Tag Archives: Federal

Kelly O'Connor
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Dishonest Potency Testing In Oregon Remains A Problem

By Kelly O’Connor
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Kelly O'Connor

Oregon, we have a problem.

Anyone with a search engine can piece together how much THC certain strains produce and what their characteristics are. Oh wait- there’s an app for that… or dozens, I lose count these days.

Nefarious lab results are rampant in our communityLet’s take one of my favorites, Dutch Treat; relaxing, piney and sweet with a standard production of 18-25% THC, according to three different reviews online. So, did I raise an eyebrow when I saw Dutch Treat on Oregon shelves labeled at 30% THC? Did I take it in to an independent, accredited lab and have it tested for accuracy? You bet your inflated potency results I did! The results? Disappointing.

Nefarious lab results are rampant in our community; it is hurting every participant in our industry affected by the trade, commerce and consumption of recreational cannabis.

“I have had labs ask me what I want my potency numbers to look like and make an offer,” says David Todd, owner and operations manager of Glasco Farms, a craft cannabis producer in central Oregon. “It’s insane- I want to stand behind my product and show through scientific fact that I produce a superior flower.”

But without enforcement of lab practice standards, producers are being pressured to play dirty. In her third year cultivating at a two-tier recreational cannabis farm, a producer who wished to remain anonymous sent me an email about the pressures she is up against to produce high THC strains:

“The only sure way to get my product on the shelf at a profitable price is with THC 25% or above. Not a lot of strains have that potential, but the market has plenty with 28% to 32% floating around so I have to go with the same labs as the rest of the independent farmers to get the best numbers I can. The lab I use … return(s) good numbers.”

Those “good numbers,” aka high THC %, are the driving force of sales. A strain tests at 20% THC and it sells for $1,000/lb. Then it tests at 25% THC, and sells for $1300/lb. You produce cannabis for sale- this is your business. And labs are telling you that they can manipulate samples and reports to make you more money. Everyone else is doing it. If you don’t, your product isn’t “good enough” to sell. What do you do?Labs should operate ethically.

It’s a vicious cycle perpetuated by lies, lack of enforcement resources, coercion and undereducation. We are all responsible. Yet, ask who the source of the problem is and everyone points fingers across the circle.

The consumers are uneducated about cannabis and only focus on THC. The dispensaries and budtenders should be educating them. Producers should take a stand and use an honest lab. Labs should operate ethically.

I repeat: Oregon, we have a problem.

It’s time to stop living in a land where Dutch Treat is hitting 30% THC. It’s time for everyone to demand auditing and ethics.

Laws have been set forth on how to sample, prep, test and report analyses for cannabis to ensure fair commerce, consumer health and public safety. But there’s a clear need to blind test the different labs, and for unbiased, third-party research and development.

As federal eyes turn to the Oregon to investigate black market activity, regulatory bodies are tightening their grip on licensees to maintain legal validity and avoid shut down.

The time to demand change and integrity is now.The crack-down began on August 23, 2018, when the OLCC investigated several prominent producers’ practices. Black market distribution incurred the harshest penalty; the OLCC revoked their wholesale license due to multiple violations.

“We want good compliant, law-abiding partners as OLCC marijuana licensees,” says Paul Rosenbaum, OLCC Commission Chair. “We know the cannabis industry is watching what we’re doing, and believe me, we’ve taken notice. We’re going to find a way to strengthen our action against rule breakers, using what we already have on the books, and if need be working with the legislature to tighten things up further.”

Trends in METRC data lay the foundation for truth, and it’s time to put it to use. “The Cannabis Tracking System worked as it should enabling us to uncover this suspicious activity,” says Steven Marks, OLCC Executive Director. “When we detect possible illegal activity, we need to take immediate steps …”

Potency fraud might not be at the top of the list for investigation, but labs and producers are breaking the law, and there will be consequences. ORELAP and OLCC have the right to investigate and revoke licenses of labs that are falsifying data and consumers can file claims with the Department of Justice.

The time to demand change and integrity is now.

Marguerite Arnold

A Busy 4th Quarter Heralds An Amazing Cannabis Year Globally

By Marguerite Arnold
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Marguerite Arnold

In retrospect, when the cannabis history books are written, 2018 may come to represent as much of a watershed year as 2014. Much has happened this year, culminating in a situation, much like at the end of the first year of modernization, where great victories have been achieved. But a long road to true acceptance and even basic and much broader medical use still beckons. Even if the new center left ruling coalition party in Luxembourg has just announced that recreational cannabis reform is on its agenda for the next five years.

This is a quick and by no means a full review of both fourth quarter activity globally, and how that ties into gains for the year.

Canada Legalizes Rec Sales

Beyond all the other banner headlines, October 17 will go down in history as the day that Canada switched the game.

Will 1017 replace 420? Not likely. But it is significant nonetheless.

What does this mean for the rest of the industry (besides international border checks and lifetime bans for Canadian executives and presumably others traveling into the U.S. to cannabis industry conferences at present)? For starters, a well-capitalized, public industry which is building infrastructure domestically and overseas like it is going out of style.

This is important for several reasons, starting with the fact that the big Canadian LPs are clearly not counting on supplying Europe from Canada for much longer. Why? The big European grows that were set up last year are starting to come online.

So Does California…

And other significant U.S. states (see Massachusetts this month and Michigan) are following suit. However the big issue, as clearly seen at least from Canada and Europe, is there is no federal reform in sight. That opens up a raft of big complications that so far, most U.S. firms have not been able to broach. That said, this situation is starting to change this fall, with two U.S. firms entering both Greece and Denmark, but in general, a big issue. Canadian firms are still trying to figure out how to both utilize the public markets in the U.S. without getting caught in detention when crossing the border.the U.S. is continuing to be a popular place to go public for Canadian firms

Regardless, the U.S. is continuing to be a popular place to go public for Canadian firms, who are also looking for access to global capital markets and institutional capital. Right now, Frankfurt is off limits for many of them. See the Deutsche Börse. That said, with the rules already changing in Luxembourg, one firm has already set its sights for going public in Frankfurt next spring.

The German Situation

Like it or not, the situation in Germany is key to the entire EU and increasingly a global enchilada, and no matter where companies are basing their cultivation sites at this point, there are two big gems in the European cannabis crown. Deutschland is the first one because of the size of the economy, the intact nature of public healthcare and the fact that the German government decided to mandate that sick people could get medical cannabis reimbursed by their public health insurer.

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Photo: Ian McWilliams, Flickr

Ironies abound, however. In the last quarter, it is clear from the actions of the Deutsche Börse that Frankfurt is not a popular place to go public (Aurora went public on the NYSE instead in late October).

The cultivation bid was supposed to come due, but it is now likely that even the December deadline might get pushed back again, interminably at least until April when the most recent lawsuit against the entire process is due to be argued.

In the meantime, there is a lot of activity in the German market even if it does not make the news. Distribution licenses are being granted all over the country (skip Berlin as there are already too many pending). And established distributors themselves, particularly specialty distributors, are increasingly finding themselves the target of foreign buyout inquiries.

There are also increasing rumours that the German government may change its import rules to allow firms outside of Canada and Holland to import into the country.

The German market, in other words, continues to cook, but most of it is under the surface a year and a half after legalization, to figure things out.

The UK

Next to October 17, the other date of note this fall of course was November 1. The Limeys may not have figured out Brexit (yet). But cannabis for medical use somehow made it through the national political fray this summer. Hospitalized children are compelling.

UKflagNow the question is how do other patients obtain the same? The NHS is in dire straits. Patients must still find a way to import the drug (and pay for it). And with newly imposed ex-im complications coming Britain’s way soon, there is a big question as to where and how exactly, patients are supposed to import (and from where). All looming and unanswered questions at the moment.

But hey, British doctors can now write prescriptions for cannabis.

Greece and Malta

Greece and Malta are both making waves across Europe right now. Why?

The licensing process that has continued into the fall is clearly opening up inexpensive cultivation in interesting places. Greece is growing. Malta, an island nation that is strategically placed to rival Greece for Mediterranean exports across Europe is still formalizing the licensing process, but don’t expect that to last for long.

Look for some smart so and so to figure out how to beat Brexit and import from Malta through Ireland. It’s coming. And odds are, it’s going to be Malta, if not the Isle of Mann that is going to clinch this intriguing if not historical cultivation and trade route.

Poland

Just as October came to a close, the Polish government announced the beginning of medical imports. Aurora, which went public the same week in New York, also announced its first shipment to the country – to a hospital complex.

Let the ex-im and distribution games begin!

It is widely expected that the Polish market will follow in German footsteps. Including putting its cannabis cultivation bid online whenever the Polish government decides to cultivate medical supplies domestically. The country just finalized its online tender bid system in general.

Does anyone know the expression for “pending cannabis bid lawsuit in Warsaw” in Polish?

Notable Mentions

While it gets little press outside the country, the Danish four year experiment is reaching the end of its first year. While this market was first pioneered by Canopy/Spectrum, it was rapidly followed by both Canadian LPs and others entering the market. Latest entrant this quarter? A tantalizingly American-British conglomerate called Indiva Ltd. as of November 21.

Italy is also starting to establish a presence in interesting ways as multiple firms begin to establish cultivation there.

There are also increasing rumours and reports that Israel might finally be able to start exporting next year. That will also disrupt the current ecosystem.

And most of all, beyond a country-by-country advance, the World Health Organization meeting in early November and in the early part of December is likely to keep the pressure on at a global level for rescheduling and descheduling the cannabis plant.

This in turn, is likely to set the stage as well as the timeline for rec use in Luxembourg. Look for developments soon.

A busy time indeed. Not to mention a quarter to end a very intriguing year, and certainly destined to sow returns for years to come, globally.

Luxembourg’s New Ruling Coalition To Legalize Recreational Cannabis

By Marguerite Arnold
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Stand aside Canada! Events are moving in a strategically interesting way in Europe. And for once it is not news of the German bid.

In this case, implementation of the decision in Luxembourg would actually have two immediate effects.What, where, when? Luxembourg’s new center-left coalition of the Greens, Socialists and more traditional Democrats have put recreational cannabis on their ruling mandate and five-year agenda as of November 29, 2018.

In the comments of the same at the press conference held last week, the sentiments were pretty much of one tenor: “It’s way overdue.”

What does that mean, however, for the rest of the conversation across the continent?

Luxembourg: The First Recreational “State” Market In Europe?

While local advocates are quick to say that their ambition will make them the first EU country to completely legalize recreational cannabis, this is mostly true, but not entirely.

As much as it is fashionable these days to diss Holland, the fact of the matter is that the Dutch pioneered just about everything about the modern movement except clear cut regulation. Coffeeshop envy being what it is, however, it is true that the historical marker of the Dutch market was grey areas. That, however, has been in shifting territory for the last four to five years however. Hard as it is to believe that in just 2014 the Cannabis Cup held its last expo in Amsterdam. How the world has changed since then!

There is also this fact: Switzerland (true not an EU country but just next door geographically), is also poised to use this excuse to make its next move to fully leaded THC. The country has seen a sharp uptick in the consumer, OTC CBD market over the last two years. So much so that foreign (read American and Canadian in particular) enterprises are now looking to Switzerland as one of the more interesting “semi-EU” entry strategies at present. Taxes on a highly profitable industry are also in the public discussion. Adding a bit of THC to the mix, in other words, is likely to come fast in other places too.

Will This Move The Needle In Other Places?

The answer to that question is also, undeniably, yes. How fast that will happen in individual countries across Europe is another discussion. See France, which is now the largest member of the EU to have so far successfully ducked the cannabis question except for some basic decrim ideas that the now embattled French President Emmanuel Macron might, finally, put some enthusiasm into backing.

This could also certainly galvanize the UK. One way or the other, to stay or leave the EU itself. Full recreational won’t be in the cards, however, for quite some time.

Sound incredible? See Brexit so far.it will create the first deliberately regulated recreational market in Europe.

Many other EU countries have also been chafing at the slow pace of reform. Even after basic medical use has occurred. See German advocates who long to follow both the U.S. and Canada, and at present are for the most part shut out of the medical cultivation process. They are simply being outbid by the large Canadians.

But how fast such reforms will come even in Luxembourg, not to mention have a knock on effect elsewhere, no matter how momentous, is still an undecided question.

What Is The Biggest Immediate Impact Going To Be?

As is usually the case in Europe, things are rarely as straightforward as one country deciding to do (or not do) something. In this case, implementation of the decision in Luxembourg would actually have two immediate effects.

One, it will create the first deliberately regulated recreational market in Europe. How fast that could actually roll out is up for debate, considering that the country only legalized medical use as of this summer. As Colorado, California and certainly Canada have proven in spades so far, recreational reform always need some kind of medical base to start with. And implementation of both kinds of markets always seems, at least so far, to carry litigation. Especially in young, untested markets. See the German bid, most recently, just across the border.

However here is the second, and far more intriguing reality that really may be key to the entire enchilada. The legality of cannabis in Luxembourg also has everything to do with the German public cannabis market. Namely, the German stock exchange will only allow Germans to clear stock purchases of publicly listed cannabis companies on the Deutsche Börse if they are in line with not only German cannabis law but also that in Luxembourg, where they actually clear. That was a big issue this summer, only rectified when Luxembourg first changed its medical law.

It also meant, as of this fall, that Aurora went public in New York, not Frankfurt.

In the future, however, after Luxembourg goes full recreational Monty, this will no longer be the case. This will already be tested next spring as another company hopes to go public here. And when that happens, although certainly not for the next several years, the entire discussion of recreational reform will fully and finally be in the European room.

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The Ever-Pending German Cultivation Bid

By Marguerite Arnold
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german flag

It was supposed to be cut and dried. Change the law (after getting sued by patients). Eliminate “home grow” by the same. Set up a nice, neat, efficient sub-department of the German version of the FDA (or BfArM for short). Put the bid online, in an attempt to take the paperwork out of the whole process, and let it rip.

Done and dusted by last summer. Right? Wrong.

In fact, as of now, the second bid deadline has been extended to (at least) December 2018. There is already a pending lawsuit, which has pushed the deadline back this fall several times.

German Parliament Building

BfArM as usual, is sending out non-statements. They cannot comment. This is, again, a pending EU bid.

However, this is, as Germans at least are rapidly realizing, not just another bid. To begin with, there is never a normal first in this industry. And the highly bumpy road auf Deutsch is just a redo of industry realities in every other legalizing jurisdiction.

That the dramas involved are both Shakespearean and of a lesser kind is also part of the mix. Here, for our reader’s benefit, are the summaries of the acts:

The Story So Far

Cue the German Parliament. Change the law. Issue the tender. Get sued. And this is all before last summer was over. Generally speaking that was more or less Act I.

Act II, so far, has been the response. The government, along with BfArM have been engaged in a remarkable discussion in public that is already dramatic by German standards anyway.

enterprising entities are getting import licenses.First, a federal German court called out a fault by a federal agency, which was bad enough.

However, in what appears to be an ongoing act of defence in this very strange second act indeed, BfArM appears to be playing defence to prevent any more legal action. Notably, as the threat of a second lawsuit appeared this fall against the second bid and revised bid issuance, the agency just moved the deadline back, repeatedly. It is now set for some time in December, although industry rumours suggest that the agency will continue to move the goalposts back until after the court date next spring, if necessary.

That does extend the time for intermission. In the meantime, enterprising entities are getting import licenses.

The Major Drama

As in all of the greatest acts and periods of historical change, there are far greater currents that carry the main story line forward. The revolutionary rumbles surrounding cannabis legalization earlier in the decade in the United States have now been felt on a far greater, global scale. Politically, the right to take cannabis has been tied closely to states’ rights in the U.S. since the turn of the century.

Now in the second decade of all of this tumult, cannabis reform as global revolt echoes the zeitgeist of the times. The Donald is now in the second part of an already historically constitutionally convoluted time in the U.S. The U.K, potentially spurred by similar forces might appear to still be on the brink of Brexit. And the EU has begun to try to organize, both on an individual country basis as well as collectively, to deal with political populism.

Shifting regulation in Europe may be groovy, but from a public health perspective, there is much to prove.There is a great deal of political and economic discontent just about everywhere. Law suits, particularly against governments over issues as intransigent as cannabis, in other words, are a powerful tool right now for the disaffected just about everywhere. Not getting a license to grow cannabis and participate in a valuable, multi-billion dollar economy is a powerful grudge.

There is also, beyond this, the overarching flavour of a new trade agreement called CETA which specifically gives corporations the right to sue federal governments. Strange times indeed. Maybe that is why the German Minister of Health, Jens Spahn, just oversaw a historic lifting of the import quota of medical cannabis from Holland to Germany?

The Minor Drama

There are quite a few acts to this play too right now. Shifting regulation in Europe may be groovy, but from a public health perspective, there is much to prove. This is true of cannabis that is reimbursed by health insurers. It is also true of the novel food debates now springing up across the continent, particularly tied to isolates that have made their landing here.

There are also other issues in the mix that include the idea of an agriculturally based economy that might also damn the bid to a kind of strange purgatory for some time. Germans, despite their historical nostalgia for the same, are not an agrarian society. This is a culture ruled by tradition and science, for all the many conflicts that generates. This means the “cannabis as pharmaceutical” conversation is in the room is a part of the national DNA. No matter how much cheaper unprocessed flower might be.

The Players

There are two, broad camps here at the moment. The first are firms that made the cut the first time around (i.e. the large public Canadian LPs). The second is everyone else.

Nobody seriously expects more than one upstart German firm to make it through to getting a cultivation or processing license at this time. Those are widely expected to go to the major firms who have been in the front position from last spring, such as Canopy, Wayland, Aphria and the Dutch Bedrocan.

But those “upstart” Germans are furiously trying to deal themselves into the game. For some it means starting with CBD cultivation. For others it means slinging lawsuits. The last go around, one of the most serious litigants was not an agricultural producer, in fact, but a German wheelchair company.

In other words, while a bit more European in flavour, those who still clamour for a chance to cultivate are every bit as iconoclastic as those on in other climes.In the meantime, the import business is flourishing. 

The Concluding Act?

There are several ways the current situation could end. The first is that the bid is concluded next April. The second is that it is not. In the meantime, the import business is flourishing. And, even better for the German government, the industry is not cultivating domestically.

In the eventuality that the bid is run off the road again next spring, in other words, the government is gamely lining up behind the idea that imports, at least for now, are the way to move into the next segue.

That said, at some point, tired of getting sued if not delayed, the German bid will conclude and German crops will be grown. For now, however, the safest conclusion for this particular drama looks to be 2019. But with plenty of room for a curtain call the year after that too.

mpp logo

Massachusetts Opens Recreational Market

By Aaron G. Biros
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mpp logo

Last week, on November 20, dispensaries in Massachusetts began selling cannabis to recreational consumers. The market was off to an obviously electric start, following the path of other states that legalized recreational cannabis. Consumers waited in long lines on opening day, more than two years after voters in the state legalized cannabis.

While this marks an important milestone as the first legal recreational cannabis sales began on the East Coast, regulators only approved two licensed dispensaries to begin operations on opening day. Those two retailers allowed to begin sales are Cultivate Holdings in Leicester and New England Treatment Access in Northampton.

The Cannabis Control Commission (CCC), the state’s regulatory body overseeing the new marketplace, received some criticism for taking more than a year to establish and implement regulations for the industry. In April of this year, regulators were just preparing the final rules.

It has taken them a fair amount of time to establish the regulatory framework, but much of the recent delays were due to a lack of laboratory licenses. Earlier in November, the CCC finally approved two laboratories for testing in the recreational market. Those two labs are MCR Labs LLC of Framingham and CDX Analytics LLC of Salem. With the labs approved for third-party independent testing in the recreational market, regulators began allowing retailers to open shortly after.

Shawn Collins, executive director for the CCC, told Boston 25 News that they are delivering on the voters’ requests to provide for a safe marketplace. “When Massachusetts voters legalized adult-use cannabis, they communicated a desire to purchase products that are safely regulated and properly tested,” says Collins. “The Commission has done scrupulous due diligence to make that vision a reality and ensure licensed independent testing labs maximize public health and public safety.”

Canopy_Growth_Corporation_logo

Big Canadian LPs Announce Major German and EU Moves

By Marguerite Arnold
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Canopy_Growth_Corporation_logo

Canopy Growth Corporation, continues to move aggressively across Europe to solidify its presence across the continent. As of the beginning of November, Canopy’s European HQ in Frankfurt announced that the company is currently eyeing additional cultivation sites in Spain, Italy and Greece.

Aphria is also making news. The producer has just announced that it is seeking EU GMP certification and its intention to buy existing German distributor CC Pharma, with distribution reach to 13,000 pharmacies. Earlier in the year, Aphria acquired German Nuuvera, a global cannabis company currently exploring opportunities in Israel and Italy beyond Germany.

But that is also not the only thing going on “in town.” Wayland Corp also has announced recently that it is going to be producing in Italy in a unique cleantech, biogas fueled facility, and even more interestingly, working with a university on high-tech absorption techniques to help standardize dosing for (at present) CBD.

The European Production Industry Is Growing At Lightning SpeedCanopy_Growth_Corporation_logo

Buoyed by their experience in the Canadian market, LPs are now focusing on Europe with even more intensity as the drama over the German cultivation bid, British schedule II access (no matter what happens with Brexit), and medical cannabis reform itself unfold.

As a group, they have money and talent, but are now also aware that they are not the only game around.

Producers from the rest of the world, including South America, are increasingly eyeing the European market, frequently in combination with Canadian corporate ties (see ICC and Hexo). So are institutional investors (from the U.S. in particular). The European market represents, as a region, the first real medical market anywhere and a healthcare system set to absorb a great deal of cannabis sales.

One thing is also increasingly crystal clear. Not being in the room, especially at the top industry conferences now establishing themselves across the continent, but even more particularly in Germany, is the best way to be locked out of a highly valuable and rapidly expanding market.

Seed to Sale Show

Seed to Sale Show is the only national show focused solely on innovative best practices, science, and cutting-edge technology surrounding the whole life cycle of the cannabis plant grown, processed, and sold in a regulated market.

This February 12–13, more than 3,000 of the nation’s leading professionals will convene in Boston, MA, at the forefront of the cannabis industry’s technological advancement and modernization, to learn about the latest innovations behind the growing, extracting, infusing, marketing, and retailing of cannabis in three highly-focused educational tracks

aurora logo

Aurora Cannabis Burnishes Its Medical and Recreational Game

By Marguerite Arnold
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aurora logo

It has been a busy couple of weeks for Aurora executives, no matter what else is going on. And all signs indicate that Aurora is not only keeping its pressure on major competitors Tilray and Canopy in particular, but playing a highly sophisticated political and global game right now.

Where the company in other words is not “winning,” Aurora is clearly establishing an effective global footprint that is ensuring that it is at least keeping pace with the speed of market development and even breaking new ground more than once recently.

The Aurora Tour Of The Global Stage In Late October

Forget what is going on in Canada for a moment, if that is possible. Global investors, certainly, in the aftermath of the post legalization glow, certainly seem to be. So are the big LPs like Aurora. They are looking elsewhere, to medical markets and to Europe, for more clarity on where the market will go.

Aurora certainly has been, even if unwittingly, caught in the middle of that conversation, in part because of where and how the company has been positioning itself lately.

Last time around, the company announced it was in the top ten finalists. This time, it is also expected to do well.That said, what Aurora is doing, like everyone else in this space right now, is playing a global game of hopscotch in terms of both raising equity and then where that capital gets spent. Aurora’s recent victories, certainly this year, indicate that it will continue to be a formidable presence in the room.

For now, however, it is clear that retail investors are suddenly cautious and institutional investors are clearly still very leery. So where does that leave Aurora?

Road Trip To Germany

CEO Cam Battley at a conference in Frankfurt
CEO Cam Battley at a conference in Frankfurt

Consider these interesting series of events. Canadian recreational reform “goes live” on October 17. Instead of sticking around Canada, however, CEO Cam Battley spoke at a recent investor road show for the Canadian public cannabis companies over the weekend of October 21-22 in Frankfurt, Germany. Three well placed, but anonymous industry sources confirmed to Cannabis Industry Journal that a meeting between all the major cannabis companies in Frankfurt over the weekend (including not only Aurora, but Wayland Corporation, Canopy, Aphria, Green Organic Dutchman and Hexo) was either planned or attempted with federal Minister of Health, Jens Spahn sometime during this period of time.

Even more interestingly, this conference had clearly been planned to coincide with the original due date of the new German cultivation bid, in which Aurora is also well positioned. Last time around, the company announced it was in the top ten finalists. This time, it is also expected to do well.

Whenever the bid finally is decided, that is.

As of October 23, the day of the IPO in New York and the day after the conference in Frankfurt concluded, news circulated that the bid had been delayed a second time, with rumours of further lawsuits swirling.

IPO In New York

That day, Tuesday October 23, Aurora announced its IPO on the NYSE, not in Frankfurt after announcing this possibility the month before. This is significant, namely because all of the cannabis companies listed here are essentially in what is known, colloquially, auf Deutsch, as being “in the dog house.” Namely, financial regulators are looking closely at listed companies’ profiles on the exchange. If a listed company is too associated with the recreational industry, trades will be barred from clearing by Clearstream, the daughter company of the Deutsche Börse and located in Luxembourg. Earlier in the summer, all of the major LPs were briefly on the restricted list.

The next day after Canadian recreational reform became reality in fact, on October 18, the Deutsche Börse made the latest in a series of comments regarding its intentions about their future decisions on the clearing of cannabis stocks. Namely, that at their discretion, they can prevent the clearing of stock purchases of a cannabis company at any time. In other words, essentially delisting the stock.

Aurora, with its ties to mainstream, “adult use” in North America, is absolutely affected by the same, certainly in the short term. Including of course, all those rumours about Coke’s interest in the company (still unconfirmed by both Aurora and Coke).aurora logo

Looking Toward Poland

Yet here is where Aurora stays interesting. Just two days after its debut on the NYSE, the company announced that Aurora would be the first external company to be allowed to import medical cannabis to Poland (to a Warsaw hospital and pain clinic). The same day, incidentally, as the Polish government announced that medical cannabis could indeed begin to be imported.

This came after a stunning move earlier in the year when the company bagged the first medical cultivation license in Italy.

Clearly, Aurora is keeping good, if not powerful, company. And that will position it well in the long run. Even if, for now, its IPO on the NYSE got off to a less than powerful start.

Why Does Aurora Stand Out?

Like all the major cannabis companies on the global stage right now, Aurora understands what it takes to get into the room (wherever and whatever that room might be) in politically and regulatorily astute ways, much like Tilray. Both companies are also very similar in how they are continuing to execute market entry and public market strategy. Tilray, it should be remembered, went public over the summer, in North America too, right around the announcement of the final recreational date in Canada.

And while Aurora is clearly playing a still retail-oriented stock market strategy, it has proved over the last 18 months that it is shaping up to be a savvy, political player on the cusp of legislative change in multiple European states so far. They are courting the much bigger game now of institutional investment globally.

Richard Naiberg
Quality From Canada

Protecting Intellectual Property in Canada: A Practical Guide, Part 6

By Richard Naiberg
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Richard Naiberg

Editor’s Note: This is the sixth and final article in a series by Richard Naiberg where he discusses how cannabis businesses can protect their intellectual property in Canada. Part 1 introduced the topic and examined the use of trade secrets in business and Part 2 went into how business owners can protect new technologies and inventions through applying for patents. Part 3 raised the issue of plant breeders’ rights and Part 4 discussed trademarks and protecting brand identity. Part 5 took a detailed look at copyright laws for cannabis companies and how they can protect works of creative expression.  

In Part 6, the conclusion of this series, we take a look at nine key takeaways from the series:We hope you enjoyed this series and found the information provided to be useful. If you’d like to learn more about intellectual property law in Canada as it relates to the cannabis industry, feel free to reach out to Richard Naiberg at rnaiberg@goodmans.ca 

Summary of Practical Considerations For Cannabis Producers

  1. Cannabis producers should establish procedures by which the technological innovations achieved by their employees are kept confidential and are quickly reported to management for consideration as to whether the innovation should be protected as a trade secret, by patent, by plant breeder’s right or not protected at all.
  2. If a trade secret protection is desired, the producer must invoke systems that limit knowledge of the secrets to those in the company with a need to know it, and make sure that departing employees understand their obligations of confidentiality and do not take any documentation of the secrets with them when they go.
  3. The nature of the innovation under consideration will drive the choice between a patent and a plant breeder’s right. Plant breeder’s rights only protect whole plants. Patents protect other innovations, subject to the limitations described above. Patents may be drafted to protect whole plants, albeit indirectly: a patent on genetic sequences or engineered cell can be infringed by a whole plant that incorporates those sequences or cells.
  4. The decision as to whether to file an application for a patent or a plant breeder’s right, and in what jurisdiction(s), should be made with careful consideration of whether the producer will employ the invention/variety in its business (and in what countries), as well as the potential value of the invention/variety to other producers who may eventually become licensees of the resulting patent(s) or plant breeder’s right.
  5. Cannabis producers must remain up-to-date on patent and plant breeder’s rights applications that are filed in the jurisdictions in which they operate so as to be in a position to identify patents and plant breeder’s rights that will potentially affect their freedom to operate. Such due diligence will also allow the producer to predict the technological and business focuses of their competitors.
  6. Cannabis producers must select a trademark that is immediately distinctive or can quickly become distinctive of its goods and services. The trademarks ought to be fully available, in the sense that they are not in use by any competing business in any of the jurisdictions in which the producer intends to do business. Ideally, the trademark ought to be available as a domain name to ensure that there is no confusion on the Internet.
  7. Once the trademark is selected, the cannabis producer should make consistent and extensive use of that trademark. The more consistent and ubiquitous the use, the stronger the producer’s brand and trademark will be.
  8. The owner of the trademark must routinely conduct searches to ensure that no third party is using a trademark that is similar that of the owner. If such unauthorized use is discovered, the owner must act quickly to restrain that use or potentially license the use.
  9. Cannabis producers ought to contract to ensure that they are the first owners or assignees of any copyright subsisting in the artwork, literature and websites the company creates or hires other to create. Producers ought also to obtain waivers of the moral rights of any authors of this work.

We hope you enjoyed this series and found the information provided to be useful. If you’d like to learn more about intellectual property law in Canada as it relates to the cannabis industry, feel free to reach out to Richard Naiberg at rnaiberg@goodmans.ca

Midterm Elections Bring Green Wave of Legalization

By Aaron G. Biros
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On Election Night in America, pundits on the news media were reporting on the blue wave of Democrats taking back control of the House of Representatives, a less-discussed green wave made its way through the ballots in a number of states. While not as big of a tidal force as we saw back in 2016, this election still brought a handful of states on the cannabis legalization train.

Measure 3 in North Dakota failed to get enough votes, but many seem to think this was somewhat expected, as the state is still working on implementing their medical framework years later and that this new measure was less than perfect.

However, here comes the good news: Missouri voters passed Amendment 2, which legalizes, regulates and taxes medical cannabis. Very interestingly, this measure includes language allowing for caregivers to grow up to six plants. Check out Tom Angell’s article on Forbes to learn more.

In Utah, Proposition 2 passed by a narrower margin than other states, but legislators in the state are already full steam ahead on legalizing medical cannabis. They planned to pass a bill with the same language in Prop 2 if it didn’t get enough votes. Regardless, Utah will begin working on implementing a regulatory framework for legal medical cannabis, per the voters’ request.

While the 2016 election saw a handful of states legalize recreational cannabis, only one state did so this time around: Michigan. Voters in Michigan passed Proposal 1, making it the ninth state in the country to legalize and regulate recreational cannabis. According to Matthew Schweich, deputy director of the Marijuana Policy Project, Michigan’s legalization is a major milestone for the country. “The passage of Proposal 1 is a major milestone for marijuana policy reform in the U.S. Michigan will be the first state in the Midwest to end marijuana prohibition and replace it with a system in which marijuana is regulated for adult use,” says Schweich. “Michigan is going to demonstrate that regulating marijuana works, and it will set a strong example for other states in the region and around the country.”