While the practitioners can allow registered patients to grow a limited amount at home for personal use, the regulator’s findings show that such authorizations rose to a staggering 36.2 grams by the end of March, compared with 25.2 grams in October 2018.

Meanwhile, average purchases by registered patients, who can buy pot from licensed producers and federal medical sellers, have stayed as low as 2 to 2.1 grams every month, data showed.

“An early review of the data signals to me a striking difference in the average amounts prescribed per day in the two different channels,” said Deepak Anand, CEO of Toronto medical cannabis distributor Materia Ventures.

With no concrete limits on personal production, Health Canada is facing rising pressure to tackle the perceived abuse of the home-grow program.

“Health Canada is concerned that high daily authorized amounts are, in a few instances, leading to abuse of the access to cannabis for medical purposes framework and are undermining the integrity of the system,” the regulator said.

CBC News reported in October that the Ontario Provincial Police (OPP) raided dozens of illegal cannabis grow operations between July and October, a majority of which had personal production authorization.

“It remains unclear if we are dealing with systemic issues as opposed to targeted ones, as a result of the tremendous pressure the regulator has fallen under recently by provincial and municipal governments,” Anand said.

Health Canada’s finding show 43,211 individuals were allowed to grow marijuana for their personal medical use by the end of September, and 377,024 clients were registered as patients.

— Reporting for Reuters by Shariq Khan and Vishwadha Chander in Bangalore and Steve Scherer in Toronto.

The post People growing too much pot at home, Health Canada warns appeared first on Manitoba Co-operator.

Between March 16 and 22, sales of recreational cannabis across California, Colorado, Oregon and Alaska — some of the key U.S. markets — were up 50 per cent and medical marijuana sales rose 41 per cent from the same period last year, figures obtained from cannabis point of sale and data platform Flowhub show.

Several U.S. states and Canadian provinces have taken steps to curb the fast-spreading coronavirus by issuing stay-at-home orders, restricting business operations, or closing down borders as death toll in both countries approaches 600.

While many businesses have been ordered shut, cannabis stores have been listed as essential services and allowed to remain open.

In Ontario, online sales on the provincial Ontario Cannabis Store’s (OCS) website have soared over the last two weeks, OCS director of communications Daffyd Roderick said. For example, last weekend’s orders were more than twice as high as only two weeks ago.

In Nova Scotia, which on Sunday became the latest province to declare a coronavirus emergency, cannabis sales spiked 76 per cent last week, according to the province’s liquor commission, which controls sales of cannabis there.

Fears of months of supply disruptions were boosting Canadian sales, Stuart Titus, CEO of California-based Medical Marijuana, told Reuters.

“We have seen stockpiling in Canada by consumers who have snapped up products from LPs (licensed producers).”

The surge in demand may offer pot producers a welcome respite after investors sold off cannabis stocks throughout much of last year as profits in the sector remained elusive.

Jamie Pearson, CEO of California-based Bhang, which makes cannabis-infused beverages, chocolates and other products, said sales were booming and should boost revenue and profits this quarter.

Pearson said edibles such as gummies, brownies, and chocolates were most popular, probably because they were easier to store and eat, even with gloves on.

Still, Titus and others recommended caution, saying the long-awaited reversal of fortune could prove not much more than a short-lived relief.

“The cannabis industry is showing itself to be recession-proof but at times like this, it’s important to understand that the spike in consumer demand is probably not going to last long,” Avis Bulbulyan, CEO of cannabis consulting firm Siva Enterprises, said.

— Reporting for Reuters by Shariq Khan and Shanti S Nair in Bangalore.

The post As customers hoard pot brownies, weed firms see lockdown boost appeared first on Manitoba Co-operator.

Health Canada canceled CannTrust’s license to produce and sell cannabis in September, months after it found the company was illegally cultivating pot.

The inventory to be destroyed will include product returned by patients, distributors, and retailers, the company said in a release Monday.

“Given the status of its licenses, the company is unable to process the material being destroyed or sell it to other licensed producers,” the company said.

Vaughn, Ont.-based CannTrust also said the destruction process will allow it to free up “much needed capacity” to carry out remediation measures and to store material grown and processed since April.

— Reporting for Reuters by Shanti S Nair in Bangalore. Includes files from Glacier FarmMedia Network staff.

The post Pot producer CannTrust to destroy $77M in plants, inventory appeared first on Manitoba Co-operator.

For some time companies including Canopy Growth, Aurora Cannabis and Tilray Inc. have been signing export deals with European governments, buying local companies, even opening production facilities in the region.

This year, they have also stepped up pitching their businesses to European funds at conferences and road shows, betting their size and first-mover advantage will help replace fickle retail investors with more stable institutions.

Canada was one of the first countries to approve medical marijuana in 2001, and legal recreational sales will begin in October.

Until now, though, Canadian firms have had little success in drawing institutional investors because of high valuations and lingering concerns about the future and legitimacy of the industry — particularly in the United States.

Executives say institutions are moving cautiously and acknowledge it will take time before their efforts translate into substantial investments, but cite some early results.

For example, while Tilray’s Nasdaq initial public offering in July primarily went to North American investors, 12 per cent of the $153 million offer was taken up by funds from London, Frankfurt, Sydney and Hong Kong.

Brendan Kennedy, CEO of Tilray and executive chairman of private-equity firm Privateer Holdings, which remains Tilray’s majority owner, said he met with more than 200 institutions, many in Europe, ahead of the listing.

“Some of the investors who participated in the IPO, they would’ve been unimaginable eight years ago, of course, but a year ago as well,” Kennedy told Reuters.

One of those to take part, albeit with a symbolic stake, was global investment house Fidelity International, which bought around 0.15 per cent of Tilray shares across several funds.

Canopy’s latest financing deal, a $500 million convertible debt offering in June, was only pitched to institutions and drew about 60, mostly new investors, with a third coming from Europe, CEO Bruce Linton told Reuters.

A significant shift toward a more institutional and diverse investor base, however, has yet to happen.

A Reuters analysis of publicly available shareholder data shows Canopy has just four Europe-based active investors that use a common long-term investing strategy, in contrast to 102 for Goldcorp, a similarly valued Toronto-listed stock.

Still, investors, organizers and executives say this year’s events mark a step up both in turnout and a shift to institutions compared with recent years when European conferences would primarily draw retail investors.

Michael Barnes, professor of neurological rehabilitation at the University of Newcastle and chief medical officer at Scythian Biosciences, said plans to relax rules later this year in Britain, home to many of Europe’s top investors, could unlock institutional demand.

“I think we’re close to a tipping point.”

In February, Canadian financial services firm Canaccord Genuity hosted Britain’s first medical cannabis conference in London aimed solely at investors and attended by more than 100 fund managers, family office representatives and wealthy individuals. Three months later, another conference organized by advisory firm Prohibition Partners with Canaccord as one of the lead sponsors drew 450 participants, according to the organizer.

“A couple of months in cannabis is like two years in most industries,” said Tristan Gervais, who leads Canaccord Genuity’s cannabis investment banking and corporate broking in Britain and Europe.

Different kind of cash

On the face of it, Canadian cannabis firms do not need cash. In anticipation of a surge in sales after October and more medical marijuana approvals worldwide, the valuations of the five biggest Canadian companies have soared to about $43 billion, even though most have yet to turn a profit. Yet most shares are held by retail investors, which brings price volatility that complicates planning and expansion.

“It’s smart strategy to… bring in institutions who will be with us as we expand,” said Cam Battley, Aurora’s chief commercial officer.

Aurora last year bought Pedanios, which supplies marijuana to German pharmacies, and also operates in Denmark and Italy. Canopy has operations and partnerships in Germany, Spain and Denmark.

For now, North American investors remain the main source of institutional capital.

Despite a federal ban, the U.S. is also by far the biggest legal market, accounting for almost 90 per cent of the $9.5 billion in global sales in 2017, according to research firms Arcview Group and BDS Analytics.

But Europe, projected to become the world’s largest medical cannabis market by 2028, could become a key source of funding.

Over 20 European countries allow medical marijuana, providing incentives to invest in Canadian firms, which account for the majority of operating licenses in Europe and about 70 per cent of its imports, according to Prohibition Partners.

The group predicts annual sales in Europe will reach 116 billion euros (C$175.9 billion) by 2028, with growth of 40 per cent a year.

Prohibition Partners’ founder Stephen Murphy said the Cannabis Europa conference attracted alongside fund managers also executives from sectors such as pharmaceuticals, healthcare and insurance.

Constellation Brands, a U.S. producer and marketer of beer, wine and spirits, set a high bar when it raised its stake in Canopy by $4 billion in August.

Among European investors to take their first step this year is Felix Wintle, fund manager of the London-based 15-million-pound (C$25.56 million) VT Tyndall North American Fund.

Wintle said the fund had about three per cent of its portfolio invested in Canopy Growth and Tilray, though lofty valuations made it tough to justify buying more.

“It’s a fascinating time for the sector because … you’re coming off prohibition, basically,” he said. “You don’t often get opportunities like this.”

— Reporting for Reuters by Nichola Saminather in Toronto and Simon Jessop in London; additional reporting by Joshua Franklin in New York.

The post Big Weed hits up Europe hoping for expansion cash appeared first on Manitoba Co-operator.

Aphria Inc., based at Leamington, Ont., announced Monday it has locked in a cash-and-stock deal to buy Toronto-based Nuuvera Inc. for $826 million.

The deal, expcted to close in April, is one of several major plays in the marijuana sector ahead of Canada’s plans to legalize recreational cannabis use later this year.

Two other players, Edmonton’s Aurora Cannabis and Saskatoon’s CanniMed Therapeutics, announced a friendly $1.1 billion cash-and-stock merger last week.

Aphria’s own plays so far this month have also included a $230 million cash-and-stock deal for Vancouver Island producer Broken Coast Cannabis, and $2.5 million for a 25 per cent stake in Australian medical cannabis firm Althea Co.

Aphria said its latest deal will allow it to leverage Nuuvera’s relationships with suppliers and processors in Germany, Italy, Spain, the U.K., Malta, Israel, Lesotho and Uruguay, along with the Toronto firm’s expertise in extracting, distilling and processing medical-grade cannabis derivatives.

The merged company expects to unlock value through “supply chain efficiencies, cross-selling and upselling to customers through a broader product portfolio (and) developing a more diverse customer base.”

Buying Nuuvera also gives Aphria access to “the only standalone Health Canada GMP-approved facility… authorized and dedicated under its controlled drugs and substances licence to conduct commercial-scale activities with respect to cannabis and cannabinoids.”

“This transaction, which builds on a long-standing relationship between the two companies, brings together our top-tier ability to grow high-quality cannabis at a low cost with Nuuvera’s expansive international network, expertise in processing, and access to industry leading technology,” Aphria CEO Vic Neufeld said in a release.

The deal, subject to the usual approvals from shareholders and regulators, would see Aphria pay $8.50 per Nuuvera share in the form of $1 cash plus 0.3546 Aphria shares.

The deal calls for two-thirds approval from Nuuvera shareholders, of which Aprhia already has “irrevocable hard lock-ups” covering about 57 per cent of outstanding shares, counting Aphria’s existing 6.5 per cent stake in the Toronto firm. It also calls for a $25 million break fee if Nuuvera walks away for a higher bidder. — AGCanada.com Network

The post Ontario medical marijuana producers plan major merger appeared first on Manitoba Co-operator.

About 4.9 million Canadians between the ages of 15 to 64 purchased both medical and non-medical cannabis last year, the statistics agency said. Medical marijuana is already legal in the country.

The average cannabis user spent about $1,200 on the drug last year, mostly on non-medical marijuana, the report said. Recreational use of cannabis is currently illegal nationwide.

Canadians’ spending on cannabis was well below 2016 levels for alcohol at $22.3 billion and tobacco at $16 billion.

The report, which looked at cannabis consumption going back to 1961, was based on surveys and other data sources. Statistics Canada cautioned that the numbers were provisional and subject to potentially large revisions due to assumptions made and as data on illegal cannabis production is sparse.

The report is part of Statistics Canada’s efforts to measure the economic and social impacts of legalized cannabis. The agency said in November that it would begin incorporating marijuana consumption and spending estimates into economic growth figures in November 2019.

The price of non-medical cannabis has declined by an average of 1.7 per cent a year since 1990 and stood at around $7.50 a gram last year, probably due to increased supplies, the report said.

Nearly all cannabis consumed in Canada came from within the country, accounting for $5.4 billion in 2017.

The size of the country’s cannabis-producing industry was $3 billion last year, down from $3.4 billion in 2014, due to declining prices. That put it on par with the beer industry, which was $2.9 billion in 2014.

–– Reporting for Reuters by Leah Schnurr.

The post Canadians spent $5.7 billion on cannabis in 2017 appeared first on Manitoba Co-operator.

Edmonton-based Aurora Cannabis announced an agreement Wednesday in which it will ante up on its previous hostile bid for CanniMed Therapeutics and buy all the shares of the Saskatoon company that it doesn’t already own.

Aurora now plans to pay CanniMed stockholders the equivalent of about $43 per share in Aurora shares, cash or a combination of their choosing, subject to prorating of the $140 million Aurora is making available in cash.

“Market recognition of Aurora’s continued performance and strategy execution since we first announced our intention to acquire CanniMed allows us to share that benefit directly with CanniMed shareholders,” Aurora CEO Terry Booth said Wednesday in a release.

CanniMed CEO Brent Zettl, who along with the company’s board has committed to support the new bid, said Wednesday it “clearly confirms that the company has been highly successful in becoming a preeminent global leader in the medical cannabis industry.”

CanniMed earlier this month had gone so far as to challenge Aurora’s hostile bid in court, alleging in a $725 million suit that Aurora and several major CanniMed shareholders had “participated in a civil conspiracy intended to injure the economic interests of CanniMed.”

CanniMed at that time had instead urged shareholders to support its bid to buy another competitor, Toronto-based Newstrike Resources, whose Up Cannabis brand is well known for a partnership deal it reached in May with Canadian rock band The Tragically Hip.

Break fee

The terms of the new deal with Aurora, subject to the usual conditions and federal antitrust regulators’ approval, also call for CanniMed to walk away from its deal to buy NewStrike and pay the Toronto company an agreed-upon $9.5 million break fee.

The break fee, combined with Newstrike’s plan to fully convert a debenture it issued last fall and exercise common share purchase warrants it issued to CanniMed, leave Newstrike with a $14.1 million cushion it plans to use to speed up work on its new Niagara-area greenhouse and expand its rollout of the Up brand.

“These additional resources will immediately help us solidify Up as the leading cannabis brand in the emerging adult-use market,” Newstrike CEO Jay Wilgar said Wednesday in a separate release.

CanniMed had announced last Thursday it was postponing a special shareholders’ meeting that was to be held this week on the Newstrike deal, to instead consider a “possible transaction” with Aurora.

Aurora, a licensed medical marijuana producer, operates two production plants in Alberta and Quebec and has a second facility under construction in each province.

Aurora also already holds stakes in other production, processing and distribution companies including the Green Organic Dutchman, Aurora Nordic, Radient Technologies, Hempco Food and Fiber, Australia’s Cann Group and Germany’s Pedanios.

CanniMed has also been a major player in the Canadian medical marijuana business for 17 years, 13 of which were as the sole supplier to Health Canada under the country’s former medical marijuana system though its Prairie Plant Systems subsidiary.

The company, which started operation in underground growth chambers at Flin Flon, Man. in 2001, now has its main Canadian production plant above ground southeast of Saskatoon, plus a site at White Pine in Michigan’s Upper Peninsula. — AGCanada.com Network

The post Aurora, CanniMed to form Canadian weed giant appeared first on Manitoba Co-operator.

TMX disclosed its plans as Canadian securities regulators said companies must disclose any connection to the U.S. marijuana industry, which has grown as some states relax rules around cultivation and distribution. The regulators did not prohibit marijuana firms with U.S. ties from listing in Canada, leaving room for any firms rejected by TMX to move to other exchanges.

TMX said it would begin a review of cannabis-related companies listed on its exchanges by the end of the year to determine whether their operations violate listing standards.

“There may be issuers on our markets that are not in compliance with our requirements,” Ungad Chadda, TMX’s head of capital formation for equity markets, told reporters at a briefing at the company’s headquarters.

While U.S. federal law prohibits marijuana, a memo issued by former U.S. Deputy Attorney General James Cole in 2013 directed federal prosecutors not to go after those that complied with state law.

Canada has a national, regulated medical marijuana industry and plans to legalize pot for recreational use by mid-2018.

About 25 companies listed on TMX exchanges cultivate, distribute and possess marijuana, while others provide services to the cannabis industry, Chadda said. He declined to say how many have U.S. exposure.

One company that may run afoul of the TMX review is Aphria Inc., which has a market capitalization of $1.1 billion and has invested in companies operating in Florida and Arizona.

Aphria said it had no immediate comment.

TMX’s smaller rival, the Canadian Securities Exchange, has said it would welcome cannabis companies with U.S. interests and has already begun to recruit them.

Twelve of 50 marijuana-related companies listed with CSE have U.S. exposure, according to the exchange’s chief executive, Richard Carleton.

The new rules from securities regulators require marijuana companies to clearly describe their U.S. activities and explain any risks that could result from changes in U.S. federal enforcement, said Louis Morisset, chair of the Canadian Securities Administrators.

— Reporting for Reuters by Alastair Sharp in Toronto; additional reporting by Leah Schnurr in Ottawa.

The post Toronto exchange may delist marijuana firms with U.S. operations appeared first on Manitoba Co-operator.

Marijuana won’t be sold alongside wine or liquor, but in separate, independent stores, as was recommended by a parliamentary committee earlier this year. While Ontario deserves some credit for forging ahead with guidelines for its legal marijuana distribution system, the province’s statement was really filled with ambiguities and unknowns.

• Read more: Post-secondary cannabis credentials on offer

Private sector marijuana retailing seems to be off the table, which in turn will allow a government-run Crown corporation to distribute and sell this commodity to the public. Not surprising, given what has happened to the sales of alcohol over the last few decades in the province. Like beer and wines now, marijuana will eventually be available through privately owned retailers; however, little about cannabis is straightforward in our modern society.

Social stigmas related to cannabis use remain, so Ontario felt the public was not ready for private distribution. After all, cannabis has been illegal in Canada since 1923, so we need to give ourselves a chance to get used to the notion of living in a society where it is a legal part of everyday life.

Ontario has set the legal age limit at 19 for purchasing marijuana, but few specifics were given on pricing or costs. Most important, no consideration has been given to edible cannabis products, or how these products would be marketed. Nor have guidelines for home cultivation and use been contextualized, especially for households with children. Cooking at home with marijuana, for example, can be tricky. What’s more, the food-service industry and restaurants were not even mentioned in the announcement.

Cannabis is the most widely used illicit drug in the developed world. Its use has, for the longest time, been associated with negative social and economic outcomes. By legalizing marijuana for recreational use, many wonder how it could affect food in general, and it will, despite Ontario’s wishes. The province will not allow edibles, for now. But the black market remains and may impact everything else the province is trying to achieve in mitigating risks for the public.

Since Ottawa’s announcement, several food companies, processors, and distributors are considering the possibility of commercializing cannabis-infused products. In some U.S. states where marijuana is already legal, consumers can purchase a variety of marijuana-infused food products from fudge, cookies, and brownies, to hard candies, gelato, and even gummy bears. Yes, candy.

Some food products, like marijuana brownies, have long been a staple of cannabis coffee shops in some parts of the world, but the new products are quite different and may be deceiving. They are skilfully produced and packaged to closely mimic popular candies and other sweets. Making cannabis more readily available to children, especially in edible forms, represents significant risks.

Research shows marijuana use can be damaging to children and their developing brains, and of course, to fetuses through use by expectant women. No policy framework related to edibles, or by pretending the problem does not exist, will lead to more challenges down the road.

Ontario was completely tight lipped on many facets of a highly complex marijuana puzzle. The stigma of marijuana use clearly got the better of the Ontario government. Looking at retailing the product is one thing. But it is worthwhile considering its various applications beyond the exchange between the seller and the customer. Instead, Ontario has adopted an excessively prudent, incremental deployment strategy to the marketing of marijuana across the province. Again, this is unsurprisingly short sighted.

With the legalization of recreational marijuana, Canada is following in the footsteps of a few states in the U.S., and edible marijuana products have been tremendously popular in these markets. Edibles with marijuana raise public health concerns, including, as mentioned above, the risk of consumption by children. Making them illegal won’t solve anything since they will reach the market, one way or another. The food-service industry is also considering its options with the looming legalization of marijuana. Some guidance by provinces would serve the public well, particularly at a time where many wonder how marijuana, as a legal food ingredient, could potentially impact our society.

While governments may see the legalization of recreational marijuana as an interesting new source of substantial revenue, risks associated with the prevalence of marijuana use as a food ingredient have not been clearly articulated. Even with the few stores Ontario will operate, the amount of revenue will likely motivate the province to reconsider its options in this field. No doubt, more stores will open. But as the province grows its addiction to marijuana tax revenues, it should also consider how it will develop guidelines for edibles, and for marijuana as a food ingredient for domestic use. Or else, the underground market will occupy that space and that is not a desirable outcome.

The post Weeding out what is missing appeared first on Manitoba Co-operator.

Vancouver-based Village Farms announced Tuesday it has partnered with Victoria-based medical cannabis producer/processor Emerald Health Therapeutics in a 50/50 joint venture to grow cannabis for medical use and, pending changes to federal marijuana legislation, the “non-therapeutic adult use market.”

Emerald has pledged $20 million in cash to the venture, while Village Farms will “initially” contribute a 25-acre greenhouse at Delta, B.C., to be converted to cannabis production, and leased to the joint venture with an option to buy.

The joint venture also has options to lease or buy Village Farms’ other two Delta greenhouses: a 25-acre facility and a 60-acre facility, both “adjacent” to the leased greenhouse.

Village Farms, in a release, described the j.v. as a “transformational opportunity… to grow a substantially more profitable agricultural product.”

That said, the company, which grows tomatoes, cucumbers, peppers and eggplant hydroponically at seven greenhouse sites in B.C. and Texas, emphasized Tuesday it “remains committed to its existing greenhouse produce business and customers.”

Once full licensing and the greenhouse’s conversion for cannabis production are completed, the Delta site, at its current size, is expected to yield up to 75,000 kilograms of “product” per year, the company said Tuesday.

Taking up the other two Delta greenhouses, they said, could allow them to expand operations up to 4.8 million square feet and dial their yield up over 300,000 kg of product per year.

At that scale, they said, the facility “would supply a considerable portion of the expected future cannabis demand in Canada or for export abroad.”

Village Farms CEO Michael DeGiglio said the company’s “conservative” market pricing forecasts and yield projections could generate revenue of “10 to 15 times that of our current Canadian vegetable production, with EBITDA (earnings before interest, taxes, depreciation and amortization) margins potentially expanding to more than 50 per cent compared with our current Canadian vegetable margins.”

The joint venture’s goal, the companies said, is to be the “lowest-cost, highest-quality cannabis producer in Canada,” with a targeted production cost of less than $1 per gram.

From Emerald’s standpoint, the deal “strategically positions” it for “rapid production capacity expansion in partnership with world-class greenhouse operators, preparing it for the future non-therapeutic market and existing undersupplied medical cannabis market.”

Emerald, a TSX Venture Exchange-listed firm, brings “significant cannabis industry experience” to the table, they said, including “high-quality genetics and refined standard operating procedures” plus a “flawless” record of operations under Health Canada’s current medical marijuana regulations.

Emerald’s executive chairman Avtar Dhillon hailed Village Farms as “an expert in the complex matter of safety for agricultural consumables, which is a critical competency in the production of cannabis.”

The joint venture plans to “immediately” start the process to get a Health Canada license to grow medical cannabis and, at the same time, start converting their leased greenhouse for cannabis cultivation.

Emerald said it will also still develop the first phase of its own indoor growing operation, a 50,000-square foot facility on a 32-acre site in B.C.’s Lower Mainland, and expects to complete that phase’s construction by the first quarter of 2018. — AGCanada.com Network

The post Hothouse produce grower to devote site to marijuana appeared first on Manitoba Co-operator.