Dealmaking in the U.S. cannabis industry has heated up this year as companies bank on Democrats’ promises to reform marijuana laws and potentially legalize the plant at the federal level.

However, little progress has been made so far and weed stocks have fallen off a cliff in recent months. Gage Growth shares have plunged about 22 per cent up to its last close, since its direct Canadian listing in April.

Gage Growth, which closed its first day of trading at C$2.89 on April 6, will receive an implied consideration of C$2.66 per share in the merger.

The combined company will have operations in five U.S. states and Canada, including seven cultivation and processing facilities and 23 operating dispensaries in the two countries, according to TerrAscend, which has a major cultivation and processing plant at Mississauga, Ont.

— Reporting for Reuters by Shariq Khan.

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Major producers such as Colombia’s Clever Leaves and Canada’s Canopy Growth are developing and selling medicinal cannabis products to a Brazilian consumer segment estimated at 10 million to 13 million people. This results from a 2019 regulatory change allowing the import, sale and manufacturing of such products.

But permission for cultivation of hemp and cannabis in Brazil would be a bigger prize. If granted, the industry could blossom in four to five years, based on the experience of other countries such as Colombia.

“By 2025, I would like to be planting hemp in the interior of Pernambuco,” said Jose Bacellar, founder of Canada’s VerdeMed, referring to a northeastern state known for illegal marijuana growing.

A proposal that would legalize cultivation was approved in June by a congressional committee. Lawmakers are weighing if it could be fast-tracked to the Senate for approval. If passed there, President Jair Bolsonaro would have to sign it into law.

While Bolsonaro’s far-right positions may seem an unlikely match for the bill, the proposal has support from some members of the powerful farm sector, a key constituency that helped him win the 2018 election.

‘Silicon Valley of cannabis’

In the quiet town of Viçosa in southeastern Brazil — which some call the Silicon Valley of cannabis — researchers are developing a hemp variety better suited to the tropics.

If the law is changed and research is successful, Brazil could become a top grower of cannabis and hemp, experts said.

Sergio Rocha, director of ag-tech startup Adwa which is developing the hemp strain for Brazil, said about three million square km of land would potentially be suitable for cultivating the new variety.

Brazil could overtake China, the world’s largest hemp producer, which has about 670 square km planted.

“Using a part of Brazil’s agricultural land would be enough to give the country the title of world’s largest producer and exporter of hemp fibers, seeds and flowers for medicinal and industrial purposes,” said Dennys Zsolt, an agronomist specializing in the plant.

Brazil bans growing of Cannabis sativa L, the plant that produces hemp and marijuana. Hemp, which has less than 0.3 per cent of the psychoactive compound THC, contains CBD or cannabidiol. This non-intoxicating ingredient has been touted as beneficial for many health conditions including childhood epilepsy.

Growing the plants in Brazil would lay the foundation for a vertically integrated industry. A stable source of the raw material would support manufacturing of medicinal cannabis products, growth of a retail market and exports. Recreational cannabis would remain illegal.

Gabriela Cezar, chief executive of New York-based Panarea Partners investment banking firm, sees Brazil playing a leading role in hemp in Latin America, a region she calls the “epicentre of world hemp production.”

Panarea plans to form a Brazilian cannabis company focused on pharmaceutical products for pets while seeking to broker more cannabis deals in Brazil.

Tropical advantage

Among Brazil’s advantages are lower growing costs because its warm climate allows plants to grow outdoors compared to greenhouses in some countries. Stable hours of sunlight due to Brazil’s proximity to the equator are another plus.

Canopy Growth is “actively monitoring the advancement of hemp regulations in Brazil,” David Culver, the company’s vice president of global government relations, said.

But nothing is certain without the change to Brazil’s law, though some signs suggest the prospects are favorable. When Rocha spoke to a congressional committee about hemp in 2019, he was surprised that conservative lawmakers were not hostile.

“After I finished presenting the maps and hemp’s potential, I was applauded,” he said.

Although the farm caucus has not taken a formal position, members of the group said a majority in both houses of Congress back the proposal. The farm caucus controls slightly fewer than half the seats in the two chambers, and the law requires approval by a simple majority.

Centre-right lawmaker Fausto Pinato, a member of the farm caucus, said he supports the bill.

“If you are authorizing the sale, why not cultivation?” he said.

— Reporting for Reuters by Ana Mano in Sao Paulo, Jimin Kang in Seul and Maximilian Heath in Buenos Aires.

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“It looks like we are looking at another 15 to 20 per cent increase in seeded acres nationally, which should take us over the 100,000-acre level for sure,” he said.

The CHTA gathers data from seed companies as to how much hemp seed has been sold, then estimates how many acres would be planted, he said.

One catch, however, has been a lack of information from Health Canada, which produces A Summary of Notices of Cultivation usually in November/December of every year.

Haney said the CHTA is still waiting for that report, almost six months later — and a big part of the reason, he noted, has been Health Canada’s ongoing struggle to collect the data from licensed producers.

As for prices, Haney said conventional and organic prices have increased about 20 per cent.

“Hemp is remaining competitive with the entire oilseed market, which has been astronomical this year,” he said.

“The revenue streams in the industry continue to diversify. By that I mean the vast majority of revenue derived by our industry, up until 2018, was farmers growing hemp for the seed harvest and selling that as pedigreed seed and for food processing. Also, selling it for the European birdseed market.”

More recently, producers have garnered revenue from the sale of hemp stalks or straw. This, he said, will further improve with a third hemp processing facility to open in Canada.

And the export market is looking bright, Haney noted.

“Our exports went up 20 per cent in 2020 and we expect to see a similar increase in 2021,” he said.

On the downside, the harvesting of hemp flowers and leaves struggled in 2020 in Canada as well as globally. In Canada, that aspect saw a tough year because of “overreaching regulations by Health Canada,” and not due to consumer demand, Haney said.

“The black market continues to serve consumers’ needs in the high-[cannabidiol, or CBD] extract concentrate market,” he said.

The ultimate goals of removing risk and protecting Canadians – and removing organized crime from the cannabis industry – are not really happening when it comes to the CBD market and particularly as it relates to hemp, he said.

One hope on the horizon will be using hemp for livestock feed, he predicted. The industry still needs to get approval from the Canadian Food Inspection Agency (CFIA) for the registration of hemp seed and its seven derivatives to be used as livestock feed.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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CannTrust had delayed its second-quarter results last month awaiting a decision from Canada’s health regulator on a large amount of inventory put on hold after discovery of illegal cultivation by the company.

Last month, Health Canada found fault with cannabis production at a second CannTrust facility, a month after the regulator froze sales of several tonnes of marijuana grown at another one of its Ontario operations.

Since Health Canada found the unlicensed pot cultivation, CannTrust fired Peter Aceto as CEO, while Eric Paul resigned as chairman.

The company had said in July it was exploring a possible sale.

On Tuesday, CannTrust said its management and board were reviewing the notice with the company’s counsel and other advisers.

— Reporting for Reuters by Arundhati Sarkar and Debroop Roy in Bangalore.

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No matter how you slice it, the discovery detailed on Monday shows that hunter-gatherers in the Eastern Mediterranean achieved the cultural milestone of breadmaking far earlier than previously known, more than 4,000 years before plant cultivation took root.

The flatbread, likely unleavened and somewhat resembling pita bread, was fashioned from wild cereals such as barley, einkorn or oats, as well as tubers from an aquatic papyrus relative, that had been ground into flour.

It was made by a culture called the Natufians, who had begun to embrace a sedentary rather than nomadic lifestyle, and was found at a Black Desert archeological site.

“The presence of bread at a site of this age is exceptional,” said Amaia Arranz-Otaegui, a University of Copenhagen postdoctoral researcher in archaeobotany and lead author of the research published in the journal Proceedings of the National Academy of Sciences.

Arranz-Otaegui said until now the origins of bread had been associated with early farming societies that cultivated cereals and legumes. The previous oldest evidence of bread came from a 9,100-year-old site in Turkey.

“We now have to assess whether there was a relationship between bread production and the origins of agriculture,” Arranz-Otaegui said. “It is possible that bread may have provided an incentive for people to take up plant cultivation and farming, if it became a desirable or much-sought-after food.”

University of Copenhagen archeologist and study co-author Tobias Richter pointed to the nutritional implications of adding bread to the diet. “Bread provides us with an important source of carbohydrates and nutrients, including B vitamins, iron and magnesium, as well as fibre,” Richter said.

Abundant evidence from the site indicated the Natufians had a meat- and plant-based diet. The round floor fireplaces, made from flat basalt stones and measuring about a yard in diameter, were located in the middle of huts.

Arranz-Otaegui said the researchers have begun the process of trying to reproduce the bread, and succeeded in making flour from the type of tubers used in the prehistoric recipe. But it might have been an acquired taste.

“The taste of the tubers,” Arranz-Otaegui said, “is quite gritty and salty. But it is a bit sweet as well.”

— Reporting for Reuters by Will Dunham.

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College Communautaire du Nouveau-Brunswick will launch the course sometime next year, said Michel Doucet, executive director of continuing education and customized learning.

Canadian Liberal Prime Minister Justin Trudeau campaigned last year on a promise to legalize recreational marijuana and the government has said it would introduce legislation by the spring of 2017.

Medical marijuana is already legal across Canada, and companies in that relatively small sector have been eyeing the larger recreational market with expansion in mind.

In August, the government of New Brunswick, where the college has five campuses, said it invested $4 million in a medical marijuana company that will create up to 208 jobs in the region.

Doucet said the school was still determining the exact details of the program, including class size and the length and frequency at which it will be conducted.

“This is not a mainstream program,” he said. “We’re looking at training qualified employees to meet the needs of industry, versus training students at large.”

Doucet said the college had not yet determined whether it would be a full diploma program.

— Ethan Lou is a Reuters reporter based in Toronto.

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“The proprietor, Mr. John Tizard, owns land in the vicinity to the extent of 3,200 acres. His land skirts the lake for 11 miles, and is peculiarly well adapted for grazing and hay culture. The pampas grass grows here to the height of six or seven feet and is excellent food. There are on the farm about 160 grade cattle, a herd of pedigree Shorthorns, a herd of pedigree Polled Angus, a flock of 160 Shropshire and Lincoln sheep, 35 Berkshire and Suffolk pigs and 14 horses.”

The issue contained a prize essay by D.F. Wilson of Brandon on “Treatment of Stubbles for Wheat Growing.” Mr. Wilson was an early skeptic about excessive plowing and recommended surface cultivation, following the drill with the harrow to take care of early-germinating weeds. He also warned against burning stubble, “which shelters the soil from wind.”

However, a rather shorter essay from Mr. James Downie of Wawanesa had this simple prescription:

1. Burn stubble off if possible.
2. Plow about five inches deep.
3. Give two strokes of the harrows.
4. Roll with a heavy roller.
5. One stroke of harrow after roller.
6. Seed in spring with drill seeder.
7. One stroke of harrows after seeder.
8. After wheat is up, should many weeds show up, give another stroke of light harrows.

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