Cannabis in the news December 19, 2018

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In volatile markets, news on cannabis stocks and the cannabis industry is at a premium.  As always, we examine all the news and select for you the articles that are most likely to shed light on your future investments.  

1. A U.S. group has now launched the first benchmark price to track Canadian wholesale cannabis prices—a key step toward commodity trading.

Demand to develop a benchmark Canadian cannabis price has grown steadily since legalization in Canada, said Jonathan Rubin, CEO of New Leaf Data Services. It’s the parent company of Cannabis Benchmarks, which releases similar U.S. pot prices.

For the week ending Dec. 14, the company’s Canada Cannabis Spot Index was $7.79 per gram, up 0.8% from the previous week and up from $7.47 on October 19. That price has fallen as low as $6.66 and risen as high as $8.23.

Cannabis Benchmarks collects price data from both growers and dispensaries as well as industry associations that submit their cannabis prices to analysts, Rubin said. His Canadian benchmark will also include analysis of public and private data from Statistics Canada and publicly-traded cannabis producer filings.

2. Cannabis investor interest is increasingly shifting from Canada to the U.S., say some market insiders.

“Investors’ imagination is being captured more by what’s possible in the U.S.,” Alfred Avanessy, managing director of investment banking at Cormark Securities Inc., told BNNBloomberg.

U.S. consumer spending on legal cannabis is expected to reach $20.9 billion U.S. by 2021. That dwarfs the $4.5 billion in spending expected for Canada, according to a recent report from Arcview Market Research and BDS Analytics.

That divide may also evident in recent investor interest.

In the first 10 months of 2018, U.S.-based cannabis issuers raised $1.5 billion (US$1.1 billion) on Canada’s CSE exchange. That’s about 60% of the total raised by all pot firms, according to the exchange’s own data. Contrast that to 2017, when only one U.S. cannabis listing on the CSE raised $145,000.

3. The Ontario government says it will now cap the number of licences for cannabis retailers at just 25 because of supply challenges.

Winners of those licences will be decided by a random lottery draw in January. The move means only 25 retailers will legally be able to sell pot at bricks-and-mortar locations starting April 1, 2019. Previously, the government said it would not cap the overall number of licences. Rather, it would restrict any one operator to 75 individual licences.

The province says a shortage of cannabis has forced it to now limit the overall number licences, although that number would likely increase as supply improves.

Still, the industry and consumers say a limited number of stores selling pot means that most Ontarians will effectively be restricted to buying cannabis from the government’s online store.

4. The Quebec government has kept its promise to introduce legislation to raise the legal age for cannabis consumption to 21.

Bill 2 also seeks to block cannabis consumption in all public places, including parks and streets.

Increasing the legal age to 21 from 18 was one of the Coalition Avenir Quebec’s main campaign promises leading up to its Oct. 1 victory.

The government proposed the change as the best way to limit any damaging effects the drug may have on the developing brains of young people.

The federal law legalizing cannabis consumption set the minimum age at 18, although it gives individual provinces the power to raise it. Quebec has been the first to do so.

5. Shares of Tilray Inc. jumped Tuesday on news the B.C. producer has entered a collaboration agreement with a subsidiary of pharma giant Novartis.

The new global arrangement builds on an original partnership struck early this year. Under the updated plan, Tilray will use the supply chain of Novartis’s Sandoz Canada as well as its sales force and global distribution network to distribute its medical cannabis products.

The deal should significantly boost Tilray’s opportunities to supply the 35 countries that have now legalized medical cannabis. Their number is only expected to grow.

Under the new agreement, Sandoz may also support Tilray’s commercialization of non-smokable and non-combustible medical cannabis products. They may also work together on developing new products as well as partnering to educate pharmacists and doctors about medical cannabis products.

“Tilray is a global company, and we’re thrilled to build upon the success and momentum from our existing agreement with Sandoz Canada by taking our partnership global,” Tilray chief executive


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