Alcohol goliath pours $190M into Canadian cannabis company

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Alcohol goliath pours $190M into Canadian cannabis company

Alcohol goliath pours $190M into Canadian cannabis company

Constellation Brands, the alcohol goliath that two years ago acquired craft beer darling Ballast Point Brewing Co. for $1 billion, is putting its money toward another emerging sector — cannabis-based beverages.

The Victor, N.Y.-based company plans to spend C$245 million ($190.88 million USD) to acquire a 9.9 percent stake in Canopy Growth Corp., the companies announced Monday. Canopy, itself a giant in the emerging Canadian and international cannabis markets, produces and sells marijuana through its brands such as Tweed.

The Wall Street Journal first reported about the investment on Sunday.

Constellation will provide support in areas such as consumer analytics, marketing and brand development, Canopy officials said Monday, adding that the companies will collaborate in developing cannabis-based beverages for adults in areas where marijuana is federally legal.

The terms of the deal include an option for Constellation to increase its future ownership interest in Canopy to nearly 20 percent, Constellation spokesman Michael McGrew told The Cannabist on Monday.

“Canada is expected to become the second country to fully legalize cannabis for adult recreational use at the national level,” McGrew wrote via email. ” We feel it is strategically important to be cognizant of and knowledgeable about this emerging and potentially disruptive market.

“But it’s important to note that we have no plans to sell any cannabis-related products in the U.S. or any other market unless or until it is legally permissible to do so at all government levels.”

Federally legal adult-use cannabis sales are on the horizon in Canada, however, the program’s July 2018 launch likely will allow for the sale of only cannabis flower. The regulated sale of edibles (including beverages) and concentrates is expected to come a year later.

Don’t expect Canopy executives to sit around their Smith Falls, Ontario, headquarters twiddling their thumbs until July 2019.

“We’re not really good about standing around and waiting,” Bruce Linton, Canopy’s chief executive officer, said in an interview Monday. “It’s a great environment when you have licensed rights to be inventive, and you can’t sell the goods.”

Cannabis beverages, in particular, piqued Canopy’s interest. The provincial authorities that could oversee cannabis sales are comfortable with the liquid form, Linton said, noting they’re the same bodies that govern alcohol sales.

“I don’t think we’re a wild outlier on the probability of (cannabis beverages) becoming a governed product,” he said.

Neither Canopy nor Constellation officials mentioned the possibility of an alcoholic beverage infused with THC.

Canopy has positioned itself as an industry leader, setting the market standard in innovation while ensuring compliance with the rules and regulations for the provinces throughout Canada, said Jonathan Sherman, a Cassels Brock attorney who closely tracks the Canadian cannabis industry.

Whether R&D could dictate policy remains to be seen, he said.

“I don’t know if (cannabis beverage regulations approval) comes down to lobbying or if it’s more demonstrating a need for a product” that is safe, regulated and desirable in the (Canadian) market, he said.

Potable, profitable

The fledgling cannabis-based beverage segment has flourished in the early years of America’s state-based recreational cannabis legalization, data show.

For the first six months of 2017, cannabis beverage sales in Colorado, Oregon and Washington, totaled $13 million, up 26 percent from the comparable year-ago period, said Greg Schoenfeld, vice president of operations for BDS Analytics, a Boulder, Colo.-based cannabis analytics firm.

Colorado, the most mature market of the three, accounted for the lion’s share of the sales with $7.95 million, according to BDS. That’s up 27 percent from the first half of 2016.

It’s not explosive growth, but the segment is showing gains every single month, Schoenfeld said.

“We do have a fair amount of delineation — some (companies) are focused on carbonated drinks, others coffee, other tea,” he said. “It’s still a fairly diverse category.”

In Colorado, cannabis beverage sales are on track to hit between $15 million and $15.5 million this year, he said. The segment brought in $12.5 million in 2016 and $7.9 million in 2015, he added.

Beverages claim a 1 percent market share in Colorado, he said. As other legal markets mature, Schoenfeld anticipates they will have a similar make-up.

“When brands invest in developing new products and new categories, there tends to be a response if it’s a well thought-out product,” he said. “There are opportunities for brands to continue to expand the market as well as take it into new directions.”

A deal based on optimism

Confident cannabis-based beverages will be legalized — and profitable — in Canada, Canopy began looking for partnerships with companies already in the beverage market, CEO Linton said.

The company approached Constellation last year after the alcohol conglomerate’s CEO publicly expressed a business interest in developing cannabis beverages.

“Why wouldn’t big business, so to speak, be acutely interested in a category of that magnitude,” CEO Rob Sands told Bloomberg News in November 2016, less than a week after eight states voted to legalize the medical or recreational use of marijuana. “If there’s a lot of money involved, it’s not going to be left to small mom-and-pops.”

Sands’ optimism came at a time when other alcohol purveyors expressed wariness — some publicly in regulatory filings — about the emerging cannabis market and its potential to depress sales.

Meanwhile, a Cowen & Co. equity research report released in late November 2016 suggested that beer volume sales in recreational marijuana states of Colorado, Oregon and Washington under-performed the overall U.S. beer market by 2.6 percentage points.

Constellation, which recorded $7.3 billion in revenue during its past fiscal year, has a portfolio of liquor and beer brands that include as Corona, Mark West, Ballast Point and Svedka. Constellation’s sales don’t appear to have been dinged by cannabis, spokesman McGrew said.

“Based on modeling we’ve seen, cannabis does not seem to have had a negative impact on overall beverage alcohol trends. That said, we do feel it is strategically important to be cognizant of and knowledgeable about this emerging and potentially disruptive market,” he said.

And cannabis has been a “global trend we’ve been watching for some time,” McGrew added.

The investment that comes at a relatively low risk level for Constellation could be a bright spot of some magnitude for Canopy, said Vivien Azer, a Cowen & Co. analyst who specializes in the beverage, tobacco and cannabis sectors.

“From a branding, packaging, product form … but most importantly, from a distribution perspective, that’s where Constellation can really lend (its) expertise,” she said.

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Published at Mon, 30 Oct 2017 14:17:57 +0000

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Cannabist Show: She lobbies for policy change and education on hemp and marijuana

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Cannabist Show: She lobbies for policy change and education on hemp and marijuana

Cannabist Show: She lobbies for policy change and education on hemp and marijuana

Featured guest: Samantha Walsh, CEO and co-founder of Tetra Public Affairs, a cannabis-centered consulting firm.

LOTS TO TALK ABOUT

•  How state laws have changed in recent years to help hemp farmers.

•  Hemp has seen massive expansion in Colorado, but hurdles remain.

•  The critical need for education about plant cannabinoids — particularly CBD — in the public and political spheres.

•  Outside of the ballot box, ways consumers can support the hemp and marijuana industries.

TOP MARIJUANA NEWS

New four-year college degree puts students on the cutting edge of cannabis industry Northern Michigan University in Marquette is the first to offer a degree in cannabis. The program, Medicinal Plant Chemistry, is the first program to offer a 4-year undergraduate degree focusing on marijuana, according to Brandon Canfield, the associate professor of chemistry who started the program. “The historical stigma associated with cannabis is quickly vanishing,” says the school’s website, “and although there is a surge in businesses related to the marijuana economy, there is a major gap in educational opportunities available to prepare people for this field.” –Report by The Washington Post’s Amber Ferguson

L.A. aims to help disadvantaged communities cash in on marijuana legalization: Oct. 21-The war on drugs has taken a disproportionate toll on people who are poor, black or Latino, community activists have long lamented. Now that marijuana is on the brink of legalization in California, Los Angeles leaders want to make sure that disadvantaged people can cash in. Under a proposal drafted by outside consultants and released this week, the city would provide extra help to some people seeking to run cannabis businesses, in an attempt to address the uneven effects of the drug war. –Report by the Los Angeles Times’ Emily Alpert Reyes

Future of new Maine marijuana law uncertain after lawmakers send bill to gov’s desk: Maine Republican and Democratic lawmakers have voted in a legislative special session to rewrite the state’s recreational marijuana law. However, the Legislature’s votes are not enough to withstand a veto from Republican Gov. Paul LePage. The Senate voted 22-9 Monday night on a bill backed by the Legislature’s marijuana implementation committee. The House voted 81-50 on a final vote. –Report by The Associated Press

Related op-ed: Maine gov shouldn’t interfere with legislators’ solid work on new marijuana laws

Corey Feldman charged with weed possession in Louisiana: Police in Louisiana say actor and musician Corey Feldman has been charged with misdemeanor marijuana possession and driving with a suspended license after his tour bus was pulled over for speeding over the weekend. Mangham, Louisiana, police say they pulled over a recreational vehicle driven by Feldman on Saturday and took him to a police station after discovering his license was suspended. Police say an officer at the station smelled marijuana and the drug was found in the RV following a search. –Report by The Associated Press

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Published at Fri, 27 Oct 2017 21:47:31 +0000

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Sessions: Drug addiction starts with marijuana. Trump: Just say no

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Sessions: Drug addiction starts with marijuana. Trump: Just say no

Sessions: Drug addiction starts with marijuana. Trump: Just say no

Speaking at separate events Thursday, Attorney General Jeff Sessions and President Donald Trump delivered remarks on drug policy that matched messaging straight out of the 1980s.

“We’ve got to re-establish first a view that you should say ‘no’ – people should say ‘no’ to drug abuse,” Attorney General Jeff Sessions said at the Heritage Foundation, echoing former first lady Nancy Reagan’s famous line.

Sessions said he thinks the country has become “lackadaisical” about drug use. In the past he has railed against permissive attitudes toward marijuana use, praised mandatory minimum sentences for drug criminals and spoken fondly of “20 years almost of hostility to drugs that began really when Reagan started ‘Just Say No.’”

At Heritage, Sessions also spoke approvingly of the “gateway theory” of drug abuse, popular among 80s-era anti-drug crusaders, which states that marijuana use becomes a “gateway” to harder drugs.

“When you talk to police chiefs, consistently they say much of the addiction starts with marijuana,” Sessions said. “It’s not a harmless drug.”

Trump echoed some of these thoughts later at the White House. He promised that “if we can teach young people, and people generally, not to start (taking drugs), it’s really, really easy not to take them.” He added that “there is nothing desirable about drugs. They’re bad.”

But the research on drug policy has come a long way since the Reagan days.

As a slogan, “just say no” informed national anti-drug programs such as DARE (Drug Abuse Resistance Education), which attempted to educate children on the dangers of drug use. The phrase was even turned into a board game.

But the problem with simply telling kids (or adults) to say “no” to drugs is that research shows it doesn’t work. Study after study has demonstrated that programs such as DARE not only didn’t reduce drug use, but in some cases may have actually inspired certain kids to experiment with illicit substances.

The gateway theory is also far from universally accepted. The National Institute on Drug Abuse says “further research is needed to explore this question,” noting that the overwhelming majority of people who try marijuana do not go on to use other drugs.

Other researchers point out that most people try alcohol or tobacco well before they try marijuana or any other drug, which would make the true “gateway drugs” 100 percent legal. Other studies have pointed to socioeconomic conditions and even drug enforcement policies as better predictors of hard drug use than marijuana.

Most Americans have also come to understand the “drugs are bad” mantra as overly simplistic. Alcohol, after all, is a drug, one that 70 percent of Americans say “yes” to in any given year. Marijuana is another drug that nearly two-thirds of Americans say should be legalized – a percentage that has risen even as Sessions has made his skepticism of legalization very public.

Ironically, marijuana may even have a role to play in mitigating the opiate epidemic, as numerous studies have shown that medical and recreational marijuana laws are associated with decreases in opiate dependency and overdose.

While the attorney general says the public has become “lackadaisical” about drugs, in reality the public’s thinking on the issue has become more nuanced. But that nuance has, so far, been missing in the Trump administration’s approach to the current drug epidemic.

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Published at Fri, 27 Oct 2017 14:53:39 +0000

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There's a battle brewing for control of Denver 420 rally

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There's a battle brewing for control of Denver 420 rally

There's a battle brewing for control of Denver 420 rally

A Colorado cannabis entrepreneur is making a play for control of the Denver 4/20 rally after its controversial aftermath this past April.

Pepe Breton, co-founder of dispensary chain Euflora, regrets that his company was a title sponsor of the 2017 rally, he said Wednesday.

But Breton isn’t just dropping support for the annual rally at Civic Center Park celebrating marijuana — his company is launching a long-shot bid to wrest the permit for the event from longtime organizer Miguel Lopez. The future of the rally has been in question with Lopez facing a three-year ban from the city to host the event.

Representatives of Euflora will camp out in front of the Denver’s Wellington Webb building 24-7 for the next week to be first in line on Nov. 1 when the city opens the 2018 permitting process for event facilities and parks, Breton has announced.

The 2017 rally was “categorially mismanaged” and suffered from a severe lack of funding, Euflora marketing director Bobby Reginelli said at a hastily arranged news conference Wednesday afternoon outside the Webb building downtown.

“We have the time, talent and treasure to professionalize the 4/20 rally,” he said. “Our vision is to grow the rally into a celebration of (marijuana) legalization that people ages 21- to 100-years-old can enjoy and relate to.”


People walk through Civic Center Park the morning after the 4/20 marijuana event was held at the park on April 21, 2017 in Denver, Colorado. (RJ Sangosti, The Denver Post)

But Breton and Euflora aren’t just camping out for the 4/20 permit — Breton is also suing event producers Civic Center Park Productions, LLC for $23,126 in unpaid cash loans allegedly made to keep the event afloat. Further complicating matters, the promissory note for the loan is secured by CCPP’s contractual agreement with Lopez, who has priority status from the city to apply for the annual permit.

“We’re making a point that this is not how you do business and this is not how you treat partners,” Breton told The Cannabist after the news conference.

Lopez, who attended the Wednesday press conference, told The Cannabist that he’s optimistic he will win his appeal and that the ban will be lifted. Should the ban be upheld, or should he lose his “priority event” status, however, he vowed to tie up the permit in litigation.

Among the allegations levied Wednesday, Breton said he saved the event by scrambling to produce $12,000 of the cash loan to to pay scheduled performer 2 Chainz the day of the event.

“Four-twenty had come and gone and everybody was waiting for 2 Chainz,” Reginelli explained. “He wasn’t going to preform until he got paid.”

For all the allegations, posturing and legal maneuvers, the fate of the permit required to host next year’s 4/20 rally is currently outside of both Breton’s and Lopez’s control.

Denver has put a hold on permits issued for April 20, 2018 pending a ruling by an administrative officer on Lopez’s appeal of a three-year ban imposed by the city last May, city officials told The Cannabist.

The city cited “substantial violations of city requirements,” including noise complaints, untimely trash removal, limited security staff, unlicensed food vendors and street closures. In addition to the ban, the city levied $11,965 in fines and $190 in damages, and revoked Lopez’s “priority event” status with the city, a qualification given to a permittee who has run the same event at the same park on the same date, weekend or holiday for two consecutive years or more.

Lopez appealed the penalties, and during a two-day hearing in mid-September, his attorney Robert J. Corry Jr. argued that his client met the terms of his permit agreement and that the city’s three-year ban was “overreach.”

Hearing officer David Ramirez is expected to issue a ruling by Nov. 20, city officials have said.

If Ramirez upholds the ban prior to Nov. 1, another party could apply for an event permit for April 20 in Civic Center Park — marijuana-related or otherwise — when the 2018 permit process begins, city officials said. If the ban is upheld on a date after Nov. 1, the city will then announce a special date to apply for a permitted event on April 20, 2018.

Lopez left the door open for working with Breton on next year’s 4/20 rally and making peace on a beef that threatens an event for which he cares deeply.

“Peace comes by mutual respect,” he said. “(Breton) needs to respect the rally and respect the grassroots that come together on 4/20 for a larger purpose — this isn’t a party, it’s a human rights campaign with a marijuana platform.”

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Published at Thu, 26 Oct 2017 01:15:33 +0000

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Cannabis Culture to intervene as Supreme Court hears provincial free trade case

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Cannabis Culture to intervene as Supreme Court hears provincial free trade case

Cannabis Culture to intervene as Supreme Court hears provincial free trade case

Photo courtesy of News 1130

In 2016, a New Brunswick man, Gerard Comeau, faced a $292.50 fine after being caught with 14 cases of beer and 3 bottles of liquor that he bought in Quebec, where alcohol is cheaper.

In the case, also known as R. v. Comeau, the provincial court judge threw out the charges against Comeau, and called New Brunswick’s ban on transporting alcohol across provincial borders unconstitutional.

This all comes down to an interpretation of Section 121 in the Constitution Act of 1867 which states:

“All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

The judge interpreted Section 121 as ensuring free trade between provinces, and the ruling suddenly threatened to overthrow 95 years of provincial trade barriers and government-owned monopolies.  

Now, the case is going to the highest in the land- the Supreme Court.

Cannabis Culture gets involved

The Supreme Court’s ruling will affect more than just alcohol- the ruling will have a huge impact on the cannabis industry, especially as the provinces work on getting their respective regulatory regimes ready for July 2018.

With different provinces choosing different models and methods, Cannabis Culture is intervening on behalf of cannabis business owners across Canada, according to a post from Tousaw Law Corporation, their legal representatives.

Cannabis Culture is fighting against the domination of government-owned monopolies in the cannabis industry, and according to their lawyers, “To allow for monopolies in Ontario and elsewhere is to explicitly consent to the criminalization of huge numbers of Canadians, and the ruination of large numbers of small businesses.”

Backstory

From 1921 until 2016, section 121 had been interpreted as goods from other provinces only being free from customs duties, which allowed for regulations like the one Comeau was ticketed for- importing more than 12 pints of beer from a different province, in this case, Quebec.

In other words, the only way you can have more than 12 pints of beer in New Brunswick is if you bought it at a liquor store in New Brunswick.

After the charges were thrown out, the Crown appealed the judge’s decision but the New Brunswick Court of Appeals refused to hear it.

Intervention!

Cannabis Culture are not the only interveners in this hearing- far from it. As it’s a constitutional issue, there is much at stake for provincial authority, and it has the interest of many in government. According to the CBC, “The Attorney Generals of Canada, Ontario, Quebec, Newfoundland and Labrador, Alberta, Nova Scotia, Saskatchewan, British Columbia, Prince Edward Island and Northwest Territories, and the Minister of Justice of Nunavut have all filed to be interveners in the case”.

Sources

CBC: Cross-border booze appeal a chance to hit reset on interprovincial trade, MP says.

Globe and Mail: Supreme Court to hear ‘polarizing’ border-beer case.

Tousaw Law Corporation: Cannabis Culture to intervene in interprovincial trade hearing at the Supreme Court of Canada.

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Published at Tue, 24 Oct 2017 14:00:51 +0000

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Cannabis Trimming Parties

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Cannabis Trimming Parties

Cannabis Trimming Parties

As a child of the rural Ontario countryside, I witnessed the great undertaking of making Maple Syrup many times.  For some of my neighbors boiling tree sap into syrup was not only a cause for great labour but also a cause for visitors and late night card games that played out like celebrations.  These farmers would harvest sap like this every Spring working their normal tireless pace around the farm by day and then boiling watery sap to silky syrup till late into the night.  Neighbors and relatives alike stopped by to help or deal a hand or two, the game often ending only when someone fell asleep at the table.  

From tapping to collecting, boiling to perfecting, Maple Syrup production is proof that humans and nature can be partners through the seasons.  I see this in other Canadian products too.  Ontario is famous for its Maple Syrup while British Columbia is famous for its Cannabis- or “BC Bud” as it’s also known worldwide.  I’m sure the fall season in B.C. also sees friends and neighbors gather to help with the huge undertaking of harvesting and trimming the many indoor and outdoor Cannabis crops.

I predict this for Ontario and the other provinces too.  Only after the harvest & trim is finished does the celebration begin.  Or did it begin months ago when those seeds first popped?  In fact I really hope that Canadians get creative with their growing and sharing.  Remember cookie exchange parties?  Why not Cannabis exchange parties?  Heck, make it vegetable exchange parties too!  You grow the THC strains and I’ll grow the CBD strains.  I’m currently growing Green Kale with my Cannabis plants!  Each of our medicine cabinets and fridges will have exactly the strains and veggies we need.  

We Cannabis growers are proudly green-thumbed and ready to celebrate the way other Canadians do when harvesting sap or hay or vegetables!  Growing as a way of life is a big part of what speaks to us as Canadians and I really welcome legalization as a way for many of us to get back to our roots and get back to nature.  We may all find that partnership with nature, feels right to us too.


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Published at Mon, 23 Oct 2017 16:00:08 +0000

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Karma Cup highlights with Craig Ex

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Karma Cup highlights with Craig Ex

Karma Cup highlights with Craig Ex

The 4th annual Karma Cup happened Sept.9-10, 2017 and it was an amazing time, as usual. We have the highlights from that cannabis-packed weekend with our friend Craig Ex, who was pulling double duty as a Karma Cup judge.

Check out the video with Craig Ex reporting from the hazy grounds of the Karma Cup in Toronto as he goes through a who’s-who of the cannabis community. Watch as Craig chats with Erin and Chris from Cannabis Culture about their court case and bail, Amy Anonymous from Swearnet, the guys from Glacial Gold, the Thompson Caribou Concentrates “Squad!”, and of course, the organizer behind it all, Sarah Sunday, amidst all the edibles, glass-blowing, and cannabis you can handle.

During the Karma Cup, the Ontario government’s recent announcement of its LCBO-controlled cannabis model was on a lot of people’s minds. As the team from Dankr told Craig Ex, “They just want their own monopoly”. But in spite of the government’s plans that threatened to kill the buzz for all the people who helped make the industry what it is today, the Karma Cup was a chance for the cannabis community to come together and show some love.

The Karma Cup was two days full of dabs and doobs, and we can’t wait for next year.

For the full winners list, click here.

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Published at Sat, 21 Oct 2017 22:47:12 +0000

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