MARCH 3, 2018
THIS IS WEEDWEEK CANADA.
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.

Like the original WeedWeek, WWCanada strives to replicate the separation of business and editorial operations practiced at reputable news organizations. Most importantly, advertisers have no influence on editorial content. (For complete ethics statement see the bottom of this email.)

WWCanada is a paid subscription newsletter. Subscriptions cost $72/six months ($12/month) and $120/twelve months ($10/month). We think you'll find it a bargain.

WWCanada is written by Jesse Staniforth, a freelance journalist in Montreal who has reported extensively on indigenous issues, cybersecurity, food safety, and cannabis for outlets including Leafly, ThinkProgress, The Walrus and Salon. You can find him on twitter @jbstaniforth .

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ALEX HALPERIN
The WeedWeek Podcast
This week on the podcast, Hayley and Alex talk to Michael Gorenstein CEO of Cronos Group about taking his company public on the Nasdaq and Hayley's mom, Jackie Fox, about becoming a MED user later in life. The episode lands Monday at 4:20 p.m. Pacific.


Previous episodes feature:
-Episode 7 Dr. Peter Grinspoon, Harvard Medical School, on cannabis, opioids and the medical establishment.
-Episode 6 Anja Charbonneau, editor of design forward cannabis magazine Broccoli
-Episode 4 L.A. cannabis Business attorney  Ariel Clark on what cannabis entrepreneurs need to know
-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

Comments or feedback? Don't be shy. Our producer is Katie Long.

Interested in sponsorship opportunities? Contact here.

Here's the news.
Politics
The Trudeau Liberals’ 2018 federal budget , presented to Parliament on February 27, had several sections dealing with the effect of REC legalization on the Canadian economy (Toronto Star ).

 
 
  • The budget anticipates $35M in tax revenues (iPolitics.ca) from cannabis sales in the first year following REC legalization, with a total of $690M in cannabis-based tax revenue expected over five years.
 
  • For the first two years, federal tax revenues would be capped at $100M, and taxes collected beyond that would be distributed to the provinces, which have already forged an agreement with the federal government to split tax revenues (Global News) 75-25 in the provincial favour, though few expect the tax revenues to top $100-million until more than two years into REC legalization.
 
Local police departments don’t yet understand how legalization is supposed to work. In what may be a bellwether for police departments nationwide, a meeting of the Ottawa police services board on Monday heard that no one knows how much funding the Ottawa police will require to support with legalization (CBC Ottawa).

  • Ottawa Deputy Chief Jill Skinner said a local estimate of $6.2M for Ottawa’s the first year of legalization was unfounded and that no one knows the true cost of legalization, because too many concerns remain unresolved.
 
  • For example, there has not yet been a decision about what police should do with cannabis plants they seize (Ottawa Citizen). If police are required to keep them alive while the relevant trial works its way through the courts, they will need to build greenhouses. If they will sell the plants and pay out to the accused on condition of acquittal, that will need to set up a program for doing so.
 
  • As they continue to struggle with shutting down illegal dispensaries (Ottawa Citizen), the Ottawa police have not budgeted any extra funding for dealing with cannabis legalization this year. Mayor Jim Watson is requesting additional funding from the Ontario and Canadian governments.


The Canadian military is also struggling to come to grips with what legalization might mean (Calgary Herald ) for its ranks.

 
  • While he will not call for all-out prohibition on cannabis use by members of the military, he says the Forces would adopt “common-sense” rules based on research currently underway by the military’s surgeon general into the effects of cannabis.
Business
Aurora Cannabis is the latest company to sign a supply deal with Shoppers Drug Mart (CBC Canada), subject to Health Canada approval of Shoppers’ application to dispense medical cannabis.

 
 
On Wednesday, a group of investment banks has cancelled their $70M deal with the Maricann Group ( Financial Post ).
  • The Ontario Securities Commission is investigating the Maricann Group for insider trading.
 
  • Two board members under investigation have resigned (Raymond Stone and Neil Tabatznik).
 
  • CEO Ben Ward is also under investigation for his conduct at his previous post, CEO of Canadian Cannabis Corp.
 

 

  • Cronos Group already trades on the TSX Venture Exchange in Canada.


Toronto cannabis retailer Fire & Flower said that it is moving its headquarters to Alberta, and intends to open 30 stores in the Edmonton area (Edmonton Journal ).
 
  • Cannabis in Ontario will be sold by the provincial government only, while Alberta will allow private companies to enter the market.
 
The move toward legalization means cannabis growers are buying a lot of real estate ( Bloomberg News ).
 
  • They will require 8Mft2 of commercial space across Canada, with the greatest concentrations in Alberta, Ontario, and Quebec.
 
 
Working off information in a study by Canaccord Genuity, the Motley Fool warned investors that Canadians may not buy recreational cannabis at the rate many are now projecting they will .
 
  • Though many believe there will be a shortage caused by demand surge once legalization occurs, the ability to grow cannabis at home (in all provinces except Quebec and Manitoba) will quickly cut into it.
 
  • The cost per-gram for legally produced cannabis is projected to be around $8—before 10% federal tax and GST/HST, which should bring that price up to $10 per gram.
 
  • With cannabis selling for a current national average of roughly $7 (CBC Politics) on the black market, $10 legal cannabis doesn’t provide much of an incentive for users to switch to legal weed. Especially considering that Canadians can grow their own.
 
  • In short, the cannabis investment bonanza may not be as limitless as some now believe it will.
Other News
Universities across Canada are working to draft new rules for residences to reflect cannabis’s new legal status.

  • As yet no school has determined how it will formally regulate use of cannabis in residence.
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Bye,
Jesse

Advertising policy: Advertisers and contributors through Patreon have no influence on WeedWeek's editorial content or on the content of articles that Alex Halperin and other WeedWeek contributors write for other publications. In an effort to replicate the separation of business and editorial operations practiced at reputable news organizations, a WeedWeek salesperson will be responsible for all sales-related contact with advertisers and will work, as much as possible, without input from Halperin. All advertising queries sent to editorial staff will be referred to a salesperson. In all WeedWeek material, all ads and other forms of paid content are clearly distinguishable as such. WeedWeek editorial staff does not approach potential advertisers to solicit business, and reserves the right to reject ads if they present a conflict of interest, the appearance of a conflict of interest or for any other reason. Due to our small size, editorial staff may read ads on the podcast or provide editorial input on ads after they have been purchased.

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