Cannabis perspective from the Great White North

🍁 CANNABIS REFORM
Canadian cannabis CEO takes a stand

Driving the news: Time and again it’s good to get perspective on a mature market that is not California or Colorado. Today, we’re looking north of the border to Canada, where Beena Goldenberg, CEO of Organigram, took to the pages of the Financial Post to lay down some truths about cannabis legalization in Canada.

It’s legal, but: While what Goldenberg laid out was specific to Canada, the lessons learned in Canada may sound familiar to her American counterparts:

“High excise duties, restrictive limits on edibles, curbs on consumer education, strict rules on packaging and labelling, limited opportunities to build brands that would support conversion from the illegal market, complex provincial distribution systems, high compliance costs and cumbersome excise stamp requirements that add to complexity and costs have prevented legal businesses from succeeding…”

Why now? Canada is federally legal in Canada. But, while federal legality has dented the legacy and illicit markets, it’s not wiped it out completely. In fact, Statistics Canada estimates that around 30 percent of cannabis bought in Canada is bought outside of legal channels. 

High taxation: One of Goldenberg’s key messages was about how excessive taxation drives consumers away from legal channels. Statistics Canada estimates that two of every five dollars spent on legal cannabis enter government coffers. 

What’s next? As a large operator in Canada, Goldenberg is voicing the concern of many of her CEO colleagues of companies large and small. Her overall takeaway to regulators on all levels of Canadian government:

“To compete effectively with the unregulated market, the industry needs higher potency limits and prices that are more competitive — which is only possible with lower excise taxes. These adjustments will help bridge the gap between consumer expectations and what the regulated market can deliver, thus levelling the playing field for legal producers.”

US regulators take note. 

-JR

Writing in SFGate.com, United Food and Commercial Workers’ Union strategist Jim Araby advocated for cannabis reform measures in California to keep the industry afloat and local:

Without immediate reform, the future of California’s cannabis industry will be bleak. The market is poised to consolidate into the hands of private equity-backed corporations that have little interest in fostering a sustainable or inclusive cannabis industry. Smaller companies started by passionate California entrepreneurs will be forced out. What will remain is a ruthless, profit-driven market, far from the innovative and community-oriented vision that legalization once promised.

Read the full OpEd.

Trump’s appointment parade continues 🙄

Yesterday, our Editor-in-Chief wrote about the nomination of Representative Matt Gaetz as Attorney General: This is a cannabis newsletter, so we’ll refrain from commenting on all the ways that Gaetz is historically unprepared to manage the entire Justice Department. But for the industry, the Gaetz pick is a positive. Ditto with yesterday’s news that President-elect Trump will nominate Robert Kennedy, Jr. as the head of the Department of Health and Human Services, who has expressed support for cannabis reform in the past. 

ALJ to decide standing 👨‍⚖️

The would-be witnesses for the Administrative Law Judge hearing on rescheduling slated for December 2nd had to make their case to the ALJ this week that they would be adversely affected by rescheduling. If that sounds strange, especially for cannabis rescheduling advocates, you’re not wrong. MJBizDaily unpacks it all.

Off-duty use A-OK in NM ✌️

The largest county in New Mexico — Bernalillo County — appears to be moving forward with a plan to allow county employees to use cannabis, both recreationally and medically, while off-duty. More good news from Marijuana Moment.

Cannabis a “genotoxic’ substance?

A research paper published in Addiction Biology, classified cannabis as a “genotoxic” substance and noted that it damages a cell's genetic information, which can lead to DNA mutations, accelerated aging, and cancer – according to the research cited.  

Cannabis earnings season continues: 

• Agrify reported their Q3 financial results, including $1.9 million in revenue and gross profit of $0.2 million. (Of course, the biggest Agrify news is that Ben Kovler is now the Chairman and Interim CEO.) 

• C21 Investments, based in Vancouver, announced their quarterly earnings, include a 14% quarter-over-quarter revenue growth.

• Canadian producer Rubicon Organics released their Q3 financials and reported an adjusted EBITDA of $2.0 million for the three months ended September 30, 2024.

Tilray announced yesterday that they’ve launched their first German-grown cannabis products under their newly expanded German license.

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