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Why are Canadian cannabis products recalled for incorrect labels?

Labeling errors are the most common reason for of cannabis recalls. (Photos courtesy Health Canada)

Since the Canadian government legalized adult-use cannabis in late 2018, cannabis product recalls have been issued 42 times.

Some of those recalls have addressed serious product defects, like potential contamination or leaky packaging.

However, most cannabis product recalls involved a far more mundane issue: 29 of them – or 69% – have involved labeling problems, according to Health Canada’s recall database.

Four-and-a-half years after Canadian adult-use sales started, the persistence of cannabis recalls for incorrect labeling raises a question for the regulated industry: Why does this keep happening?

Recalls, even for minor issues, can damage the reputations of cannabis companies and the regulated industry as a whole.

Title "Marijuana Business Daily"
Title "Marijuana Business Daily"

Canada’s crackdown on some cannabis extracts could cost industry millions

Health Canada has begun asking some federally licensed marijuana companies to stop selling certain ingestible cannabis products the regulatory agency says are incorrectly classified and labeled as “extracts” rather than “edibles,” MJBizDaily has learned.

The move could cost cannabis businesses millions of dollars, Canadian industry sources say, because the products in question – including some lozenges and chewable extracts – are increasingly popular among consumers.

Executives are puzzled over Health Canada’s timing, especially since some of the products in question have been on the market for years. The apparent crackdown also comes at a sensitive time for the Canadian marijuana industry, as most publicly traded cannabis producers are still losing money.

From a packaging perspective, the distinction is important because any cannabis product classified as an “extract” has 100 times more allowable THC per package than a product classified as an “edible,” making it more appealing to certain consumers.

Cannabis companies weigh pricing strategies after OCS margin cut

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will hold its prices as licensed pot producers weigh whether to pass along to consumers the savings from the Ontario Cannabis Store’s forthcoming margin decrease.

The Smiths Falls, Ont. cannabis company behind the Tweed, Ace Valley and 7Acres brands isn’t budging on what it will charge because the pot market is already “highly competitive,” chief executive David Klein said in a statement to The Canadian Press. Canopy declined to say more about the pricing decision, which comes after it laid off 800 workers and the company reporting a $266.7-million net loss in its third quarter.

The decision comes after the OCS, the province’s pot distributor, said last week that it would reduce the margins it makes on weed sales this September in a move expected to put $35-million back in the hands of licensed pot companies this fiscal year and $60-million in the 2024 fiscal year. Companies aren’t required to pass along the savings to consumers by lowering their prices, so many observers believe licensed producers will adopt a range of pricing strategies when the new margins come into effect.

“It’s reasonable to think that some cannabis producers and retailers may decide to decrease their prices after the OCS announcement just to be more competitive, provided that they have the wiggle room in their market margins,” said Sherry Boodram, chief executive of CannDelta Inc., a Toronto cannabis consulting company.

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We were lucky to catch up with Sherry Boodram recently and have shared our conversation below.

Sherry, appreciate you joining us today. How did you come up with the idea for your business?

Launching my company, CannDelta Inc., really was a case of having the right skills and experience at the right place and the right time. I have always had an ambitious spirit and a passion for making a difference through my skill set. After completing a PhD in Chemistry, I started working as a Drug Forensic Chemist at Health Canada’s Controlled Substances Program where I analyzed illicit drugs confiscated by law enforcement and testified in court as the expert witness. Very CSI and I loved it. Then I transitioned to an amazing role as a Senior Compliance and Enforcement Officer aka a Senior Inspector in Health Canada’s Medical Cannabis Program. In my role I inspected cannabis facilities and was involved in reviewing licensing applications. At the time, commercial cannabis production in Canada had just started and it was an exciting time to see a new industry emerging. I had the fortunate opportunity to influence policy and observe first-hand, at the field level, the impacts of cannabis policies and legislation, as well as challenges the licensed cannabis companies were facing navigating a new regulatory landscape.

Canada proposes ‘Cannabis Health Products’ category for humans and pets, paving way for large new market

Canada’s federal health regulator is proposing a new category of cannabis that could potentially open up a huge market in which marijuana is used for the therapeutic treatment of humans and animals for minor ailments. Health Canada is asking the public to submit feedback on the new category – called Cannabis Health Products – via a consultation paper before eventually advancing draft regulations.

The agency’s public consultations are only the first step, and any new products wouldn’t be available until 2020 at the earliest. Any new regulations would fill a gap in the current federal framework that does not provide a legal pathway to market for a drug containing cannabis that makes a health claim and could be sold without practitioner oversight.

Current rules ban the use of cannabis in natural health products, and similar controls are in place to prevent the use of cannabis in veterinary health products.
The proposed rules would change that.

Health Canada would leave it up to provinces and territories to determine where Cannabis Health Products (CHPs) could be sold within their borders.

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House Lawmakers Introduce Bipartisan Cannabis Business Tax Relief Bill

Oregon Representative Earl Blumenauer this week introduced legislation in the U.S. House of Representatives that would allow regulated cannabis companies to take tax deductions commonly enjoyed by businesses in other industries. The bill, known as the Small Business Tax Equity Act, was introduced by Blumenauer on Monday, with bipartisan co-sponsorship by fellow Democrat Representative Barbara Lee of California, as well as South Carolina’s Representative Nancy Mace and Representative David Joyce of Ohio, both Republicans.

Under Section 280E of the federal tax code, cannabis businesses are denied most tax deductions offered to companies in other industries. State-legal marijuana companies are permitted to deduct the cost of goods sold, while other expenses including rent, payroll and utilities are not deductible for most cannabis businesses.

“State-legal cannabis businesses are denied equal treatment under 280E. They cannot fully deduct the cost of doing business which means they pay two or three times as much as a similar non-cannabis business,” Blumenauer, the founder of the bipartisan Congressional Cannabis Caucus, said in a statement on Monday. “This grotesquely unfair treatment incentivizes people to cut corners. If Congress wants to get serious about supporting small businesses and ending the illicit cannabis market, it is commonsense that we allow legal cannabis operations to deduct business expenses, just like any other industry.”

'It's going to be a bloodbath': Why some Toronto pot store owners are giving up

Like many entrepreneurs, Michael Motala was eager to take part in Canada’s newly legal — and hopefully, lucrative — cannabis industry. But after less than a year of running a cannabis store on Toronto’s fashionable Queen West neighbourhood, mounting competition and over-regulation are leading him to consider selling his business.

“It was an interesting experience as we were building a new business,” said Motala, who operates High Street Cannabis Retail with his parents. “But the space is highly restrictive and regulated to the point where it is a comedy of the absurd, if you will, with advertising and the like.”

Motala has listed his retail store, which he opened in October 2020, for just under $2 million. Selling cannabis during a pandemic while adhering to a lengthy list of regulations and amid an influx of neighbouring pot stores has whittled down High Street’s bottom line.

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Title "Marijuana Business Daily"

How a cannabis industrial park is partnering with Canadian micro-cultivators

Experienced marijuana growers face plenty of challenges transitioning to the regulated market, but Canadian cannabis industrial park Sitka Weed Works pitches its business model as a way to help growers make the switch – and sell craft cannabis for a profit.

The industrial park is based in British Columbia, on the southern tip of Vancouver Island. It does business as Sitka Legends and is located in the seaside municipality of Sooke.

Sitka serves two key roles for its partner growers, who have micro-cultivation licenses (a license type meant for small-scale producers):

Micro-cultivators lease production space from Sitka.
Sitka serves as the licensed processor for those small growers, processing and packaging their crops and selling it to distributors.
The site was originally an industrial park that Sitka repurposed for licensed cannabis production, said Michael Forbes, majority owner and CEO of the privately held company.

By the time the site was licensed, Forbes said, “we had missed a lot of the hype.”

Can smoking weed lead to temporary personality loss? Here's what you should know

Cannabis affects people differently. Some get anxious, others feel calm, but few unfortunate ones go on a very bad trip. One Reddit user recently posted about a friend’s bad trip and how it resulted in temporary personality loss.

Is there such a thing as temporary personality loss and what are the signs to look for?

“Your friend probably has psychosis that was triggered when he got high,” Reddit user theredditofjessica commented.

Rather than calling it a temporary personality loss or even psychosis, “I would reference this episode as depersonalization and disassociation,” says Thomas Folan, MD, CEO and founder of SolaceMD, an emerging online medical cannabis information, recommendation and consultation platform. “Psychosis is a very broad diagnosis,” he adds.

Depersonalization and disassociation refer to a “dreamlike state when a person feels disconnected from their surroundings. Things may seem ‘less real’ than they should be,” reports Medical News Today.

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Title "Marijuana Business Daily"

Here’s how much legal cannabis is being sold in Canada’s biggest cities

Toronto might boast the most legal cannabis sales of any Canadian city, but its residents lag far behind those in Calgary and even Quebec City when it comes to per capita spending on recreational products.

Data from Canada’s federal statisticians offers early insights into how much legal cannabis is being sold in some of the country’s largest urban centers and how effectively provinces are opening new stores to reroute illegal sales to regulated channels.

The data reveals which cities are underperforming compared to other large cities, where illicit sales still rule and where the best potential opportunities might remain for aspiring retailers in underserved markets – provincial legal frameworks and regulations notwithstanding.

From a raw data perspective, Toronto led the country in sales in January 2021 at 39 million Canadian dollars ($31 million), according to the most recent Statistics Canada figures.

Montreal and Edmonton were a distant second and third, respectively, with cannabis store sales of CA$21.2 million and CA$19.1 million.

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