WeedWeek Canada, 3/17/18: Everyone Hates the Ontario Cannabis Store--Especially Doug Ford

MARCH 17, 2018

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Welcome to WeedWeek Canada, the best way to keep up with Canada's green rush.

WWCanada is a Saturday morning newsletter for professionals in the world's largest fully-legal cannabis market. Our goal is to deliver key data and insights in a quick, digestible format.

Every issue of WeedWeekCanada will highlight key developments in political, business and regulatory affairs. Plus, Reporter Jesse Staniforth is incentivized to deliver exclusive scoops.

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This week on the podcast, Hayley and Alex talk to Lukas Lucas, a formerly incarcerated cannabis activist and entrepreneur, about equity within the industry, especially in L.A.

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-Episode 9 Journalist David Bienenstock talks about social justice within the industry and his new podcast Great Moments in Weed

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-Episode 5 Sex advice columnist and activist Dan Savage

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-Episode 3 Congressman and longtime legalization supporter Earl Blumenauer

-Episode 2 Emily Dufton, author of Grass Roots: The rise and fall and rise of marijuana in America, on the history of legalization

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Here's the news.

Politics

Newly elected Ontario Progressive Conservative Party leader Doug Ford (brother of late Toronto Mayor Rob Ford), said the free market should guide cannabis policy. ( CBC Ottawa)

Ford allegedly sold hashish in the 1980s.
The Cannabis Canada Association said they support “private, yet responsibly regulated” cannabis. (Financial Post)
Ontario Premier Kathleen Wynne, said the proposal to sell cannabis outside of government-run outlets was “reckless” and ran counter to government planning to legalize “safely and responsibly.” (iPolitics)
Wynne and her party will face Mr. Ford and the Conservatives in the polls on June 7.

Ontario unveiled the austere name and logo for its provincial cannabis outlet: Ontario Cannabis Store (OCS). ( LCBO Cannabis Updates) The name and logo quickly became the target of widespread ridicule. ( The Leaf News, Global News, and the Montreal Gazette)

The province announced it expected to pay ad agency Leo Burnett roughly $650,000 for all brand and marketing work related to the OCS. (Ottawa Citizen)
Other Ontario organizations who also use the acronym OCS—such as the Ontario Crane Service and Oakville Christian School—are unhappy to be sharing it with the Ontario Cannabis Store. (CBC News)

Private dispensary owners in Ontario have not given up the fight for their businesses. ( Marijuana.com) The Ontario Cannabis Consumer & Retail Alliance (OCCRA) has launched the Sensible Ontario campaign to pressure the government to leave some space for lounges and private retail in the province. ( Marijuana.com)

In Toronto, however, police are growing more aggressive in their raids on illegal dispensaries, seizing as much property as they can (including cash, cannabis, computers, cameras, signage, display cases, and containers). (CBC News)

Saskatchewan unveiled its REC regulations, which closely follow those of other provinces such as Ontario. ( Government of Saskatchewan)

The purchase age will be 19. For more details see the Regina Leader-Post.
In the April 10 budget, the province will announce whether it will add an additional sin-tax to the federal excise tax, as it does on tobacco and alcohol. (Saskatoon Star-Phoenix)

New Brunswick Finance Minister Cathy Rogers said that the province’s revenue projections have been thrown off due to the federal delay in REC legalization. ( CBC New Brunswick)

Results from a national Statistics Canada survey show the average national price for a gram of marijuana is $6.83. ( Global News)

The government’s three goals of REC legalization—discouraging youth use, collecting taxes, and shutting out the black market—are difficult to balance, Ernst & Young analyst Fred O’Riordan argues in the Globe and Mail.

With tobacco, O’Riordan argues, Canada has had difficulty striking the right rate/revenue balance over the last 25 years and has swung its excise rates dramatically.

The Ontario government has earmarked $40M of its share of federal cannabis taxes to pay for municipal law enforcement related to REC legalization. ( Canadian Press)

In Ottawa, where police had not budgeted extra for REC legalization this year, Mayor Jim Watson praised the extra funds. (CBC Ottawa)

The Yukon will stockpile $2.7M in cannabis prior to legalization to ensure stable inventory. ( CBC North)

NDP MP Wayne Stetski (Kootenay—Columbia) said Canadian REC legislation is biased toward large corporations with substantial funding, and leaves no place for smaller growers. ( Greencamp)

The Anishinabek Nation, comprising roughly 60,000 people across several dozen First Nations in Ontario, said it does not yet know how REC legalization will work in its territory. Deputy Grand Chief Glen Hare said the Nation will likely hold a referendum to decide whether to accept cannabis businesses on Anishinabek lands. ( CBC News)

Goods and people moving across the Canada-US border may slow down following REC legalization, Policy Options argues.

Independent Senator André Pratte argued that if the unelected Senate takes an “unreasonable” amount of time to study and pass REC legalization Bill C-45 and impaired-driving Bill C-46, they are representing the position of opposition Conservatives, not the elected government. ( Toronto Star)

Business

Private industry’s desire to profit from the Green Rush will be at odds with government aims not to promote cannabis, two Montreal economists argue. ( Financial Post)

Producers’ market valuation, will depend on factors including how provincial distributors set and negotiate prices and long-term supply agreements.

As demand increases for capital to back cannabis businesses, equity markets are giving way to debt financing. While Canadian banks still shy away from lending to the cannabis industry, credit unions and other smaller organizations are open to it. ( Mondaq)

Projected Earnings Per Share (EPS) for Canadian cannabis stocks have declined over the last month, likely due to uncertainty over what REC legalization will look like, and concerns about oversupply and dilution. ( Madison)

The Manitoba Liquor and Lotteries Corporation, the Crown corporation that will distribute cannabis in that province, has put out a call for cannabis suppliers. ( CTV Manitoba) Responses are due no later than noon, March 26. ( Manitoba Liquor and Lotteries)

The Green Organic Dutchman looks to raise from $75M to $100M in its IPO later this month. ( Financial Post)

Aurora succeeded in its bid for a friendly takeover of CanniMed Therapeutics. ( Financial Post)

The Hydropothecary said it controls one third of Quebec’s cannabis market. . ( Montreal Gazette)

Canopy Growth reported Third Quarter revenue of $21.7M, reflecting 123% year-over-year growth. ( Pot Network).

Canopy also said it had selected an undisclosed location for its Newfoundland production facility. (CBC Newfoundland)

Following an amended license from Health Canada, Aphria will more than triple its production capacity from 9,000 kg to 30,000 kg per year with plans to triple production again by next year . ( Pot Network)

CannTrust Holdings entered into a Joint Venture Agreement with Denmark’s STENOCARE. ( Newswire.ca)

Cannabis-based pharmaceuticals may have a broader appeal than traditional cannabis products, and offer more competitive margins. ( National Post)

Other News

BC has not ruled out cannabis lounges, though public health authorities frown on them because of second hand smoke. ( CBC News)

Ottawa Public Health’s call for a total ban on smoking or vaping in multi-unit dwellings and on balconies runs contrary to harm-reduction approaches and is “more consistent with prohibition than legalization,” nursing scholars argue. ( CBC Ottawa, Ottawa Citizen)

Part of the reason for REC legalization is that policing cannabis is a waste of money, said New Brunswick criminologist Michel Boudreau, yet police continue “foolhardy” raids of private grey-market dispensaries that “even at the best of times were not part of the so-called black market.” ( The Chronicle Herald)

The city of Vancouver is calling for an immediate decriminalization of all personal drug possession as a means of easing the overdose crisis. ( The Straight)

However, a University of Victoria researcher says that BC police continue waging a war on cannabis that resulted in the highest cannabis possession arrest rate in Canada. (The Straight)
Though the NDP and Green Party are open to decriminalization of all drugs, Prime Minister Trudeau has dismissed the idea. (The Straight)

Launching a crime-prevention campaign called Know Your Source at Toronto Police Headquarters, Bryan Larkin, president of the Ontario Association of Chiefs of Police cautioned against consuming black-market cannabis. ( CBC News) He warned that black-market cannabis “may have come in contact with an opioid,” though Snopes notes that to date there has not been any recorded incident of cannabis contaminated by fentanyl, and nearly all reports of fentanyl-laced cannabis are the product of faulty reporting.

Nova Scotia will have 9 cannabis retail locations—one store per roughly 106,000 people and every 6,142 square kilometres. By comparison, New Brunswick (which has 20 per cent less population) will have 20 retail locations—one store per 38,000 people and every 3,654 square kilometres. ( CBC News)

The New Brunswick government is giving $250,000 to a Cannabis Education and Awareness Fund so they can begin public education programs. ( National Post) They are seeking members of the public who wish to sit on the advisory committee. ( Government of New Brunswick).

Scientists know a lot less than they would like to about cannabis and the way it works on the brain and body. The 2018 federal budget earmarked $20M for cannabis research, and set aside roughly $1B for the three national granting councils, including the Canadian Institutes of Health Research. ( CBC News)

This research will attempt to answer questions about the acute and long-term health-consequences of cannabis use, as well as the effects of various types of use, including vaping and edibles as well as smoked cannabis.
In order to legalize ethically, argues University of Guelph President Franco Vaccarino, Canada must treat cannabis as a complex drug requiring careful programs to mitigate potential mental-health harm. (Globe and Mail)

Colleges and universities continue to rush to offer cannabis-specific programs. ( Toronto Star)

REC legalization also presents the promise of a boom for economists, reports Macleans.

Cannabis has become the third most likely source of accidental dog poisoning, after chocolate and pharmaceutical drugs. ( CTV Montreal)

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Bye,

Jesse

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