Ajax rolls out some marijuana answers

Ajax rolls out some marijuana answers
Dont count on pot pardons to wipe your record clean, legal experts warn
Cannabis was “flying off the shelves” in retail outlets and online stores across the country as soon as the clock struck midnight Wednesday.

The demand was so high that pot stores reported running low or completely out of cannabis on the first day. So how much weed did Canadians purchase on legalization day?

Midstream processing of cannabis oil, edibles and concentrates will provide many lucrative opportunities. A competitive operator will have mastery of extraction, distillation, formulation and packaging to provide quality results with efficient use of inputs and operator time. An understanding of scalability and supply chain, likely through connection to beverage alcohol, food, natural health products or pharmaceuticals, will be a must. Significant partnerships with beverage alcohol and more recently soft drinks have been announced over the past year and we can expect to see more than one approach to defining a new and lucrative archetype – the cannabis beverage.

Here is a breakdown of the cannabis sales by province (Manitoba, Ontario and Newfoundland did not get back to Global News at the time of publication).

The Cannabis Regulations diversify federal licensing into seven categories: cultivation, nursery, processing, analytical testing, sale for medical purposes (direct to customer), research, and production of drugs containing cannabis (not to be confused with medical cannabis). The significantly revamped Industrial Hemp Regulations allow use of hemp flowers as inputs for high-CBD cannabis oil, a product with great demand in the medical cannabis market. Provincial and territorial law allows private retail outside of Quebec, Nova Scotia, New Brunswick and Prince Edward Island.

According to the BC Liquor Distribution Branch, a total of 9,980 orders were placed — 9,175 of which were online sales. Around 800 sales were made at the only government-run store open on Day 1. It’s in Kamloops.

Explosive growth and consolidation will continue as this newly-regulated industry becomes a fixture of Canadas economy. Gone are the days of 2014 when the business model of get licensed, sell product sufficed. Canadas regulated industry must innovate, manufacture, market and retail compliant cannabis products while out-competing the illicit market. Winners in the next phase of this industrys development will identify a specific opportunity and focus on it with an appropriate road map for acquiring regulatory approvals, talent, partnerships and technology.

The government did not provide the total sales, but the cheapest weed you can buy in the province is a pre-roll for $4.20. So if the baseline is set at the minimum price, B.C. made around $41,000 in sales that day.

Consolidation of Canadian corporate cannabis is well underway and the future of this capital-intensive industry is apparent – a handful of companies will control the majority of the market, similar to mature regulated industries such as beverage alcohol, food, pharmaceuticals and tobacco. With a few heavily capitalized leaders and players from outside the cannabis industry taking a stronger interest, consolidation will accelerate. Pressure is increasing on smaller players to distinguish themselves and attract investment or a favourable valuation at acquisition.

Alberta Gaming, Liquor & Cannabis said it made nearly $730,000 in sales that day. As of 3:30 p.m. on Wednesday, the province recorded around 8,300 sales.

With more ways to play, cannabis companies will be free to author their specific path to success. At the upstream end, cultivation will benefit from proprietary growing technology and stabilized cultivars to lower production cost, increase yield and avoid crop failure. Unusual plant varieties that stand out will be valuable, but upstream success will be found in reliable and cost-effective yield. Partnerships with established agricultural partners and access to a diverse library of cannabis varieties will each be a huge plus.

Watch below: More questions were being raised about Alberta’s cannabis supply on Friday. Some retailers have sold out already and experts warn we may face shortages for years. Fletcher Kent reports.

Cannabis products are chosen based on user experience, which begins with browsing and purchasing. Downstream success will be founded on a satisfying consumer experience, whether online (medical and adult use) or in a storefront (adult use only), predicated on effective and compliant packaging, labelling, and promotion. Connection to retail supply chain and marketing expertise, particularly from regulated consumer product industries including alcohol, pharmaceuticals and tobacco, is a tremendous downstream asset.

The Saskatchewan Liquor & Gaming Authority said it does not track cannabis sales as private retailers sell recreational marijuana and the product comes from federally licensed producers or private wholesalers.

Cannabis products are the foundation of the industry. Saleable classes of cannabis will remain limited to dried cannabis and cannabis oil (for eating, not vaporizing) at the outset. Product diversification and regulated sale of edibles (including beverages) and concentrates are expected in late 2019. Based on trends in Colorado and other states with regulated cannabis markets, edibles and concentrates will gain tremendous market share

The Société québécoise du cannabis (SQDC) said there were 42,000 cannabis orders processed on the first day of legalization, with 12,500 in-store transactions and 30,000 online orders.

Canada is defining a new problem – a national cannabis shortage. For the first time, headlines will describe the efforts of multi-billion dollar companies to get more cannabis into stores. Prohibition is an expensive policy, socially and financially. Moving forward from prohibition to regulation means displacing an entrenched illicit market while maintaining appropriate public messaging, particularly with children.

“This volume of orders far exceeds the SQDC’s expectations, but also demonstrates the robustness of the company’s systems,” the SQDC said in a statement.

The market for adult use cannabis is undeniable. The existing illicit supply chain is vast and competitive in price and product variety. Successful implementation of the federal Cannabis Act will require players with the sophistication to effectively comply with strict regulations. And also supply cannabis. Lots of it.

Quebec has previously said products would be priced at a minimum of $5.25 a gram, taxes included, meaning if every customer limited themselves to one gram of the cheapest product, the province would have pulled in $220,500 in sales.

David Wood, Ph.D., is co-chair of the Borden Ladner Gervais LLP cannabis industry focus group. He is a lawyer and patent agent practicing from BLGs Calgary office. The vast majority of his practice is in the international cannabis industry.

It was a big day for Nova Scotia. The province made 12,180 cannabis transactions on the first day of legalization.

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Beverley Ware, a spokesperson for the Nova Scotia Liquor Corporation said the transactions totalled just over $660,000 in sales and that almost $47,000 of those sales were online.

“We want to take the extra time to do a manual analysis of our foot traffic, sales, and inventory to ensure that they are all function as prescribe,” a spokesperson told Global News.

P.E.I. Cannabis said it made a total of $152,408 in sales after tax on Wednesday. Online sales accounted for $20,974 and stores brought in around $131,434.

While the driver was not found to be impaired, OPP said the 38-year-old man from the Greater Toronto Area was issued a $215 Provincial Offences Notice for having cannabis readily available in the vehicle.

The Revelstoke-area man says he's been paying for those mistakes ever since — despite receiving a pardon in 2014 and having no brushes with the law since the '80s, other than one traffic ticket.

Lambton OPP issued a ticket to a driver under Ontario’s Cannabis Control Act, the day after the recreational use of marijuana became legal in Canada.

"It felt good getting that letter from the government, but [pardons] are quite misleading," the 54-year-old musician said.

On Thursday, October 18, police said they stopped a luxury vehicle on Highway 402 near Airport Road that was reported to be driving erratically.

Following this week's promise from the Liberals to pardon people convicted of minor pot crimes — and with an estimated 500,000 Canadians expected to apply to the Parole Board of Canada — legal experts are also warning that a pardon may not completely wipe the slate clean.

The OPP said they will enforce Ontario’s laws and regulations governing cannabis, and also educate the community about them.

Even a pardon does not get rid of records within the system. To do this people must apply for a destruction of records — otherwise evidence of prior convictions remains in the system and can be used by border officials to deny Canadians entry into the U.S.

Baxter spent years — and more than $3,000 — on a pardon and temporary waivers. He's now been granted a five-year waiver that allows him to cross between B.C. and the U.S. 

At one point Baxter said U.S. border officials made it clear to him that the pardon he got four years ago was useless.

"'We don't care about your pardon. We don't recognize it anyway. If we want to see your record we'll just look. We still have access to your records,'" Baxter recalls one official saying.

"He was so belligerent. My wife and I were so uncomfortable. We just wanted to get out of there," Baxter said.

"It was the most demeaning thing that I've ever been through. But you are pretty much at their mercy, and they know that."

Len Saunders, Baxter's lawyer in Blaine, Wash., says pardons can flag authorities to past convictions.

He said clients of his that applied for pardons ended up with old records added to their digital files — and then had to undergo long bureaucratic struggles to get documents they needed that had been sealed under the pardon process.

After Baxter realized in 2014 his pardon did him no good, he hired a lawyer to apply for a waiver of inadmissibility to allow him to enter the U.S., despite a past criminal record. 

In Baxter's case, he got lucky because a copy of his court records was mailed to him by mistake. Without that, his lawyer told him he'd have spent years trying to get access to original sealed records required to apply for a temporary $765 waiver that he needed to enter the U.S.

Waivers are based on individual circumstances and can be granted for a day or years before they expire, depending on the need and justification, according to U.S. Customs and Border Protection. 

Ministry of Public Safety officials told CBC that pardon information is not passed on to U.S. authorities.

They say a pardon simply removes a person's criminal record from the Canadian Police Information Centre (CPIC) database.

In an email, the ministry said that no alerts of pardons are shared unless the "RCMP has specifically shared an individual's criminal record with the U.S. …through an Interpol request."

However, American authorities keep their own records — and they do not destroy them if there is a pardon.

University of Western Ontario criminologist and former police officer Michael Arntfield said he saw "all sorts of outrageous things" added as "liner notes" on people's CPIC files, from suspicions of connections to organized crime to "pending pardons."

"It's almost like leading the lambs to the slaughterhouse. The Canadian government unknowingly is going to create hundreds if not thousands of Candians inadmissible to the United States who currently are not on the radar," said Saunders.

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