Cannabis Industry

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In a move that can only be described as hypocritical, impractical and politically-charged, Quebec went through with its move to pass Bill 2.

As CTV News reports, Quebec’s alleged goal is to protect youth from marijuana’s adverse effects. While there is no denying that, as a drug, cannabis has its risks, most critics argue that this is not the way to go.

But as we have seen before, Quebec is not known for its common-sense approach to marijuana, which leads many to believe that the government is simply pandering to a socially conservative voter base.

Nonetheless, the bill sparked fury among industry representatives, advocates and health critics.

 

“Protect Young, Developing Brains”

 

Quebec Junior Health Minister Lionel Carmant’s – the mastermind behind the bill – says it aims to “protect young, developing brains.” But he has essentially gone against that goal.

One of the reasons for legalization was to provide a safe, regulated alternative to the black market. It is no secret that illegal cannabis has no safety or manufacturing standards, leaving the door open to harmful microbes, fungi, heavy metals, and pesticides. The recent vaping epidemic based on illegal THC vape pens and cartridges is a prime example.

Francois Limoges, who is a spokesperson for the Quebec Cannabis Industry Association (QCIA) says:

 

“You’re pretty much telling the younger generation that you wanna protect, well, ‘go back to your dealers’ — or ‘find a dealer’ — because they’ve been buying legal cannabis for the last 12 months and as we know, when you’re a younger adult you’re not going to wait [until age 21].”

 

Limoges is also concerned that, once they reach legal age, disenfranchised consumers will be less likely to use legal marijuana.

 

Politically Motivated

 

It could be argued that Carmant is misguided, but his apparent disregard for the clear flaws presented about Bill 2 indicates that he has his agenda.

CTV News explains:

 

“Quebec’s association of public health has also criticized the bill, with spokesperson Marianne Dessureault saying it lacks a scientific basis. In an interview earlier this year she worried that ‘we are going ahead and maybe transforming a law that sought to protect public health, towards a law that has more of a political flavor.’

She described the bill as having a “populist appeal,” which “doesn’t have [a] place in public health policy.’”

 

 

Based on Stigma

 

Despite tobacco being the leading cause of preventable death and alcohol having a massive kill count of its own, both products are legally consumable by age 18. Yet cannabis, which to date has no recorded deaths related to THC consumption, is considered the worst of the three.

Strangely, voters are fine with declaring that 18-year-olds are adults when it comes to tobacco and alcohol. But cannabis is in a league of its own. It is quite clear that this is just an old Reefer Madness mentality that, to this day, people everywhere cannot shake.

Francois Limoges puts well when he says Bill 2 is based on “social conservatism from the government … [which] appears to be stuck in the old ways of thinking.”

 

WeedAdvisor’s Support for Common Sense Policy

 

We understand the importance of protecting youth from the potential health risks of marijuana. But the Quebec government’s restrictive policies will do little – if anything – to support that goal.

Unless something changes, the negative impacts of this supposedly well-meaning bill will show themselves in the coming years, especially when it comes to the black market

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A crime lab in Douglas County, Nebraska, confirmed the efficacy of a test to determine whether seized cannabis is marijuana or hemp, according to Colorado broadcaster KETV.

When industrial hemp was federally legalized in December, it opened up a whole new market and helped legitimize (still unregulated) CBD products. However, this also created an unexpected headache.

The problem with the U.S. classification of hemp is that it is based on THC content, rather than the type of plant. Marijuana (cannabis sativa) is the THC-rich variant in the cannabis plant genus, while hemp (cannabis sativa L.) is 99.7% CBD.

In order to be classified as hemp, the dry herb must contain 0.3% THC or less. But with no reliable test to determine THC content to such a close level, law enforcement could not provide conclusive evidence that a suspect was in possession of marijuana. Individuals could simply claim they had hemp and would never set foot in a courtroom.

Now, the new test – originally developed in Zurich, Switzerland – will help law enforcement solve the hemp/marijuana conundrum.

 

Current Testing

 

At this time, testing methods are meant to fit the old laws, where cannabis of all forms was prohibited. But with a new legal limit being set for THC, crime labs need something more precise.

Originally, police used a field test known as the “Duquenois Levine test.” It relies on a chemical reaction that turns purple if it detects the presence of cannabis. The problem is that it does not differentiate between marijuana and hemp.

 

New Test is Street-Ready

 

Unlike the old method, the new one can instantly differentiate between marijuana and hemp. Using a simple chemical reaction, the sample turns purple for hemp and blue for marijuana.

Like the Duquenois Levine test, the new method is also meant to be used in the field. However, its role is meant to be preliminary, not conclusive.

First, law enforcement will use the old method to confirm the presence of cannabis. If the sample turns purple, the second test will be administered. Conventional wisdom would dictate forgoing the old method and skipping straight to the new option. However, the latter is three times more expensive, so only a supervisor can administer it once the Duquenois Levine test confirms the sample to be cannabis.

Even if the sample does blue, it needs to be sent to a lab to confirm whether the THC level is above 1% – the threshold assigned to determine whether criminal charges are to be laid.

 

False Sense of Security

 

The unintended consequences of hemp legalization may have thrown a wrench into marijuana prosecution in many states, but authorities caution that this is not some sort of passive legalization.

Christine Gabig, the local forensic scientist who validated the test in Douglas County, warns:

 

“There is no big crisis. Everybody was saying that nobody could get in trouble anymore for marijuana, or that we essentially legalized marijuana, or that we essentially legalized marijuana and that didn’t happen.”

 

Douglas County is the only location in Nebraska using this new test. But if successful, it will likely spread to other law enforcement agencies to combat the current leg.

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CannTrust continues its fight to remain in the industry following a set of violations that nearly sank the company, according to BNN Bloomberg.

Initially, CannTrust’s situation seemed untenable. But when Bonify – a company known for allowing massive amounts of illegal cannabis into its supply – regained its license, CannTrust’s case actually has a fighting chance.

After months of investigation and internal changes, CannTrust submitted a remediation plan to Health Canada, aiming to meet all compliance requirements in the coming months.

 

Aiming for First Quarter 2020

 

CannTrust’s license was suspended in September. But rather than make gradual progress to improve operations, Health Canada discovered additional violations as time went on.

But after months of treading water, CannTrust has regrouped and intends to push forward. BNN Bloomberg explains:

 

“CannTrust Holdings Inc. has submitted a remediation plan to Health Canada as part of its efforts to regain the regulator’s trust and return to compliance. The embattled cannabis producer says it’s aiming to complete all of the activities detailed within the plan by the end of the first quarter of next year, according to a release late Thursday.”

 

CannTrust has a lot of work ahead of them in the coming months. With issues like illegal grow rooms, poor labour practices, black market seeds, security flaws and deliberate attempts to withhold information from Health Canada, the company has built up quite a rap sheet since July.

 

No Specific Details

 

CannTrust’s specific steps have not been publicly announced. However, they do give a general idea as to what the plan entails.

The company says their plan includes:

 

“…an expanded internal training program, a strengthened governance and operations framework, infrastructure enhancements, and prescribed accountabilities and timelines for a variety of specified tasks.”

 

From what we can glean, the plan is highly focused on efficiency, compliance, facility enhancements and training – all of which were lacking prior to CannTrust’s suspension.

Although we are kept guessing about whether CannTrust will succeed, interim CEO Robert Marcovitch is optimistic, saying:

 

“CannTrust is confident that its remediation plan addresses all the compliance issues identified by Health Canada.”

However, not everyone shares Marcovitch’s optimism. Derek Dlay, an analyst at Canaccord Genuity believes CannTrust is on the right track, but also adds:

 

“Having said that, there is still significant uncertainty whether CannTrust will eventually achieve full compliance in the near term.”

 

Realistically, only CannTrust knows how much legwork is ahead of them. Those of us on the outside can only speculate.

 

Massive Layoffs

 

Unfortunately – albeit unsurprisingly – CannTrust was forced to scale back its workforce. In September, the company laid off 180 workers. Now, another 140 are joining them in order to save money in the interim.

CannTrust says these layoffs will save them $400,000 per month in labour costs. However, they need to rehire these employees within 35 weeks, or the total severance will be $880,000.

Marcovitch is not happy with the situation, but admits that it is necessary in order to reflect the company’s current sustainability. He explains:

 

“This was a difficult decision, but it is imperative that our workforce reflects the current requirements of our business. Reducing [CannTrust’s] current operating expenses supports our financial sustainability, and places us in the best position to fully resume production upon the reinstatement of our [licences]. We look forward to rehiring at that time.”

 

 

WeedAdvisor’s Compliance Solutions

 

Out of all the errors producers, distributors or retailers can make, non-compliance is arguably one of the most egregious. Whether accidental or intentional, the consequences may amount to millions in fines, lost productivity and severe loss of public trust.

WeedAdvisor understands the critical balance required to ensure compliance, which is why one of our many business solutions include key functions like inventory tracking, real-time data, safety monitoring, reporting and more.

We help our clients remain compliant in a seamless, automated fashion, so they can focus on providing the best products possible.

 

 

 

 

 

 

 

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The first year of legalization saw its share of scandals. But while CannTrust stole the spotlight in the summer of 2019, Winnipeg-based licensed producer Bonify was arguably worse.

As we covered in our article from early 2019, Bonify’s most egregious offence was when it sourced and sold illegal cannabis into the open market. This was during a volatile time, where pressure to provide inventory was massive as a huge shortage bottlenecked the nascent cannabis industry.

However, BNN Bloomberg now reports that Bonify, despite the seriousness of their violations, had its licensed reinstated after a massive overhaul.

 

“A Landmark Moment”

 

When it comes to dealing with punitive measures from the government, there was no precedent for whether or not working to improve would even yield results. But Bonify proved that, while Health Canada does not hold back when it comes to non-compliance, it is possible to bounce back.

When Bonify’s licensed was suspended, they brought in RavenQuest Biomed to get them back in the right direction. Now, RavenQuest CEO George Robinson says:

 

“Having guided Bonify through corrective action vis-a-vis operational procedures, proper record-keeping, training, and all other standard operational procedures within the Bonify facility, we now have the roadmap to licence reinstatement for non-compliant operators. This is a landmark moment in an industry that has faced several high-profile compliance challenges.”

 

Essentially, Bonify went from a complete regulatory disaster to total redemption – although it took about eight months to accomplish. More importantly, it provides a living guide for companies like CannTrust, who are still fighting to once again become compliant.

BNN Bloomberg explains:

 

“Bonify’s ability to sell cannabis legally again also offers a clear pathway for other suspended producers to return to compliance with Health Canada if they can demonstrate that they can abide by the regulator’s various measures aimed at ensuring public safety and compliance with the law.”

 

A Learning Experience

 

The Bonify debacle has taught us some very valuable lessons. First of all, Health Canada is not to be trifled with. It is likely that offending licensed producers underestimated the government’s resolve to enforce compliance.

But we are in a time where image is critical. Any health issues from contaminated or substandard cannabis can drastically affect consumer confidence – something we desperately need in order to fight the black market. Consequently, regulators will scrutinize LPs very closely.

Second, it is clear that actions have consequences. Bonify’s offences were severe and the punishment more than fit the crime.

However, the third major lesson here is that there is always the opportunity to be better, whether it is due to Health Canada’s orders or voluntary, proactive measures to improve best practices.

In the words of George Robinson:

 

“The lessons from Bonify are clear: Follow the rules, train your staff and run a clean, well-designed facility capable of producing high-quality cannabis without cutting corners.”

 

WeedAdvisor’s Compliance Solutions

 

WeedAdvisor understands the severity of non-compliance and its effects on both the industry and consumers. It is also important to understand that it is possible to unintentionally fall short of Health Canada’s highly intense standards.

Keeping track of every critical area is no easy task. But thanks to our business solutions, we make compliance automatic, easy and inexpensive.

Inventory tracking, real-time data gathering, reports, safety and quality compliance are just a few areas that our solutions effectively cover. In turn, this brings valuable protection against fines or suspensions, while ensuring continued public confidence.

 

 

 

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Customers often complain about the disadvantages of the legal market – mainly when it comes to pricing. Some, however, also argue that legal cannabis is inferior in quality to the unregulated product found on the streets or in grey market dispensaries.

But according to Newswire, recent events prompted many naysayers to change their attitudes, swinging the pendulum in favour of the legal market in both Canada and the U.S.

The black market is still a major presence and will continue to exist for quite some time, but the new demand for clean, safe cannabis threatens to take a serious bite out of illicit sales.

 

Organic Cannabis

 

The term “organic” has become a trendy buzzword among health enthusiasts. Chemicals and GMOs scared the public (more than they should) and created the organic food market we see today.

The same trend is happening now. Thanks to the vaping crisis and reports of tainted cannabis popping up in the media, marijuana users are careful to educate themselves on contaminants and ingredients.

Newswire predicts:

 

“As cannabis consumers become more educated on the value of buying organically grown cannabis, the market for such products will likely take off. Not only is organic cannabis safer for consumption and environmentally sustainable, but it also offers a more robust flavor profile and better quality effect for the user.”

 

It is important to note that “organic” cannabis is not to be confused with “premium” cannabis, the latter which is considered to be high quality but still uses pesticides and other chemicals during the growing process.

 

Competitive Advantage

 

The beauty of offering organic cannabis is that it opens the door to a growing niche market that could very well become mainstream. When marketed properly, organic cannabis can be highly lucrative.

Newswire explains:

“…companies like Canada’s The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) and US-based Citation Growth Corp. (CSE:CGRO) (OTCQX:CGOTF) are offering certified organic cannabis. But it is organically grown cannabis that is becoming a differentiating factor for cannabis companies in an increasingly competitive market. What’s more, offering organic products allows companies to sell their products for 26% more than regular-grade cannabis…”

 

The current mass panic does not hurt sales either, turning people to organic cannabis out of both preference and necessity.

 

Customers are Sold

 

It did not take a lot of time to convince the general public that there is more to marijuana than simple pricing:

 

According to Brightfield Group, nearly half of the cannabis consumers they surveyed…32% would dish out more money for certified organic products and 30% said they’d willingly pay more for lab-tested cannabis.”

 

In Canada, “certified organic cannabis” is a rare gem. It is so rare that The Green Organic Dutchman is the only licensed producer to offer this product, allowing them to completely dominate the market – at least for now.

The same applies to Citation Growth Corp., whose market is limited to its home state of Nevada due to federal prohibition.

 

WeedAdvisor’s Emphasis on Product Quality

 

We understand that “quality” cannabis goes beyond its therapeutic or recreational effects. Recent news makes it abundantly clear that cannabis can pose a serious health hazard when not grown or processed safely.

WeedAdvisor fully supports the sale of safe, regulated products, which is why all of our strain reviews come from legitimate licensed sources.

Feel free to visit our product reviews page for a full list of descriptions, with new ones added daily from Canada and legal U.S. dispensaries.

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According to CBC News, many analysts say that the upcoming round of edible products will boost cannabis sales and take away business from grey market dispensaries. With many users understandably turned off by the idea of smoking, it is safe to say that these products will be well-received in some circles.

But are experts truly correct in their prediction? Let us not forget what happened with the first stage of legalization. Investors flocked to licensed producers in droves, driving up stock prices well above the companies’ respective valuations. In the end, sales were – and continue to be – short of expectations.

Analysts and industry insiders alike, however, seem more comfortable with the future of edibles. However, this is likely because they missed one critical factor.

 

Cannabis Industry “Optimistic”

 

Licensed producers have a lot of faith in their products and the legal market as a whole. Understandably, a major goal is to eliminate their primary competitor, the illegal industry. However, experts warn that the fight is far from over:

 

“Licensed cannabis producers are optimistic that the introduction of legal edibles will help displace the black market, but analysts say it will take time to displace illegal sales.”

 

Aurora Chief Corporate Officer Cam Battley says consumers are interested in edibles because they provide an alternate consumption method to smoking. Battley says:

 

“This will give the legal industry the real opportunity to make significant strides in replacing black market sales with attractive and safe adult consumer products,” Battley said. There is a willingness to pay for products that are deemed to be properly regulated.”

 

Andrew Udell, another analyst, says a successful legal edible market requires a certain equilibrium between competitive pricing and public safety. He explains that we need to:

 

“Try and find the right price at the right size for how much goods or products should cost, versus societal goals of, say, public health and reducing social costs of consumption.”

 

Unfortunately, these “societal goals” could prove to be the Achilles heel of the edible industry.

 

One Size Does Not Fit All

 

While safety is a bonus for many consumers, the limitations on Canada’s edible products will force many recreational users to stay with the grey market.

At a THC limit of 10mg per unit, this level is adequate for new and casual users. But veteran consumers are another story.

Many heavy users consume products containing hundreds of milligrams of THC. For them, 10mg will not provide any intoxicating effects. These individuals will have no choice but to buy from illegal sources, whether they want to or not.

Analysts may be correct that legal edibles will affect illegal sales to a degree, their appeal is heavily limited by the outrageously minuscule potency. This is something that seems to have eluded them and will likely set them up for disappointment.

But we cannot entirely blame the government for this decision. In the months leading up to legalization, the media started a frenzy as they reported story after story on children and adults ingesting excessive amounts of THC.

Even though the edibles in question were all purchased illegally – a fact that most of the stories conveniently failed to address – it made people and lawmakers uneasy. Consequently, the government overcompensated and will likely see the unfortunate results.

 

WeedAdvisor’s Hope for a Growing Industry

 

As a provider of critical business solutions for cannabis retailers, licensed producers, and government agencies, WeedAdvisor stands firmly in support of the legal edible market. However, we cannot ignore the fact that, like the first wave of legalization, people are being overly optimistic.

The reality of the situation will not be clear until edibles finally reach consumers. In spite of potential challenges, we hope this addition to the open market will ultimately achieve its goal of promoting legal sales.

 

 

 

 

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One universally notorious consequence of legalization is that large grow operations a ripe for the picking by thieves. Given the size of some of these fields, keeping every area safe is a logistical nightmare. Consequently, it is not hard for thieves to sneak in and take plants – as is the case with one story reported by ABC News.

However, ever since hemp was legalized in the U.S., it effectively became an involuntary decoy for people trying to steal marijuana from local growers.

It is fair to say that petty thieves are not exactly a pillar of intelligence, especially when it comes to botany (or any science, for that matter). Unfortunately, one Indiana grower is just a single example of an increasing and concerning trend.

 

Mistaken Identity

 

To those familiar with cannabis, the physical differences between hemp and marijuana are blatantly obvious. Unfortunately, criminals are not aware of this key distinction and legitimate businesses pay the price for that ignorance, as is the case with one Indiana grower:

 

“People are stealing hemp plants from a local legal growing hemp business after mistaking the plants for marijuana. US Hemp Co. launched in 2019 and the business started harvesting in Indiana’s first legal hemp crop in 80 years. Will Weaver, one of the founders at US Hemp Co., chased down two suspects in Elkhart County on October 17 after watching the suspects remove the hemp plants from one of the business’s fields.”

 

Weaver says this is a chronic issue that understandably “…makes you feel violated.” He says that every time he catches people trying to steal his plants, they always say they thought they were stealing marijuana.

Unfortunately for Weaver and those like him, this problem is gaining momentum. According to ABC News:

 

“Between the customers, US Hemp Co. harvests for and themselves, there were 11 days straight and approximately over 20 people put in jail over hemp thefts during the past few weeks, according to Weaver.”

 

“None of it is Marijuana”

 

Weaver makes it clear that there is nothing in his field worth stealing:

 

“In reality, none of it is marijuana. All of it is below 0.3 THC level…so you could smoke the whole field, you’ll never get high.”

 

Furthermore, stealing hemp is a lesson in futility. Even if thieves get away with a tiny haul of hemp plants, there is no way for them to make money.

Unlike marijuana, there is no black market for hemp. Weaver also explains that selling the hemp through legitimate channels (the only real option) would require a certificate of analysis and a license – neither of which hemp thieves are likely to have.

 

Still Does Damage

 

Although the joke is effectively on the thieves who get caught and charged, it is no laughing matter for Weaver and his counterparts in the industry. He explains:

 

“There’s no value to [hemp]. It looks a little different, it smells different and there’s no value to them. They’re just taking money out of our pocket…that’s all they’re doing.”

 

Weaver frankly explains that this grow operation is his livelihood. These pointless thefts affect his bottom line and – in turn – his livelihood.

 

WeedAdvisor’s Concern for Unintended Consequences

 

Legalization of cannabis has been beneficial, but with it came some unintended consequences. In the past, we have mentioned thefts and armed robberies at Canadian facilities. It appears that legalization has the same effect in the U.S.

Unfortunately, little can be done other than to increase security. However, small growers do not have the resources to hire security staff or services.

Although we would like to see this trend reverse – and it may very well do so – having a controlled substance so easily within reach is simply too tempting and, more importantly, too easy, for some unscrupulous people to not steal.

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Mexico is just one day away from submitting its final draft on cannabis legalization, according to Marijuana Business Daily. After that, the country has only a few days to end prohibition, with the senate’s deadline set for October 23rd.

But when stacked next to Canada, Mexico’s situation did not offer a very generous amount of time to prepare. Consequently, the process has been rushed – and it shows.

Despite their best efforts, Mexico’s ultimatum mandated by the Supreme Court to legalize cannabis has caused a lot of difficulty that created a nearly impossible time crunch.

Needless to say, the next few days will be critical.

 

“Reasonable Time”

 

According to Marijuana Moment, Justice Commission Senator Damián Zepeda Vidales asked for “reasonable time” to evaluate the final draft before implementing legalization. Unfortunately, there is one problem – or rather, twelve problems.

Marijuana Moment explains:

 

“The problem is that despite the deadline being less than two weeks away, there remains at least a dozen different proposals. Earlier this month, lower house majority leader Mario Martín Delgado Carrillo introduced a new bill that would create a state monopoly through a public company named Cannsalud. Last month, Menchaca Salazar introduced a bill that would legalize domestic growing.”

 

With a slew of bills still circulating, politicians have their work cut out for them if they hope to finalize their vision of the upcoming framework.

 

Shifting Focus

 

Although there are many legislators with different visions and agendas for legalization, the government simply does not have the time to consider them all. Fortunately, they may not have to:

 

“…local industry sources that spoke with Marijuana Business Daily are confident the bill that is being given priority is the one filed almost a year ago by Olga Sanchez Cordero, then a senator, now secretary of the interior, but with significant modifications.”

 

The other proposals currently in limbo will likely need to be set aside, but this does not mean they will not see the light of day. With a rushed process like this, it is possible that reforms will continue over time.

 

Approval

 

If there is one good thing about this situation, it is that final passage of the law should be relatively smooth. Once the senate votes on the bill, the lower chamber has to approve it. Frankly, they have no choice in the end.

The political climate itself is rather friendly to legalization, but it is not enthusiastic either:

 

“Because the government holds majorities in both houses of congress, no significant opposition is expected. This week, President Andrés Manuel López Obrador said that legalizing marijuana is not his government’s priority, adding uncertainty to an already confusing situation.”

 

WeedAdvisor’s Anticipation for a Mexican Cannabis Market

 

Mexico has a long way to go once the legislative process is complete. Legalizing marijuana on paper is a lot simpler than actually implementing it.

The next few months will be both interesting and nerve-wracking for many individuals. Hopefully, however, WeedAdvisor will soon be able to offer its assistance through business solutions for Mexican licensed producers, retailers and government agencies.

 

 

 

 

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The budding South American cannabis industry has gained a great deal of attention in recent months, with Colombia being no exception, according to Marijuana Business Daily.

As attitudes and policies develop across the continent, its countries prepare to – if successful – pose a real competitive challenge to their North American and (to a lesser extent) European counterparts.

With superior growing conditions, cheaper overhead and plenty of skilled labour already available, South American countries took the hint and are either considering medical/recreational legalization or – in Colombia’s case – refining existing policies.

The proposed Colombian reforms will provide a variety of new opportunities, be they social or economic.

 

Improving Trade

 

In its effort to carve a place in the legal cannabis industry, Colombia’s reforms include ways to facilitate the transportation and distribution of marijuana into foreign markets.

Marijuana Business Daily explains:

 

“Among other things, the proposed changes would make Colombian medical cannabis companies more competitive internationally by allowing flower to be exported into free trade zones.”

 

A free trade zone (a.k.a. “FTZ” or “foreign trade zone”) is basically an area without customs interference or financial roadblocks like taxes and tariffs. Things like manufacturing are not subject to the same monetary restrictions, greatly reducing the cost of production.

The aim is to make it easier for small and medium businesses to produce and distribute through these areas, giving them a competitive chance against larger companies.

Currently, cannabis can only be exported when produced in that zone. Up-and-coming companies will have to import the necessary equipment. However, lower corporate taxes and lack of tariffs give new companies the financial break they need to establish themselves.

 

Tighter Monitoring of “Non-Psychoactive Cannabis”

 

Colombian regulations define “non-psychoactive cannabis” as anything containing less than 1% THC. Under current regulations, companies do not require a manufacturing license.

With the new proposal, the Colombian government wants to ensure that these companies also require licensed. The aim is to have total control over the intoxicating substance found in marijuana and hemp (in trace amounts).

According to the former head of Colombia’s National Narcotics Fund Andres Lopez:

 

“The reasoning behind also requiring a manufacture license for the production of nonpsychoactive extracts is to give tools to the National Narcotics Fund (FNE) to control the residual THC in the production process.”

 

The regulations would also require a third-party lab analysis with a certificate proving that the final product contains less than 1% THC.

 

Benefits to Smaller Cultivators

 

A sad trend in many industries is how larger producers effectively muscle out smaller competition with their scope and resources. Colombia recognizes the value of these “underdogs” and currently has a law stating that at least 10% of their stock from “small-or-medium-sized growers” – defined as any grower with less than 5,000 square meters of space.

Unfortunately, many large companies find loopholes to avoid these partnerships, effectively preventing many otherwise successful companies from entering the medical cannabis market.

Colombia’s revised medical marijuana rules, however, will help address this:

 

“The new decree would create stronger ties between licensed producers and small- and medium-sized cultivators to ensure that they are legitimately included in the industry by transferring knowledge and technology to them.”

 

Tighter Overall Controls

 

Colombia’s regulatory framework is in dire need of an adjustment. The country hopes to achieve stronger industry control through tighter requirements and transparency.

These reforms include tracking funds through increased transparency, increasing the complexity and speed of the licensing process and demanding “more detailed documentation” from applications.

Additionally, growers involved in “nonpsychoactive cannabis” will have six months to start production. Marijuana producers get a quota, which they must reach in one year.

 

WeedAdvisor’s Involvement in the South American Market

 

It is abundantly clear that Colombia is serious about expanding its presence in the medical cannabis industry. Bold reforms like these are designed in a way that benefits everyone, which is why they are highly likely to work.

Eventually, the demand for licensed producers and retailers will grow. As this happens, WeedAdvisor will be available to offer a variety of business solutions for critical functions like compliance, POS and inventory-tracking – to name a few.

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For all the hype and hard work that was poured into the Canadian legal cannabis industry, it appears that the market fell way short of expectations, according to the Financial Post.

Despite high hopes for investors and licensed producers, the open market is not meeting sales expectations that proponents of legalization were hoping for.

But just because sales are a bit stagnant does not mean the entire forecast is doom and gloom, either.

 

Poor Earnings

 

What analysts predicted would be a bang turned out to be more of a crackle when it came to cannabis sales after legalization. The Financial Post explains:

 

“Soaring expectations for Canada’s cannabis industry are being tempered in some quarters after licensed producers reported what for the most part were underwhelming financial results in the first post-legalization period”.

 

According to the publication, Canada’s biggest LPs all suffered from poor revenue, which the Financial Post describes as “microscopic in relation to the valuations the companies are carrying”.

 

Pricing a Huge Issue

 

It is no secret that legal cannabis is more expensive than its illegal counterparts. It appears that LPs did not take into consideration just how important money was to their consumers. In a way, perhaps they hoped that quality would be enough to win them over – which was still the case for many.

But those looking to save money certainly made an impact. Jason Zanberg of PI Financial tells the Financial Post:

 

“Sales and revenues have been absolutely horrible post-legalization. Clearly the market is overpriced and many of these companies have gotten ahead of themselves in valuations”.

 

Unfortunately, this put the black market way ahead. The Financial Post explains that, while sales of legal marijuana totalled $307 million, illicit sources raked in $1.17 billion. This means legal cannabis accounted for only about 27% of the market.

 

Still Some Hope

 

Despite the gloomy situation, there is still some good news. While we cannot deny that the Canadian legal cannabis industry is not doing well, a lot of the reasons are easy to point out and – more importantly – correct.

According to the Financial Post:

 

“Part of the reason why cannabis sales have been weaker than expected is because of a nation-wide supply shortage — a combination of Health Canada licensing delays and the struggles many producers are facing to scale-up quickly. While the issues are not entirely unexpected for an industry in its infancy…”

 

If supply issues, regulatory problems and an inability to mobilize in time are partially to blame for the crisis, then all of these are solvable with time.

The supply shortage will eventually level out as licensed producers create more product. This will occur naturally as these companies “scale-up”. The licensing delays by Health Canada will eventually get sorted out and, hopefully, red tape will be reduced with future reforms.

One source tells the Financial Post that, in the next year or two, licensed producers will be able to provide more product and resolve the supply issues that have hamstringed the industry since October.

 

WeedAdvisor’s Continued Role in Industry Developments

 

WeedAdvisor is not happy to see the rough start in Canada’s legal cannabis industry. However, like the Financial Post indicates, these issues are likely temporary.

In the meantime, we offer a variety of business solutions to help prepare government entities, licensed producers and dispensaries for what will hopefully be an inevitable influx of business.

At the same time, our staff will continue to provide coverage of the industry as it unfolds.