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Canada: Cannabis oil supplies vastly outweigh sales, stats show

Newly released data from Health Canada indicates Canadians just aren’t that into cannabis oils.

The agency reports that inventories of cannabis oil greatly outweigh the number of sales.

For the month of June, around 9,600 litres of cannabis oil was sold compared to a total inventory of just over 141,000 litres — that is 14.7 times more inventory than sales.

Sales of cannabis oil also decreased in June by 2.1 percent, but finished inventory actually increased 15 percent, from a little over 85,000 to more than 98,000 litres.

Meanwhile, dried cannabis sales increased 4.7 percent in June from a month earlier, from a little over 9,500 kilograms to nearly 10,000 kilograms, and finished stock was held at around five times the number of sales, at around 50,000 kilograms.

Less appealing than edibles

Cannabis oils are made up of extracted resin and a carrier oil and are often taken sublingually from an oil dropper.

It is albeit not the sexiest way to consume cannabis but has proved popular with the medicinal market.

Aleafia’s Chief Medical Officer Michael Verbora said that the majority of his patients, about 7 out of 10, use cannabis gel caps and oils.

Cannabis oil’s effects are the same as taking an edible, meaning the high won’t be felt for at least a couple of hours and may cause more of a body-high.

Edibles will be legal in Canada in October, and Verbora thinks they will be more marketable than the oils, even though the effect is the same.

“[Consumers] have the perception if you put cannabis in a cookie it will be different from a capsule, for some reason,” he said.

Nevertheless, retailers seem to have been hit by the lack of current demand for cannabis oils.

Overstocked and not selling

One retailer told the Financial Post about their struggle to sell Canopy Growth Corp.’s Tweed-branded oils and gel capsules.

“They are just not selling. We have been talking to Canopy for some time now about the issues with their oils and gel capsules,” Mark Goliger told the Post.

Goliger is the CEO of National Access Cannabis, which has 35 recreational cannabis stores in Alberta, Saskatchewan and Manitoba.

“[Canopy Growth] have known for months that most of the retailers are having problems selling them,” said Goliger.

A Toronto-area store owner also told the Post anonymously that Tweed’s gel capsules were one of the store’s “worst-selling” cannabis products, but the store also had ordered “too much” of it because they wanted to stock their shelves.

“Our margins are going to take a hit because I have boxes of Tweed product — oils and gelcaps — sitting in my back office,” the owner said.

The oversupply has affected Canopy’s bottom line.

The company said an “oversupply of certain oil and gel-cap formats in certain markets” caused it to make a revenue adjustment of $8 million in its latest quarterly results, according to the Post.

Canopy Growth’s recreational revenue had declined 12 percent that quarter.

European cannabis THC levels have doubled in ten years

Cannabis potency in Europe has risen dramatically with THC levels more than doubling in a decade.

And, cannabis remains the most widely used ‘illicit’ drug in Europe, show findings from some recent research. The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) report shows that the THC concentration of ‘herbal cannabis’ doubled from 5% to 10%, from 2006 to 2016, whilst cannabis resin potency increased from 8% to 17% over the same period.

Legalization Drives Innovation

The report — Developments In The European Cannabis Market — provides an overview of emerging and established cannabis trends – and products – in Europe. It says the global moves towards legalization of recreational cannabis, and the wider adoption of cannabis as a medicine – is driving innovation.

This is leading to a surge in the development of new cannabis products, and some of these are now appearing in the European market. The report calls for closer monitoring of the health effects of all cannabis products. EMCDDA Director Alexis Goosdeel said: “New and more potent cannabis products may have serious public health consequences for users. 

17.5 Million Euro-Cannabis Users

“Therefore, monitoring and understanding new trends in cannabis products available to European consumers today is important to inform the policy and regulatory debate.”

With concentrates, edibles, and CBD nutraceuticals now prevalent in Europe  the report calls for new monitoring tools and regulations. It says: “Having the ability to distinguish illicit cannabis products from cannabis-based medicinal products and unregulated CBD oils will be important for law enforcement in many jurisdictions.”

The report gores on to say that some 17.5 million Europeans, aged between 15–34, are estimated to have used cannabis in the last year, while one per cent of 1% of adults – aged between 15 and 64 years, use cannabis every day. In 2017, some 155,000 people entered drug treatment in Europe for problems related to this drug, of those around 83,000 were entering treatment for the first time. 

Cannabis is now the substance most often named by new entrants to specialist drug treatment services as their main reason for contact in the 28-member states of the European Union, says the report.

For cannabis software, one size does not fit all

As the legalization movement continues, cannabis dispensaries have become more and more like any other mainstream retail operation, such as a shoe or clothing store, Customers expect a superior and tailored experience and the highest quality products for the best prices.

But there's one big difference between the two. Unlike other retail stores, cannabis shops must be in compliance and report to state track-and-trace systems. In order to deliver on that experience while maintaining high levels of confidence in compliance, a dispensary owner must hire top talent, implement sound processes and plan carefully in order to optimize and streamline business operations for continued growth. The technology stack that powers today’s modern dispensary is at the epicenter of executing a successful retail operation in a burgeoning industry.

Why the existing solutions fail

All cannabis retailers need a point-of-sale system (POS) to manage the front-end operations such as processing payments and promotions, as well as a back-of-house functionality for inventory management and compliance tracking and reporting. This requires performance-driven technology that arms retailers with powerful data insights and tools to drive their business further and create seamless experiences.

Many of today’s existing POS solutions deliver a “jack of all trades, master of none” approach by providing the tooling and technology for the entire cannabis supply chain. From growing to manufacturing to selling, they’ve developed homegrown solutions that attempt to make the retail owner’s job as easy as possible by relying on only one vendor for everything. On the surface, this is appealing because it removes the burden of having to build and operate a sophisticated tool stack by him or herself.

However, each dispensary has different growth priorities and not all shops operate under the same business models. The sacrifice for a single-solution software is a lack of customization, scalability and continued product innovation. It also presents issues for the vendor, especially on resource allocation and deciding which tools receive the most resources.

Why a platform approach works

Innovation, regardless of industry, is driven by consumer demand and business need— and there is no shortage of either in a market expected to reach $26.3 billion by 2025. 

The technology industry has long been gravitating toward an openly-integrated "platform approach" that draws on a complex and rich ecosystem of vendors and partners each providing complementary offerings. It is no surprise that the emergence of the cannatech market should follow the same path as pioneers like Salesforce or Apple by redefining the solutions to modern technology problems. 

The world is too vast and complicated for any one company to build the software and hardware that supports the entire cannabis supply chain. Those that try to do so will fail because there will always be someone doing one category of the chain better. From cannabis cultivation to payments to CRM and customer loyalty to delivery, HR, advertising and analytics, new players are emerging as category leaders in each of these sub-markets. The solution is to leverage the growing cannatech ecosystem and partner with these niche market leaders to deliver an extensible POS and inventory management platform that can be built out to support all facets of the supply chain.

The tool stack solution

With the right intelligent POS platform at the core of any retail business, dispensary owners are able to hand-pick the best essential elements of the cannabis tool stack for their business. For instance, they can automatically update online menus with Leafly, power their delivery services through Dutchie, integrate with BDS Analytics to drive better decision making and then track customers through CRM and loyalty rewards software like SpringBig or Sprout.

Cannabis retailers deserve to pick and choose what their cannabis tool stack looks like -- from hardware to software -- to create the perfect customer experience that aligns with their store’s unique mission and vision. No dispensary takes a one-size-fits-all approach, and neither should their point of sale system.

At the end of the day, it all comes down to one thing: the customer experience. The future of cannabis legalization and medicinal use is bright and as technology leaders and innovators, it is our responsibility to provide the best technological solutions to solve modern challenges that benefit the greater good.

New Hampshire House overrides Governor’s veto on home-grown medical cannabis

The New Hampshire House of Representatives voted on Wednesday to overturn Republican Gov. Chris Sununu’s veto of a bill that would allow for the home cultivation of cannabis by medical marijuana patients. The measure, HB 364, will now head to the Senate after the House voted 259 to 120 to override the veto.

Earlier this year, the Senate approved HB 364 by a margin of 14 to 10. Two additional votes will be needed in the Senate to override the veto by the required two-thirds majority. The Senate is expected to vote on the veto on Thursday.

All home cannabis cultivation is currently a felony under New Hampshire law. Under HB 364, registered medical marijuana patients and caregivers would be allowed to possess up to three mature cannabis plants, three immature plants, and 12 seedlings. The bipartisan and bicameral measure was sponsored by Democratic Rep. Renny Cushing and Republican Sen. John Reagan.

In the governor’s veto message, Sununu said that allowing home cultivation of cannabis would put a burden on law enforcement agencies in the state and compromise regulations to prevent the diversion of medical marijuana to the illegal market.

Activists Call on Senate to Follow Suit

Matt Simon, the New England political director for cannabis reform advocacy group the Marijuana Policy Project said in a press release that overriding the governor’s veto of HB 364 will help ensure that medical marijuana patients can access their medicine affordably.

“It’s encouraging to see the House vote so strongly in favor of HB 364. This bill is critical for patients who are successfully using cannabis to stay off opioids, but are unable to afford the high-priced products that are available from dispensaries,” Simon said. “Sadly, 10 senators voted against HB 364 earlier this year, putting the preferences of a few police chiefs ahead of the needs of patients and their families.”

The Marijuana Policy Project noted in its release that two polls have shown that 68 percent of New Hampshire’s residents support legal medical marijuana and that all three states that border New Hampshire have already legalized home cultivation for patients, caregivers, and adults 21 and older.

“Residents of the ‘Live Free or Die’ State overwhelmingly support cannabis policy reforms, so it’s clear that any senator who opposes this simple step forward is incredibly out of touch with their constituents,” he said. “Patients, caregivers, and their advocates will be watching the Senate vote closely and hoping that common sense and compassion will finally prevail.”

New Hampshire legalized the medicinal use of marijuana in 2013. As of the end of last year, more than 7,000 residents had registered as patients in the state program. Currently, patients are only permitted to obtain medicinal cannabis at one of four licensed dispensaries, leading many to say that the cost and travel involved make it difficult to access their medicine.

Tennessee's new tool allows authorities to differentiate hemp from high-THC cannabis

After facing a load of approximately 10,000 cannabis-related cases to process, the state of Tennessee Bureau of Investigation (TBI) has established a two-step system of testing the product for tetrahydrocannabinol (THC) — a cannabis compound that causes intoxication — that takes just minutes.

Any cannabis containing more than 0.3 per cent of THC, which is the legal cut off point for whether the plant is defined as hemp, is considered illegal under federal and state law.

Both medical and adult-use cannabis are prohibited in Tennessee, with those convicted of possession risking a fine of at least $250 and up to a year in jail.

Although the test itself — a simple colour test — takes minutes to complete, clearing the backlog could take months.

“It is the same plant, it is the same species. It looks the same, feels the same and reacts the same to a lot of field color tests,” Mike Lyttle, TBI Assistant Director, Forensic Sciences Division, told WSMV News. “This has been one of the greatest challenges in forensic science over the last couple of years, how do you tell the difference between marijuana and hemp?”

Already overwhelmed with testing cannabis flower, the TBI is also responsible for testing products like vape cartridges, edibles, and “harder” drugs such as methamphetamine and opioids.

Hemp became officially legal on a federal level in the U.S. in December 2018 with the passing of the Hemp Farming Act of 2018. The bill “legalizes industrial hemp that has tetrahydrocannabinol of no more than 0.3 per cent by removing it from Schedule I of the Controlled Substances Act,” and grants hemp producers eligibility for resourced such as USDA research grants and federal crop insurance programs.

The bill has caused confusion in various states such as Texas, where authorities lack the resources to differentiate between hemp and high-THC cannabis — effectively decriminalizing the drug.

South Africa’s cannabis Industry expected to be worth $1.7B If legalized

In a country with 29 percent unemployment, South Africa could tap into a lucrative industry that creates desperately-needed jobs and boosts the economy if the government passes legislation.

A legalized cannabis industry in South Africa could be worth more than $1.7 billion annually by 2023, according to the African Cannabis Report, the first detailed report on the legal cannabis industry in Africa.

South Africa would be the second-biggest African market for cannabis and related products such as hemp and oils, according to the research presented by strategic consultancy firm Prohibition Partners.

The same report suggests that Nigeria’s market would be worth $3.7 billion by 2023 if cannabis use is legalized in Africa’s most populous country.

Industrial cannabis creates jobs

In Morocco, where cannabis is illegal but tolerated for personal use, the cannabis industry employs 800,000 people, according to BusinessLive.

Morocco’s marijuana industry is expected to be worth $900 million by 2023.

“With affordable land, low-cost labor and an experienced agricultural workforce, Africa offers enormous opportunity to local startups and foreign companies looking to expand,” according to the Africa Cannabis Report.

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There are 1.25 million cannabis farmers in South Africa, according to World Health Organization estimates. At least 350,000 African cannabis farmers are traditional healers who give the plant to others for its medicinal benefits.

In September 2018 the South African constitutional court ruled that the recreational use of cannabis was no longer a criminal offense

The court gave the government two years from the date of the ruling to bring the country’s cannabis laws in line with the constitution.

The South African government is working towards regulating the cannabis industry to legalize its use and benefit from the job creation, especially in rural areas, according to CityPress.

Authorities in South Africa want to have a framework for the development of the hemp and cannabis sector in place by October.

Tech company aims to revolutionize cannabis supply chain

The legal cannabis industry is a work in progress. In many ways, the industry shapes itself as it grows and as more and more places continue to legalize weed.

A key part of this evolutionary process is figuring out what aspects of the burgeoning industry work and what parts don’t, and then searching out solutions to improve the system.

Cannabis logistics company WAYV is the latest example of this evolution. The company just announced the rollout of its “Dynamic Distribution” technology. Designed to streamline the entire supply chain, Dynamic Distribution aims to improve the legal cannabis industry for everyone involved, from cultivators and distributors, to retailers and consumers.

WAYV Launches Dynamic Distribution Technology

On the surface, buying weed at a legal dispensary seems like a very smooth and simple process. You walk into the shop and see a huge range of products and brands. You browse around, select what you want, make your purchase, and you’re out the door.

But what isn’t visible are the numerous processes, companies, and players that operate behind the scenes to move a product from the original grow site to dispensary shelves. This reality is much more complicated and messy.

Before a product makes its way to the final consumer, it passes hands multiple times, moving between growers, manufacturers, distributors, and more. Coordinating all these players and the movement of products between them can quickly become a daunting challenge. And each point along the journey is another potential for inefficiencies, mistakes, or delays to creep in.

That’s exactly what WAYV aims to fix. The company’s Dynamic Distribution technology integrates all points of the supply chain into a single, easy-to-use interface.

Retailers log on to the platform’s marketplace, where they can learn about new brands and products, place orders, make payments, and track shipments in real-time. Distributors and brands likewise have access to a massive network of retailers, and have a single tool for managing shipments, inventory, payment processing, and more.

With Dynamic Distribution, what has always been a fragmented process involving multiple companies and steps is now a single digital platform.

Using Digital Technology to Solve Cannabis Challenges

There are a couple of key technological innovations that undergird all of this.

One of them is a streamlined payment processing technology. Given the legal tensions surrounding weed, financial transactions have always been a problem. Typically, the industry relies almost exclusively on cash. Now, with the Dynamic Distribution platform, companies make payments just once and then the software quickly and securely disburses payments to all upstream players.

The other key technology has to do with optimizing inventory and shipping. Specifically, WAYV has created an algorithm that predicts what products need to be in which locations—before they’re ever actually ordered.

This feature allows for faster-than-ever shipping. In fact, WAYV says that Dynamic Distribution is capable of delivering orders on a next-day turnaround.

“Dynamic Distribution optimizes all aspects of existing distribution infrastructure to provide the best overall experience for brands and distributors and next-day delivery for retailers and customers,” WAYV CEO Keith McCarty said. “Brands and distributors have never had this level of choice, speed, and quality throughout the supply chain.”

Innovating the Cannabis Industry…Again

According to McCarty, WAYV’s Dynamic Distribution is largely the result of his prior experience in the consumer-facing side of the industry.

Prior to his work with WAYV, McCarty was co-founder of Eaze, an online platform that connects consumers with dispensaries and delivery services. Working on this project gave McCarty insight into some of the industry’s biggest challenges.

“We learned that there’s a lot of friction in the supply chain,” McCarty told High Times. “When companies become successful they face constraints on supply. There are problems getting product from the brand to the distributor to shops to finally getting products on shelves. It seemed like there were big problems we could solve via technology.”

As a result, McCarty launched WAYV in August 2018. In the company’s first year of operations, it quickly caught on amongst some of California’s biggest cannabis companies. So far, companies like Caliva, Kurvana, High Style Brewing Company, Goldrop, and distributor Sierra Pacific Warehouse Group have already started using WAYV’s tools. In fact, many have already started utilizing the Dynamic Distribution platform.

“Part of a Movement”

For now, Dynamic Distribution will serve only the California market. But McCarty said that all aspects of the software have been designed for scalability. Next up, he says, is Canada, the rest of the United States, and the world.

“This isn’t just about building a technology that gets adopted, it’s about being part of a movement that connects to a lot of other social issues,” McCarty told High Times. “We are extremely passionate about solving the industry’s biggest problems because we believe this is a good thing for the world. We believe that technology plays a big role in this, and we take that responsibility seriously.”

He added: “There’s a lot of passion behind what we’re building. We want the industry to know that we’re here to support them in whatever way we can.”

Despite market bumps, start-up humps, hemp to be a 2020 cash crop in Florida

The Florida Department of Agriculture expects to receive 8,000 applications by December and issue 3,000 cultivation permits early next year when the state rolls out its new industrial hemp program.

Some officials estimate the crop could eventually spawn a $30 billion annual industry in the Sunshine State but, as the Senate Agriculture Committee learned Tuesday, the rosy prospectus comes with thorns.

While 37 states have authorized industrial hemp programs in the two years since the crop was legalized under the federal 2018 Farm Bill, all await approval and guidance from the U.S. Department of Agriculture (USDA).

Yet, according to HempBenchmarks.com, there are already more than 400,000 acres producing hemp in 34 states under the 2014 Farm Bill’s pilot program, outpacing processing capacity and market development. As a result, the new domestic commodity’s price has been falling since May.

Nevertheless, State Director of Cannabis Holly Bell told lawmakers, “homegrown” hemp will be a “several million dollar industry that will become hundreds of millions in the next two years.”

Bell said Colorado, Vermont, New York, Kentucky and Tennessee are among states that have given farmers the green light to grow hemp after submitting plans to the USDA months ago without any federal interference.

Florida will do as well in early 2020, Bell said, although she expects USDA guidance before year’s end.

“Everybody else is doing it,” she said. The USDA has “not intervened and stopped any state. By December, if everything goes well, our team is ready to issue permits.”

Bell, hired in February by Agriculture Commissioner Nikki Fried as the state’s first cannabis czar after helping Tennessee establish its hemp industry during two decades of developing marijuana industries, said Florida’s program will include a workforce component and an automated permit process.

Without the USDA’s approval of the state’s program, however, Agriculture Committee Chairman Sen. Ben Albritton, R-Bartow, a Central Florida farmer, said many farmers who may be interested in adding hemp to their crop mix, – like himself – will be hesitant to do so until the feds sign off.

Sen. Bill Montford, D-Tallahassee, said hemp could be help the Panhandle recover from 2018’s Hurricane Michael.

In a February hearing before the Senate Agriculture Committee on Senate Bill 1020 – the 2019 bill lawmakers approved to create the state’s hemp program – University of Florida North Florida Research & Education Center Director Glen Aiken recommended hemp and hops as alternative crops for Panhandle farmers recovering from October’s Category 5 storm.

Aiken said there is increasing demand for hemp, which can be used for high-quality fibers and ropes, clothing, even as food.

“I know of an entrepreneur in Kentucky that processes hemp sausage,” he said. “It’s hemp and pork combined. I had some. It’s not the best sausage I’ve ever ate, but it wasn’t too bad either.”

During Tuesday’s pre-session committee primer, agricultural scientists from the University of Florida and FAMU gave presentations of hemp’s prospects in the Sunshine State.

UF Director Dr. Robert Gilbert feared growers could “get ahead of the science” on hemp and said there will be an “emerging crops” summit sometime soon.

Creating a state industrial hemp program has been a priority for Fried since she assumed office in January after being the only Democrat elected to a statewide office in November.

“It’s going to cause an industrial revolution in our state and across the country,” she said in support of SB 1020, noting hemp has as many as 35,000 different uses and its market as a cash crop is only getting brighter as it is considered as a biodegradable replacement for Styrofoam, plastic and paper.

SB 1020, sponsored by Sen. Rob Bradley, R-Fleming Island, was adopted by the House in a 112-1 vote and by the Senate in a 39-0 tally.