News on cannabis stocks and on developments in the industry haven’t let up in today’s volatile markets. Here are this week’s stories that we believe will mean most to you as a Canadian investor.
1. Members of Saskatchewan’s cannabis community are cautioning consumers about online purchases that appear to have all the hallmarks of legal marijuana, including packaging, but are nonetheless counterfeit.
Chase Ruttig, an assistant manager with Prairie Records in Saskatoon, is pointing to fake labels on packaged cannabis ordered by a customer online and then brought to his attention.
While that wrapping was a good imitation, it lacked critical pieces of information such as a lot number and a line detailing the potency of cannabis compound THC or CBD in the product.
A bigger problem for the industry may be the counterfeit websites themselves, meant to resemble government-controlled or sanctioned online retail hubs.
“It makes it even harder for customers to differentiate what’s a legal, regulated Health Canada-tested product,” says Ruttig, “and what is something from the grey market or the black market that could get them in trouble.”
2. New numbers from Ontario’s ombudsman are now quantifying consumer dissatisfaction with the province’s online cannabis store following its December 2018 launch.
More than 2,400 Ontario residents complained to the provincial ombudsman about the government’s online marijuana store in the wake of delays and delivery problems.
Paul Dube says his office had to establish a dedicated team to handle the volume of complaints, which included a man receiving an empty box and being told he would have to return it for a refund.
3. Ontario’s 25 brick-and-mortar cannabis stores have quickly eclipsed the province’s online retail hub in sales—that’s despite their limited presence.
Ontario was the only province to solely offer cannabis online until April 1, when a handful of stores opened.
Under the online-only system Ontario used to launch its cannabis sales, revenue ranged between $7 million and $8 million a month. With even just a few stores opened, that number quickly soared, reaching $19.6 million for April.
On a per capita basis, Ontarians spent between $0.50 and $0.60 per month on legal cannabis from December through March—before the opening of privately run cannabis stores. That spending quickly rose to $1.36 in April following the opening of the first 25 outlets licenced by the province.
Despite the jump, Ontario’s per capita cannabis sales still come in as the second-lowest among the provinces. But Ontario nonetheless remains the country’s most important in terms of dollars spent: it is now Canada’s highest in overall spending.
4. Illinois’s governor has now signed a bill to legalize recreational cannabis in that state.
Gov. J.B. Pritzker signed the bill into law Tuesday, but residents (21 and over) will have to wait until January 1, 2020, to buy marijuana at dispensaries.
Illinois joins 10 other states that have legalized recreational marijuana.
Unlike most of those states, it legalized the drug through the legislative process rather than through a referendum.
The law will automatically expunge the records of those with arrests for possession of 30 grams of marijuana or less and will also help minority communities get involved in the business.
The governor noted black and white people in the state use the drug at similar rates, but “black people are far more likely to be arrested for possession.”
“In the past 50 years, the war on cannabis has destroyed families, filled prisons with nonviolent offenders and disproportionately disrupted black and brown communities,” said Pritzker “Change is hard, but an essential tenet of good governance is recognizing the need to change the laws that have failed.”
The new Illinois law allows residents to possess 30 grams of cannabis flower, and 5 grams, or less than a quarter-ounce, of cannabis concentrates such as hash oil. Additionally, Illinoisans will be able to carry up to 500 milligrams of THC in a cannabis-infused product such as gummy candy.
For now, convictions dealing with amounts of cannabis up to 30 grams will be dealt with through the governor’s clemency process, which does not require individuals to initiate the process.
5. Canopy Growth is among the country’s producers already experimenting with outdoor cultivation after receiving the go-ahead from Health Canada.
Canopy Growth has started planting on a 160-acre area in northern Saskatchewan. The move comes despite the company’s earlier efforts to lobby against outdoor cultivation.
Those initial reservations about outdoor growing haven’t yet been entirely resolved, Canopy CEO Bruce Linton told BNN Bloomberg.
“We’re not sure this is going to be a long-term business for us,” he said, “but we need to try everything.”
If Canopy does move forward with outdoor cultivation on a bigger scale, Linton expects that, that crop will be earmarked for extraction purposes.
“Anything grown outdoors will not be of bud quality,” he said.
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