Business
Canada business leaders note ‘lost opportunity’ for cannabis in Trudeau-Scholz meeting
Olaf Scholz’s recent trip to Canada is raising eyebrows among Canadian business executives over what wasn’t discussed during talks between the German chancellor and his Canadian counterpart, Prime Minister Justin Trudeau.
Cannabis and mainstream business leaders said Canada missed an opportunity last week to highlight its regulated cannabis industry and promote international trade when Scholz visited the only large country in the world to have legalized marijuana.
Germany announced its intention earlier last year to regulate the distribution and sale of recreational cannabis and, this summer, kicked off the preparatory phase. A draft law is expected to be published this year.
Industry officials said the circumstances created a unique opportunity for the Canadian prime minister to back the multibillion-dollar industry, which has struggled to tap into international markets.
But a spokesperson for the Office of the Prime Minister confirmed cannabis was not discussed between the German leader and Trudeau during Scholz’s trip last week.
“It didn’t come up? Shocking. It’s shocking,” George Smitherman, CEO of the Cannabis Council of Canada, which represents dozens of businesses, said in an interview with MJBizDaily.
“Canada has a chance to align with Germany, and we’re not advancing that? That’s crazy,” added Smitherman, a former deputy premier for Ontario who also was the province’s energy and infrastructure minister.
Smitherman said opportunity abounds between Canadian and German cannabis businesses.
Germany is suffering through an energy crisis because of the war in Ukraine, and cannabis cultivation can be incredibly energy intensive, he said.
That, plus the fact that Canada already has more cannabis cultivation capacity than it will ever need, puts Canada in a position to ramp exports.
Canada has so much excess cannabis, it has destroyed more than 1 billion grams since 2018, and inventories are still overflowing. (That cannabis is thought to mostly be unsellable, but the production capacity remains in place.)
“You might have thought that the combination of these two, the symmetry if you will, the rationale for having Canada and Germany collaborating could be an extension of the energy cooperation,” Smitherman said.
“I’m a former energy minister. I was looking at it from that standpoint.”
Canada is already Germany’s top supplier of medical cannabis, and business leaders say that could easily be expanded.
Canada’s Chamber of Commerce said the country missed an opportunity to promote the legal sector internationally.
“As the first G-7 economy to legalize recreational cannabis, Canada has a narrow first-mover advantage and should promote the legal sector internationally,” the business group said in a statement to MJBizDaily.
“Although cannabis was not on the agenda for German Chancellor Scholz’s short visit to Canada earlier this month, the Canadian Chamber’s National Cannabis Working Group believes Canada should actively work towards securing future meetings with countries like Germany to share industry best practices and to facilitate business opportunities, including the export of medicinal cannabis.”
Canada is top supplier
Canada was the top supplier of medical cannabis flower and extracts to Germany last year, according to data provided by Germany’s Federal Institute for Drugs and Medical Devices (BfarM).
In 2021, Germany imported 6,493 kilograms (14,315 pounds) of cannabis from Canada, or 31% of its medical and scientific marijuana imports.
Denmark was the next closest, with 3,726 kilograms, or 18% of the total amount imported.
Business leaders estimate the opportunity to be in the hundreds of millions of dollars.
Germany is expected to overtake Canada as the largest federally regulated medical marijuana market in the world in 2022.
Economic driver
Despite massive losses at a small number of producers, cannabis has been a driver of economic growth in Canada.
The industry has added roughly 43.5 billion Canadian dollars ($37 billion) to the country’s economy and sustained 151,000 jobs since legalization in 2018, according to a report by accounting firm Deloitte.
Industry leaders have said the Canadian government could be doing more to help struggling cannabis producers make inroads into foreign markets.
“That the (Prime Minister’s Office) confirmed that is really kind of a smoking gun for just how leadership attention and interest in Ottawa has diminished over their own prized initiative,” Smitherman said of the absence of cannabis as a topic in the Scholz-Trudeau discussions.
“If I was prime minister, and I was meeting with the German Chancellor, I might actually be saying, ‘You know, chancellor, us two leading G7 nations, the legalizers of cannabis, we have a chance to be the foundation for countries in favor of a $100 billion industry that’s emerging, what can we do strategically to align that? For instance, could Canada offer Germany supply arrangements?’”
Smitherman said the federal government’s “neglectful leadership model” is being replicated in several provinces and “is an extraordinary threat to the public health goals and to the livelihoods of many Canadians.”
‘Incredible lost opportunity’
Nathan Mison, CEO of Alberta-based Diplomat Consulting, called Scholz’s visit an “incredible lost opportunity.”
He said a majority of Canadians want the cannabis sector to be promoted as an economic opportunity, citing data from Ontario-headquartered pollster Abacus Data.
Mison, co-chair of the National Cannabis Working Group for the Canadian Chamber of Commerce, believes the federal government should treat the cannabis industry like it does mining.
“When we’re looking for positive opportunities for our cannabis sector, what an incredible opportunity to treat cannabis sector regulation the same way we exported Canadian mining rules around the world,” he said.
Mison said 55 countries are weighing cannabis regulation, and it’s in Canada’s best economic interest to be involved in that process, where possible.
“We should be looking to trade opportunities for Canadian businesses to understand how to operate in emerging jurisdictions.”
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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