was delisting from the Canadian Securities Exchange and moving its listing to the Toronto Stock Exchange, where it may now trade because it sells hemp-based CBD products, which became legal in December with the passage of the U.S. farm bill. Expect other companies working in hemp to follow.
   Financial Post
2. The BC Securities Commission settled with LP Beleave over market misconduct. The company admitted it claimed in April and June of last year that it had raised $10M in private placements, but had instead paid $7.5M “consulting fees” to those who would be “investing.” The BCSC noted Beleave conducted an investigation when it became aware of the allegations and sacked its management.
   Twitter—Mike Hager, Globe and Mail

Quick Hits

1. In spite of Health Canada’s strict regulations about cannabis marketing, the sector is nonetheless seeing an influx of creative professionals, particularly to ad agencies.
   AdWeek—Paywall
2. A Toronto Rastafarian believes his faith protects his right to give out cannabis, which he considers sacrament, in return for donations. Not all lawyers agree. CBC Toronto
3. It isn’t easy for employers to test employees for cannabis use. Globe and Mail–Paywall

• Canadians for Fair Access to Medical Marijuana received a House of Commons response to their petition demanding the government end MED excise taxes. The House response essentially repeated most of the talking points the government has used to discuss the issue to date. CFAMM wasn’t pleased, and characterised the response as the government “leaning on language.” ” We are not second class patients,” CFAMM stressed, and posted a detailed response of their own.
  Twitter
• Aleafia Chief Medical Officer Dr. Michael Verbora noted that since Health Canada removed physician name, dose, and date from MED, he’s been getting more calls from confused schools and nursing homes unable to discern MED from REC.
  Twitter

Quick Hits

1. There’s no sign of legalization leading to any health effects (positive or negative), possibly because Canadians used cannabis so widely before legalization that it hasn’t changed much.
   The Star
2. Workplace accidents have not increased since legalization—and in some places have actually declined— but that doesn’t stop some employers in dangerous industries from worrying impaired workers will hurt or kill someone.
   CBC Business, Leafly
3. Brad “PancakeNap” Martin published data-visualizations of dry-flower REC available in PEI, mapping data like average price per gram and listing-count-by-LP. He also considered Aurora, MedReleaf, and Tweed softgels.
   PancakeNap