medmen

What You Need to Know About Canada’s Cannabis Act

need-know-about-canadas-cannabis-act-hero.jpg

Yesterday was a historic day for Canadians, as the Cannabis Act passed through the Senate after two years of intense debate. The landmark decision makes Canada the first G-7 country to legalize cannabis recreationally, with the first legal stores expected to open by September.

The bill passed on a vote 52 to 29, with several opposing Senators cited concerns that legalization for non-medical cannabis violated the UN drug control treaties.  Yet despite heated opposition, Bill C-45 is now making its way into law and is expected to come into effect 8-12 weeks after Royal Assent which is expected by the week’s end.

Independent Senator Tony Dean who sponsored the bill was elated celebrating the end of cannabis prohibition in Canada, “We have seen in the Senate tonight a historic vote that ends 90 years of prohibition of cannabis in this country, 90 years of needless criminalization, 90 years of a just-say-no approach to drugs that hasn’t worked.” Dean emphasized, “I’m proud of Canada today. This is progressive social policy.”

Amendments that were originally proposed by the Senate were struck down by the House of Commons, could have been disastrous for the industry. Originally, the Senate had proposed a ban on all cannabis swag, including t-shirts and tote bags and attempted to reinforce the province’s ability to ban homegrown cannabis.  Under the Cannabis Act, every Canadian can grow up to 4 plants which certain Senators complained would increase children’s access to cannabis. Senators ironically also attempted to decriminalize adults giving their children cannabis as young as age 16.

 

The Senate has also originally proposed disclosure of foreign investment, as millions of dollars poured into float Canadian cannabis companies from offshore tax havens like the Cayman Islands. These amendments were struck down by the House of Commons and did not make it to the final version of the bill, which led to a suspenseful voting session at the Senate after the stock markets closed for the day.

An Economic Boon

Not passing the bill would have been disastrous for Canadian economy, but now Canadian cannabis stocks expected to soar as soon as the markets open leading up into legalization. Shortly after the bill passed, Canada’s Prime Minister Justin Trudeau tweeted #PromiseKept, “It’s been too easy for our kids to get marijuana – and for criminals to reap the profits. Today, we change that.”

As trade wars between Canada and the US amp up, legalizing cannabis federally means that Canadian licensed producers can import and export for medical and scientific purposes, while US companies remained landlocked in legal states by federal prohibition.

 

Legalization for medical use occured in 2001 in Canada, with private companies expanding into cannabis starting in 2014 and growing into a robust industry now with over 100 licensed producers in 2018. Canada now boasts cannabis stocks as some of the highest traded, which are beginning to premier on the NASDAQ in 2018, while US cannabis penny stocks continue to fluctuate due to federal prohibition. It’s worth noting a lot of US cannabis brands have moved north with hopes of trading on the major exchanges, including MedMen, Dosist and Province Brands, with other companies licensing IP to Canadian companies including Dixie, Bhang, Greenhouse, O.PenVAPE, and many more.

While the first year of legalization in Canada products will be limited to dried flower and oil, Deepak Anand, Vice President of Government Relations at Cannabis Compliance Inc. was optimistic about diverse cannabis products being approved within a year of Royal Assent. “Health Canada has already started thinking about regulations surrounding forms of Cannabis not going to be legal on proclamation day.” On the retail side, he noted, “Provinces such as New Brunswick appeared far better prepared for a September legalization date when compared with BC or Ontario.”

While the west side of the country amps up for private retail, east of Ontario is primarily government retail outlets with potential for privatization as government swings right. Originally legalization was supposed to take place by July 1st on Canada Day but now is expected in September giving provinces more time for the rollout.

 

Justice, Freedom, and Cannabis

Despite the celebrations, many activists worry that legalization will ultimately leave out those who have most been affected by the war on drugs in Canada.  For those Canadians who have a criminal record for cannabis, there are no pardons proposed currently in the Cannabis Act. Having a criminal record or being suspected of breaking the law are grounds to deny someone a cannabis business license. Critics say that cannabis should take an equity perspective, especially with Canada’s massive diversity problem when it comes to cannabis. Health Canada is listening to criticism and recently announced that Indigenous cannabis applicants are being fast-tracked now to make up for the lack of diversity.

The new Cannabis Act includes micro-cultivation and micro-processors, which will be able to produce edibles, extracts and beverages by 2019. While marketing remains restrictive in Canada, there is the potential for farm gate sales for micros in the future as legalization potentially opening the door to licensed cannabis lounges, restaurants and cafes depending on provincial restrictions.

As for next steps for Canada, Trina Fraser co-managing partner and CannaLaw® group leader at Brazeau Seller Law is optimistic for the future of craft cannabis, “Hopefully the regulations will include implementation of previous proposals by the federal government, including ‘micro’ licences with lower regulatory burdens, clarity on security clearance requirements for prior illicit market participants and improved access for medical patients.”

It’s hard to know if legalization will truly be inclusive after almost a century of prohibition, whatever Canada does will set an example for the world. As the World Health Organization releases its pre-review for cannabis, according to Senior Policy Analyst for Transform Drug Policy Foundation and consultant for Health Canada’s legalization task force Steve Rolles, “This will have major repercussions at the UN.”

Rolles reflected that while the UN ignored Uruguay, and turned a blind eye to the US states, Canada is a major voice in the United Nations, so this will inevitably force the debate on drug policy reform back to center stage. “The malfunctioning and antiquated UN system is long overdue for some modernisation, so it comes a good moment. We hope the Canadian government can now show the same leadership at the UN they have shown domestically.”

CEO of US marijuana company MedMen says Oregon, Colorado are 'horrible markets' to be in

e9e2049ef8f735fe84cd80a95111eacb.jpg
  • CNBC's Jim Cramer sits down with Adam Bierman, the co-founder and CEO of the marijuana dispensary operator whose stores have been dubbed the "Apple Stores of weed."
  • Bierman explains why Oregon, Washington and Colorado are not considered ideal markets for weed retail.

Marijuana dispensary operator MedMen sees major hurdles in operating in Oregon, Washington and Colorado, where pot is medically and recreationally legal, co-founder and CEO Adam Bierman told CNBC on Monday.

Bierman, whose company functions in California, Nevada, New York and Florida, called the first three fully legal U.S. weed markets "horrible markets to be in" in an interview with "Mad Money" host Jim Cramer.

"[It's] good for business that those are tiny markets that, in the grand scheme of things, maybe matter not that much," the CEO said.

"What's really important to understand is every market since those markets came online [has] been supply constrained, so limited licenses and, most importantly, especially for the MedMen's case, the most arduous retail zoning restrictions known to man," Bierman continued.

While MedMen is licensed to operate in the United States, where some of its retail locations have been affectionately dubbed the "Apple Store of weed," the company is publicly traded in Canada on the Canadian Securities Exchange and the OTCQB Venture Market.

In early June, the Canadian Senate voted to legalize recreational marijuana nationwide. The move would make Canada the first and only country in the G-7 to fully legalize marijuana.

But Bierman won't stop at Canada.

"From the beginning, we've been the 'Why not?' people," he told Cramer. "Why can't you build a billion-dollar business in this industry? Why not? Why can't you take the biggest U.S. weed company and make it public and available for people to own all over the world? Now, there's a lot of roadblocks in that kind of an attitude and we can't list here in the U.S., so we have to list in Canada and, unfortunately, that's the only place to go. Now, fortunately, it is a place to go and they've been great partners."

According to MedMen, some of the company's California stores bring in over $20 million a year in revenue. When the company reaches $1 billion in revenues, Bierman said he'll "look at what's next."

Buffett's investing basics. Warren Buffett outlines the main investment principles he practices.

Learn More

 

Part of MedMen's mission is to make marijuana mainstream, as illustrated by its latest marketing campaign, "Forget Stoner." The visual ads attempt to buck the "stoner" stereotype with photos of professionals and others who say they use marijuana.

It could even help stem the opioid epidemic sweeping the United States by offering individuals an alternative solution to prescription pills, Bierman said.

"The concept of a stoner or a stoner image is something that's yesteryear," the CEO said. "This is about Chardonnay moms. This is about working dads. This is about marijuana substituting and replacing, you know, other things that people are already utilizing that, in some instances, are detrimental to their health."