News

Numinus First Canadian Public Company to Complete Legal Harvest of Psilocybe Mushrooms

Numinus Wellness Inc., a company creating an ecosystem of health solutions centred on developing and supporting the safe, evidencebased, accessible use of psychedelic-assisted psychotherapies, has harvested the first legal flush of Psilocybe mushrooms in Canada by a public company under its Health Canada-issued Controlled Drugs and Substances Dealer’s Licence. This development coincides with other recent developments by Numinus Bioscience, the Company’s 7000-square-foot analytics and research laboratory, which is focused on handling various psychedelic substances and developing analytical methods and formulations for the evolving psychedelics space.

Cannabis Policy Reform Wins Big On US Election Night as Five States Approve Ballot Initiatives

Voters have approved cannabis policy reform measures in five states, with four passing laws to make cannabis legal and regulated for adults and two approving cannabis for medical purposes. Adult-use initiatives were passed in Arizona, Montana, New Jersey, and South Dakota, with the latter also approving a medical initiative. Mississippi voters supported the more comprehensive of two medical cannabis options. With the passage of the adult-use initiatives, nearly 34% of Americans now live in states with laws making cannabis legal and regulated for adults. These four states account for roughly 60,000 marijuana arrests every year, mostly for simple possession. Congressional representation of states where cannabis is legal for adults will increase by 29 representatives and eight senators.

The People’s Alliance of Cannabis in Canada Brings Support, Services and Standards to the Growing Industry

The People’s Alliance of Cannabis in Canada (PACC) launched on the second anniversary of cannabis legalization in Canada. PACC represents the interests of professionals and consumers within the growing cannabis space across the nation. It provides support through crucial programming, develops professional standards for the industry to emulate, encourages the unification of all cannabis markets and creates a standard for cannabis education in Canada. PACC operates and advocates for legislative change so that we create an industry where cannabis is always safely accessed, and provided by cultivators and producers who meet a set of defined professional standards. The People’s Alliance of Cannabis in Canada has six focus areas that are led by one of the founding members, and supported by an Advisory Team of cannabis professionals, advocates, and consumers that have been carefully chosen to represent their part of cannabis. These focus areas are Medical Cannabis, Recreational/Retail, Black, Indigenous and People of Colour (BIPOC) in Cannabis, Hemp and Agriculture, Legacy Market and Cannabis Advocacy. PACC is working on establishing its Advisory Team and Working Groups, at which time the organization will move forward with establishing bylaws, terms and conditions, and objectives of PACC for the remainder of this year, and the year ahead.

Berlin Packaging Acquires Consolidated Bottle - Significant Expansion in Canada

Berlin Packaging, the world’s largest hybrid packaging supplier, announced the acquisition of Consolidated Bottle Corporation, a leading packaging supplier in Canada. The transaction significantly expands Berlin Packaging’s footprint in Canada, enabling the combined businesses to offer even more packaging solutions and value-added services to its customers. As one of Canada’s most established companies, Consolidated Bottle has 110+ years of experience supplying innovative plastic, glass and metal containers and closures across various industries, including personal care, pharmaceutical, cannabis, food, beverage and industrial. Berlin Packaging is a global supplier of rigid packaging products and services designed to streamline packaging supply chains and help companies grow their profits. In 2016, Berlin Packaging established a Montreal location focused on supplying specialty glass packaging for food, spirits and wine. Berlin Packaging and Consolidated Bottle customers can now enjoy added product depth and breadth, as well as new value-added services, including Berlin Packaging’s award-winning design studio for custom packaging solutions and Consolidated Bottle’s injection molding, decorating and shrink sleeving capabilities. Suppliers of packaging also benefit by leveraging the 150+ person sales force across the combined organizations.

High Tide Unites Wholesale Businesses Under Valiant Distribution

High Tide Inc., a retail-focused cannabis corporation specializing in cannabis lifestyle accessories, announced that, effective November 1, 2020, the Company has combined its wholesale businesses, RGR Canada and Famous Brandz, under the Valiant Distribution brand in Canada and the United States. Valiant will continue developing licensed accessories in collaboration with celebrity and studio brands under the Famous Brandz banner while also delivering the Company’s best-selling proprietary brands to market. The development of the Valiant brand and streamlining of High Tide’s wholesale segment began last year, subsequent to the Company establishing a warehouse in Las Vegas, Nevada for the distribution of cannabis accessories. Representing the wholesale core of High Tide’s business since 2013, RGR Canada has grown to become a high-quality and innovative designer and distributor of proprietary cannabis accessories featuring best-selling brands like Dopezilla, Famous Design, Puff Puff Pass and Vodka Glass. Founded in 2016, Famous Brandz is a dominant manufacturer of licensed lifestyle accessories, through partnerships with celebrities and entertainment companies including but not limited to Snoop Dogg, Paramount Pictures, Lions Gate, and Guns N’ Roses. RGR Canada’s and Famous Brandz’ products will continue to be sold to wholesalers and retailers around the world by Valiant.

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Forget THC There’s More Opportunity in CBD

Michael Brubeck is the Founder and CEO of Centuria Foods, a vertically integrated cannabis company that is the largest global supplier of USDA Certified Organic water-soluble CBD ingredients and scalable THC-remediation processing. Its subsidiary Nevada Labs houses a dedicated research and development team that originated the early solutions to separating THC from CBD extracts and increasing the oral bioavailability of cannabinoids.

It was just over two years ago that Canada became the second country to legalize recreational cannabis. Since then, a supply imbalance fueled by too much cultivation and domestic competition has caused headaches for the industry’s major licensed producers (LPs) and their shareholders. As of this article’s publication, more than a dozen Canadian LPs have filed for creditor protection and cannabis giants like Canopy Growth (TSE: WEED) and Aurora Cannabis (TSE: ACB) have written down billions of dollars in inventory and assets. But from where I stand, there is reason for optimism toward the future and profitability of cannabis. The top four cannabis companies in the world are Canadian LPs and the country itself remains a leader in the industry for reasons that include regulatory clarity and its established potential as a hemp exporter. The rigorous oversight of cannabis legalization in Canada has also resulted in some of the highest safety standards in the world, leaving Canadian LPs with a significant advantage over their U.S. competitors. That’s why producers looking to take advantage of untapped global opportunities should look no further than CBD. CBD, or cannabidiol, is best known as one of the two most common cannabinoids found in the cannabis plant along with THC, or tetrahydrocannabinol. A non-psychoactive compound that is often touted as an effective treatment to every conceivable ailment that affects the human body, CBD has skyrocketed in popularity, with public and government opinion continuing to shift in its favour. Once extracted from hemp, CBD can be added into oils, creams, gummies, and a variety of other consumables. The highest potential revenue segment is anticipated to be from consumer beverages, with Canopy Growth and Truss already establishing an early lead in North American markets.

According to a 2019 report by Bank of America Merrill Lynch (BAML), a global cannabis market valued at an estimated USD$166 billion will soon emerge, with a $33.6 billion jump in global CBD spending by 2032 credited as one of the largest sources of growth. BAML’s sentiments of potential for the CBD market echoed an earlier report by BMO Capital Markets, which projected that the global cannabis market could be worth $194 billion before 2025. Another Canadian financial services company, Canaccord Genuity estimates U.S. CBD sales alone will deliver a dramatic 45 per cent compound annual growth rate from $1.9 billion to $18.4 billion by 2024.

In 2016, Canadian LPs raced to build massive facilities ahead of legalization. I discussed the issues with this approach at length in my book, Tipping the Scale: The Book That Changed Everything You Know About Investing in Cannabis. When cannabis stocks tanked in 2019, it confirmed that shareholders didn’t care about square footage, they cared about revenues and earnings. In addition, no producer had the infrastructure in place to run more efficiently than the black market — in other words, LPs couldn’t identify the real competition because it wasn’t listed on the TSE. Quarterly revenue targets fell flat and foreign markets weren’t performing well, so the industry lost the confidence of investors.

Of the 507 producers that Health Canada has licensed to grow cannabis legally, none have properly acted on the market opportunity presented by CBD. By no longer solely relying on the oversaturated

“CBD is the most neglected part of the legal cannabis space in Canada. When it comes to addressing this multi-billion industry, the responsibility begins with Licensed Producers, who must be fully compliant with provincial and federal law if they want to succeed in taking their share of the market. Producers will also need to invest in the correct infrastructure and technologies to verify that every aspect of their operations meets the evolving set of global standards.”

THC market, any Canadian LP can emerge from hundreds of global competitors that are producing THC using slightly different iterations of the same archaic strategies. Companies that are open to immediately investing in the right technical infrastructure to produce CBD, as well as scalable internal manufacturing technology, stand to add significant top-line growth from a lowcompetition revenue channel — within a multi-billion dollar industry.

The 2018 Farm Bill defined federally legal hemp and its derivatives as all cannabis containing less than 0.3 per cent THC. Next year, confirmation by the White House on updated FDA use-guidelines for CBD will open the door for its use in mainstream CPG and mass retail, and propel the entire industry forward. But after meeting with 82 North American major retailers and brands on behalf of Centuria Foods last year, without exception, all had the same ingredient requirements: no isolate and no THC. In other words, CBD ingredients with less than 0.3 per cent THC won’t be good enough for mass-market brands.

With these limitations, Canadian LPs that want to access the global market opportunities presented by CBD should consider the following available technologies for THC remediation:

Isolate Manufacturing

One of the most common THC remediation methods involves isolate reactors, a cheap, easy to use, and primitive technology. It’s used by major producers including Aurora Cannabis and involves cyclically heating and cooling a blend of solvent and distillate to create a THC-free, odorless and tasteless CBD crystalline. Some FDA officials, including former Commissioner Scott Gottlieb, have recently suggested enforcement action against users of this technology, as CBD crystalline meets the FDA definition of an Active Pharmaceutical Ingredient (API), the manufacturing of which is illegal without proper licensing. Beyond that, there is clinical evidence to support that CBD crystalline is ineffective relative to full and broad-spectrum CBD, which include hundreds of cannabis’ botanical compounds, each one with its unique effects and benefits, labeled the “entourage effect.” In addition, the solvents used in processing CBD using this method disqualify the end ingredient from organic certification. The equivalent capital expenditure of removing THC from 1000 litres of distillate per day using this method is less than $14 million, including necessary ancillary equipment required for manufacturing. The CBD loss rate is high, exceeding 30 per cent for many labs, but due to ease of operation and low operating expenditure, it’s a very attractive solution for THC remediation.

Chromatography

Chromatography is the leading technology for THC remediation. It involves passing a fluid (called the mobile phase) through a medium (stationary phase), akin to moving muddy water through a tube of sand to purify it. It sounds simple, but the operational challenges tied to chromatography have left many U.S. labs with multimillion-dollar equipment that they lack the technical ability to run, let alone efficiently. While chromatography can produce federally compliant full and broad-spectrum CBD, it also removes approximately 90 per cent of cannabis’ other beneficial botanical compounds. In addition, the solvents used in processing CBD using this method disqualify the end ingredient from organic certification.

The lowest equivalent capital expenditure of removing THC from 1000 litres of distillate per day using chromatography was recently quoted as $71 million, by RotaChrom. The CBD loss rate is 15-22 per cent for many labs, with Centuria’s historical peak efficiency reaching slightly under 14 per cent. This technology benefits from having a low operating cost of $134 per litre of input distillate for achieving THC levels below 0.2 per cent. Achieving undetectable levels of THC with the same throughput would require doubling both equipment and operating costs.

CenturiaZero

Being the first company to utilize chromatography in the cannabis space almost a decade ago for the purposes of drug development, Centuria’s R&D team quickly learned of its limitations. CenturiaZero is a technology developed in response to the shortfalls associated with other remediation technologies with the scalability to meet the demands of the entire global market. Unlike isolate manufacturing and chromatography, CenturiaZero provides a cost-effective way to preserve an extract’s quality by targeting only THC, leaving the entire array of cannabis’ botanical compounds intact to achieve the optimal “entourage effect”.

Today, CenturiaZero processes 1200 litres per day and can expand to meet any global needs within 60 days of a purchase order. The technology also outputs a USDA Certified Organic product, which protects the Canada Organic or USDA NOP label that is virtually nonexistent in the CBD space and essential for companies that are committed to quality. In addition, CenturiaZero offers a peak loss rate of less than 1 per cent, therefore scaling and operating this method of remediation could unlock the most technical and costly component of massmarket admissible CBD.

If Canadian LPs deploy capital correctly in this space to gain new revenues from CBD, they will enjoy being in a space that is growing rapidly with relatively no competition.

Michael Brubeck is the Founder and CEO of Centuria Foods. For those looking to get in contact to discuss these technologies, he welcomes all enquiries to info@cenlabs.com

Our entire nutrient line is based on our 3 part solution of Grow, Micro and Bloom. The key is Micro, mixed first, but used in combination with Bloom and Grow. Micro has our specially developed sequestering formula and contains nano-emulsion technology, unique to Diablo. Carefully engineered to create a specific match for the species you are cultivating with the ability to increase or lower the ratio depending on the culture, making the combo the choice of hobbyists and commercial growers. Our research has told us that a plant's physiology and its overall health rely on the delivery of nutrition faster and delivered in a protected form, it's what all our R & D is based on.