Cannabis in Canada turns 3 Years
Cannabis in Canada turns 3 Years old, and not everyone is happy. After three years of legalization in Canada, there are many good and not-so-good reasons to be pleased about how legalization was rolled out in Canada.
The good news is that cannabis sales in Canada have hit monthly records in 2021, with Ontario becoming the biggest market in sales and Toronto the biggest city with more than $46M in monthly sales in August. Toronto's monthly sales are almost the combined total of all cannabis sales in Manitoba, Saskatchewan, Nova Scotia, New Brunswick, and Newfoundland and Labrador.
What are Canadians buying? More than three years into legalization, Canadians still prefer dried flower with edibles and beverages accounting for less than 5.5% of total sales for the first half of 2021. Second, to dried flower, Canadians prefer extracts, oils, and concentrates.
Who are the big winners in Canada?
Consumers are ultimately the big winners in cannabis, with consumers in Ontario benefiting the most over the past 18 months with the rapid growth of licensed dispensaries all across the province. Stores are opening so frequently that Torontonians now complain about construction, weather and cannabis store density.
Our view is simple, the market will decide winners and losers, and store density will find an equilibrium as consumers make their preferences known. Expect stores to compete with elevated service, better product offerings, and loyalty reward initiatives until then.
If four dispensaries in the same intersection want to compete for my business, I'm open to letting them complete. I have two dispensaries walking distance from my office, a regional brand and a local independent. I visit and purchase from both regularly, each providing a different experience and product variety. When one is out of stock of my go-to product, the other is in stock. The increased competition means better prices and much better service for consumers.
What needs improvement?
Cannabis is tightly regulated more than alcohol and tobacco, even though both contribute to higher healthcare costs and reduce the quality of life. Cannabis, in comparison, is used by medical patients and has the potential to address pressing issues around sustainability and the environment.
Unfortunately, the regulations and strict limitations on marketing, packaging, excessive taxation, licensing requirements, and lack of equity and diversity initiatives have left Canada losing ground globally as a leader and example of rolling out a national legalization program.
According to BNN Bloomberg, "The Canadian legal cannabis industry contributes more to the country's gross domestic product than Canada's media sector; iron, gold, potash, and copper mining; meat manufacturing; breweries; clothing manufacturing; wood product manufacturing - and close to surpassing auto manufacturing."
Delta 8 is illegal in Texas according to State Law
Texas declared Delta 8 illegal, impacting more than 2000 hemp retail dispensaries in the state. There is confusion on enforcement and when the law came into effect as many dispensary owners had no official notification from the Texas Department of State Health Services.
In 2018, the US Congress passed the Farm Bill, which among other things, regulates hemp production, research, importation of seeds, interstate transportation, and licensing requirements under Title X of the Farm Bill. The Farm Bill defines hemp federally as cannabis with less than 0.3 percent of tetrahydrocannabinol (THC).
Although the federal law regulates hemp, individual states are responsible for licensing, control, health safety, product testing, production and possession limitation.
Businesses are now considering suing the state and asking for temporary restraining orders against the Department of State Health Services.
The confusion is compounded by Gov. Greg Abbot signing into law Bill: HB 1325, which regulates industrial hemp production, occupational licensing, authoring fees, and administrative penalties. The law also made a distinction between hemp and marijuana.
Delta-8 is the little sister to Delta-9, the potent big brother found in recreational and medical cannabis. Delta-9 is a psychoactive cannabinoid with identical molecular formula as Delta-8 but distinctly different arranged atoms.
As with Delta 9, Delta-8 has medicinal properties and similar psychoactive effects. Many medicinal patients have turned to Delta 8 to manage medical symptoms and improve their quality of life.
Opponents to Delta-8 say the FDA has not regulated it. And products can contain harmful chemicals used to extract Delta-8 from hemp plants. Also, there have been increased cases reported to the national poison control center involving Delta-8.
The cannabis industry takes over Las Vegas
Last week was MJ Biz and MJ Unpacked, and from my feed on LinkedIn, it looks like it was a great week in Vegas. I suspect this week all our feeds will be flooded with video, images and stories of all the excitement in Vegas.
We didn't attend Vegas this year, but we hope to see everyone in 2022. MJ Biz celebrated its 10th Anniversary. This year's most talked-about subject was growth for 2022 and how to continue the rapid growth of the cannabis industry in the US. Expect many deals, consolidations, expansions, and significant capital raises across cannabis in the next 12 - 18 months.
Reviews of Daymon John's Keynote presentation are strong, with the audience giving him a standing ovation as he talked about growing up in New York, running FUBU from his house, and the personal investment in himself guided by the sage advice of his mother.
We hope a streaming version is available for those that didn't attend this year.
Jobs of the week
USA CBD Expo on October 28 - 30th in Chicago at McCormick Place - the largest CBD Expo in North America.
Next month is the Black Canna Conference & Expo 2021 in New Orleans, November 18th - 20th