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Canada Admits Why the Illicit Cannabis Market is Crushing Their Legal Market -Lower Prices, Better Selection, and Convenience!

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Despite Canada’s legalization of marijuana for adult use more than five years ago, according to a recent analysis from Deloitte Canada, sales of cannabis remain mostly concentrated in the illegal market, accounting for anything between 25% and 50% of the entire market.

 

The paper explores the distinctions between the legal and illegal cannabis marketplaces and poses relevant issues about product offers, pricing, and operational tactics. 624 legitimate adult-use marijuana outlets and 57 illegal ones were the subject of an analysis by Deloitte and its data partner Neobi.

 

Christopher McGrath, senior manager at Deloitte Canada and the report’s author highlighted two key findings: the convergence of prices and the audacity of illicit online platforms. Illicit websites were found to offer nearly double the product variety compared to legal retailers.

 

On average, regulated recreational stores stocked 538 different products per store, whereas illicit operators boasted an average of 918 SKUs. McGrath pointed out that the illicit market enjoys a significant competitive edge due to fewer regulations, pricing flexibility, simpler and cheaper production processes, and the use of pesticides.

 

He emphasized the upcoming Cannabis Act review, due by the end of March, as an opportunity to address industry challenges. The report also seeks insights from experts across Canada to understand why the country’s cannabis market is not flourishing as expected.

 

Delayed Tax Payments Pose Challenges for Competing LPs

 

Beena Goldenberg, CEO of Organigram Holdings in Toronto, highlights the struggles facing many licensed producers (LPs) in the current industry landscape.

 

Amidst challenges to achieve profitability, LPs are often forced to prioritize payments to suppliers, bills, and employees over excise duties. Unfortunately, for numerous cannabis companies, excise duties frequently fall to the bottom of the list of payables.

 

This situation is exacerbated by the Canada Revenue Agency’s (CRA) lack of enforcement in excise collection in recent years, creating an uneven playing field within the industry. LPs in arrears are utilizing excise duties collected from provincial wholesalers as a source of funding, effectively using the Canadian government as a financing mechanism.

 

This unfair advantage gives delinquent LPs, unlike those promptly paying taxes like Organigram, the ability to leverage excise payables for cash flow. Goldenberg emphasizes the importance of consistent penalties, payment plans, and enforcement in tax policy to facilitate industry consolidation, ultimately bolstering a thriving legal market.

 

Success in the Legal Cannabis Market: Lessons Learned

 

Julia Cameron, Vice President of Communications at Pure Sunfarms in Vancouver, British Columbia, sheds light on the positive aspects of the cannabis industry amidst its complexities and challenges.

 

While acknowledging the hurdles, Cameron emphasizes the importance of recognizing the bright spots in profitability, performance, and productivity. She points out that those achieving success have done so through strategic and measured approaches, rather than haphazard spending.

 

Successful players in the market have adopted prudent capital utilization, maintained careful cash flow management, made strategic investments, and employed thoughtful product segmentation strategies. They have also capitalized on the expertise of seasoned operators who understand navigating regulations, economic shifts, and tight profit margins.

 

Additionally, successful businesses have remained grounded in reality, avoiding overly optimistic market assumptions and setting achievable goals. They have also embraced collaboration, fostering open communication with government entities, regulators, and even competitors.

 

Cameron concludes by urging industry participants to consider these principles as they strive to build thriving cannabis businesses.

 

The Legal Cannabis Market Falls Short of Expectations

 

Tamara Lovi, Chief Business Officer at Rose LifeScience and Board Treasurer of the Cannabis Council of Canada (C3) in Montreal, highlights a significant gap between expectations and reality in the regulated cannabis market.

 

Approximately five years ago, prior to legalization, there was an assumption that the legal market size would reach approximately CA$ 10 billion. However, the current reality falls short of this projection, with the market only surpassing halfway.

 

While the legal market continues to expand annually, businesses that heavily invested based on the expectation of reaching CA$10 billion are facing sustainability challenges. Lovi points out that excise tax, which was anticipated to represent around 10% of gross sales, now accounts for approximately 30%, significantly impacting licensed producers’ profit margins.

 

Limited resources are available for licensed manufacturers to operate, adhere to laws, compete with illegal market prices, or reinvest in their enterprises as a result of this increased tax burden. Consequently, in order to stay lucrative, licensed manufacturers must innovate and simplify their operations; many are fighting just to survive.

 

In order to reduce the booming presence of the illegal market and to allow the legal sector to reach its full potential, Lovi highlights the urgent necessity for excise tax reform.

 

The Legal Cannabis Market Falls Short of Expectations

 

Tamara Lovi, Chief Business Officer at Rose LifeScience and Board Treasurer of the Cannabis Council of Canada (C3) in Montreal, highlights a significant gap between expectations and reality in the regulated cannabis market.

 

Approximately five years ago, prior to legalization, there was an assumption that the legal market size would reach approximately CA$ 10 billion. However, the current reality falls short of this projection  at roughly CA$5 billion a year, with the market only surpassing halfway

 

While the legal market continues to expand annually, businesses that heavily invested based on the expectation of reaching CA$10 billion are facing sustainability challenges. Lovi points out that excise tax, which was anticipated to represent around 10% of gross sales, now accounts for approximately 30%, significantly impacting licensed producers’ profit margins.

 

Limited resources are available for licensed manufacturers to operate, adhere to laws, compete with illegal market prices, or reinvest in their enterprises as a result of this increased tax burden. Consequently, to stay lucrative, licensed manufacturers must innovate and simplify their operations; many are fighting just to survive.

 

In order to reduce the booming presence of the illegal market and to allow the legal sector to reach its full potential, Lovi highlights the urgent necessity for excise tax reform.

 

Bottom Line

 

The analysis and insights provided by industry experts paint a complex picture of Canada’s cannabis market. Despite legalization, significant challenges persist, with the illegal market continuing to thrive alongside legal retailers. Key issues such as delayed tax payments, regulatory burdens, and pricing differentials pose barriers to the growth of legal cannabis businesses. However, clear success strategies are emerging, including prudent financial management, strategic investments, and collaboration with stakeholders. Moving forward, addressing these challenges and fostering a supportive regulatory environment will be essential to realizing the full potential of Canada’s legal cannabis market.

 

CANADA TRIES TO SLOW THE ILLICIT MARKET, READ ON…

health canada on illegal marijuana market

HEALTH CANADA TRIES TO CURTAIN THE ILLEGAL MARIJUANA MARKET!

 



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Do Psychedelic Mushrooms Have an Entourage Effect Similar to Cannabis?

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Understanding How The Entourage Effect Works In Psychedelic Mushrooms

Learn fascinating ways about how magic mushrooms work!

 

Most of us are already familiar with the entourage effect in marijuana. In essence, the entourage effect means that the therapeutic compounds in cannabis work more efficiently with one another, synergistically, to provide health benefits that are more powerful compared to when we take compounds on its own. While there are cannabis products that isolate THC and CBD, the science tells us that taking flower or full-spectrum form, where other cannabinoids and terpenes are present, are much more effective than one compound on its own.

 

The concept of the entourage effect was discovered in 1999 by none other than Raphael Mechoulam, the famous godfather of THC. Up until recently, most of what we know about the entourage effect has been limited to cannabis plants.


Now, there’s new data suggesting that the same can be observed when medicating with psychedelic mushrooms.

 

After all, psilocybin mushrooms – just like marijuana – also contain a complex array of other compounds, not just the star compound they are known for. While we do have some knowledge of how psilocybin works in the body thanks to clinical tests, keep in mind they do make use of synthesized psilocybin for research most of the time.

 

According to a recent study, psilocybin extracts may have more powerful health benefits for treating depression, OCD, anxiety, and PTSD to name a few because of the other psychoactive as well as non-psychoactive compounds in the mushroom.  “My colleagues and I are very interested in the potential of psychedelics to treat serious, treatment resistant psychiatric disorders such as depression, PTSD, OCD and even schizophrenia,” explains Bernard Lerer, study author and a psychiatry professor and director at the Hadassah BrainLabs Center for Psychedelic Research at Hebrew University.

 

“There are many anecdotal and clinical reports which suggest that extract of psilocybin-containing mushrooms may have unique effects that are qualitatively and quantitatively different from chemical psilocybin, and also some preclinical studies. This observation has important clinical implications and we wanted to test it empirically in a laboratory study,” they said. So for the study, the researchers compared naturally-derived mushroom extracts to chemically made psilocybin, with the intention of discovering whether the other compounds within the extract can provide benefits that are not found when consuming isolated psilocybin.

 

The researchers utilized male adult mice for the trials; they were divided into groups: some were given the naturally occurring mushroom extracts, while the others were given the synthetic psilocybin. Meanwhile, others were given a control solution made of saline. Additionally, the researchers analyzed the heat twitch response (HTR) assay, which is a reputable method for analyzing the impacts of psychedelics on mice. Furthermore, the researchers analyzed the mice in a molecular and biochemical level to understand any synaptic protein expressions within the brain, which are features of neuroplasticity.

 

The results were astonishing: they found that the brains of the mice who were given the naturally occurring mushroom extracts showed more significant neuroplasticity markers through the presence of synaptic proteins, specifically GAP43, SV2A, PSD95, and synaptophysin. Since these proteins are required for development, synaptic growth, and neuroplasticity, these findings suggest that naturally occurring mushroom extracts may indeed have a more powerful impact compared to psilocybin isolate.

 

“Our findings need to be confirmed in human studies but they do suggest that there may be therapeutic advantages to psilocybin-containing mushroom extract over chemically synthesized psilocybin, when both are administered at the same psilocybin dose,” explains Lerer to Psypost.

 

So Much We Need To Uncover In The World Of Mushrooms

 

When magic mushrooms are cultivated and extracted naturally, the sub metabolites of the plant remain intact, unlike the isolated versions that are synthetically produced in a laboratory since it only contains psilocybin.  There are several examples, such as the Baeocystin tryptamine, which can induce mild hallucinogenic effects. Beta-carbolines have also been discovered in psychedelic mushrooms, which can effectively help metabolize psilocin in the human body, causing a more intensive psychedelic experience.


But Why Is It Harder To Study Mushrooms Compared To Marijuana?

 

While the entourage effect of cannabis is already widely studied and better understood, the opposite is true when it comes to psychedelic mushrooms. There’s still so much we need to understand and study better; rodent studies are a start but translating them to humans is a whole other ball game. In addition, other experts have already acknowledged the challenges of identifying such impacts of the entourage effect.

 

For instance, Alan Rockefeller, a renowned mycologist who specializes in DNA sequencing as well as photography of fungi, tells Psychedelic Health: “No one really knows whether the entourage effect occurs with mushrooms.”

He goes on to elaborate the difficulties associated with studying mushrooms: “It is difficult to study because the same batch of mushrooms will have different effects in different people, and the same person on different days,” Rockefeller said. Also, it’s difficult to understand which compounds are active in a plant or mushroom, and how large the impact is for the active compounds. Researchers also need to understand the concentrations of each compound, and how different growing environments or processing can impact it.

 

“There are a dozen different tryptamines that can occur in mushrooms, plus a few beta-carbolines and hundreds of other molecules – so there is probably more than just psilocybin having an effect,” Rockefeller said. “Studying one compound at a time is hard enough, studying mixtures of hundreds of compounds is much more difficult. Without pure compounds, it is difficult to get repeatable results,” Rockefeller said. “It is possible that the therapeutic potential is different depending on the different compounds in the mushrooms. It’s also possible that psilocybin is the only thing that matters, and the other compounds are mostly inactive,” he said.


Conclusion

 

There’s so much yet that we need to know about how psychedelic mushrooms work. However, the possibilities that can be brought about by harnessing the power of the entourage effect in magic mushrooms is incredibly exciting. There is so much potential in this field that we can only truly uncover with more studies.

 

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The Dangers and Effects of THC Vape in UK

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People in the UK increasingly realize that CBD vaping is quite safe. Even NHS recommends CBD vaping as one of the relatively safer ways to quit smoking. Vaping is not without any harm, but it is much safer than tobacco smoking. Even more, CBD vaping is associated with some good health effects. However, now people are realizing that THC vape pens could be an even more potent way of enjoying CBD’s health benefits.

What is THC Vape?

If readers noticed that in the introduction of this text, we talked about CBD, there is a reason for that. THC vaping is different from CBD vaping, but not entirely. It has much in common with it.

The hemp plant is rich in many cannabinoids. Two major cannabinoids are THC (Tetrahydrocannabinol) and CBD (Cannabidiol). It also has many minor cannabinoids in smaller amounts, like CBG, CBC, CBN, THCV and CBDV. CBD vape pens generally have all these compounds except THC.

However, THC vape differ in the way that they also contain small amounts of THC along with CBD, minor cannabinoids, and other beneficial organic compounds like terpenes for added flavour and enhanced vaping experience.

So, why do some of the vape pens have added THC in small amounts? After all, THC is known to be addictive and has mind-altering properties. Well, the explanation is simple: the secret is in the dosage. In smaller and legally permitted dosages, THC does not cause a high; it is safe and can have many health benefits.

When small amounts of THC are added to CBD, minor cannabinoids, and terpenes, it results in much more powerful health benefits. That is why some of the CBD-based clinically approved drugs also contain THC.

THC vape pens may also have some distinct benefits not experienced with CBD vape pens. This is due to “the entourage effect.” The entourage effect is a bit different from synergy. Synergy is like two-plus-two equal to five, meaning that using some compounds together results in a more potent effect, yet safety is not compromised. However, the entourage effect means combining two compounds may result in some unique health benefits not seen when those compounds are used in isolation. So, the entourage effect is more powerful and unique than synergy.

Therefore, using THC vape pens means some unique health benefits, although these vape pens contain THC in small amounts.

THC Vape: The Dangers

It is no secret that THC is the main compound responsible for all side effects of the cannabis plant. This substance is addictive and, at higher dosages, causes euphoria, has potent mind-altering properties, and may cause hallucinations.

However, there is one important thing to understand. All these effects of THC are seen at much higher dosages than those in legally produced THC vape pens.

Legally produced/sold vape pens in the UK, like those by CBDoilking, do not contain THC more than 0.2%. This is significantly lower than cannabis indica or marijuana, which may contain 25% or even more THC. So, there is no comparison between legal THC vape pens and marijuana. At these small dosages, THC does not cause euphoria or other side effects and has no addictive properties. It only has mild stress-relief properties at these dosages.

Secondly, THC vape pens sold by CBDoilking follow other important UK guidelines and legal requirements, which means that THC vape pens cannot contain more than 1 mg of THC. Hence, it is not just about low concentration but also about low amounts, thus ensuring its safety.

Safe and Potent THC vape pens

THC vape pens are for health-conscious individuals who would like to vape on a regular basis. It is safe and may have beneficial effects like reduced anxiety, improved mood, and enhanced sleep, and it may also help reduce pain sensation.

THC vape pen is even better than your regular CBD vape pen for quitting smoking. This is because it is better at reducing tobacco cravings.

CBDoilking sells one of the strongest THC vape pens in the market (75-80% CBD plus CBG along with THC in permitted amounts), and yet all pens sold on the platform follow strict legal guidelines. All the products undergo third-party testing and are proven to contain THC, CBD, and other minor cannabinoids within legally permitted and safe limits.

Another good thing about CBDoilking is that these excellent THC vape pens come in many flavours. These flavours are not due to some artificial substances but rather due to their content of terpenes. Terpenes are plant-based aromatic compounds with antioxidant and anti-inflammatory properties.

CBDoilking offers vapes that are based on science, combining different natural compounds in the right ratio. This is both about safety and potency. So, these products are really good for those looking for something better, potent, and yet safe.

The Bottom Line

CBD vape pens have been around for some time, and their safety is well-established. They are an excellent way to quit smoking and also enjoy CBD’s health effects. However, some people are looking for something more potent. THC vape pens are good for such individuals. These contain all beneficial compounds present in the cannabis plant but in the right proportions.

THC vape pen is a new way to enjoy vaping. It is unlikely to cause any side effects as these products are made for regular use. Of course, one should not overdose on THC or CBD. It is important not to have more than a few puffs a day. Rare side effects like nausea or stomach issues might occur but are transient and short-lived. Such issues are rarely the cause of concern, except in a very small number of cases.

Thus, if you are looking for something better to reduce stress and overcome pain and anxiety, then a THC vape pen may be the right choice. Choosing something strong like the one offered by CBDoilking may be a good idea. Despite being strong, these vape pens contain THC only in legally permitted amounts and in concentrations proven to be safe and not cause euphoria.

To sum up, if you are already an experienced CBD vaper, it may be a good idea to give THC vaping a try.

 

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How to Buy or Sell a Cannabis Business: The Webinar Replay

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For anyone who wasn’t able to join us on April 17th, the video replay of our webinar titled “How to Buy or Sell a Cannabis Business” is now available on our website. You can view it here.

The description of this webinar is also included directly below. Enjoy!

____

On Wednesday, April 17, 2024 at 12:00 pacific time, Harris Sliwoski managing partner Vince Sliwoski (Portland), Harris Sliwoski partner Griffen Thorne (Los Angeles), and Andy Shelley of CannXperts will present a free webinar entitled “How to Buy or Sell a Cannabis Business.”

Drawing on their extensive experience from representing businesses and entrepreneurs across numerous M&A transactions, including crucial state license transfers throughout the United States, our panelists will share insights and practical wisdom from their firsthand experiences in the legal cannabis industry.

  • Crafting and understanding Letters of Intent
  • Conducting thorough Due Diligence
  • Drafting and Negotiating purchase agreements and ancillary documents
  • Navigating State-Specific Regulatory Concerns
  • Managing Escrow Challenges
  • Optimizing Financial Arrangements: Purchase Prices, Holdbacks, Earnouts
  • Tackling Post-Closing Considerations

As always, we’ll also take Q&A, so please feel free to either submit questions when registering or you will be able to ask comments in chat during the webinar.



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