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In October 2018, Canada legalized cannabis for adult use nationwide. Under Canada’s Cannabis Act, adults are allowed to cultivate up to four cannabis plants per household, either indoors or outdoors. Now, almost a year into legalization, more Canadians are taking advantage of this freedom — and are pushing to expand it. 

Take, for example, a nursery in the small town of Petitcodiac, New Brunswick that decided to hold a workshop on home cannabis cultivation last week. They were overwhelmed by the turnout and had to find a bigger venue at the last minute.

“I’ve never seen anything like it,” Bob Osborne, owner of Corn Hill Nursery, told the Canadian Broadcasting Corporation. “We’ve obviously touched a nerve.”

Another CBC report on this year’s home-growing trend quoted Alex Rea, owner of Ontario’s Homegrown Hydroponics chain, who boasted of booming sales — and the obvious reason for them.

“For the price-conscious consumer, if you’re paying around $10 a gram for the varieties at the store, you might be only paying 50 cents per gram or less for a variety you grow yourself at home,” Rea said.  

The report also happily raises the possibility that the Cannabis Act’s four-plant limit may simply go unenforced. The enforcement effort is up to local police, and they don’t seem particularly interested.

“To suggest that we’re going to have teams of officers peeking in people’s backyards to see if they’re growing four plants, it’s just not realistic,” said Don Belanger of the Toronto Drug Squad.

However, there are two Canadian provinces that banned home-growing cannabis altogether: Quebec and Manitoba. Cannabis advocates are fighting the bans — and here, too, they’ve seen progress.

A Judge Rules for Home Grow in Quebec

A key victory for homegrown cannabis in Canada came on Sept. 3, when the provincial courts overturned Quebec’s prohibition on home cultivation. Quebec Superior Court Justice Manon Lavoie ruled that the provincial prohibition infringed upon the jurisdiction of Canada’s federal government by instituting the ban.

The decision means it is now legal to grow your four cannabis plants at home in Quebec, the Canadian Press reports.

The challenge was brought by Montreal resident Janick Murray-Hall — a bit of a professional prankster, and publisher of the satirical “fake news” website World News Daily Report. He argued the ban violated the federal Constitution Act of 1867, which defines the limits of federal and provincial jurisdiction. 

Quebec’s provinicial law imposed a fine up to $750 (in Canadian dollars) for home cultivation — doubled on a second offense. The federal Cannabis Act states that provinces have the right to create “additional rules for growing cannabis at home, such as lowering the number of plants per residence.” But it does not say that provinces can ban home cultivation outright.

Justice Lavoie found that, in fact, they cannot ban home growing. He wrote (translated from the French): “The effect of the provincial provisions is a step backward, as though the new federal law aiming at accessibility and legalization of cannabis had never existed.” 

Nobody had actually been charged yet under the Quebec law.

Manitoba’s Ban Might Topple Next

Over in Manitoba, where there is a similar ban on home growing cannabis, only one person has been charged for home cultivation since Manitoba’s Liquor, Gaming and Cannabis Control Act came into effect last fall, a provincial spokesperson told CBC News.

Cannabis advocates in Manitoba say that’s one too many, of course. And with the ruling in Quebec as precedent, the CBC portrays it as a matter of time before a similar challenge is brought in Manitoba.

Manitoba’s law actually imposes a $2,542 fine for home cultivation. When it was instated last year, legal experts warned that the province could be crossing the line by imposing such a hefty fine, according to the CBC. 

No other provinces have imposed stricter limits than the four plants allowed by federal law — Quebec and Manitoba stand alone in going beyond the federal Cannabis Act. And in Manitoba, home cultivation is still permitted for registered medical marijuana patients. 

The reversal in the Quebec courts may cause provincial leaders to rethink plans to further rein in the cannabis community. Quebec’s cannabis law was passed in June 2018 under the previous Liberal government. The new Coalition Avenir Québec government has announced plans to raise the legal age of consumption from 18 to 21. It also wants to ban the sale of cannabis edibles. 

Homegrow Increasingly Important as ‘Gray Market’ Dispensaries Squeezed Out

Before Canada legalized adult-use cannabis, consumers could often turn to “gray market” dispensaries to purchase their pot, particularly in Vancouver. But now, these dispensaries are fighting for their right to stay open as they face new enforcement and competition. Canada has licensed only a select few dozen Licensed Producers to sell recreational cannabis (and opened government-operated pot shops), pushing out these old-school, smaller retailers.

In May of this year, British Columbia’s Supreme Court rejected a bid from nine Vancouver dispensaries seeking to stay open. In a strange irony, Vancouver is shutting down its long-tolerated but unlicensed cannabis dispensaries — even as British Columbia struggles to meet demand amid a dearth of licensed retail outlets.

David Malmo-Levine, a longtime prominent Canadian cannabis advocate and Vancouver resident, told Cannabis Now he recently sold his share in the dispensary he co-founded, the ironically named Stressed and Depressed — citing the exorbitant fees imposed by the city government.  

“I had to sell my dispensary because I couldn’t come up with the $35,000 [Canadian dollars] per year,” he said. “It’s a rich man’s game, now.”

Without mom-and-pop licensed dispensaries to turn to, home grow is even more relevant for Canadians looking to avoid corporate cannabis.

Medical marijuana company Cannabit is slated to buy out competitor Tikun Olam, after the two firms signed principles of agreement, which were revealed on Monday. Cannabit saw its valuation jump 13%, to 271 million shekels ($76.4 million), on the news.

Tikun Olam, in comparison, is one of Israel’s biggest, most respected medical marijuana companies, with some 15,000 customers and a well-regarded product. Patients view Tikun Olam’s cannabis strains as particularly high quality, according to interviews.

Buyers started pursuing Tikun Olam when it emerged that the Israel Police and the Health Ministry would not let the company’s founder, Tzachi Cohen, to continue working in Israel’s medical marijuana industry after a police probe raised suspicions that Cohen had underworld ties, although the information was kept confidential and even Cohen has not been apprised of it.

Prime Minister Benjamin Netanyahu told Channel 13 in an interview that his government had halted cannabis exports because “we feared that criminal elements would take over the medical marijuana field.”

As uncertainty rose regarding Tikun Olam, several prospective buyers submitted offers. Three companies reached the final stage – Intercure, whose chairman is former Prime Minister Ehud Barak, now one of the leaders of the Democratic Union party, and which has farms in northern and southern Israel; privately held Bazelet Pharma, which has a processing plant and a cannabis farm at Sdot Yam; and Cannabit, led by chairman Eitan Ben Eliyahu, which has a farm near the Dead Sea.

Barak Rozen, who controls Cannabit indirectly, went to Los Angeles to meet Cohen. Rozen spent several days trying to convince him to sell; Cohen asked for $100 million. Ultimately, on September 12, the two signed principles of agreement that called for $10 million to be paid immediately, $32 million to be paid once the deal closes, and another $18 million to be paid should Cannabit’s valuation top 1 billion shekels within five years. Cohen will also receive 4.99% of Cannabit’s shares and 5% of Tikun Olam’s future sales.

In exchange, Cannabit is receiving the company’s Israeli operations and a permit to use Tikun Olam’s intellectual property. Cohen himself is keeping the company’s medical marijuana varieties, which limits Cannabit’s ability to export Tikun Olam products.

Cannabit has only about $16 million in cash, and will need to issue bonds in order to make the payment.

A source close to another potential buyer stated that Cannabit had offered significantly more than the others, but questioned whether it was a good deal for the company to have bought what was essentially 5% of Tikun Olam’s global operations.

“Cohen saw that there was a buyer who would pay full price and leave most of the operations in his hands, so he cut a deal with Cannabit,” said the source.

A source close to Cannabit countered that the company saw the deal as the acquisition of a major brand such as Nike or Coca-Cola. The source added that the company plans to keep most Tikun Olam employees, and to go on selling Tikun Olam’s marijuana varieties under Health Ministry supervision.

Surgeon General Jerome Adams raised eyebrows when he warned that cannabis was getting stronger two weeks ago. He added that, as a result, developing adolescents and pregnant mothers should avoid using today’s cannabis, due to the possible long-term damage. Health and Human Services Secretary Alex Azar went as far to call cannabis “a dangerous drug.”

“This ain’t your mother’s marijuana,” Adams added. “Not enough people know that today’s marijuana is far more potent than in days’ past.”

In some circles, it could be easy to dismiss Adams’ comments. They recalled similar language used by FOX News host Tucker Carlson when he tried to link mass shootings with marijuana usage. Or it reminded others of Alex Berenson’s Tell Your Children book, which connected weed use with psychosis and reinvigorate the “Reefer Madness” movement. (Most scientists and researchers have discredited Berenson’s work.) But was Adams comments so hyperbolic? Studies have linked adolescent cannabis use with memory problems later in life. The science remains mixed at best about using marijuana while pregnant, with researchers suggesting not doing so until we know more.

The truth is marijuana is getting stronger. You don’t think almost a decade of legal marijuana growing being conducted under optimal settings wouldn’t improve the plant’s potency? What matters, of course, is the degrees of its increased potency. This is where comments like the Surgeon General’s can get out of hand. Canadian author and marijuana advocate Dana Larsen recently analyzed on Twitter how, if you used statements from public health officials, you’d arrive at cannabis being 12,600 times stronger than it was 60-70 years ago.

But the problem, as VICE columnist Maia Szalavitz astutely points out, is marijuana’s chemical balances have changed. We know that THC is responsible for marijuana’s psychoactive component, and that CBD, in addition to other wellness benefits, tends to mellow out THC’s buzz. Somewhere between 1994 and 2005, the typical ratios of CBD to THC became out of whack. Researchers discovered that whereas marijuana strains previously had 14 times the amount of THC as CBD, cannabis found on the street today has 80 times the amount of THC.

One Dutch study found that first time admissions for cannabis use disorder were more likely when consuming higher THC marijuana. Meanwhile, Dr. Julie Holland, The Pot Book: A Complete Guide to Cannabis as well as a psychiatrist, told VICE, “Higher THC strains are more likely to cause problems in people at risk for psychotic illness.”

This is yet another argument for marijuana legalization. Just like with the vape crisis, these problems are the direct result of allowing the market to decide how marijuana will be crafted and marketed, instead of policy and regulations. Black market retailers are driven to mess with THC:CBD ratios to ensure their product makes stoners say “they got the good shit, man.” But that attitude ultimately creates more problems than it solves. Bring marijuana out from the dark and we might soon be instead saying, today’s cannabis is more balanced, healthy, and safe for consumers than your momma’s marijuana. Who doesn’t want that?

The EPA would ordinarily evaluate pesticide safety, but it has never done so for marijuana because the plant is illegal under federal law. (Bill Clark/CQ Roll Call)

The filing was anticipated before and after the tentative deal, which could be worth up to $12 billion over time, was struck.

"This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation," Steve Miller, chairman of Purdue's board of directors, said in a statement, "and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis. We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible."

But legal battles still lie ahead for Stamford, Connecticut-based Purdue, which is spending millions on legal costs as it defends itself in lawsuits from 2,600 government and other entities.

'Clearly a game': Opioid lawsuit settlements appear aimed at giving tax breaks to drug firms, experts say

Tentative settlement: OxyContin maker agrees to tentative opioids settlement but it falls short of national deal

Infographic: How companies turn government settlements into tax write-offs

About half the states have not signed onto the proposal and several of them plan to object to the settlement in bankruptcy court and to continue litigation in other courts against members of the Sackler family, which owns the company. The family agreed to pay at least $3 billion in the settlement plus contribute the company itself, which is to be reformed with its future profits going to the company's creditors.

In a statement, the families of late company owners Mortimer and Raymond Sackler said they have "deep compassion for the victims of the opioid crisis" and believe the settlement framework "is an historic step toward providing critical resources that address a tragic public health situation."

Objections came over the amount of the deal, which some officials say will not reach close to the $12 billion mark, and because it means the company won't be found liable by a jury or judge.The company that made billions selling OxyContin has filed for bankruptcy protection. This comes after it reached a tentative settlement with many governments. AP

Purdue chairman Miller said the company has not admitted wrongdoing and does not intend to. "The alternative is to not settle but instead to resume the litigation," he said on a conference call with reporters. "The resumption of litigation would rapidly diminish all the resources of the company and would be lose-lose-lose all the way around. Whatever people might wish for is not on the table now."

Because so many states balked at the settlement, it could complicate the bankruptcy process. The Sackler family members said they're still trying to get more states to sign on.

"We are hopeful that in time, those parties who are not yet supportive will ultimately shift their focus to the critical resources that the settlement provides to people and problems that need them," they said.

Key issues that could be decided include whether the suits against the Sacklers in state courts will be able to move ahead, and what will happen to the company itself. Under the tentative settlement deal, it would continue to operate, but with profits used to pay for the settlement. Another option could be for a judge to order it be sold.

Court filings assert that members of the Sackler family were paid more than $4 billion by Purdue from 2007 to 2018. Much of the family's fortune is believed to be held outside the U.S., which could complicate lawsuits against the family over opioids.

A court filing by the New York Attorney General's office on Friday contended that Sackler family members used Swiss and other hidden accounts to transfer $1 billion to themselves. The discovery of the transfers bolsters several states' claims that family members worked to shield its wealth because of the growing legal threats against them and Purdue.

The Sacklers have given money to cultural institutions around the world, including the Smithsonian Institution, New York City's Metropolitan Museum of Art and London's Tate Modern.

The lawsuits assert that the company aggressively sold OxyContin as a drug with a low risk of addiction despite knowing that wasn't true.

Since OxyContin, a time-released opioid, was introduced in 1996, addiction and overdoses have surged. In both 2017 and 2018, opioids were involved in more than 47,000 deaths, according to the U.S. Centers for Disease Control and Prevention.

In recent years, there have been more deaths involving illicit opioids, including heroin and fentanyl, than the prescription forms of the drugs. That change has happened as awareness of the dangers of prescription opioids has increased and prescribers have become more cautious.

Purdue's drugs are just a slice of the opioids prescribed, but critics assign a lot of the blame to the company because it developed both the drug and an aggressive marketing strategy.

According to a lawsuit filed by the Massachusetts attorney general, the company pushed big sales of OxyContin from the start. Doing so meant persuading doctors who had been reluctant to prescribe such strong painkillers that this one was safe.

A court filing asserts that Richard Sackler, then a senior vice president in charge of sales at the company, told the sales force at a launch party for the drug: "The launch of OxyContin Tablets will be followed by a blizzard of prescriptions that will bury the competition. The prescription blizzard will be so deep, dense, and white."

Along with others in the industry, Purdue paid doctors who attested to the drug's safety and became a major funder of groups that advocated for pain patients and campaigned to have opioids prescribed.

The Associated Press and the Center for Public Integrity found the industry and groups it funded were also politically active, spending more than $880 million nationally on lobbying and campaigns from 2006 through 2015. That spending helped the industry fight off restrictions on prescribing the powerful painkillers.

All those issues are part of the lawsuits facing the drug industry now. The governments that are suing want reimbursement for costs associated with the opioid crisis and also funding for drug treatment and abuse-prevention programs.

In court filings, Purdue has pointed out that its products were approved by federal regulators and prescribed by doctors.

A federal judge overseeing close to 2,000 of the cases has been pushing the parties to reach a grand settlement that would make a difference in the opioid crisis. The judge, Cleveland-based Dan Polster, has scheduled a trial for the claims brought by Ohio's Cuyahoga and Summit Counties for October.

One lawyer who is suing Purdue on behalf of clients including the city of Albuquerque, New Mexico, and the state of Utah, which has signed on to the tentative settlement, said it's long been a consideration that Purdue could not afford to pay the massive amounts being sought in the lawsuits.

"I don't think there's enough money in that company to pay for the damages that are claimed," said Jonathan Novak.

That is one reason there are other defendants in most opioid lawsuits, he said, including members of the Sackler family and huge drug distribution companies such as McKesson Corp. and Cardinal Health. State and local governments have also been battling over how any national settlements would be distributed.

Organizations facing big lawsuits have a long history of bankruptcy claims.

Dozens of asbestos companies have done so since the 1980s. Last year, USA Gymnastics filed for protection as it faced lawsuits over sexual abuse by team doctor Larry Nassar.

Earlier this year, Pacific Gas & Electric Corp. sought bankruptcy protection because it faces billions of dollars in potential damages from lawsuits over catastrophic wildfires in California.

And in June, another company that makes opioids, Insys Therapeutics, filed for bankruptcy just days after reaching a $225 million settlement with the federal government over a kickback scheme. Now, a bankruptcy judge will have to sort out how much of that will be paid.

Vincent Buccola, a lawyer and professor of business ethics, said Purdue may be trying to avoid going to court in states that have been deeply harmed by the opioid epidemic.

"That's not the jury you want to face," said Buccola, who teaches at the University of Pennsylvania. "So you might try to stop that litigation from happening and consolidate it in front of bankruptcy judge who you hope will be more favorable."

Associated Press reporter Matthew Perrone in Washington contributed to this report.

Cannabis regulation in Mexico is a key topic this week. The US, Canadian, and Mexican economies are more closely intertwined than other countries. According to the U.S. Chamber of Commerce, about 14 million US jobs relate to trade with Mexico and Canada. Therefore, these countries might take cues on regulating an industry from each other.

Cannabis legalization

Cannabis regulation is a good example. After Canada legalized marijuana for recreational use in October 2018, legalizing marijuana in Mexico and the US gained momentum.

While several US states legalized recreational cannabis, Mexico wants to move in that direction as well. A bill to regulate cannabis was introduced in the Senate on September 3. Senator Julio Salazar, the bill’s sponsor, hinted at taking cues from Canada and the US on regulating cannabis. As a result, there will be a discussion on the bill this week. 

Why does Mexico need to regulate marijuana?

Mexico has a history of drug-related crimes. The country has one of the biggest drug trafficking cartels led by El Chapo Guzman. Regulating marijuana could reduce drug crimes in the country.

For example, keeping “profits out of the pockets of criminals” was one of the goals for legalizing and regulating recreational cannabis in Canada. The country legalized cannabis to introduce a legal marketplace for companies. As a result, the companies would have access to capital markets to build the industry. The companies would also conduct research and develop advanced marijuana-infused products. Growth in the legal cannabis market would replace the illicit market.

Canopy Growth (WEED) (CGC), one of the biggest players in the cannabis market, offers several brands to recreational customers. Aurora Cannabis (ACB) doesn’t expect too much demand from advanced cannabis-infused products, according to a Bloomberg report. There’s also the potential for Aphria (APHA) to develop the vaping market in Mexico if legalization follows through.

What we think

While Mexico moves to regulate marijuana, Canadian companies might sell their products to a new market. However, enforcing the regulations will determine the success in Mexico. According to Transperancy.org, Mexico ranked 138 out of 180 on the Corruption Perception Index in 2018. Uruguay, which was the first country to legalize and regulate recreational marijuana, was ranked at 23. Canada was ninth on the same index.

Federal marijuana legalization in the US might be even more distant. Even individual states face setbacks regarding cannabis regulations. However, President Trump might legalize cannabis. With the 2020 election around the corner, we’ll have to see how he approaches the issue. The Trump administration might ban vaping, which could be one of the biggest markets for marijuana companies.

Ontario said its government-owned cannabis business lost $42 million in the last fiscal year, while the province collected barely half the amount of excise taxes it estimated it would generate, in the latest symptoms of a shaky start to legalizing recreational pot in Canada’s most populous province.

The Ontario Cannabis Retail Corporation, a crown corporation that operates the Ontario Cannabis Store’s online retail business and sells wholesale cannabis to the province's private retail stores, generated $64 million in the fiscal 2018-2019 year, according to public accounts released on Friday.

However, expenses at the OCRC ballooned to $106 million in the twelve months ending Mar. 31, up from $6 million in fiscal 2017-2018 when the government commenced operations of its cannabis business.

Daffyd Roderick, a spokesperson for the OCS, said the agency wasn’t able to book wholesale revenue from selling into the first wave of physical retail stores in the latest fiscal year, which hurt the crown corporation’s bottom line.

“OCS expects continued revenue growth as the industry evolves and Ontario’s private retail store network expands to meet the needs of adult consumers across the province,” Roderick said in an email to BNN Bloomberg.

“Cannabis legalization is a new venture for Ontario,” Marc Pichette, a spokesperson for the province's finance ministry, told BNN Bloomberg in an email.

Developing the province’s retail framework — needed to effectively stamp out the black market — also led to some initial costs, he added. 

Meanwhile, the Ontario government said Friday it generated $19 million in revenue from cannabis excise taxes in its last fiscal year, falling well short of the $35-million estimate presented in the most recent provincial budget.   

Legal cannabis sales in Ontario have totalled $121 million since October, the second-largest amount in the country behind Alberta which has sold $124 million, according to Statistics Canada. However, sales of recreational cannabis in Ontario have been off to a sluggish start amid a lack of available bricks-and-mortar retail outlets, supply shortages, and various logistical issues.

CBD edibles and vapes spiked with a variety of synthetic marijuana compounds have found their way to consumers in Louisiana, Maryland and nearly a dozen other states, according to a nationwide Associated Press investigation into unregulated cannabidiol products. Synthetic marijuana, often marketed as K2 or Spice, has been linked to mass hospitalizations and other health emergencies across the U.S. and Europe. While they have nothing to do with cannabis plants, synthetic marijuana chemicals somewhat mimic the activity of cannabinoids, but they are significantly more potent. Adverse reactions to synthetic marijuana range from fainting and dizziness to vomiting, heart and lung illness, coma, and even death.

Investigation Uncovers CBD Vape Cartridges and Edibles Spiked with Synthetic Marijuana

The U.S. hemp-derived cannabidiol industry is growing rapidly, thanks to the lifting of the ban on hemp products. But unregulated, untested CBD products still dominate the market. And while many products come from reputable companies that are as transparent as possible about their manufacturing processes, some originate from sources that are lacing products with dangerous synthetic chemicals.

The term synthetic marijuana is somewhat of a misnomer. It’s a catch-all term for unknown chemical mixtures sprayed on or added to smokable herbs and flowers and typically inhaled or ingested, hence its association with cannabis. These drugs provide a cheap, intense and dangerous high. And now, investigators are finding them in CBD vape and edible products.

AP’s investigation began with a nationwide survey of law enforcement. That survey revealed that at least 128 of 350 CBD products labs tested contained synthetic “marijuana.” Gummy bears accounted for 36 of those 128. The rest were vape products. AP says most of the testing occurred in Southern states. And in Mississippi, labs detected fentanyl in some products labeled CBD.

Through the survey, AP obtained a list of brands and products containing synthetic marijuana. It then sent reporters to purchase those products in retailers across the U.S. and have them tested. In all, AP turned up contaminated CBD products in 13 states. Some of the products could be purchased online and shipped anywhere in the U.S.

Because the investigation focused on suspect brands and products, its results don’t represent the CBD market as a whole. Still, the report highlights the dangers of untested cannabidiol products at a time when the U.S. is still dealing with a string of vape-linked illnesses and deaths.

Green Machine, Yolo Vape Cartridges Found Containing Synthetic Marijuana

AP reporters have so far tested about 30 suspicious cartridges purchased at convenience stores mostly located in Southern states. Lab tests showed that 10 of the 30 contained synthetic marijuana, including Juul-compatible Green Machine CBD pods and Yolo CBD vape cartridges. Test results found the cartridges contained chemicals linked to multiple deaths in Europe and dozens of hospitalization in the U.S., spanning states from Utah to Louisiana to Maryland.

One of those cartridges, sold at a mom-and-pop convenience store, the 7 to 11 Store, put a young man in a coma in South Carolina. Jay Jenkins said two puffs of a vape cartridge he thought contained CBD induced hallucinations and made him feel like he was dead. According to Jenkins’ medical records, he suffered acute respiratory failure after being rushed to the hospital, where he fell into a brief coma.

There are no consistencies in terms of the chemicals found or the products contaminated with them, either. Products found to contain no synthetic marijuana in one state tested positive for them in another. For Green Machine CBD pods, for example, four of seven tested positive for synthetic marijuana.

Furthermore, investigators had little luck tracking down anyone to hold accountable for the spiked CBD products. Retailers typically point higher up the supply chain, placing blame with producers and manufacturers. The absence of any regulatory oversight makes it very difficult to track down the people behind the laced CBD products. As a result, the American Association of Poison Control Centers has listed CBD as “an emerging hazard.”