Health Canada wants feedback on possible Cannabis Act amendments. This proposal is separate from the federal government’s legislative review of the Cannabis Act. The Cannabis Act, of course, legalizes and regulates cannabis in Canada. Health Canada put out a notice of intent for consultation. The purpose is to “inform Canadians and interested parties that Health Canada is seeking feedback on potential amendments to the Cannabis Regulations (CR) for regulatory burden reduction while still addressing public health and public safety risks.” […]
Is a 2023 cannabis recession inevitable? While an economic downturn is inevitable, how the cannabis industry weathers the storm remains to be seen. For sure, saturated retail markets will feel the hit as consumers cut back or make more discerning purchases. And large-scale industrial grows that have been more about selling equity than weed will feel the impact. But why? Why has the value of cannabis stocks been removed from fundamentals? Why are small cannabis business owners – through no […]
Has Health Canada approved a B.C.-based cannabis company to produce cocaine? Adastra Labs released a statement saying Health Canada granted them a “Dealer’s Licence” that allows them to possess, produce, sell and distribute 250 grams of cocaine. The company can legally import coca leaves to manufacture and synthesize the substance locally. Additionally, the Dealer’s License grants Adastra the right to possess, produce, sell and distribute up to 1,000 grams of psilocybin mushrooms. “Harm reduction is a critically important and mainstream […]
What’s the state of cannabis in Alberta? According to the headlines, not great. Calgary-based SNDL, previously known as Sundial Growers, is cutting nearly 100 jobs as part of an industry-wide reduction. “Oversupply and excess capacity have resulted in high-quality flower being widely available and sold well below the marginal cost of production,” SNDL Zach George said in a statement Monday. The news comes as other large producers have realized that they overextended themselves. Edmonton-based Aurora announced last year that they […]
Forget ketamine- and MDMA-assisted therapies: A psychedelics manufacturing company is moving forward with cocaine and heroin—with an end goal to fight fentanyl overdoses and drug addiction.
British Columbia-based Lucy Scientific Discovery, a psychedelics manufacturing company focused primarily on emerging psychotropics-based medicines, announced today in a press release that it has filed an amendment to its current Dealer’s License with Health Canada. The amendment would add cocaine and heroin to its existing list of approved substances the company is authorized to manufacture.
Lucy already is authorized through Health Canada to manufacture several controlled substances, including the psychedelics psilocybin, MDMA, LSD, psilocin, N,N-DMT, mescaline, and 2C-B. Adding cocaine and heroin to the portfolio could lead to treatments to fight addiction.
“We look forward to a time when Lucy can safely supply harm reduction programs globally, aiming to reduce lethal and or negative consequences associated with adulterated drug supply, particularly considering that fentanyl overdose is the leading cause of deaths among 18 to 45-year-olds in the United States,” said Lucy CEO Chris McElvany. “It’s time to realize that the failed war on drugs has caused additional harm to the masses worldwide, and harm reduction programs will lead to less death and more treatment options in the long term.”
It reflects a sea of change in the way controlled substances are being explored for potential benefits in the field of medicine. With more focus on a public health response to the drug crisis, the company can provide more opportunities for people who use substances to gain access to more harm reduction and treatment options.
Lucy’s Dealer’s License under Part J of the Food and Drug Regulations of the Food and Drugs Act (Canada) was issued by Health Canada’s Office of Controlled Substances.
The license enables Lucy to develop, sell, deliver, and manufacture via extraction or synthesis certain pharmaceutical-grade ingredients. The company also works with active pharmaceutical ingredients (APIs) that are used in controlled substances as raw material precursors.
The company works with raw materials, crude extracts, targeted formulations, single-molecule fractions, as well as white label and private label products.
Over 106,000 people in the U.S. died from drug-involved overdoses in 2021, mostly due to prescription opioids as well as illegal drugs, the CDC says, according to the latest available data.
Lucy Launches IPO
Lucy commenced trading on the Nasdaq Capital Market on Feb. 9 under LSDI. Lucy announced the closing of its IPO on Feb. 13 for gross proceeds of approximately $7.5 million. After going public with an IPO, Lucy’s leadership believes the company can impact the field of psychedelic medicine.
Lucy also announced today that McElvany, Richard Nanula, Executive Chairman of Lucy, and other members of the company’s board of directors and leadership team will ring the Nasdaq closing bell to celebrate its new IPO.
“We are excited to celebrate this victory at Nasdaq’s iconic bell ringing ceremony, as today marks an important milestone for the Company,” McElvany stated. “We are pleased to celebrate many months of hard work and team effort that led to the successful completion of our IPO. Seeing Lucy, a pioneer in psychedelics manufacturing, take the next step in its development by becoming the first psychedelics manufacturing company to be listed on NASDAQ is a huge accomplishment. This milestone marks a significant step in the company’s growth and plans for expansion. We look forward to the opportunities ahead of us to continue working on improving mental health and finding sustainable solutions for treatment.”
Stay tuned to see where Lucy goes in this latest development.
Disclaimer: High Times is an affiliate of Lucy Scientific Discovery, Inc.
A Canadian federal court has ruled that medical cannabis growers have privacy rights. This ruling comes after a lengthy battle where a couple of journalists tried to get Health Canada to disclose the location of medical cannabis growers. Once upon a time, the government regulated medical cannabis through the Marihuana Medical Access Regulations (MMAR). Under the MMAR, patients could grow their own cannabis plants or have someone designated to do it for them. In 2013, the government replaced the MMAR […]
Where does Health Canada come down on extracts vs edibles? Last week, Canada’s federal bureaucracy caught the cannabis industry by surprise. Some licensed producers have been marketing “chewable extracts,” which Health Canada says are actually edibles. In an email to CLN, a Health Canada spokesperson said: “Health Canada has identified edible cannabis products erroneously being classified and marketed as cannabis extract products. These non-compliant products do not meet the controls in the Cannabis Act and Cannabis Regulations which serve to mitigate against public health […]
Despite a healthcare system already on the verge of collapse pre-COVID, Health Canada bureaucrats have focused on companies selling cannabis extracts. Health Canada recently requested federally licensed cannabis companies to discontinue the sale of cannabis products the bureaucracy considers mislabeled. Health Canada is concerned adults are consuming cannabis products labelled “extracts” as “edibles.” The move is expected to cost cannabis companies millions of dollars. And it comes at a time when most publicly traded cannabis producers are still losing money. […]
What were some of the top cannabis stories of 2022? It was a big year for legalization efforts, but full-scale implementations are still needed. While Germany looked to legalize cannabis, it didn’t happen in 2022. Likewise, despite beliefs that Biden and the Democrats would legalize cannabis or, at the very least, pass some cannabis banking regulations, nothing came of it. Cannabis didn’t fare much better in Canada, where authorities launched a full-scale war on medical cannabis and legacy medical providers. […]
For the first time since Heath Canada began tracking it after legalization, they report that over a quarter of their domestic cannabis crop was destroyed in 2021. Over 425 million grams, a full 26% of the unpackaged dried flower produced last year was destroyed, along with all the resources that went into growing it, leading to an environmental nightmare for a supposedly green industry.
Glut of Unsellable Products Leads to Astronomical Rate of Product Destruction
In addition to the unpackaged dried cannabis that was destroyed, more than 140 million grams of unpackaged extracts (17%), edibles (4%), and topicals were destroyed (4%). If that wasn’t bad enough, more than 7 million packaged products were also destroyed (on average, 3% of the total). The percent of the crop destroyed has gone up every year that Health Canada has data available, with last year seeing a dramatic increase from 19% to 26%, but experts suspect that is still an undercount. “The 425 million grams destroyed is likely only a fraction of the cannabis that was grown but has no market, tons of product remains in inventory in various formats,” says Stewart Maxwell, a crop consultant and founder of Elevated Botanist, adding “I have seen fresh frozen product offered on the market that is several years old.”
Tammy Jarbeau, Senior Media Relations Advisor for Health Canada, told High Times that the reasons for product destruction “include, but are not limited to: crop losses; post-harvest disposal of unusable plant material (e.g., stalks); recalled products; and elimination of unsold or returned products.” Maxwell noted that when it comes to packaged products, “any typo on a label can cause a recall,” which may be a contributing factor to the millions of packaged products destroyed. While, thankfully, “Producers must have recall insurance,” that costs tens of thousands of dollars per year. Unfortunately, Jarbeau was clear that, due to how they collect their data, Health Canada does not know “the amount or percent of cannabis destruction that can be attributed to recalled products.”
Quantities of Unpackaged Cannabis Destroyed (January – December 2021)
Cannabis class
Quantity destroyed
Quantity destroyed as a percentage of total unpackaged production for the class of cannabis
Dried cannabis
425,325 kilograms
26%
Cannabis extracts
40,454 kilograms
17%
Edible cannabis
97,959 kilograms
4%
Cannabis topicals
3,940 kilograms
4%
Quantities of Packaged Cannabis Destroyed (January – December 2021)
Cannabis class
Quantity destroyed
Quantity destroyed as a percentage of total packaged production for the class of cannabis
Dried cannabis
3,576,232 units
3%
Cannabis extracts
1,118,148 units
3%
Edible cannabis
2,421,823 units
5%
Cannabis topicals
15,359 units
1%
Source: Health Canada
The Root Cause Of Oversupply – Speculative Investment
The huge increase in crop destruction last year is quite paradoxical, as it came at a time when the COVID-19 pandemic drove up cannabis sales in Canada. So, while sales were very good, they were not good enough to deal with a severe oversupply in the market. Jarbeau called the destruction “a part of normal business practices” and attributed the escalating rate of destruction to “the increase in number of the federal license holders since 2018.” Maxwell had a more pointed view, “The glut of product on the market is entirely a factor of overproduction driven by investment hype.” At the onset of legalization, many large companies “were able to raise billions on promises to dominate a brand-new industry,” using square footage of cannabis canopy as a selling point, which Maxwell says led to “an exponential overbuilding of cultivation facilities.” Making matters worse, that cannabis was not very good and didn’t sell, which led to “many of these facilities were shuttered,” such as the Aurora Sky facility in Edmonton.
An Environmental Catastrophe with Incalculable Costs
Maxwell says that based on the typical cost of goods sold, “the cost of the product destroyed is in the billions,” but that doesn’t take into account the cost of the facilities themselves and other resources spent to grow the cannabis. “This overproduction is an environmental catastrophe and the energy required to cultivate this glut is incalculable,” says Maxwell, “When facilities costing tens of millions of dollars are built, then closed without ever producing product of any quality, the destruction of capital and energy resources is astounding.”
When asked if they collect information on the water, fertilizer, and other resources used when growing cannabis, Jarbeau told High Times that “Health Canada does not collect this information from license holders.” That means there is no way to accurately know exactly how much of and which resources were destroyed along with those 425 million grams of cannabis. This is one area where data collection can be improved both in Canada and the US to better understand how cannabis can be most efficiently grown.
Can Remediation Be Salvation?
You may be wondering, with billions of dollars of cannabis being destroyed every year, who is left in the red? Maxwell says that “Cannabis producers, and their investors are the losers here, and consumers are the winners.” Costs have dropped consistently both in Canada and around the US, where “it is now possible to purchase an ounce of decent weed for just over a hundred bucks.” According to Maxwell, that plummeting price has “almost entirely disrupted the legacy market,” and even growers using artisanal methods to produce premium flower “struggle to achieve profitability due to the glut of product on the market, excise tax issues, and the regulatory cost burden.”
Anyone familiar with the cannabis industry has likely heard the term “remediation” before, meaning, to remedy something, which can range from methods of reducing contaminants in a product (pesticides, heavy metals) or reducing the THC content of a hemp product to ensure it legally can be sold as hemp. Remediation is a way for cannabis producers to salvage a batch of products that otherwise would be unable to be sold, and would be a massive waste of money and resources.
Unfortunately, it does not appear that remediation is an option here. “To my knowledge, there is no avenue to direct excess cannabis flower to other product streams,” says Maxwell, “The product must be destroyed as per Health Canada guidelines,” which include incineration, composting, or mixing with kitty litter. “It may be possible for cannabis to be used in other applications,” says Jarbeau, “however, depending on the activity, it could still be subject to the requirements under the Cannabis Act and its regulations as well as requirements under other Acts and regulations.” Those regulations and requirements can be pretty burdensome, to the point where attempts to remediate products might not even be worth it. One bright spot Jarbeau mentioned was that “Certain cannabis plant parts (e.g. mature stalks stripped of their leaves, flowers, seeds, and branches) … are exempted from the application of the Cannabis Act,” and could be remediated into other uses without a license.
Bigger Than Canada, Bigger Than Cannabis
Unfortunately, the problem of widescale product destruction is not unique to Canada or to the cannabis industry. While Canada destroyed 26% of their unsold or unsellable cannabis flower last year, the US destroyed nearly 11% of our hemp crop because it tested “hot,” above the 0.3% THC limit. While 11% is the average, it is much worse in some states, like Tennessee, where the Department of Agriculture reports “42% of crops are being found non-compliant.”
While the reasons are different, the end result is the same, millions of pounds of cannabis and hemp plants being destroyed rather than used to make products, with investors, farmers, and other businesses left in the red. And remember, it isn’t just the cannabis being destroyed here, but all the water, fertilizer, and other resources that went into growing it. On a deeper level, in many cases it is someone’s dream being destroyed as well, with legacy farmers being forced out of the industry they created while being offered insultingly low prices for artisanal quality flower.
Now that 2022 draws to a close, Health Canada will be compiling their data from this year, and if current trends hold, Canadian cannabis businesses will be destroying around 1/3 of their unpackaged cannabis crop next year.
Follow Up After Hearing Back from Health Canada
“I didn’t realize that that number represented total cannabis waste destroyed,” says Maxwell. “Cannabis waste is regularly destroyed during the growing process and at harvest. The weight of this waste varies dramatically based on water content. Sometimes waste is destroyed right away, and the weight is mostly water weight. Other times the waste is weighed, then stored until there is a large amount, then weighed again, the discrepancy is justified in documentation as due to water loss, and the dry waste is then destroyed. As you can imagine, with all of these variables, it is not possible to determine which portion of the total waste would be saleable (but unsold) flower, as compared to stem and leaf waste. I would estimate that for every gram of saleable flower, 2 or more grams would be destroyed as unusable byproduct.
“It would be much more interesting to know the ratio of finished saleable product produced, relative to the annual consumption in Canada,” Maxwell adds. “This would give a much better insight into the scale of overproduction. I would estimate that the vast majority of finished product that is destroyed is excess product rather than recalled product. I hope this helps.”
