Neptune Wellness gets out of cannabis following strategic review

Canada’s cannabis market lost another player this week after Neptune Wellness Solutions announced plans to divest its pot brands and production facility in an effort to focus on its consumer products business. Neptune, which generated about $23.2 million in cannabis sales over the past 12 months, according to industry data tracker Hifyre, said it would lay off half of its workforce as a result of the divestment. The company said selling off its Sherbrooke, Que.-based production facility – which is valued at $21 million - as well as its Mood Ring and PanHash brands would generate estimated cost savings of $5.8 million per year. Neptune’s move follows similar decisions made by FSD Pharma and Harvest One Cannabis, which have struggled to make an impact in Canada’s cannabis industry amidst heavy competition and disappointing sales.

Landlord acquitted of charges tied to illicit Toronto dispensary

A Toronto-based landlord whose property was used as an illicitly-run cannabis dispensary was acquitted of several charges tied to not evicting his tenants fast enough, CBC reports. Mohsen Ghelichkhani faced six charges under Ontario's Cannabis Control Act after his Toronto property was used by the CAFE cannabis dispensary. An Ontario Justice of the Peace said Ghelichkhani took “reasonable steps” under the circumstances to evict CAFE, which has frequently flouted the law and has several dispensaries still open in Toronto. City officials said they are reviewing the decision and declined to comment further. Three other CAFE landlords are facing similar provincial charges, CBC reported.

Sugar Cane aims to open B.C.’s first farm-gate facility next month

A British Columbia-based cannabis producer aims to be the province’s first farm-to-gate facility as well as the first of its kind on Indigenous land in Canada, Global News reports. Sugar Cane Cannabis, located in the Williams Lake First Nation in B.C., plans to open its farm-gate facility next month after the community obtained the necessary licenses from the province. Williams Lake Chief Willie Sellars believes the producer could generate annual sales of between $2 million and $6 million, which would flow back to the community through student grants and elder support.

Thailand officially liberalizes cannabis laws to help boost tourism

The laws around cannabis are shifting in Thailand after it became the first Asian country to knock marijuana off its list of banned substances, Australia’s ABC News reports. The policy changes are an effort to boost the wellness and tourism industries in a region previously known for its harsh drug controls. Thai authorities announced plans to decriminalize cannabis in January. The move was welcome news for the roughly 4,000 prisoners who are currently serving jail time for cannabis-related crimes in Thailand and now will soon have their criminal records expunged, officials said. – Written by Mitchell Consky


Schumer meets with Republican to curry legalization support

The wheels of progress to legalize cannabis in the U.S. grinded forward over the past week after reports emerged that Senate Majority Leader Chuck Schumer held a meeting with a Republican counterpart to discuss marijuana reform. Marijuana Moment reports that Schumer met with Ohio Congressman Dave Joyce to go over possible reform bills like the SAFE Banking Act or the HOPE Act, although discussions appear to be preliminary. Schumer plans to unveil his own cannabis reform bill before the August recess. Meanwhile, Florida Republican Congressman Matt Gaetz took his Democratic Party colleagues to task after they failed to enact marijuana reform while they have a majority in both chambers of Congress and the White House. Despite the legislative malaise, Washington, D.C. city policymakers passed a bill that forbid firing employees who fail marijuana drug tests, NPR reports.


BMO Capital Markets downgrades Canopy Growth

BMO Capital Markets Analyst Tamy Chen published an update on the firm’s two-year outlook on the cannabis industry with a tough message for some investors to swallow: most of the challenges currently seen in the industry are set to continue unabated for the foreseeable future. That includes how consumer demand is still driven by THC and price, rather than any focus on terpenes or other marketable points, as well as how dried flower will remain a dominant category amid a lack of significant interest in edibles. Perhaps more importantly, Chen believes there won’t be any “meaningful rationalization” of Canadian cannabis producers and the country’s “punitive” excise tax regime and distribution system that places the lion’s share of control on provinces will continue to exist. “We believe the incremental opportunity from further illicit market displacement is much less than most LPs’ expectations,” Chen said. As a result of those various challenges on the industry’s supply chain, Chen thinks the industry is projected to grow in the single-digits in 2024 and onward.  

She noted that Village Farms International, which owns the Pure Sunfarms cannabis producer, is BMO’s top pick in their coverage universe with a US$6-per-share price target and the only firm in the 10 cannabis companies she tracks to be awarded an outperform rating (the equivalent of a buy). Chen is also cautiously optimistic on Cronos Group’s long-term prospects while maintaining reservations on Organigram and Tilray’s business models. Chen also downgraded Canopy Growth to underperform (the equivalent of a sell) and a $2.50-per-share target price following the company’s latest quarterly results that show ongoing challenges in selling competitive products and how some of its cost savings are unlikely to impact its bottom line. “Every LP likely struggles from time to time with suboptimal crops, yet we have not seen another company report a [gross margin] as low as Canopy’s,” she said.


$5.11 per gram

-- This week's price is up 0.7 per cent from the prior week, according to the Cannabis Benchmark’s Canada Cannabis Spot Index. This equates to US$1,850 per pound at current exchange rates.


Kush, Colorado

– The potential new name of Moffat, a small town in Colorado that is also the home of 70 cannabis companies, the Denver Post reports. Residents are pushing for the name change to help showcase the town’s economic engine.