Cannabis in the news September 11, 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. The U.S. government must do a better job of regulating cannabis products says the former head of the FDA, pointing to a growing number of reported deaths from vaping.

Former FDA Commissioner Dr. Scott Gottlieb told CNBC on Monday the government needs to regulate cannabis products, after reports of 450 possible cases and five deaths from a mysterious lung disease linked to vaping.

Most of the patients reported vaping both nicotine and THC, the marijuana compound that creates a high, though some reported only using nicotine.

“People who are vaping nicotine and having these reactions probably are vaping illegal products that are counterfeit,” Gottlieb said in a “Squawk Box” interview. “We have to have a federal reckoning here.”

The states allowing recreational use of cannabis “don’t have proper oversight, so these illegal vapes are getting on to the market.”

Health officials are warning people not to use e-cigarettes because the exact cause of any link between vaping and the lung condition remains unknown.

Gottlieb, a health advocate, Pfizer board member and CNBC contributor, said the current belief is the illnesses are linked to illegal vapes containing vitamin E oil — used as an emulsifying agent and dangerous when inhaled.

2. It’s something the neighbours of cannabis users have been calling for, for years, and now odorless pot may soon be a reality

CannabCo Pharmaceutical Corp., a Brampton, Ont.-based company awaiting a production licence from Health Canada, claims to have technology that virtually eliminates the tell-tale smells when cannabis is smoked and stored.

“A number of users, and people that are around cannabis smokers, complain about the smell, especially in enclosed areas, condos and apartments, and this technology addresses those concerns,” said CannabCo president and chief executive officer Mark Pellicane Tuesday.

CannabCo said it has an agreement with an undisclosed provider to deploy the anti-odour technology, and plans to release a wide variety of products for the medical and recreational markets. The privately-held company is touting the pending release as a “global first.”

CannabCo claims its PURECANN technology “greatly reduces” cannabis odour when flower is combusted, and makes the smell “virtually undetectable” when dry product is in storage. The technology is also said to reduce harshness when smoking, and lessens day-after effects.

According to the news release, Health Canada has given CannabCo a Confirmation of Readiness notification, and the company is currently raising capital. They are also constructing a pilot facility in Brampton.

CannabCo said the technology is fully compliant with GMP standards, a widely-accepted set of rules on handling, cleaning, quality assurance and packaging processes for manufacturing facilities and products.

3. In a podcast interview, the head of the American Bankers Association said he believes the U.S. Congress will pass legislation allowing banks to serve cannabis-focused companies.

The head of the American Bankers Association (ABA) is predicting that the House of Representatives will pass legislation allowing banks to service state-legal marijuana businesses as early as this month and no later than October.

ABA CEO Rob Nichols said that his group will be actively lobbying for the bipartisan cannabis banking bill in order to provide clarity to financial institutions that currently worry that taking on marijuana-related clients will put them at risk of federal penalization.

He emphasized the bipartisan nature of the Secure and Fair Enforcement (SAFE) Banking Act, which currently has 206 cosponsors in the House, including 26 Republicans.

“This is legislation that already passed in the House Financial Services Committee early in this calendar year by a huge bipartisan margin, and this is something that I predict…as early as September—probably no later than than October—will pass the full House of Representatives by a bipartisan majority, which is exciting,” he said.

Nichols recognized that there is “more work to do” in the Republican-controlled Senate, but noted that there are “33 states where it is legal [for medical or recreational purposes] and so there’s a lot of senators who have been hearing from their constituents about these challenges in those particular states.”

4. About 44 Canadians have now been given cannabis pardons under the new system.

A month after the federal government announced its amnesty program was taking applications, more than 40 pardons have been granted.

“The balance of applications are either under investigation or may have been returned to the applicant as incomplete or ineligible,” Parole Board spokesperson Iulia Pescarus Popa wrote in an email.

About 250,000 Canadians are thought to have prohibition-era records for simple possession of marijuana, though because some people were charged under a generic drug possession offence rather than one specific to cannabis, it’s not clear how many there are. Also, those who have a record for other offences aren’t eligible for the program.

5. Colorado’s private sellers now count more than $6.5 billion in sales over the last five years, with the market as a whole surpassing $1 billion in total cannabis-related sales.

The state’s per-person sales of cannabis are also the highest in the U.S. at an average $280 per year. Washington and Oregon—the second and third states to legalize pot—follow with annual per-person spending of $220 and $130, respectively.

Colorado’s cannabis-related revenue equals just 3% of its annual budget. Still, most of those proceeds have gone directly to education, health care, literacy and drug prevention programs.

As of June 2019, the state had 2,917 licensed marijuana businesses and 41,076 individuals licensed to work in the industry.


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