July 31, 2023

DENVER — Alisha Gallegos’ purple and blue bus may look like a school bus, but it’s definitely not. It’s a cannabis consumption bus, only recently licensed for business by the City and County of Denver.

“What we’re trying to do is create responsible consumption practices,” Gallegos said “I saw the need for it.”

The bus can be rented out for weddings, private events, even festivals and can be smoked in.

“Definitely in the wedding market, when you go outside, and people are huddling in a corner or they’re, you know, trying to hide and smoke their cannabis,” Gallegos said.

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Now that the licenses are up, the bus is allowed to start rolling through the city. To get to this point Gallegos had to make tons of modifications to the bus to be compliant.

“There’s carbon filtration, I have a medical grade air purifier, we have to make sure that we have no visibility into the bus,” Gallegos said.

The bus driver has to be blocked off from the back of the bus and cannabis all together, to do that Gallegos had to install two doors, one that slides shut and another that zippers closed.

There are also multiple cameras recording every single thing happening inside of the bus.

“Everything has to be recorded and held for 45 days,” Gallegos said.

Even route logs with planned stops need to be approved seven days before an event.

“We can park in smoke, or we can drive in smoke,” she said.

Although there is a vending machine filled with snacks and drinks on the bus, you’ll notice there’s no actual cannabis for sale on the bus. That’s because it’s ‘bring your own cannabis.’

Eric Escudero, the spokesperson for the Denver Department of Excise and Licenses says all of these requirements are in place for a reason.

https://744b7af8962a662a4cac1f1ef080a294.safeframe.googlesyndication.com/safeframe/1-0-40/html/container.html

“People can’t see consumption happening on them because we don’t want children to see that or markings that might reduce the perception of risk among children if they see a bus driving around Denver,” Escudero said.

These rules are something Gallegos doesn’t mind abiding by because following them means she’s compliant and therefore can continue working on building her business.

Source: https://www.denver7.com/news/local-news/cannabis-consumption-buses-now-licensed-to-operate-in-denver?fbclid=IwAR0mUePFd3EeF34Zf4rKjXHvjWQCQLi9TOWTneucHLap6YEDRPgT8h9uiTY

Basketball star Kevin Durant has said the NBA commissioner could smell cannabis on him as he lobbied to end the league’s ban on the drug.

“He smelled it when I walked in, so I didn’t really have to say much, you know what I’m saying?” Durant said in an interview.

The 34-year-old added that the drug is so commonly used in the league “it’s like wine at this point”.

NBA players are no longer prohibited from using cannabis.

The league and its union, the National Basketball Players Association, signed a new collective bargaining agreement last month that removes the drug from its list of banned substances.

The policy change drew praise from the likes of rapper Snoop Dogg, who touted its “health benefits and how it could actually help ease the opioids and all the pills that they’ve been given and the injections”.

Players have not been subject to random tests for cannabis since the 2019-20 season.

Durant, a forward for the Phoenix Suns and one of the top scorers in NBA history, was among those who personally lobbied NBA commissioner Adam Silver in a meeting to stop the league penalising use of the drug.

During an interview at a sports and business conference in Los Angeles on Tuesday, Durant said: “He kind of understood where this was going.

“It’s the NBA, man. Everybody does it, to be honest. It’s like wine at this point.”

He said Mr Silver – the league’s commissioner since 2014 – agreed with him. The BBC has contacted the NBA for comment.

“I just enjoy the plant,” said Durant, who has invested in several cannabis-related companies. “It’s as simple as that.”

Other US sports leagues, including Major League Baseball, the National Football League and Ultimate Fighting Championship, have all relaxed their cannabis policies in recent years.

The drug is legal for recreational use in 23 US states, three US territories and the capital Washington DC – but its use and possession remains illegal under federal law.

Source: https://www.bbc.com/news/world-us-canada-66325946?fbclid=IwAR2cS6x4Pz1jquUJcQfN6t1hJG2tNVdJTjXR1eMLE4K5Arn5tWxE4CG360A

Mastercard’s new hardline demand that banks and payment processors immediately halt cannabis transactions involving its debit card has upended the marijuana industry and put more licensed operators at financial risk, industry insiders told MJBizDaily.

The latest development, first reported by Bloomberg, is expected to affect adult-use and medical marijuana retailers the most as well as their customers.

Those consumers will likely revert back to the days of cash-only transactions – a throwback in an era when digital wallets are used to buy everything from groceries to gas.

It’s also a stark reminder that these types of business setbacks will persist without federal cannabis reform and as long as marijuana remains illegal under U.S. law, executives told MJBizDaily.

Earlier this year, cannabis operators were forced to scramble and find a new payroll provider after receiving a memo from Paychex advising that the company would no longer process direct deposits or offer other services for marijuana-related businesses.

Mastercard issued its cease-and-desist orders earlier this week to participating banks, Bloomberg reported.

“In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connect them to Mastercard to terminate the activity,” a company spokesperson told the news agency.

It’s widely believed the vast majority of marijuana debit transactions at U.S. marijuana stores are routed either through First Federal Bank of Florida or Dart Bank in Michigan.

Executives from the two banks did not immediately respond to MJBizDaily inquiries.

As a result of the Mastercard order, cannabis businesses said consumers will likely see more ATMs at stores.

Retailers and their supply chain will also have to deal with a lot more cash, which brings its own set of challenges and risks.

Marijuana companies are particularly vulnerable to break-ins and robberies given the highly cash nature of the business.

“We are taking a situation and making it harder for cannabis businesses to facilitate legal operations,” said Dawne Morris, co-founder of California-based Proteus 420, which makes point-of-sale (POS) and inventory software for cannabis companies.

“What this means is moving into heavier cash processes again, which increases theft, and potential for more (illicit) market operators to move back into a space prior to legalization.”

Dutchie pivots

Financial service providers in the cannabis space will have to find new solutions as well.

Technology platform Dutchie, which provides POS hardware and e-commerce solutions for marijuana retailers across the country, alerted customers on Monday via email it’s rolling out a new payment processing service utilizing Bitcoin and a digital wallet to “deposit, transact and receive funds,” according to an updated user agreement sent to customers.

“This alternative solution is intended to allow you to continue processing without any disruption,” the company told its marijuana retail partners in an email notification.

Bryan Barash, Dutchie’s vice president of external affairs, said the company is helping address an unfair playing field when it comes to financial services.

“We continue to strongly advocate for change to outdated and unfair federal cannabis policies while monitoring and reacting to the latest updates that impact day-to-day operations,” he told MJBizDaily via email.

Under the new service, Dutchie’s retail customers will essentially purchase Bitcoins from Dutchie partner Mobile Currency LLC equal to the amount of the corresponding dispensary transaction.

Those Bitcoins, according to the user agreement, will then be used to purchase cannabis products, in essence replacing debit-card transaction.

Bitcoin’s volatility and virtual currency status could spook some marijuana retailers and affect sales volume, according to cannabis banking expert Tyler Beuerlein.

“It’s certainly not ideal,” said Beuerlein, chief strategic business development officer for Colorado-based Safe Harbor Financial, which provides banking and lending services for cannabis companies and ancillary businesses.

“We’ve got a multibillion-dollar industry that’s still struggling to find its payment identity.”

Calls for federal reform emboldened

Mastercard’s abrupt decision to stomp out marijuana debit-card purchases has renewed industry pleas for lawmakers on Capitol Hill to address banking and other financial needs for one of the country’s faster-growing industries, despite widespread struggles to secure capital, increase retail access and compete against thriving underground markets.

“Mastercard stepping in to thwart the use of debit cards in cannabis via a pin debit system is another painful reminder of the lack of federal recognition of legal cannabis,” said Morgan Paxhia, a co-founder and managing director of San Francisco-based cannabis hedge fund Poseidon Investment Management.

“Legal cannabis deserves to be treated like every other business in this country. And 10 years later, we have no support from the federal government and Mastercard retrenching.”

Wendy Bronfein, co-founder of vertically integrated Maryland operator Curio Wellness, said the industry needs partners for banking, tax relief and safe and secure payments.

“Ultimately, the only way financial institutions are going to be comfortable working with us is by getting the OK from the federal government,” she said.

Passage of the SAFE Banking Act – which would allow banks to serve marijuana companies without fear of a federal crackdown – would harmonize state and federal law as well as provide guidance to financial institutions on engaging the industry, according to Brady Cobb, CEO of Sunburn Cannabis, which operates several medical marijuana stores in Florida.

“Hopefully this is a wake-up call that action is needed,” he said.

Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.

Kate Robertson can be reached at kate.robertson@mjbizdaily.com.

Source: https://mjbizdaily.com/mastercard-ban-on-cannabis-debit-card-purchases-rocks-industry/?fbclid=IwAR0igMvfa87qbNno1jMLGAqUbzPZlnzSFpYM-ZjTDKFNU9WHyymXzS8eP9Q

Cannabis sales figures released on Monday show that the dispensary run by the nonprofit Housing Works exceeded its revenue expectations for the first six months. But it’s unclear whether other early licensees who have struggled with New York state’s slow rollout of the retail industry will be able to replicate this success.

The state’s cannabis program has prioritized granting licenses to nonprofits like Housing Works as well as people whose lives were affected by prohibition. In late December, when Housing Works opened New York’s first legal recreational marijuana dispensary in the East Village, a line stretched around the block, and it sparked a flurry of local news coverage. But the initial hype was not a guarantee of sustained sales — especially given how many unlicensed dispensaries were selling untaxed weed nearby.

The Housing Works shop sold $12 million worth of edibles, flower and other marijuana products in its first six months, averaging $2 million a month. That’s twice the monthly revenue the nonprofit was projecting when it launched, according to Matthew Bernardo, president of Housing Works, which provides health care, housing and social services.

“We were very pleased and it was really successful from day one,” Bernardo said. The dispensary did about $40,000 in sales within three hours of opening on Dec. 29, the nonprofit said.

Because state officials have been slow to open other dispensaries, Housing Works accounts for more than a third of the $33.4 million the state’s legal recreational marijuana industry generated in its first six months. But more than 400 retail licenses have now been distributed, and other shops are coming online one by one. As of Friday, seven legal dispensaries operated across the five boroughs, and 17 had opened statewide, not counting a handful of delivery-only operations.

For Bernard Allulli, who has a license to open a dispensary in Manhattan, the initial sales figures from Housing Works are encouraging. “It helps with investors, obviously, for those numbers to be released, because people know that this is a real thing,” Allulli said.

Still, he said he felt Housing Works had certain advantages.

“I’m not going to be on Broadway and Eighth Street right on top of NYU, and I’m not the first shop that opens up that has all of that press behind them,” Allulli said.

At Housing Works, deliveries currently account for about 5% to 7% of sales, and Bernardo said the goal is to expand that segment of the business. “We are trying to get the word out,” he said.

So far, Housing Works delivers to parts of Manhattan and Brooklyn as well as Long Island City in Queens.

Part of the appeal of legalizing marijuana was to generate more tax revenue for the state. Housing Works created about $1.8 million in sales tax in its first six months. New York’s recreational cannabis retailers generated an estimated $4.3 million in sales tax revenue during that time, based on overall sales figures from the state’s Cannabis Control Board.

Tax revenue from the recreational cannabis program is supposed to go towards education, grants to community organizations and drug treatment programs.

Meanwhile, Housing Works is using its cannabis revenue to bolster its social programs, including housing and job training for people re-entering the community after being incarcerated, Bernardo said.

He added that the company is planning to launch a cannabis job training program where people can shadow employees at the Housing Works dispensary, so they can either work there or elsewhere in the legal weed industry.

Source: https://gothamist.com/news/twelve-million-in-6-months-how-new-york-first-legal-weed-retailer-exceeded-expectations?fbclid=IwAR1MAt6AuQN2ybveIpE_5xC2QpUqCgOgRYuB_Q06cwt1d9y2ACqAYo239Ds

Packaging could be the first major application of hemp bioplastics, a new study from Canadian researchers suggests.

The research, by a team at Western University (WU), London, Ontario, replaced high-density polyethylene pellets used in conventional plastic with powder made by grinding up hemp stems. The material was fed directly into the manufacturing process currently used to produce packaging, with no special technology or processes added.  

“This work demonstrates a new series of biocomposites . . . which can be fully sourced from renewable resources and has strong potential for biodegradation in the environment,” according to the study, published in The Journal of Polymer Science. 

‘Works great’

Tests showed that while the strength and malleability of the hemp-based material do not meet benchmarks in conventional plastics, it is nonetheless stronger and more malleable than other plant-based materials, and of sufficient quality for many applications. 

“When it comes to packaging, plastic replaces things like metal and glass. Those are heavy and expensive,” Elizabeth Gillies, a WU chemistry professor who is an author of the paper, told Canada’s CBC broadcaster. “Depending on the shape, hemp can have a fibrous structure, which works great as a reinforcement for materials.” 

The plastics crisis

With recycling programs proving insufficient to resolve the problem of plastic refuse compounded by a global microplastic pollution crisis, hemp bio-composites offer a planet-friendly alternative, the paper observes.

“Glass recycling is not a very profitable business and although many plastics are potentially recyclable, this is often not the case in practice,” said Gillies, who works in the university’s department of chemical and biochemical engineering, and who is also WU’s Canada Research Chair in polymeric biomaterials.

Sober business outlook

The research paper adds to a growing body of work — and much hype — around hemp fiber as an input for bioplastics, offering, however, a sober assessment when it comes to business potential: “In terms of cost, biomaterials are currently more expensive to produce than plastics, but companies are working to optimize and reduce prices, so costs are expected to decrease in the coming years as these technologies improve.”

Hemp bioplastics, similar to eco-friendly, hemp-based building materials, are sure to face strong headwinds from well-entrenched incumbent plastic makers whose products are based on petroleum. That means investment will be slow to develop for the bio-plastics sector, which is essentially still at an experimental stage.

Source: https://hemptoday.net/hemp-can-be-substitute-for-polyethylene-in-packaging-canadian-study-shows/?fbclid=IwAR1dfntVgKVRcUko0r9FHgZu5N3l0pr0FTtZtE8RnO9D5P5fY-U4Ly1ehL4

As an adult, Cozzolino made buying Turkish delights from a neighborhood candy store an after-school ritual he shared with his son.

‘Infinite possibilities’

As an infused cannabis product, Turkish delights can be as practical as they are magical, he said.

“The formulation gives infinite possibilities in terms of the types of ingredients that you can use. You can throw anything at it and make it make sense and make it taste good,” said Cozzolino, who started the California-based cannabis company Rose Los Angeles in 2017.

Rose Delights, the brand’s marquis product, are cannabis-infused Turkish delights. Rose Los Angeles also sells packaged flower, infused chocolates and capsules.

“It gives you an opportunity to create a more shelf-stable, gummy type of product without having to introduce all sorts of weird synthetic or artificial ingredients,” Cozzolino said.

Cozzolino’s culinary team and occasional guest chefs have created an exotic selection of homegrown flavors infused with single-strain rosin from flower grown on Rose’s Farm in Penn Valley, California.

The farm also grows many of the fruits and vegetables that go into the delights. Ingredients not grown on the farm are sourced from local farmers and specialty producers.

Flavors of Rose Delights include apple-ginger-ume (a Japanese fruit similar to a plum) infused with Sunshine No. 4 rosin, pear-kimchi infused with Maltese orange rosin and, in a nod to the traditional Turkish delight, two types of rose hibiscus: one infused with Fruit Gushers (an indica strain) and the other with Super Lemon Mac (a sativa).

“The whole intention behind Rose Delights was to create an edible product that took responsibility for and cultivated the majority of its inputs,” Cozzolino said.

Farm and flower

The process begins at Rose’s Farm, a property in central California that includes a 10,000-square-foot cannabis garden.

Rose Los Angeles uses only a fraction of the garden to grow roughly 300 plants, which typically yield about 500 pounds of dry cannabis.

Of that, 100 pounds is selected for manufacturing rosin, which will go into Turkish delights or chocolates, and the rest is sold as packaged flower.

If Rose maxed out its grow space, it could harvest more than 1,000 pounds of flower and produce 30,000 packages of Rose Delights per month, Cozzolino said, adding: “We just focus on the genetics that are inspiring.”

Cozzolino noted that Rose uses the same grades of flower for rosin pressing that it sells as packaged bud.

“Whether we’re packaging it for prepackaged flower sales or we’re putting it in a 35-micron bag for pressing, the process all the way up until the very end is exactly the same. So, all of our flower is treated like smokable flower,” he said.

“It’s all graded similarly; we’re not only pressing smalls, we’re pressing 7-gram buds.”

After harvesting, the flower is cured for 10-14 days and then stored in bins separated by strain. It often won’t be trimmed until it’s ready for sale or pressing.

Rose’s trimmers are careful not to overtrim buds, which can cause unnecessarily trichome loss.

“For pressing, we want to preserve those. But we get off anything that could affect the flavor—so anything that’s not trichrome-encrusted. And then, a lot of the sugar leaf goes away as well. We take it down pretty close to just the bud,” Cozzolino said.

“We pretty much process that same exact way that you would process to package smokable flower, except instead of putting it in flower packaging, we put it into a nylon mesh bag for pressing.”

Pressed to impress

The flower then goes to Rose’s 3,000-square-foot facility in San Francisco’s Mission District, where it is pressed.

The facility also is home to Rose’s kitchen, where the edibles are made, as well as a curing room where the delights are cured.

For pressing, the flower is put in 35-micron bags (about the size of a single human hair, Cozzolino said) that can hold up to a half-pound of flower.

Rose uses Sasquatch Yeti rosin presses of various sizes and presses at low heat, averaging about 210 degrees, depending on the strain.

While some rosin-makers will double-press a bag to extract the maximum amount of rosin, Rose does a single press to avoid “overtoasting” the flower and creating rosin that tastes burnt.

“We do short-duration low heat in order to preserve the aromas and terpenes and not toast that flower before we cook with it,” Cozzolino said.

One pound of flower yields 60-90 grams of rosin, Cozzolino said, adding that whole-plant pressed rosin has the same terpene, cannabinoid and chemical profile as the original flower.

 Perfecting recipes

After pressing, the rosin is decarboxylated for up to a few hours, depending on the volume; it is then added to whatever carrier fat is going to be used in the recipe.

One thing that differentiates Rose Delights is that they are made with potato starch, while conventional gummies are made with pectin.

The difference is important, Cozzolino said, because with potato starch, the delights won’t melt below 180 degrees. Conventional gummies, he said, can melt at half the temperature.

“Our formulation has a higher melting point, so it’s something that you can take with you in your pocket at Coachella and not worry about it melting,” Cozzolino said.

Rose’s recipes are unique and high end.

The apple-ume recipe, for example, is made with “cult classic” Bernie’s Best apple cider from Northern California, house-made ume plum syrup and a bit of fresh-pressed ginger juice. The mixture is infused with rosin pressed from Sunshine No. 4 flower.

High Energy Rose Delights are made from house-made green juice that includes spinach, watercress, cucumber, lemon and pear, blended with 90 phenotypes of the Congolese Bubblegum strain from Purple City, a partner farm.

“It was an exclusive collaboration for this High Energy recipe,” Cozzolino said.

Because Rose Farm grows from seed and not from clones, it can blend phenotypes “to get a more robust expression” of terpenes, cannabinoids and other chemical compounds in each strain.

“The purpose behind that is, yes, it’s 5 milligrams of Congolese Bubblegum, but it’s a really robust 5 milligrams because it has all the phenotypic expressions across the 90 phenos,” he said.

Curing the delights

After being unmolded, the delights are cured for six to eight weeks. Most other gummies are cured for a few days, Cozzolino said.

The delights are cured at room temperature on parchment paper at Rose’s kitchen in San Francisco.

“We have a constant cycle of curing happening at our (kitchen) facility. Half of our facility is a curing room where we’re letting the fruit and other natural ingredients in Rose Delights reach a point where we’re comfortable that they’re ready to package. It’s always a moving target because our ingredients are different all the time,” Cozzolino said.

He noted that Rose Delights makes several products that are always available, plus seasonal offerings.

“Those things get taken out three times during the curing phase, bounced around, repowdered and resituated; parchment paper is changed out. The number of touch points with Rose Delights is extremely high.”

Even though 30% to 40% of the recipes call for fruit, Rose Delights are extremely shelf-stable because they are suspended in sugar, which acts as a preservative.

Cozzolino said the delights can be good for up to three or four years. “Preserved fruits can age a long time, even at room temperature,” he said.

 The fruit decides

How the Rose team makes each recipe changes with every batch because the fruit used is different every time.

So, Rose’s chefs chart their culinary course according to each new batch of fruit and its characteristics.

The brand’s many methods include poaching fruit before pureeing, using an immersion blender or a tabletop blender.

Sometimes the Delights are heated with an induction cooker; other times, employees use kettle cookers.

On some occasions, the team hand-cuts fruit; other times, it goes through a confectionary depositor or a confectionery cutter.

“That’s also unique about our recipes: They’re not stagnant; they’re always changing, depending on the fruit. Fruit preservers, jam-makers, they start with the produce; then, they build around that,” Cozzolino said.

Paraphrasing a lesson he learned in a class with master jam-maker June Taylor, he added: “You have a relationship with your farmers who have a relationship with your produce. And then everything stems from there.”

“There’s an improvisational element. And I think that doesn’t often happen with edibles manufacturing. Everything is about standardized SOPs. And you know, we have SOPs that we follow, but there is always a component of improvisation with the production of Rose Delights.”

Rose recently opened a rosin-pressing and kitchen facility in Albany, New York, where Cozzolino hopes to replicate the success that his company has had in California. The press cost $150,000.

“With low amounts of equipment, we can really cover a lot of ground and produce at a pretty high rate, considering the style of products that we’re making using seasonal produce,” Cozzolino said.

“I think we’ve surprised everybody and proven that you can design something like this and have a direct connection to an agricultural network and produce at scale.”

Source: https://mjbizdaily.com/cannabis-manufacturer-uses-homegrown-inputs-for-edibles/?fbclid=IwAR12D_gesXqNsshe-Ju41ddDXYTvlUtpdT78d4pmQi1bPaLfD3tI83RUiJ8

Cannabis retailers and producers hope an upcoming move by Ontario’s pot distributor to lower its price markups will help an industry still struggling to compete with the illicit market.

Ontario Cannabis Store, the Crown agency that has a monopoly on legal distribution in the province, is changing its pricing structure starting in September.  The changes will reduce most wholesale markups that OCS imposes on cannabis products it sells to retailers, lowering its profit margin.

What remains to be seen is the impact the reduction will have on prices consumers pay for pot or on the bottom line of cannabis companies. 

Lowering the wholesale markups is a good first step by OCS, says George Smitherman, president and chief executive of the Cannabis Council of Canada, the industry group that represents licensed producers. 

“There is no doubt that the reduction in markups at the Ontario Cannabis Store is beneficial to the cannabis industry,” Smitherman said in an interview. “We’ll be looking forward to celebrating future steps.” 

The cannabis sector in Canada has had little to celebrate recently. It’s going through a grim year of financial trouble, especially among producers. 

• Aleafia Health Inc., a TSX-listed company with three cannabis production facilities in Ontario, announced on Tuesday it’s gone into bankruptcy protection. 
• Fire & Flower, a retail chain with 90 locations across five provinces, filed for bankruptcy protection in June. 
• B.C. producer Tantalus Labs filed for insolvency last month and laid off nearly all its staff. 
• Canopy Growth, one of Canada’s biggest producers, announced 800 layoffs and the closure of its Smiths Falls, Ont., headquarters in February, after racking up $2.6 billion in losses in less than a year.

The business environment for cannabis producers is quite challenging and many are struggling to be profitable, says Smitherman. 

“The scenario for a lot of companies is that they just can’t find enough, after fees and taxes and markups, to be able to pay their bills and to justify what was a many, many, billions of dollars of capital investment,” Smitherman said. 

He says the OCS markup accounts for “a very significant proportion of the end cost that the consumer pays” for pot.   

Currently, the OCS wholesale markup adds on average 31 per cent to what’s called the landed cost of cannabis. That’s the price that licensed producers charge OCS, which includes the federal-provincial excise tax of $1 per gram. 

OCS is moving to new markup rates of 25 per cent on most cannabis products and 23 per cent on dried flower. 

• Ontario’s making a killing on pot sales. But are retailers getting killed in the process?

The agency has reviewed its pricing policies over the past year and believes the time is right to make these changes, says David Lobo, president and chief executive of OCS. 

“With this pricing approach, we will be much more in line with a number of other jurisdictions,” Lobo said in an interview. “We’ve been able, with the size of our market, to really put a competitive product out to consumers and I think that’s going to continue to be the case.” 

OCS estimates the changes will save the industry $60 million next year. 

To put that amount in context: OCS moved $1.1 billion worth of wholesale cannabis and made $184 million in profit in 2021-22. The agency is yet to publish its financial report for the 2022-23 fiscal year. 

What happens to pot prices?

People in the cannabis sector say they’re not sure yet how the reduced markups will affect the price that customers pay for pot in Ontario after they kick in on Sept. 11. 

“We will see once it’s rolled out where the dollars flow,” said Lobo. “There may be some additional margin room that producers choose to keep, there will likely be some margin room that flows down to retailers and there will probably be some that ultimately flows to consumers.”

A spokesperson for a prominent cannabis retailer says he doubts the changes will significantly bring down the prices that consumers pay. 

“I don’t think they’ll see a difference in retail pricing,” said Cameron Brown, communications officer for The Hunny Pot, which has 20 locations across southern Ontario. “I think most products that consumers are buying today on shelves will remain fairly close to the same price.”

• Court approves cannabis ‘fire sale’ as Tantalus Labs goes bankrupt

Brown says he believes most of the savings will go to licensed producers and retailers will see little of it. 

Legal pot has been getting cheaper in Ontario.

Prices have generally dropped since 2019 largely because of a glut of supply as well as the explosion in retail stores, now numbering some 1,500 across the province, says Michael Armstrong, an associate professor at Brock University who monitors the sector.

“There’s lots of competition that has squeezed the margins for both producers and retailers in the cannabis industry in Canada in general, and Ontario in particular,” said Armstrong in an interview. 

Despite those squeezed margins, Armstrong believes producers and retailers might still pass some of their savings from the lower OCS markups on to consumers in the form of lower prices in an attempt to carve more market share away from illicit dealers.   

• FRONT BURNERWill the legal weed business be okay?
• Canada must help legal cannabis sector compete with the illicit market, experts say

Nearly five years after legalization, estimates by OCS and the Cannabis Council of Canada suggest that the illicit market still accounts for more than 40 per cent of sales in Ontario. 

“We can’t be selling ounces for $50 just to compete with the illicit market,” said Brown. He said he hopes OCS continues to lower its markups so that retail prices can go down further. 

At the same time as it reduces its wholesale markups, OCS will increase the markup it puts on the products it sells direct to consumers from its own website. OCS says that will give private-sector retailers a better chance to compete with the provincial agency on price.

Source: https://www.cbc.ca/news/canada/toronto/ontario-cannabis-pricing-wholesale-retail-1.6921175?fbclid=IwAR3NCujPs9BdC-irE4Q8JbA8f5YBypDZoJ5JJGVZrVNntAXCh1SnDqBw-Gw