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Canada’s unsold cannabis inventory balloons to 1.5 billion grams

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Business failures and consolidation failed to stop Canada’s stockpile of unsold cannabis from reaching a new high in the final quarter of 2022, the latest sign that shrinking prices and margins could continue to squeeze companies.

Packaged and unpackaged inventory of dried cannabis jumped to an all-time high of 1.47 billion grams (3.2 million pounds) as of December 2022, according to the latest data from Health Canada, which tracks overall unsold stockpiles of licensed producers, wholesalers and retailers.

That’s an increase from 1.3 billion grams in December 2021.

Federally licensed cultivators were sitting on 1.39 billion grams of packaged and unpackaged inventory as of December 2022, while stores and wholesalers held 80.7 million grams of packaged inventory.

The data suggests the country’s cannabis industry remains gripped by a supply-and-demand imbalance, even though many of the biggest producers have mothballed their largest cultivation facilities.

Last year, for instance, Aurora Cannabis closed its flagship Aurora Sky facility in Edmonton, Alberta – one of the biggest in Canada.

The oversupply situation is thought to be one of the factors forcing down cannabis prices.

The retail price of cannabis has fallen by almost 30% since 2018, when Canada legalized adult-use sales, according to Statistics Canada’s Consumer Price Index.

Other estimates suggest the overall price decline is more severe.

Wholesale prices in the country tumbled more than 40% last year alone, according to the Canadian Cannabis Exchange (CCX), a live trading platform for B2B wholesale marijuana.

Hypercompetition

Falling prices are putting the squeeze on businesses across the cannabis supply chain in Canada.

Fourteen of the 35 Companies’ Creditors Arrangement Act (CCAA) filings in Canada between Jan. 1 and Dec. 22 of last year involved companies operating in the cannabis space.

The filings are equivalent to bankruptcy filings in the United States.

“I don’t think there’s a lack of competition in Canada – I think there’s overcompetition,” said Elad Barak, CEO of Djot, a Toronto-based company selling cannabis dispensers and pod systems for concentrates.

“They’re growing cannabis because that’s what they know how to do. But when they go to sell it, they can’t,” he said.

“You’re seeing two results – some companies are going under, but the cannabis doesn’t disappear. They hold it or sell it” via liquidations of unsold inventory, as companies go bankrupt, he said.

Citing the latest Health Canada figures, Barak noted that there are now nearly 1,000 licensed producers in Canada that are competing in various parts of the federally regulated supply chain.

The number has not stopped growing since legalization in October 2018, despite companies exiting the industry via consolidation and others via the CCAA.

As of last summer, there were 886 licensed cultivators, processors and sellers under Canada’s Cannabis Act.

That figure was approximately 730 in 2021.

In 2020 and 2019, the numbers were 440 and 206, respectively.

Record ‘croptober’

Canadian cultivators produced a record amount of cannabis during last fall’s “croptober” – when most of the outdoor cannabis harvest comes in.

Dried cannabis produced last September, October and November totaled 640 million grams, a year-over-year increase of 14%.

In the same three months of 2021, approximately 560 million grams of dried cannabis was produced.

In all of 2022, roughly 2 billion grams of cannabis was produced, according to Health Canada data.

For perspective, in the same year, approximately 360 million grams of dried flower and pre-rolls were sold at retail in Alberta, British Columbia, Ontario and Saskatchewan, according to Cooper Ashley, analytics manager at Seattle-based cannabis data firm Headset.

Those provinces account for about three-quarters of the Canadian market.

Cultivation area falling

Canada’s licensed growing area is continuing to decline, according to the Health Canada data.

The total area within federally licensed sites where indoor/greenhouse cannabis cultivation activities occurred measured 1,595,724 square meters in December 2022.

That’s almost 30% lower than the all-time high of 2,217,216 square meters reached in May 2020.

Cannabis greenhouse area as a percentage of all greenhouse area – including those used for vegetable cultivation – is also in decline.

At its peak in 2020, cannabis cultivation accounted for a little more than 11% of Canada’s total greenhouse space.

As of today, cannabis accounts for 7.6% of Canada’s total greenhouse and indoor cultivation area – a reduction of more than 30%.

Licensed outdoor cultivation area is declining at a much slower rate.

The area where outdoor cultivation activities occurred in December 2022 measured 595 hectares (1,470 acres).

That’s approximately 16% lower than the all-time high reached in December 2021, when 713 hectares were used for cannabis cultivation.

Businesses cope

Some businesses have adopted strategies to cope with falling prices and soaring inventories.

SNDL, a cannabis producer and retailer based in Alberta, launched a “pop-up” retail brand called Firesale Cannabis.

Pop-up retail outlets are stores which are not intended to be permanent.

In an investor presentation, SNDL called the pop-up strategy a “solution to the sustainability challenges facing the cannabis industry.”

“Our cannabis liquidation pop-ups help licensed producers sell aged inventory at deeply discounted prices, with the aim of providing the most affordable cannabis products in Canada.”

SNDL operated two Firesale stores as of May 12, 2023.

Adam Coates, chief revenue officer of Decibel Cannabis Co. – one of the top cannabis producers in Canada by sales – said falling prices in the discount and value segments puts pressure on the core and premium segments.

“Pricing in those categories is relative, so while there are a lot of discount and value options in dried flower, the more profitable core and premium segments see volume declines when the price difference between those lower price tiers widens,” he told MJBizDaily in a phone interview.

“It has an impact on how we think about our pricing strategy and what’s required to be successful in dried flower.”

Coates said Decibel sells all the cannabis it produces.

He said price is being used as the main driver by some competitors to get market share and volume growth.

“But that strips out all the profitability as well, because excise tax stays the same no matter where your pricing is (when priced below $10 per gram),” he said.

“At some point, that has to stop.”

Source: https://mjbizdaily.com/canadas-unsold-cannabis-inventory-balloons-to-1-5-billion-grams/

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Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light

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Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.

India’s Indigenous LEO Satellite Vision

Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.

The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.

According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.

The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.

Regulatory Process Moves Forward

Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.

The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.

Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.

Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.

Broadband, Mobile Connectivity, and Strategic Applications

Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.

The company also intends to establish 20 to 22 ground stations across India to support network operations.

Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.

Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.

Major Step for India’s Space and Telecom Sectors

Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.

The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.

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Alleged Crores Pharma Scam Mastermind Arrested from Surat

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After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.

Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.

Fake Business Deals and Dishonoured Cheques Used in Fraud

Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.

In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”

Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.

Multiple Identities and Repeated Fraud Pattern

Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.

Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.

Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.

Multi-State Surveillance Leads to Arrest in Surat

A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.

Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.

Growing Threat of Corporate Identity Fraud

The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.

Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.

Experts Urge Stronger Due Diligence in High-Value Transactions

Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.

Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.

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EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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