Cannabis Prospect Magazine - June '24

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Vape Market Sales

Over the last six months, the Canadian cannabis vape market has experienced distinct trends across provinces, product types and extract types. In this issue, we examine some of those findings.

The U.S. Hype Machine

The recent U.S. hype can be helpful in driving entrepreneurial energy and public awareness. However, that hype can also be too extreme when operators and investors ignore the realities of business fundamentals

EFT Scams

There’s a new scam on the web: Electronic Fund Transfer (EFT) scams. Most are familiar with established scams like phishing and ransomware and the damage they can cause.

Cannabis Prospect Magazine

VOLUME 6 ISSUE 3 JUNE 2024
YOUR SEED-TO-SALE PUBLICATION FOR THE CANADIAN CANNABIS MARKETPLACE

Growing Influence

C3 is the national voice of the Canadian cannabis industry.

Working with our Members we are pushing for urgent change to ensure the financial viabilty of our sector. Learn more about our current priorities or apply to join at cannabis-council.ca.

Over the last six months, the Canadian cannabis vape market has experienced distinct trends across provinces, product types and extract types. Here’s an in-depth look at these patterns with detailed comparisons to the previous year.

One such challenge the cannabis industry has faced that has raised eyebrows and sparked debates is lab shopping. This practice, prevalent in the cannabis testing scene, involves submitting a cannabis product to different testing labs and then partnering with the lab that provides the most favourable test results.

Similar to earlier iterations of cannabis industry shifts, the hype can be helpful in driving entrepreneurial energy and public awareness. However that hype can also be too extreme when operators and investors ignore the realities of business fundamentals, as the world saw after the passing of Canada’s C-45.

After making waves in the US with its cannabis brand TICAL, founding member of the Wu-Tang Clan Clifford “Method Man” Smith hopes to bring its cannabis brand north of the border. We spoke with Nathaniel “Nutta TICAL” Vereen, brand and tour management for Method Man about the next steps for the brand.

Celebrate 5 Years with Cannabis Prospect!

This February, Cannabis Prospect Magazine put out a special issue celebrating five years into cannabis legization in Canada.

If you’re a licensed producer, cannabis company or wish to support the magazine with this special milestone please email media@cannabisproonline. com for more information.

June 2024 | Cannabis Prospect Magazine 3 Table of Contents/June 2024 REGULARS 4 From the Editor 6 Events 8 News 21 Product Spotlight 27 Product Showcase 30 List of Advertisers 31 Appointments
THE
20
U.S. HYPE MACHINE
VAPE MARKET SALES 14
TICAL PROFILE 22
LAB SHOPPPING 18

September 14-15, 2024

Elevate Cannabis Industry Expo

Mirage Banquet Hall

Toronto ON http://elevatecannabisexpo.com

September 29-October 1, 2024

Grow Up Conference

Edmonton Convention Centre

Edmonton AB https://growupconference.com/alberta

To submit an event for inclusion in the Cannabis Prospect Magazine calendar, email media@cannabisproonline.com

Cannabis Prospect Magazine

CANNABIS PROSPECT MAGAZINE VOL. 6, ISSUE 3

SUBSCRIPTION SERVICES

For subscription services visit www.cannabisproonline.com or email david@cannabisproonline.com. For change of address, please include the old address and new address, along with an address label from a recent issue, if possible. If an address is not updated when the magazine is mailed, we are not responsible for delivery of your magazine. If the Post Office alerts us that your magazine is undeliverable, we will suspend our subscription until a correct address is received.

EDITORIAL

For editorial submission requests or article ideas please email media@cannabisproonline.com

Cannabis Prospect Magazine assumes no responsibility for any claims or representations contained in the magazine or in any advertisement. All materials contained are for educational purposes and intended for the legal marijuana business. Cannabis Prospect does not encourage the illegal use of any of the products contained within. ISSN 2562-1033. CANADIAN PUBLICATIONS MAIL PRODUCT AND SALES AGREEMENT NO. 43596516

Publisher and Editorial Director David Halpert

Account Representative & Contributor Christina Michael

Cannabis Prospect Magazine is published six times a year by Straight Dope Media Inc., 44 Valley Woods Road, Unit 1802, Toronto Ontario M3A 2R6 Canada

ADVERTISING

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4 Cannabis Prospect Magazine | June 2024
CONFERENCES & EVENTS

Minor Gains

It should come as no surprise that the annual 2024 Federal Budget released in April did not include any changes to cannabis excise rates despite recent recommendations for such changes by countless individuals to the federal House of Commons Standing Committee on Finance and years of industry lobbying, as well as numerous reviews of The Cannabis Act, the most recently occurred last year. Excise taxes are taken at both the federal and provincial levels, and as a result both hurt license producers (LPs) as well as hinder growth of cannabis as an industry overall. Keep in mind, ever since cannabis became nationally legalized five years ago there’s been a decreasing per gram rate on dried flower, leaving producers with even greater razor-thin profits, if at all.

If we’ve seen any legislative movement when it comes to cannabis as of late it’s been the provinces leading the charge in terms of progress as the cannabis industry wrap up the first half of 2024.

The Ontario Cannabis Store (OCS), for instance, has plans to soon allow cannabis farmgate stores to sell cannabis products that are exclusive to their location. While Ontario’s farmgate rules have allowed licensed cannabis producers to apply to operate an Authorized Retail Store at their production facility, one key difference will be that these producers would be able to sell products directly from their farms rather than first having to send them through the OCS distribution centre, bypassing that intermediary altogether.

(AGLC). As of January 2024, the AGLC no longer requires retailers to keep their products in locked display cases when the store is closed, however, these new changes can still mean significant savings for any future stores seeking to create a secure storage area.

BC is updating its rules for how long cannabis can sit in its warehouse before it has to be returned to the producer. Under the new rules, which the BC Liquor Distribution Branch (LDB) will begin using in November 2024, cannabis flower, pre-rolls (including infused) and cannabis edibles products must be delivered to the LDB distribution centre within three months from the packaging date. Inventory of these products will be held for a maximum of six months from the date it is received by the LDB.

It should also be noted that Groupe SGF is bringing a class action to court on behalf of the plaintiff, Gabriel Bélanger. Bélanger argues that the SQDC forces people to make “blind purchases” of cannabis products listed on its website. Groupe SGF says its goal with this collective action is justice for cannabis consumers. The class action includes anyone who has purchased cannabis in the “dried flower” and “pre-rolled” categories for which the strain displayed on the SQDC website has been “strain rotating” since October 17, 2018.

No doubt these aforementioned changes will be welcomed by both producers and retailers alike.

In Alberta, new cannabis stores may have a chance to save money on their secure storage rooms after recently announced regulatory changes from the Alberta Gaming, Liquor and Cannabis

President / CEO, Straight Dope Media Inc.

@cannabispromag

US ONLINE

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6 Cannabis Prospect Magazine | June 2024
FOLLOW
LETTER TO THE EDITOR

Clearleaf Inc. Announces Launch of SampleDirect Platform alongside Cova, Greenline, a BLAZE® Company, and TechPOS

Clearleaf Inc., the innovative force behind Canada’s leading free cannabis e-commerce menu service “Buddi,” is thrilled to introduce SampleDirect. This groundbreaking platform streamlines product and trade marketing opportunities for cannabis brands and sales brokers, while enhancing product selection and knowledge for retailers. By facilitating cannabis sampling programs and providing product showcasing and preselling opportunities before products become available through provincial government wholesalers such as the OCS, AGLC, and BCLDB, SampleDirect revolutionizes the way brands and retailers collaborate.

SampleDirect offers brands and sales brokers a seamless solution for exchanging product information and facilitating sample distribution across 3000+ licensed cannabis stores in Canada. Simultaneously, it provides retailers with a simple tool to explore and sample products, informing their inventory decisions and increasing product knowledge, while empowering them to take more control of the sampling request process. This platform also allows brands to accurately measure the return on investment (ROI) of their sampling initiatives. Integrated into existing pointof-sale systems, including Cova, Greenline, a BLAZE® Company, and TechPOS, SampleDirect will be accessible in all provinces with privatized cannabis retail. For more information about SampleDirect, email info@sampledirect.io, or visit sampledirect.io

Groundbreaking Study Reveals: CBD Gummy Product Proven to Enhance Relaxation Levels by 300% vs Capsule in Unique Brain Technology Research Kinloch Wellness Ltd. (Kinloch Wellness),

OCS Publishes Inaugural Social Impact Report

The Ontario Cannabis Store (OCS) published its inaugural Good All Around Social Impact Report to recap the progress it has made under its first Social Responsibility Strategy from 2021 to the end of 2023. The Social Impact Report summarizes the OCS’s strategic social responsibility objectives and illustrates how the organization is driving positive change in the areas of environmental sustainability, diversity and inclusion, and cannabis literacy. Highlights from the OCS’s first three years of social responsibility programming include: distributed $500,000 to six organizations in support of cannabis research and community-based programming, provided 26 equity and access grants designed to increase the presence and participation of equity-deserving groups and small businesses, invested $319,000 in Black-led initiatives, and drove more than 600,000 visitors to the OCS’s Cannabis Made Clear resource hub for unbiased, fact-based and current cannabis education.

a pioneer in non-psychoactive, plant-based health and wellness products, has announced the results of a landmark observational study conducted in partnership with Zentrela, Inc. (Zentrela), a leading neuroscience research company. This study marks a significant step forward in the cannabis industry, providing consumers with objective, scientific data on the relaxation effects created by Kinloch Wellness products. It also provides significant insights into the increased relaxation level effects of these products for female study participants. Key findings of note from the study:

» For female study participants, The Kinloch Serene™ CBD Green Apple Gummy Drop, containing CBD and terpenes, was five times more effective at relaxing the group than the CBD-only comparator product.

» On average, for all participants, The Kinloch Serene™ CBD Green Apple Gummy Drop was three times more effective at relaxing the study group than the comparator CBD-only product.

» Results from this study demonstrate that two products can contain identical amounts of the same cannabinoids and yet create very different effects (Kinloch Serene™ CBD Green Apple Gummy Drop vs the comparator).

Greenway Receives International Cannabis Accreditation

Greenway Greenhouse Cannabis Corporation has received CUMS-GAP and GACP certification. This demonstrates that the facility meets strict international standards, providing the company a way to distribute its product internationally. The company has entered into conversations with multiple different international cannabis purchasers, including current wholesale customers who already have established international sales routes, opportunities, and demand. “Receiving these

certifications opens up a whole new world of opportunities for Greenway. We have been talking to companies that export into multiple countries around the world, who are eager to work with us to bring Greenway’s cannabis to the global market,” said Jamie D’Alimonte, CEO of Greenway. “With our most recent expansion, we are able to scale up production to meet any new demand for our product internationally. These new sales opportunities should help us increase our revenue, gross margins, and be a key cog in achieving true profitability.” Greenway’s cultivation facility is designed for high-quality, low-cost production, and has an annual cultivation capacity of 24,000 kg. The CUMS-GAP certificate and GACP compliance certificate follows the WHO and EMA GACP guidelines, with the certification being completed through Control Union. These certifications mean that all cannabis that begins to be grown, as of April 17, 2024, meets the criteria to be distributed to certain countries outside Canada.

Class Action Against the SQDC

Groupe SGF (Legal Advisors and Cannabis Consultants) announced the launch of a class action in court on behalf of Mr. Gabriel Bélanger against the Société Québécoise du Cannabis (SQDC). The class action application alleges that the SQDC does not comply with the Consumer Protection Act (CPA). The plaintiff in the class action, Gabriel Bélanger, is determined to present in Superior Court the fact that he is obliged by the state company responsible for the sale of recreational cannabis in Quebec to make blind purchases when he orders cannabis products on the SQDC website. In fact, all cannabis products that are sold online and that have the mention “strain rotating” in their description sheet do not comply with the CPA since it provides that consumers must have access to a description which includes the characteristics and technical specifications. By not allowing consumers

8 Cannabis Prospect Magazine | June 2024
NEWS
M O R E I N F O

to know what variety is in the product when ordering, the SQDC forces consumers to make blind purchases. The class action includes all individuals who have purchased cannabis in the “dried flower” and “pre-rolled” categories for which the strain displayed on the SQDC website is “strain rotating” since October 17, 2018. For more information on the class action, please visit the Groupe SGF website at https:// groupesgf.ca/action-collective-sqdc

Cronos Enters United Kingdom Cannabis Market

Cronos Group Inc. announced that it is expanding its medical brand, PEACE NATURALS, into the United Kingdom market with its first shipment of cannabis flower to GROW® Pharma, a leading distributor of prescribed medicinal cannabis products in the UK. Cronos will provide high-quality premium cannabis products, which have become synonymous globally with the PEACE NATURALS® brand, to patients in the UK through this partnership. The company’s investments in R&D, tissue culture, and its cannabis genetics breeding program have enabled it to expand to Germany and Australia in the past year. Grow Pharma works with UKbased clinics as a wholesaler and pharmacy distributor as well as directly with patients by handling prescriptions and delivering products by mail. Its focus on quality of the supply chain, breadth of its portfolio and delivery of the best service to patients support its strong position as one of the market leaders.

High Tide Signs Limited Cannabis Distribution Agreement With Manitoba Liquor and Lotteries

High Tide Inc., the high-impact, retailforward enterprise built to deliver real-world value across every component of cannabis, announced that, through its wholly owned subsidiary Valiant Distribution Canada, it has

Aurora Marks First Shipment of Medical Cannabis to the New Zealand Market

Aurora Cannabis Inc., the Canadian based leading global medical cannabis company, is proud to announce the arrival of Aurora branded medical cannabis products to the New Zealand market. This new line of premium dried flowers represents a significant milestone in medical cannabis accessibility in New Zealand, an emerging market poised for growth. The initial product portfolio includes cultivars grown exclusively by Aurora, with each strain meticulously bred and cultivated to address a variety of patient needs. These carefully crafted offerings reflect Aurora’s commitment to providing prescribers and patients with unparalleled quality, potency, and therapeutic benefits. “As a global leader in medical cannabis, Aurora is proud to be at the forefront of advancing patient access in New Zealand with this first and meaningful product launch,” said Miguel Martin, CEO, Aurora.

signed an agreement with the Manitoba Liquor and Lotteries Corporation (MBLL), through which it will be a distributor of cannabis products to cannabis retailers in Manitoba. Through this agreement, Valiant will be able to warehouse products in the province from licensed producers and distribute these products to licensed retailers while being responsible for inventory management and tracking. “We are thrilled to be extending our wholesale and distribution services into Manitoba through Valiant Distribution Canada, building on our established setup and experience in wholesaling cannabis products and consumption accessories in Saskatchewan, consumption accessories through our Calgary warehouse, as well as leveraging our experience and success in distributing in the United States and Europe through our warehouses in Las Vegas and Amsterdam,” said Raj Grover, Founder and Chief Executive Officer of High Tide.

SNDL and Nova Cannabis Complete the Assignment of Dutch Love Stores to Nova CannabisLiquor and Lotteries

SNDL Inc. and Nova Cannabis Inc. announced that they have completed the assignment of SNDL’s rights to own or operate four Dutch Love stores (the “Dutch Love Stores”) to Nova (the “Assignment”), upon the terms announced on April 1, 2024. “This is a key step in our strategy for growth and focus on prime real estate,” said Marcie Kiziak, Nova’s Chief Executive Officer. “We are excited to transition these stores to the Value Buds banner, marking our entry into the B.C. market. We are confident that our Value Buds banner is exceptionally well-positioned to fill a critical gap in the marketplace. This move aligns perfectly with our objective for smart, value-driven expansion.” As consideration for the Assignment, Nova issued to SNDL $8.179 million of Nova shares based on the 20-day

VWAP of the Nova shares on March 28, 2024. The addition of the Dutch Love Stores brings Nova’s total store count to 99 and SNDL’s direct and indirect cannabis store count across all retail banners to 188.

Canadabis Capital Expands into European Market

with EU-GMP Partners

Canadabis Capital with Sub Stigma Grow, a leading Canadian cannabis company, is pleased to announce its strategic expansion into the European market through a significant distribution agreement. This marks a pivotal moment in Stigma Grows history, as the company’s innovative products will now be introduced to international markets. Under this new agreement, Stigma Grow will be distributing its high-quality cannabis products in several key European countries, including Portugal, Germany, and Israel, among others. This move represents a significant milestone for Stigma Grow as it continues to grow its global presence and deliver its cutting edge products to new audiences. “This expansion represents a major step forward for our company and underscores our commitment to bringing our cutting-edge products to consumers worldwide,” said Travis McIntyre, CEO of Canadabis Capital. With a reputation for excellence and a track record of innovation, Stigma Grow is well-positioned to make a significant impact on the European cannabis market. The company’s products are known for their quality, consistency, and effectiveness, and have garnered a loyal following in Canada and beyond.

10 Cannabis Prospect Magazine | June 2024
NEWS
Forward to media@cannabisproonline.com
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Glacial Gold’s MAX THC Double D Infused Prerolls

The national launch of Glacial Gold’s MAX THC Double D Infused Prerolls includes two flagship flavours, Grape Escape and Cherry K.O. (Cherry Kola) in a 3 x 0.7g format. Featuring hang dried and hand trimmed whole flower, infused with distillate, diamonds, and rolled in kief delivering one of the highest potency infused prerolls available in the regulated Canadian adult use market, with up to 1000mg THC per three-pack. Nextleaf will be debuted a one-of-a-kind Glacial Gold brand experience at the consumer and retailer focused event ‘KIND Gardens’ in Vancouver BC April 11. It also exhibited it as part of an innovative medical patient pavilion at the GrowUp Conference in Toronto May 27-29th 2024. For more information please visit www.glacial.gold

Pure Sunfarms Introduces Hi-Def Pre-Rolls

Pure Sunfarms Corp., a leading producer in the Canadian cannabis market and wholly owned subsidiary of Village Farms International, Inc. introduces the next product in the evolution of cannabis, Hi-Def Pre-Rolls. Building on its reputation for delivering the best-selling flower in Canada, Pure Sunfarms launched a first-of-itskind pre-roll, featuring pure ground flower optimized for high potency, with THC content of 36-44% with no concentrates, infusions, or kief. Through expert cultivation and a deep understanding of cannabis plants, Pure Sunfarms has brought to life the full potential of its flower, redefining what’s possible in the non-concentrate flower category. Hi-Def Pre-Rolls are available in the Kush God cultivar, just in time for 4-20 in Alberta and BC, with other provinces to follow. For more information please visit www. puresunfarms.com

Tilray Brands, Inc. announced a bold new range of cannabis-infused beverages from XMG, under two of its sub-brands: XMG Zero and XMG Plus (“XMG+”). XMG Zero, an extension of XMG’s original core line, now offers two new THC beverages: Cream Soda Zero and Orange Soda Zero. XMG+, a boosted version of XMG original, focuses on high CBG and guarana extract (for naturally occurring caffeine), while revealing its new Banana Brain Freeze and Iced Rocket Berry flavours. Recognized for its diverse offerings and unique profiles including a variety of THC and CBG ratios, XMG is reshaping the cannabis beverage market with unparalleled variety and quality. This refreshing beverage is the same formulation of XMG’s Black Cherry Alt, featuring the same fruity blend of black cherry sweetness in a 355mL can featuring 10mg of THC. Cherry Cola (Coming soon): An elevated nostalgic beverage that’s as classic as it sounds. For more information on Tilray Brands, visit Tilray Brands, Inc. and follow @Tilray on Instagram, Twitter, Facebook, and LinkedIn.

CCELL’s Mini Tank and Atom

CCELL®, the world’s leading technology brand focused on creating trendsetting vape hardware products and cuttingedge vaporization technology, introduced two new All-In-One vape devices, the Mini Tank and the Atom. The Mini Tank measures only 2.48 inches long (approximately 63 mm), making it the company’s most compact vape device in terms of height. Purpose-built for discretion, the device is also equipped with an innovative multipurpose slide switch that prevents leaks or clogs, and seals in aromas emanating from the oil within. The Atom introduces a modern and compact design with 2mL and 3mL oil capacities. Engineered with the EVOMAX heating element, this AllIn-One vape ensures an extended consumption experience without compromising vapor volume or taste. The scientifically designed structure of the element and its optimized heating distribution make the device a versatile option for working with distillates, live resins, live rosins, liquid diamonds, and any other oil type. Learn more about CCELL® at www.ccell.com

PRODUCT SHOWCASE 1
2 4 4 12 Cannabis Prospect Magazine | June 2024
Tilray Releases XMG Zero

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Companies across Canada are adapting to new changes brought on by this pandemic, and the cannabis industry is no exception. Even though most provinces have named cannabis cultivators and retailers alike an essential service, reaching the right people has never been more important.

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2024 Vape Market Insights: Strategic Sales Trends to Fuel Your Success in Canadian Cannabis

Over the last six months, the Canadian cannabis vape market has experienced distinct trends across provinces, product types and extract types. Here’s an in-depth look at these patterns with detailed comparisons to the previous year.

VAPE SALES SO FAR IN 2024 VS. 2023

Analyzing the last six months of general vape sales reveals several significant trends:

Alberta (AB): Alberta, a province known for its dynamic cannabis market, saw total vape sales reach 3.12 million units over the previous six months, a 17.8% increase from the previous year’s 2.65 million. This growth suggests a rising interest among Albertans in vape products, which could be attributed to the wide variety of devices and formulations now available. With retailers expanding their product ranges, new and returning consumers find options that cater to diverse needs.

British Columbia (BC): In the last six months, BC’s vape sales totaled 1.8 million units, a 5.7% growth from 1.7 million units last year. While this demonstrates steady progress, it hints that BC consumers prefer a more diverse array of cannabis products. This is consistent with BC’s reputation for pioneering the use of alternative cannabis forms like edibles and concentrates, which complement their interest in vape products.

Ontario (ON): Ontario saw remarkable growth with 4.92 million units sold in the previous six months, a 10% increase from the previous year’s 4.47 million. Ontario remains the largest market, with its diverse population supporting strong demand for various cannabis vape products. The province’s highly competitive market motivates brands to innovate and differentiate through creative flavours and potent formulations.

Saskatchewan (SK): Unlike other provinces, Saskatchewan experienced a decline of nearly 11% in total vape sales in the last six months compared with the same time period a year ago,

dropping from 810,420 to 722,473 units. The reduced interest in disposable vape products partly explains this decline. However, cartridges continue to hold a significant share, and targeted marketing could help reinvigorate this market.

VAPE CARTRIDGES SALES ANALYSIS

Cartridges continue to lead the vape market, with different provinces showing unique trends:

Alberta (AB): In the last six months, Alberta sold 2.57 million units of cartridges, representing a 13.4% increase from last year’s totals. The introduction of higher-potency cartridges and distinctive flavour profiles have drawn in both new users and experienced cannabis enthusiasts. Brands are capitalizing on this trend by offering new terpene-rich formulations.

British Columbia (BC): BC sold 1.47 million units, a modest 4.1% increase year-over-year. Despite steady growth, cartridge sales face competition from other cannabis formats. Retailers who focus on educating consumers about the benefits of cartridges could further expand this market.

Ontario (ON): Ontario had the largest cartridge market, with more than 4.05 million units sold in the last six months, an 8% increase from the previous year. Ontario’s expanding retail landscape and diverse demographic contributed to the growth in cartridge sales. The development of formulations that appeal to various consumer preferences has helped solidify cartridges’ dominance.

Saskatchewan (SK): Saskatchewan reached 676,699 units in cartridge sales so far this year, up slightly by 3.7%. Competition from other cannabis formats is limiting cartridge growth. However, cartridges remain a popular format among loyal consumers due to their convenience and potency.

Vape Disposables Sales Analysis

Disposable vape products have seen varied performance across provinces:

14 Cannabis Prospect Magazine | June 2024 ACCESSORIES
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Alberta (AB): Alberta led in total growth in disposable vape sales, reaching 549,263 units so far this year, an impressive 17% increase from the previous year’s total. Disposable vapes’ all-in-one design and portability make them appealing, particularly to casual users and those seeking convenience. Brands offering unique flavours and limited-edition varieties have found a dedicated audience in Alberta.

British Columbia (BC): BC saw relatively modest growth, reaching 330,014 units in the previous six months, up just 2.6% year-over-year. BC’s consumers appear more inclined to invest in cartridge systems, partly driven by environmental concerns. Despite this, innovative disposable vapes with higher potency levels could attract interest from niche market segments.

Ontario (ON): Ontario’s disposable vape sales hit 871,727 units in the first six months of the year, growing 12.7% year-over-year. With a growing retail presence, Ontario consumers have ample access to different disposable vape brands. The trend toward potent disposable vapes with customized terpene profiles keeps this market expanding.

Saskatchewan (SK): Disposable sales in the first six months of the year in Saskatchewan were relatively low, totaling just 45,774 units. However, this represents significant growth, nearly doubling from the previous year. Innovative marketing strategies targeting this market could yield promising returns.

EXTRACT SALES ANALYSIS

Each province displays different preferences for extract types:

CO2 Extracts: Alberta, British Columbia and On-

“ Overall, Canadian cannabis vape sales trends in the first half of 2024 reveal a market that isn’t only maturing but also increasingly sophisticated. Each province has distinct consumer behaviours that guide product development and marketing strategies.

tario all showed strong demand for CO2 extracts, collectively selling more than 1.74 million units. This reflects a growing preference for “cleaner” extracts, as consumers become more health-conscious. CO2 extraction is often perceived as a more sustainable and safe process.

Cured Resin: Cured resin extracts have particularly gained popularity in BC and Alberta, with 47,391 units sold in these provinces. Their complex terpene profile appeals to consumers seeking a distinctive cannabis experience.

Diamonds: Ontario stands out in the diamonds market, accounting for more than 271,000 units sold. This format’s high potency and purity attract

a segment of experienced consumers who value the intense effect.

Distillate: Distillate remains the dominant extract type across Canada, accounting for nearly 60% of total extract sales. Alberta and Ontario particularly have high demand, with many consumers favouring the versatility and potency of distillate.

Live Resin: Ontario leads in live resin sales, representing 635,897 units. This terpene-rich format appeals to connoisseurs seeking flavour, and expanding product variety in this category could draw further attention.

Rosin/Solventless: Although the smallest category, rosin/solventless extracts are gaining traction in Ontario, Alberta and BC. Their solvent-free processing aligns with the increasing demand for more natural cannabis products.

Conclusion

Overall, Canadian cannabis vape sales trends in the first half of 2024 reveal a market that isn’t only maturing but also increasingly sophisticated. Each province has distinct consumer behaviours that guide product development and marketing strategies. Cartridges continue to dominate as the primary vape format, but disposables are finding a niche audience seeking convenience. Extract types like distillate and live resin maintain popularity due to their potency and flavour. These regional trends provide valuable insights into the future of the Canadian vape market, highlighting opportunities for brands to innovate. Brands that embrace consumer preferences and respond to demands for unique flavours, potency and natural ingredients will find themselves well-positioned for success in this competitive and dynamic market.

Derek Champoux is the VP Brand & Marketing for Greentank Technologies.

16 Cannabis Prospect Magazine | June 2024
ACCESSORIES

INDCO Quic Mixers provide a portable, lightweight solution for mixing materials in five-gallon pails. A ring mount provides a low centre of gravity for steady, worry-free mixing in open-topped or closed five-gallon pails with lids to 12 ¼” OD. Stainless steel folding impellers fit through a 1 ½” opening. Air or electric motors are available, and all models are supplied with a quickchange coupler and shaft design featuring a shaft pin that locks in place during rotation. Air operated versions available with ¾ or 1 ½ HP air motor equipped with control valve to regulate speed from 3003000 RPM, and muffler. Powered by a ½ HP totally enclosed fan cooled motor that is ready to plug in to a standard outlet, the single-phase electric motor option operates at a fixed speed of 1750 RPM (EP version supplied with motor leads only). The newest model in the product line, the MVS-Q, features variable speed control from 35-1750 rpm. Ideal for mixing colorants into paint, remixing settled materials, blending powders into liquids, and general purpose mixing. For more info visit www.INDCO.com, by calling (800) 851-1049, or via email at info@INDCO.com.

New HYPERLUBE H1 from Madison Chemical keeps conveyors running smoothly. Designed for conveyors transporting bottles, cans, and other containers, HYPERLUBE H1 has excellent wetting properties, and is stable in hard or soft water (to 28 grains/gallon (500 ppm) hardness). Typically diluted with ambient water from 1:100 to 1:500, with exact dilutions determined by conditions on site can be applied to conveyors by drip, dip, roller, spray or other suitable method, at rates of 50 to 500 ml per hour depending upon the system. HYPERLUBE H1 is acceptable for use in food and beverage plants as an H1 lubricant with incidental contact. It is ideal for canning and bottling facilities of all types and sizes, including craft brewers and vintners, as well as other food and beverage processing plants, packaging applications, or wherever conveyors are used. For additional information, visit www.MadChem.com, write to them at Madison Chemical, 3141 Clifty Drive, Madison, IN, 47250, call (812) 273-6000, or email solutions@ madchem.com.

Skytree Introduces Leasing Program for Skytree Cumulus Direct Air Capture Units

Skytree is now offering CEA businesses around the world an easier and more cost-effective option to begin enjoying the benefits of on-site generated direct air capture CO2 with the Skytree Cumulus Leasing Program. Launched last September, Skytree Cumulus, which produces 20kg of CO2 per day, is the company’s first Direct Air Capture unit supporting the carbon dioxide supply needs of controlled agricultural environment businesses. Since its debut, Skytree has seen an enthusiastic response and demand from vertical farmers, greenhouse growers, algae producers and cannabis growers among other CEA businesses eager to access a reliable and uninterrupted circular supply of CO2. Through the Skytree Cumulus Leasing Program, qualified customers now have the option of leasing the Cumulus system for either a four- or six-year term with the option to purchase the Skytree Cumulus system at the end of the lease period. For more info on Skytree Cumulus please visit https://bit.ly/44ekomJ

CryoMass Announces CryoSift Separators™

Building on eight years of extensive research and development, and over two years of rigorous testing, CryoMass has engineered a modular production model that enhances performance and versatility. Key enhancements include a sectional shaft configuration for the Cryo Auger as a standalone biomass freezing solution for cultivators, improving serviceability, cleaning accessibility, and versatility. The innovative Cryo Auger combines freezing and milling capabilities into a single, efficient step, dramatically reducing biomass volume by 65%. This cutting-edge solution offers immediate storage cost savings, a first-of-its-kind advantage in the industry. A Biomass Separation and Refinement System divided into two sub-modules, enhancing system ergonomics and achieving higher throughput rates for end users. Module #1 efficiently separates the biomass, preparing it for subsequent solvent-based extraction processes or further refinement in Module #2. For more info contact by email at investors@ cryomass.com or by telephone at 303-222-8092.

Portable Quic Mixers for 5-Gallon Pails from INDCO
PRODUCT SPOTLIGHT 1 1 3 2 4 3 4
HYPERLUBE H1
2 June 2024 | Cannabis Prospect Magazine 17

Lab Shopping in the Cannabis Industry: Navigating the High-Stakes Testing Game

As the cannabis industry continues to flourish, so do the challenges it faces.

One such challenge that has raised eyebrows and sparked debates is lab shopping. This practice, prevalent in the cannabis testing scene, involves submitting a cannabis product to different testing labs and then partnering with the lab that provides the most favourable test results. But what exactly is lab shopping, and how can the industry address this issue?

UNVEILING LAB SHOPPING

In the cannabis market, lab shopping refers to the practice of sending a cannabis product to various testing labs before collaborating with the lab that produces the best test results.

Picture this: a manufacturer sends its product—be it an edible, flower, or concentrate—to multiple labs for testing. Each lab analyzes the sample and produces a report detailing various parameters, including THC potency. The game begins when the results differ.

The allure lies in the numbers. If Lab A declares a cannabis pre-roll to contain 32% THC, while Lab B insists it boasts a whopping 40%, the stakes are high. Why? Because consumers crave high-THC products. The more potent the THC, the more a company can charge for its products. And thus, the sly dance of lab shopping begins.

THE HIGH-STAKES CONSEQUENCES

Lab shopping, if left unchecked, can wreak havoc on the cannabis market. Here’s how:

» Inaccurate Microbial Testing: Lab shopping undermines the reliability of microbial testing results. When labs are selectively chosen, the accuracy of microbial limits – critical for consumer safety – is compromised. Consumers rely on accurate microbial data to assess product safety.

» Public Health Risk: Inaccurate microbial testing due to lab shopping poses public health risks. Contaminated cannabis products can harm vulnerable populations, including immunocompromised individuals. This jeopardizes the safety of medical cannabis users.

» Fraudulent Products: When companies cherry-pick labs based on favourable results, they risk introducing fraudulent products into the market. Consumers deserve accurate information about what they are consuming, and lab shopping undermines this transparency.

» Consumer Deception: Lab shopping perpetuates the myth that THC potency is the sole indicator of quality. Cannabis is a complex plant with numerous compounds. Terpenes, for instance, significantly influence taste and aroma. Educating consumers about these distinctions is crucial.

» Lab Closures: Some testing labs have faced dire consequences due to lab shopping. CannaSafe Labs, a prominent cannabis testing facility in California, explicitly blamed this practice for its closure. The relentless pursuit of higher THC numbers led to their demise.

» Legal Implications: If lab shopping results in fraudulent products entering the market, legal repercussions may ensue. Producers and labs involved in deceptive practices could be subject to legal penalties, significantly affecting their operations and reputations.

STRATEGIES TO TACKLE LAB

SHOPPING

So, how can the cannabis industry combat this concealed practice? Here are examples of nine strategies:

» Consumer Education. While not the most radical solution, it is one of the most pivotal. If consumer demand for THC drives lab shopping, then consumers must understand that THC is not the whole story. Education highlighting other compounds, such as terpenes, which affect flavour and the overall experience will help consumers make informed choices beyond just THC percentages.

» Standardized Testing Protocols. For example, California took a regulatory stance by mandating a standardized cannabinoid test for all labs in the state. This move aims to stop the lab-shopping crisis. By ensuring consistent testing protocols, California hopes to level the playing field and restore trust in lab results.

» Second-lab verification is a crucial step toward enhancing the reliability of cannabis-testing results. By involving indepen-

18 Cannabis Prospect Magazine | June 2024

dent labs to confirm the findings obtained by the primary lab, we introduce a robust cross-checking mechanism. This process not only ensures accuracy but also fosters greater confidence in the industry’s lab reports.

» Implementing a round-robin testing approach is a strategic move to enhance the reliability of cannabis-testing results. By rotating samples among multiple labs for blind testing, we eliminate any bias or preconceived notions. Labs will not know which specific samples they are analyzing, ensuring an unbiased evaluation. This systematic process significantly reduces the incentive for lab shopping, fostering clarity and accuracy in the industry.

» Requiring labs to obtain accreditation to ISO/IEC 17025 is a pivotal step toward ensuring the reliability of cannabis testing. Accredited labs undergo rigorous assessments to prove their ability to generate accurate and consistent results. By adhering to stringent quality standards, these labs contribute to the industry’s credibility and consumer confidence.

» Enhancing transparency through publicly sharing lab data is a critical strategy in the fight against deceptive practices. By making lab reports accessible to both consumers and regulators, we create a system of checks and balances. Transparency not only fosters trust but also acts as a deterrent against any attempts at manipulation or lab shopping.

» Enforcing stricter penalties for labs involved in lab shopping is a critical measure.

Regulatory bodies must take a firm stance to maintain industry integrity. By imposing significant consequences, we discourage labs from compromising their ethical standards and ensure a level playing field for all. » Collaboration and effective communication are pivotal strategies in the battle against lab shopping. By fostering dialogue between labs, producers and regulators, we create a united front. Sharing best practices, addressing challenges, and aligning efforts ensure that deceptive practices are minimized. Collectively, we can uphold transparency, accuracy, and integrity in cannabis testing.

THE ROAD AHEAD

Lab shopping is not a simple problem with a straightforward solution. It requires collaboration among regulators, labs, and producers. As the cannabis industry matures, we must prioritize precision, accuracy and consumer well-being. It’s time to change partners in this clandestine dance—to one that values integrity over inflated THC numbers.

SOLUTION

The introduction of advanced photonic decontamination technology in the post-harvest process marks a major advancement in ensuring the safety and purity of cannabis products. This innovative method utilizes high-intensity photon irradiation, also known as a “photonic storm,” to effectively neutralize harmful microorganisms without the need for chemical residues. The technology operates using x-ray light tuned to specific wavelengths that penetrate the cell walls of bacteria,

viruses, fungi, and spores, destroying them at the DNA level. This precise action prevents potential microbial contamination that could pose risks to consumer health.

One of the key benefits of photonic decontamination is its non-reliance on heat or moisture, which can degrade the quality of cannabis flowers. Unlike traditional decontamination methods that might alter the chemical structure of cannabinoids and terpenes, this method preserves the natural integrity and potency of these vital compounds. The result is a cannabis product that not only meets rigorous safety standards but also retains its original appearance, flavour, aroma, and therapeutic effects.

This photonic approach to decontamination is both quick and effective, allowing for the processing of large volumes of cannabis in a short time—essential for keeping up with market demand and meeting regulatory timelines. The adoption of such technology underscores a brand’s dedication to quality and safety, enhancing consumer trust and satisfaction.

By incorporating state-of-the-art photonic decontamination technology into the post-harvest routine, cannabis producers are making a solid investment in both product quality and consumer safety. This scalable solution addresses microbial risks efficiently, supporting the industry’s aim to meet high safety standards and comply with regulations while pioneering innovation in product handling.

Dustin Hughes is a Senior Account Executive at Rad Source Technologies Inc.

LAB TESTING June 2024 | Cannabis Prospect Magazine 19

WHAT JUST HAPPENED? THE RISE OF THE US MARKET HYPE MACHINE

Just about every news organization in the world that covers the cannabis industry had an opinion on the recent announcement that the U.S. Drug Enforcement Agency was rescheduling cannabis from the nonsensical category I to the slightly more rational level III. Most mainstream news organizations depicted the announcement as having immediate effect and mostly focused on the ever-present business killer, 280E of the IRS tax code. They then left the story there while industry business owners, researchers and patients worldwide wondered what it really means.

Similar to earlier iterations of cannabis industry shifts, the hype can be helpful in driving entrepreneurial energy and public awareness. However that hype can also be too extreme when operators and investors ignore the realities of business fundamentals, as the world saw after the passing of Canada’s C-45 and billions of dollars of reckless, over-exuberant spending followed.

When Germany changed its laws earlier in the year, we saw a moderate influx of capital as well as pragmatic business formation along with a flood of M&A activity it had been stagnant for an extended period. As Germany seeks to keep private business growth on a tight rein, it did allow for the beginnings of some practical business development. However, the most significant result of Germany’s policy change was removing cannabis from the narcotics list, resulting in decreased levels of stigma and the legal acknowledgement that indeed cannabis has extensive medicinal benefits proven out in scientific study over decades of research.

Similarly, the U.S. federal shift from Schedule I to III is a hype machine for North American markets to Germany’s removal of cannabis as a narcotic. The simple fact that after one hundred years of lying about it, the U.S. Government has finally been forced to acknowledge that cannabis had and still does have significant health benefits that

are indeed proven and backed by science. Now that the most basic of truths have been confirmed, the real work and opportunities begin.

In U.S. markets and beyond, we can expect to see billions of dollars that have been on the investment sidelines start to enter and empower well-run companies that are prepared to produce high-quality and market-compliant products.

“Similarly, the U.S. federal shift from Schedule I to III is a hype machine for North American markets to Germany’s removal of cannabis as a narcotic. The simple fact that after one hundred years of lying about it, the U.S. Government has finally been forced to acknowledge that cannabis had and still does have significant health benefits that are indeed proven and backed by science.

WHEN TO EXPECT MORE CAPITAL INVESTMENT

According to Raymond Guns, Chief Revenue Officer of Dope CFO, “There will be more equity capital flowing into the cannabis industry as a result of rescheduling. Because more debt lenders will start to lend to the cannabis industry, there will be more capital flowing into the cannabis industry as a result of rescheduling. That said, the capital will only flow to profitable businesses run by a solid team of financially literate owners.”

The reality currently faced by the industry is a wait period of many months of

review within the U.S. government at best, and several years of both federal review and lawsuits at worst. The truth is nobody knows where it all will land and there are already lawsuits presented that will inevitably delay the process further.

COMMODITIZATION OVER TIME?

While the aforementioned rescheduling isn’t the instant “light switch” as portrayed in the press, we’re beginning to see a spotlight of the U.S. market on the global stage. The medicinal landscape and research does become more viable as does investment in research around cannabis and the endocannabinoid system. It’s also highly likely we’ll see tax relief for current U.S. markets and, upon completion of rescheduling, a wave of additional capital running to companies investing in large-scale facilities with the expectation of cannabis as a global commodity instead of a niche lifestyle product.

A NEW HORIZON FOR CANNABIS

As it currently stands, the market is without a doubt at the beginning of a new life stage. As stated in a recent briefing of Global Cannabis Network Collective members by Steph Sherer, Founder and President of Americans for Safe Access, “After 22 years of personally fighting this, the simple statement that cannabis has medicinal benefit is a game changer,” but what that looks like for businesses originally founded in the previous stage is yet to be seen. Most analysts see it simultaneously as a long-term win for an industry previously held back under false pretenses but a difficult minefield for existing operators to navigate as rules and laws change with the new scheduling process.

Jill Reddish and Chris Day are Co-founders of the Global Cannabis Network Collective.

18 Cannabis Prospect Magazine | June 2021
INTERNATIONAL 20 Cannabis Prospect Magazine | June 2024
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TICAL MAKES WAVES IN CANADA

After making waves in the US with its cannabis brand TICAL, founding member of the Wu-Tang Clan Clifford “Method Man” Smith hopes to bring its cannabis brand north of the border. We spoke with Nathaniel “Nutta TICAL” Vereen, brand and tour management for Method Man about the next steps for the brand.

For those that aren’t familiar with the WuTang Clan or your music, what does TICAL mean and represent?

Nutta: TICAL stands for Taking Into Consideration All Lives and represents a brand that respects the culture and its communities.

How did your involvement with TICAL come to be? Was the cannabis brand created by members of Wu Tang or were you approached by outside parties to start a brand tied to the group? What made you want to develop a cannabis brand?

N: I have been close with Meth his entire life and TICAL is his brand. Those who are familiar with him (and his work) understand the term and its being synonymous with him as an artist (and his relationship with cannabis). Meth has had many opportunities to work with brands, but they didn’t quite align with him or his mission, so a few of us in his inner circle ran with the name and built a brand out of it.

When and where did the TICAL cannabis brand launch and how has it progressed/

been selling into other states/markets?

N: TICAL launched in California in June 2020 and has grown to 13 markets in the US and we are very excited about Canada. We have a lot planned for North America (and Europe) and cannot wait for our fans to find out.

Going through your deck, the TICAL brand looks to be heavily rooted in supporting female and minority-owned businesses. Can you speak a little about the social impact of your business?

N: When we conceptualized this project with Method Man, he asked how we were going to do this while people were still in jail on weed-related offenses. So we decided to use his platform to raise awareness around disparities in the space. We are an inclusive brand that prioritizes black, female, and minority-owned businesses.

What has been your strategy for launching in Canada?

N: We took the same approach that the Wu Tang Clan did in the early 90s. Wu Tang

started very much hand-to-hand, getting to know people and Integrating itself into the culture. We often like to do the very same. Start with smaller, more controlled launches that we can focus on and listen to reactions, that way we can pivot when needed and scale quickly.

While TICAL is very much a cannabis brand, the company promotes itself also as a full-service creative agency. Can you elaborate on these capabilities concerning the marketing side of the business?

N: TICAL focuses on branding, marketing, and event management at music festivals and we have a very successful merchandise line that we can activate and sell anywhere.

What separates TICAL from other cannabis brands on the market?

N: Our focus is on partnerships, start small and grow, a celebrity partner that is very engaged with the brand — and puts us in positions to win. We often like to work with underdogs over the bigger businesses so we can grow together.

22 Cannabis Prospect Magazine | June 2024
June 2024 | Cannabis Prospect Magazine 23

Rubicon Organics Launches 1964 Supply Co.™ Full Spectrum Extracts (FSE) Vapes

The 1964 Supply Co.™ portfolio extension represents a strategic move by Rubicon Organics to tap into the fast-growing Canadian cannabis category, vapes. At the heart of the 1964 Supply Co.™ brand are two classic cultivars, Blue Dream and Comatose, which were carefully selected as the first two vapes offerings due to their soughtafter aromas and renowned effects. Every 1964 Supply Co.™ FSE resin vape will be available in premium 510 hardware that was tested to meet the company’s rigorous quality standards. These vapes will soon be available to consumers in all major provinces, starting with British Columbia this week, followed by Alberta, and Ontario early June. For more information about Rubicon Organics and its 1964 Supply Co.™ brand, please visit https://www.1964supplyco.com.

Kush God: The Next Big Strain from Pure Sunfarms

Pure Sunfarms Corp. expands its roster of quality dried flower with Kush God – a fresh cultivar of iconic lineage. The powerful new indica is a genetic powerhouse, from two iconic parent strains: Pink Kush and Pineapple God. It is also the first Pink Kush cross from the Pure Sunfarms breeding program, bringing dedicated fans of the strains an exciting new offering. Pink Kush has cemented its place as a consumer favourite since its launch four years ago, maintaining a record as the #1 top-selling strain through 2023 in Ontario (Canada’s largest market)1. As of April 2024, Pink Kush represents the most popular strain nation-wide. Pure Sunfarms’ own Pineapple God has seen similar success since hitting markets in spring 2023, becoming a top seller in the premium flower category and currently holding its place as the #1 premium flower product nationally. For more info contact www.puresunfarms.com.

Aurora Improves Offerings in Australia

Aurora Cannabis Inc. announced the expansion of its portfolio with the introduction of a new range of premium dried cannabis flower products. Now available for doctors to prescribe to patients in Australia, the new products developed by Aurora and manufactured at its EUGMP and TGA-GMP certified facility, will be distributed by MedReleaf Australia, a premier distributor of medical cannabis products holding the second position in the Australian market. The new dried flowers, including Black Jelly, Chemango Kush, and Moon Berry, are proprietary cultivars cultivated exclusively by Aurora. Vespera, a previously existing proprietary cultivar, is also set for relaunch under the Aurora brand. These products mark a significant step forward for MedReleaf Australia as it continues to expand its offerings under the Aurora brand. Learn more at www.auroramj.com

Auxly

Launches Transformative PreRoll and Vape Innovation into Quebec

The company has officially launched its first branded product in Quebec, where consumers are able to experience the simple, uncomplicated products of Back Forty. The initial products available now are the company’s new, slim style, large format 0.75g threepack pre-rolls. Building off the incredible success of Back Forty slim pre-rolls, which is currently the #1 selling pre-roll brand in Ontario, the company is thrilled to introduce its advanced, fully automated for precision, 0.75g three pack prerolls, that deliver a full flower taste and offer a consistent burn from start to finish. This three pack uses Auxly’s latest top performing cultivar, Liquid Imagination, a potent cross between Blue Zkittles and Jet Fuel Gelato and developed at Auxly Leamington’s advanced greenhouse. Consumers will be delighted by its high-potency blend that is chock-full of trichomes.

PRODUCT SHOWCASE 1 2 2 3 3 4
4 1 24 Cannabis Prospect Magazine | June 2024

S A M P L E K I T S B Y O 2 O

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H O W I T W O R K S C

T h a t ’ s w h e r e S a m p l e K i t s B y O 2 O c o m e s i n .

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A p p l y - W h e n n e w o p p o r t u n i t i e s f o r s u r v e y k i t s a r e h e r e , O 2 O w i l l r e a c h

o u t b y e m a i l l e t t i n g y o u k n o w . A p p l y f o r t h o s e o p p o r t u n i t i e s u s i n g t h e

l i n k s i n t h o s e e m a i l s .

E x p e r i e n c e - O 2 O w i l l s e n d o u t k i t s t o r e t a i l e r s t o t r y p r o d u c t s f r o m

b r a n d s f r o m a c r o s s t h e c o u n t r y . U n f o r t u n a t e l y n o t e v e r y r e t a i l e r t h a t

a p p l i e s t o o p p o r t u n i t i e s w i l l b e s e l e c t e d , b u t a s O 2 O c o n t i n u e s t o r o l l

t h e s e o u t , w e h o p e t o i n c l u d e a s m a n y p e o p l e a s w e c a n !

R e s p o n d - P r o v i d e O 2 O p r o d u c t f e e d b a c k t o l e t u s k n o w w h a t y o u t h o u g h t o f t h e p r o d u c t s i n c l u d e d . T h e m o r e f e e d b a c k w e r e c e i v e t h e m o r e k i t s w e

w i l l b e a b l e t o s u p p l y i n t h e f u t u r e . T h o s e w h o s u p p l y f e e d b a c k w i l l h a v e

a h i g h e r c h a n c e o f r e c e i v i n g t h e n e x t k i t t h e y a p p l y f o r !

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v e n t s i n m a j o r c i t i e s f a r f r o m y o u r s t o r e , i t c a n o f t e n b e h a r d t o t r y n e w p r o d
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Electronic Fund Transfer Scams: Three Risk Mitigation Tactics

There’s a new scam on the web: Electronic Fund Transfer (EFT) scams. Most are familiar with established scams like phishing and ransomware and the damage they can cause. These and other types of fraud and cybercrime are rampant: reported fraud and cybercrime accounted for $530M in victim losses in 2022 and increased by nearly 40% over 2021 – “historic levels” – according to the Canadian Anti-Fraud Centre. And since only 5-10% of fraud is actually reported, the numbers are most definitely much higher. The risks of EFT scams are equally great. Here’s a breakdown of the two EFT scams we’re seeing, the risks they entail and three tactics you can implement to help mitigate those risks.

THE SCAMS

Two EFT scams we’re seeing a lot of (or variations of them) right now are:

1. The “Our Payment Information Has Changed” Scam

What happened? You do a big deal with a long-standing customer. As usual, you ship the product. And as usual, you emailed the invoice to your customer. But this time, your customer doesn’t pay. So, you call your customer contact … who tells you they paid the invoice weeks ago with an EFT according to the new payment instructions your CFO emailed to them. Except you don’t have new payment instructions. And your CFO never emailed out any new payment instructions.

How’d it Happen? A hacker got into your email system and lurked there, watching your email exchanges, waiting for an opportunity. When they saw your email exchanges about the big deal, they watched for you to email the invoice. Then they emailed the customer from your – legitimate – email address and

told them the EFT payment instructions had changed, providing a new one so they received the payment. Or, in a variation on this, the hacker used a domain name (for example, finance@c0mpany.com) easily confused with yours (finance@company. com) to send the payment instruction changes so their email appears legitimate; the recipient doesn’t notice and misdirects the funds to the hacker.

2. The Online Banking System Scam

What happened? You make new banking arrangements with your long-time financial institution. At some point, you notice that large sums of money have been e-transferred from your account to a number of recipients. But you don’t know who they are. And you’ve never sent an EFT.

How’d it Happen? A hacker got into the CFO’s computer (perhaps via a phishing scam) and installed a “remote access trojan”. The hacker then logged into your online banking program – as if they were you sitting at your keyboard – and e-transferred the funds to someone. The two-factor authentication to confirm via email didn’t help: the hacker controlled the CFO’s email.

THE RISKS

There are both obvious and not so obvious risks to all sides in each of these EFT scams.

» Financial Loss. This is the most obvious risk: the victim – whomever is out the money – loses it. And unless you figure it out and act fast enough, there’s a good chance it’s gone for good. We’re not talking small potatoes; the amounts can be significant, ranging from thousands to hundreds of thousands of dollars. Really there’s no limit to the damage that can be done

» Litigation. Since it’s unlikely the victim – whomever is out of the money – will be able to recover the money from the hacker or recover it before it leaves the fraudulent account, they’ll have no alternative but to sue any others involved to try to recover their loss. That could be, for example, a customer, a supplier or a financial institution. The lack of clear direction from the courts means that everyone involved has a risk of liability. Win or lose, it’s a timeconsuming and costly process in terms of money, time and reputation.

» Relationship Damage. If you sue a supplier or customer with whom you have a long-standing, solid relationship, you’ll have to figure in the cost of damage to that relationship. For example, if you’re a supplier and you sue a good customer, chances are high that customer won’t be purchasing from you in the future.

» Liability. If you’re the one getting sued, you’ll incur the time and cost of litigation regardless of the outcome –but if you lose, you’ll also incur liability for the financial loss.

THE RISK MITIGATION TACTICS

It’s impossible to eliminate completely the risks of EFT scams. You must ensure you have the necessary cyber-security and privacy systems as well as breach mitigation plans in place, and investigate with your insurer available insurance coverage for EFT fraud. There’s also a few simple tactics

“Most are familiar with established scams like phishing and ransomware and the damage they can cause. These and other types of fraud and cybercrime are rampant: reported fraud and cybercrime accounted for $530M in victim losses in 2022 and increased by nearly 40% over 2021 – “historic levels” – according to the Canadian Anti-Fraud Centre. And since only 5-10% of fraud is actually reported, the numbers are most definitely much higher.

“you can implement to help mitigate the risks of EFT scams affecting your organization.

» Stay Suspicious. Never, ever take an email about an EFT at face value. One of the main reasons these scams succeed is because the hackers are using an actual legitimate email address or one that appears legit. This distinguishes some of these scams from more routine phishing scams, where a quick glance at the email address and contents can give the scam away. However, falling for a phishing email could give a hacker access into your computer system and lead to an EFT scan.

» Communicate Clearly. If you receive EFTs, make it very clear to everyone that you will never change your payment instructions or your banking information by an email (and of course, don’t). You can give them this message verbally, and you can also regularly reinforce it with an alert to this effect on the bottom of all emails, your invoices, and on the form on which you provide your electronic payment information to another party. Put them all on notice that they should not act on any email purporting to change your banking information without additional diligence.

» Verify by Phone. If you send EFTs, implement a policy to verify the banking information with a telephone call, ideally to a known contact at the recipient before you hit send. Look up the business, call the main number – never the phone number in the email signature block – and ask to be transferred to the correct person. Similarly, two-factor authentication for your bank accounts should never rely on the same means of communication or device that’s used to initiate an EFT. You want to be sure that even if a hacker can initiate the transfer from a hacked device, they can’t also confirm it.

David Fraser is a Privacy, Data Breach & Cyber Security Lawyer at McInnes Cooper.

June 2024 | Cannabis Prospect Magazine 27

Ontario Quebec

The Ontario Cannabis Store (OCS) published its inaugural Good All Around Social Impact Report to recap the progress it has made under its first Social Responsibility Strategy from 2021 to the end of 2023. The Social Impact Report summarizes the OCS’s strategic social responsibility objectives, driving positive change in environmental sustainability, diversity and inclusion, and cannabis literacy. Highlights include: distributed $500,000 to six organizations in support of cannabis research and community-based programming through the Social Impact Fund; provided 26 equity and access grants designed to increase the presence and participation of equity-deserving groups and small businesses at industry events; invested $319,000 in Black-led initiatives; drove more than 600,000 visitors to the OCS’s Cannabis Made Clear resource hub for unbiased, fact-based and current cannabis education.

In relation to the class action lawsuit levied against the the Société québécoise du cannabis (SQDC), it responded in part with the following: “The SQDC has received a motion for authorization to exercise a class action related to products whose strain “rotates”. The SQDC will take the time necessary to properly analyze the matter. However, at first sight, the company disagrees with the applicant’s claims and intends to contest the application. The SQDC does indeed sell rotating-strain products. The company clearly mentions this special feature on the information sheets for the products concerned and, more importantly, does not require anyone to choose these products. Customers in search of a specific strain enjoy access to a broad range of single-strain products.”

Manitoba Saskatchewan

The Manitoba government says it will be placing a temporary freeze on any new licences that allow convenience stores to sell cannabis. Following the tabling of legislation that proposes to repeal the province’s ban on growing cannabis at home, Glen Simard, the Minister responsible for the Manitoba Liquor and Lotteries Corporation, told media that the province will be pausing the issuance of new licences for “controlled access” cannabis stores in the province for at least six months. A representative for Simard’s office confirms that the government is seeking to pause the issuance of new licences while it studies the issue further. The province currently lists 205 cannabis stores licensed in the province, with 122 of them in Winnipeg. Eleven of these stores are “controlled access” stores.

Alberta

Alberta now permits cannabis sales at age-restricted events such as music festivals or marijuana trade shows. The new rules took effect January 31, provincial regulator Alberta Gaming, Liquor and Cannabis (AGLC) announced. Retailers seeking a temporary extension of their store to sell cannabis at events must apply for AGLC approval. The regulatory changes also allow licensed marijuana stores to keep cannabis products in “a locked showcase in the customer area after store operating hours,” doing away with a previous requirement to move products into secure storage at day’s end; permit stores to sell marijuana to each other, “regardless of ownership structure,” and “allow unlimited transfers of cannabis products between licensees owned by the same legal entity”; tweak previous regulations that set out rules for providing cannabis samples to retail licensees, and update rules surrounding the destruction of cannabis products.

As of April 1, alcohol tests are now mandatory at all traffic stops and while cannabis screening is not part of that mandate, RCMP officers can use oral fluid devices if they suspect the driver used cannabis recently. To fail the roadside oral tests, a driver must have above 25 nanograms per milliliter of THC in their saliva. However, when it comes to those who use medical cannabis, they believe the rules are still unfair to them and their voices are not being heard. Under the Criminal Code updates from Bill C-46, penalties for driving with THC present in your system can lead to $1,000 for a first offence, 30 days (about four and a half weeks) in prison for a second offence and anywhere from 120 days (about four months) to 10 years for a third offence.

British Columbia

Cannabis sales declined in BC in the first three months of 2024 compared with the last three months of 2023 but still showed year-over-year growth. Sales through the province’s direct delivery program also shrank for the second quarter in a row from their highest point in Q2 2023. Wholesale grams of cannabis sold in BC (from the LDB to retailers) in January, February, and March 2024 were up 20.9% compared with the same period in 2023. Wholesale sales dollars were also up 10.3% compared with the previous year. All figures are for wholesale sales through the LDB, including direct delivery. Despite this year-over-year increase, wholesale dollars on cannabis sales through the Liquor Distribution Branch (LDB) declined slightly in the most recent quarter compared with the two previous quarters. Wholesale cannabis sales were $132 million in Q4 2024, down from $136.7 million in Q3 and $137.1 in Q2.

Provincial Updates/

Prince Edward Island

The province of Prince Edward Island saw total revenue from cannabis hit $1.9 million in February 2024, an increase of $208,000 or 12.2%.

Nova Scotia

Fourteen charitable and non-profit organizations across Nova Scotia that support community well-being and the environment will receive financial support from the Nova Scotia Liquor Corporation’s community giving fund. The fund provides grants to charitable and non-profit organizations of up to $20,000. The NSLC received more than 200 applications for the 2024 Fund and is providing grants to 14 organizations with a total funding of $140,000 this year. Recipients must be registered charities or nonprofits working to support communities within Nova Scotia and address areas of critical community need.

Newfoundland & Labrador

The province of Newfoundland and Labrador saw total revenue from cannabis hit $7.1 million in February 2024, an increase of $913,000 or 26.3%.

New Brunswick

Cannabis NB released its unaudited results for the fourth quarter ended March 31, 2024. Total product sales for the quarter (13 weeks) were $22.8 million, an increase of 11.1% compared with the same period last year (13 weeks). Net income for the quarter was $5.0 million, 7.7% above the prior year’s fourth quarter net income of $4.6 million. Key product sales trends for the fourth quarter (January 1, 2024 to March 31st, 2024) compared to the fourth quarter last year were (January 2, 2023 to April 2nd, 2023): sales of dried flower increased 9.7%, up $1.0 million; extracts sales decreased 9.9%, down $0.1 million, sales of accessories decreased 3.0%, down $20.4 thousand; sales of edibles increased 12.3%, up $0.2 million; sales of infused beverages increased 4.7%, up $23.8 thousand; sales of topicals increased 44.0%, up $43.5 thousand; concentrates sales increased 17.3% , up $1.1 million.

Yukon / Northwest Territories / Nunavut

The Yukon government says private retailers will be allowed to sell cannabis online starting in May. “We’re committed to that, and we’ll deliver that,” said Ranj Pillai, the minister responsible for the Yukon Liquor Commission. The Yukon Chamber of Commerce and the Yukon Party had been asking the territorial government to level the playing field between the government-run cannabis retailer, which can sell online and to private retailers. / The only cannabis store in the NWT offering online ordering says it’ll shut down the service on Sunday if a dispute over supply isn’t resolved. Releaf NT, based in Yellowknife, says it can’t get enough of the right products from the NWT Liquor and Cannabis Commission, or NTLCC, which is the only legal supplier in the territory. The commission, through an NWT government spokesperson, disputed Wood’s characterization of the problem and said it would “work with existing cannabis store operators to open an online presence as soon as possible” if Releaf’s online store shuts down. / While a new Health Canada study says three-quarters of Canadians buy their cannabis from legal storefronts, it appears to be a different scenario in Nunavik. There, 80% of cannabis in the region is purchased illegally, according to Nunavik Police Service. Earlier this month, the 2023 Canadian Cannabis Survey reported the number of users in Canada who rely on a legal outlet as their usual source of cannabis increased to 73% in 2023. That’s up from 37% in 2019, the first full year that cannabis for non-medical use was legal in Canada. Data pooled from 11,690 respondents across the country indicated legal storefronts have been the most common source to purchase cannabis since it was legalized.

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Gillin Lefever is an accomplished business, finance and capital markets executive who served as an external consultant to Village Farms International starting in 2020. In 2022, she joined the company as Executive Vice President, Corporate Affairs, leading the company’s communications, strategy, governmental affairs and capital markets functions. Ms. Gillin Lefever was previously Head of the Institutional Sales team at Barclays and Senior Equity Research analyst covering the Consumer Products sector at two Wall Street firms, where she was the recipient of numerous awards.

Dr. Joe Harloe joined Village Farms’ subsidiary, Balanced Health Botanicals, in 2019 as General Counsel to participate in the cannabinoid industry opportunity created by passage of the 2018 Federal Farm Bill. In 2023, he was appointed by the Governor to Colorado’s Institute of Cannabis Research Governing Board and he is a member of the International Cannabinoid Research Society. He previously sat on the SB 22-205 Task Force to advise the Colorado legislature as to intoxicating hemp and THC products and the Colorado Hemp Advancement and Management Plan (CHAMP).

John Macintosh is a Certified Public Accountant (CPA) who brings to Motif Labs a wealth of financial management experience and an entrepreneurial mindset as its new Chief Financial Officer (CFO). Focusing on strengthening financial discipline throughout the organization, Macintosh will play a pivotal role in navigating Motif’s expansion into additional markets, product categories, and business streams. As CFO, he will ensure that strong risk management practices are in place to support Motif’s rapid growth strategy while remaining lean, nimble, and agile in a fast-changing industry.

Cannabis industry veteran Paul McCarthy has been appointed president of the Cannabis Council of Canada. McCarthy brings more than two decades of public sector experience to C3, both as a public servant and senior political adviser, including policy adviser to the minister of industry, senior policy adviser to the minister of labor, housing and homelessness, senior policy analyst of Infrastructure Canada, and director of policy for the minister of veterans affairs and associate minister of national defense. McCarthy also worked for Canopy Growth Corp., a licensed cannabis producer, for a little more than three years starting in early 2019. His last positions at Canopy were head of corporate policy and head of international implementation.

Paul Furfaro joined Village Farms International in 2023 as Senior Vice President, Strategy, leading, among other initiatives, an assessment of international cannabis opportunities and later assuming leadership of the global medical cannabis business. Prior to Village Farms, Mr. Furfaro was Vice President of Operations and Interim President and Chief Executive Officer at the Société Québécoise du Cannabis (SQDC), Quebec’s provincial cannabis board, where he was responsible for creating and implementing the operations infrastructure, oversaw the opening of 90 dispensaries, and helped grow the sales staff to more than 1000 employees.

High Tide Inc. announced that Mayank Mahajan has joined the Company in the role of Chief Financial Officer. Before joining High Tide, Mr. Mahajan worked with Everyday People Financial Corp, Metamaterial Inc., Jubilant Bhartiya Group (Canada, India and USA), Genpact, and S.P. Nagrath & Co. He is a registered Chartered Professional Accountant in Canada, Certified Public Accountant in the United States and a Chartered Accountant in India. Mr. Mahajan also holds a Master of Business Administration (MBA) from Gonzaga University in Washington, USA, and a Bachelor of Commerce from Chaudhury Charan Singh University in India.

Mohsin Iqbal has been hired as Senior Director of Sales Finance and Insights for Motif Labs. Iqbal says, “As we embark on this exciting phase of expansion at Motif, my focus is to boost our sales performance and deepen our understanding of market dynamics and customer preferences. By integrating these insights into our strategic decisions, we are poised to meet and exceed our growth targets, ensuring Motif’s position as a leader in the industry.”

The Tinley Beverage Company Inc., announced that Theodore Zittell, has stepped down as Chief Executive Officer, and the company has appointed Larry Weintraub as Tinley’s new CEO. In 1999, Mr. Weintraub co-founded Fanscape, the first social media marketing agency, which he ran as CEO until its sale to advertising giant, Omnicom in 2014. Following the sale, Mr. Weintraub assumed the role of Chief Innovation Officer within Omnicom’s creative agency, TMA (The Marketing Arm) where he worked with many of the world’s largest brands including Samsung, Frito Lay, Uber, State Farm, US Army, and P&G. Mr. Weintraub remained with Omnicom until 2023 when he formed his own CEO consultancy, Great Gig Strategy.

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June 2024 | Cannabis Prospect Magazine 33
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