Cannabis in the news October 9, 2019

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News on cannabis stocks and on developments in the industry haven’t let up in today’s volatile markets. Here are this week’s stories that we believe will mean the most to you as a Canadian investor.

1. A year into legal cannabis, impaired driving remains a primary focus for Edmonton law enforcement.

The city’s police services will next week tell a municipal committee that it has seen a “significant increase” in drug-impaired driving in the last year.

“Impaired driving, really, there is no solution to it yet through technology. I know they’re working on it,” Chief Dale McFee said to reporters Tuesday, adding he feels like law enforcement is “waiting on technology.”

The Edmonton Police Commission echoes that sentiment in its quarterly update on the impact and financial costs of legalization.

According to the commission’s report, the police arrested 94 drug-impaired drivers in the first eight months of 2019, with 29 suspected of being high on cannabis.

For the same period in 2018, police made 69 drug-impaired driving arrests, of which 17 drivers were suspected of being impaired by cannabis.

The report also notes the minimum time required to process a high driver is six hours, while processing a drunk driver takes one hour. The estimate includes the time need to conduct a specialized field sobriety test, a test by a drug recognition expert, and to take a blood sample.

2. While an ongoing correction continues to test the commitment of cannabis investors, the industry itself is facing supply challenges that threaten to erode sales.

The North American Marijuana Stock Index—which for now is dominated by Canadian producers—has lost half its value in the past six months.

“It was a bubble and the bubble’s been burst,” said investment analyst Chris Damas, author of the BCMI Cannabis Report.

However, producers have more fundamental problems, including a shortage of legal supply. Analysts blame that on the industry’s move to ramp up production just after legalization.

That shortage has driven up prices relative to the black market, and resulted in some retailers, such as Quebec’s SQDC, having to close their doors for parts of the week.

“The retail rollout in Canada has been an unmitigated disaster,” industry analyst Greg McLeish of Mackie Research said in comments to Marijuana Business Daily.

“That is exacerbating a problem, where (companies) who do want to get their product out are having trouble, because the brick and mortar is not built out yet.”

3. A team of researchers at the University of Georgia will study how legalized medical cannabis affects people living with chronic pain.

To date, 34 states and the District of Columbia have legalized medical cannabis in the form of home cultivation or dispensary-based sales.

The researchers want to determine if medical cannabis has altered the health behaviours of people living with chronic pain, primarily whether cannabis has substituted for or reduced dependence on traditional pain treatments.

The research project is funded by a $3.5 million grant from the National Institute on Drug Abuse, a branch of the National Institutes of Health.

The study will also break new ground for states that have implemented access to low-THC/high-CBD cannabis extracts.

“So far, no one has examined whether these cannabis extract laws change health care use,” David Bradford, one of the lead researchers, said. “We’ll be the first to systematically evaluate that, and hopefully can give Georgia and other policymakers some idea of what to expect as we continue to roll this policy out in the state.”

Bradford’s team will work with the Research Data Assistance Center (RESDac) at the University of Minnesota to get access to several years’ worth of data on 5 million Medicare and 5 million Medicaid enrollees’ complete medical claims history. This will include all inpatient, outpatient and prescription drug use, as well as some information about socioeconomic status.

4. A new survey suggests 86% of Canadian employers prohibit cannabis use before, during and sometimes even after work.

Analysts point to that nearly countrywide prohibition to explain the limited impact legal recreational cannabis seems to have had on workplace productivity.

Conducted by Ipsos on behalf of ADP Canada, a human resources software company, the survey suggests that most Canadians believe recreational cannabis has had little to no impact at work.

For example, 74% of respondents said it’s had no impact on productivity, with 71% saying it has also failed to lead to higher rates of absenteeism.

Asked the same questions prior to legalization on Oct. 17, 2018, 46% of respondents felt productivity would decline and 40% expected absenteeism to rise.

Researchers surveyed 1,160 working Canadians 18 years and older between Aug. 30 and Sept. 18, 2019. The results were weighted to reflect a representative sampling of working Canadians. A randomized sample of this size would yield a margin of error of +/- 3.3 percentage points, 19 times out of 20.

“The expectation was that there would be a huge impact on the workplace, and yet the data shows this time around that it’s much, much smaller than we anticipated,” said Hendrik Steenkamp, HR advisory director for ADP Canada.

Nearly 10% of Canadians say their employers let them use cannabis on the job, according to the new Ipsos poll.

The survey found that 8% of respondents said their employer permits recreational cannabis use in the workplace.

5. A St. John’s cannabis retailer says he’s decided to go “cash only” because banks have dismissed his business as too “high risk.”

Thomas Clarke says no banks in the St. John’s area are willing to take him on after his own bank informed him it was dropping him as a client.

Some of those financial institutions have told him that they’re not taking on any more cannabis clients, says Clark. Others say that because they’re tied up with the American banking system they can’t deal with cannabis retailers.

In the meantime, the retailer is looking at following the lead of cannabis sellers in the U.S., which rely on cash-only sales, big safes and lots of security. Clarke worries about the safety of his family and staff if he can’t deposit money into an account, and whether Newfoundland’s licencing authority will allow him to keep his licence if he doesn’t have an account.


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