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Report on Business Cannabis Professional Around the industry: Dec. 17 - Pot recall; France mulls medical cannabis; Organigram earnings

Second pot recall since Oct. 17

Winnipeg-based Bonify became the second licensed cannabis producer late last week to recall its products since recreational legalization took effect. Two brands – “Cherry Lime Pie” and “Warlock Kush” – were listed for a voluntary recall, with the Dec. 7 notice saying three retail locations in Saskatchewan sold more than 50 units of the 3.5 gram size those products between Nov. 20 and 30.

“The recalled product may not meet some of the microbial and chemical contaminant limits,” the recall notice said. “Documentation confirming test results could not be matched to the lot specific numbers. To date, no complaints have been received related to the recalled lots [and] neither Health Canada nor Bonify has received any adverse reaction reports for the recalled cannabis products.”

Last month, Ontario-based producer RedeCan recalled 7,400 units of its “B.E.C.” brand after receiving five complaints that the product contained mold. All five complaints came from customers who purchased 3.5-gram containers of “B.E.C.” through the Ontario Cannabis Store.

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French medical committee recommends medical cannabis

France could be moving closer to the legalization of medical cannabis after a government-appointed expert panel recommended the use of marijuana in “certain clinical situations.”

Last September, the country's Agency for Drug Safety (ANSM) put together an expert committee, which last week ruled in favour of advancing cannabis for use as therapy in the following conditions:

  • In some forms of severe and drug-resistant epilepsy;
  • As part of supportive care in oncology;
  • In palliative situations;
  • In the painful spasticity of multiple sclerosis.

The expert committed excluded smoking as a form of use, but "will, where appropriate, provide detailed advice on the various possible routes of administration."

The committee said next steps include a year-long study of the effects of medical marijuana via the creation of a national registry of patients.


Nova Scotia getting more growth

Halifax-based AtlantiCann Medical won a cultivation license from Health Canada on Dec. 11 that will allow the company to begin growing cannabis at its facility in Lower Sackville. The 48,000 square foot cultivation and extraction site is capable of producing up to 6,000 kilograms of dried cannabis per year. The company, which is 50 per cent owned by the Denver-based MJardin Group, is planning to add an additional 20,000 square feet of cultivation space to the facility by the end of 2019.

“Since federal legalization in October, the Canadian cannabis market has struggled to meet strong consumer demand due to supply shortages,” MJardin CEO Rishi Gautam said in a release, with AtlantiCann president Christine Halef adding they expect to complete the first harvest from the facility in the spring of 2019.

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–Jameson Berkow

Organigram’s FY 2018 sales double ahead of recreational legalization

Organigram Holdings Inc.’s fiscal 2018 sales ending in August more than doubled year-over-year and the licensed producer estimated that its first-quarter 2019 sales, which include the initial six weeks of legal recreational cannabis, will exceed that of the entire year prior.

Organigram further estimated that Q2 2019 sales will exceed those of Q1, based on purchase orders received to date.

Net sales for Moncton, New Brunswick-based Organigram, jumped to $12.4-million in the company’s 2018 fiscal year ending Aug. 31, up from $5.4-million in 2017. For the quarter ending Aug. 31, net sales reached $3.2-million versus $1.8-million in the fourth quarter of 2017, the company reported.

The sharply higher sales came as Organigram’s number of registered medical patients doubled to 15,730 in 2018 compared with 7,404 in 2017, though 2019 sales were expected to be dominated by revenue from adult recreational use, the company said.

While the company is in the midst of a major expansion to reach an annual production capacity of 113,000 kg by October 2019 from 36,000 kg, increased plant yields have sharply lowered their cost of production.

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“Our all in cost of production would have been 83 cents per gram in the quarter. It’s gone down dramatically. It really is the benefit of the yields,” said Greg Engel, Organigram chief executive officer.

This is down sharply from $2.65 per gram in the first quarter of 2018, the company’s quarterly report shows.

The company aims to benefit from the sale of edibles, when they are expected to be legalized in Canada in October 2019, and is already extracting from plants and creating formulations for production with 56,000 square feet of its facility dedicated to this.

“We’re doing extraction today and building up inventory. We are planning to produce edibles ourselves and are working on formulations right now,” Mr. Engel said.

–Marcy Nicholson

New Zealand, Eastern Caribbean pass cannabis legislation

Ahead of a planned referendum on whether to fully legalize recreational cannabis use, the New Zealand government removed barriers this week that limited accessing of marijuana for medicinal purposes. The previous regime only allowed patients to access cannabis with individual approval from the country’s Health Minister, but the law that passed on Tuesday will allow anyone with a doctor’s permission to legally consume cannabis. While the new law is expected to take up to a year for the relevant regulations, quality standards and licensing rules to be put in place, it includes a clause that will allow immediate access for what the government estimates to be roughly 25,000 terminally ill New Zealanders currently in palliative care. Cannabis industry participants would likely be most interested in the aspect of the new law that will allow commercial cannabis production and overseas distribution, as the provision paves the way for large-scale production. As part of a coalition agreement with the New Zealand Green Party, the governing Labour Party has pledged to hold a nationwide referendum on recreational cannabis legalization before the end of 2020, which is broadly expected to pass.

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Another jurisdiction to advance cannabis legislation this week was Saint Vincent and the Grenadines. Home to more than 100,000 people, the founding member of the Organization of Eastern Caribbean States became the first OECS country to decriminalize cannabis for medical and scientific purposes on December 11th. While the rules governing who can access cannabis and how long the regime will take to be established remain unclear, the government has promised to impose “tightly regulated guidelines.” However, SVP is also encouraging private foreign companies to enter its nascent cannabis industry, having published a list of more than 30 reasons to invest last month.

–Jameson Berkow

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