Privacy Laws
2024 Report
Retail Regulations
In our first legal article of the year we look at privacy FAQs for startups & growing businesses.
As we head into 2024, we offer a special report on four cannabis product categories: edibles, beverages, pre-rolls and vapes, and what each market has for us in the New Year.
Understanding and navigating the intricate web of cannabis regulations in Canada are crucial for retail store owners in the burgeoning cannabis industry.
Cannabis Prospect Magazine YOUR SEED-TO-SALE PUBLICATION FOR THE CANADIAN CANNABIS MARKETPLACE
VOLUME 6 ISSUE 1 FEBRUARY 2024
Table of Contents/
February 2024
EDIBLES
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Our industry is slowly maturing despite the pressure of heavy regulations. All the while consumer-buying patterns are adapting, and LPs are diversifying.
PRE-ROLLS
BEVERAGES
VAPE MARKET
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20
22
Beyond being a method of consuming cannabis, cannabis enthusiasts often enjoy the art of hand-rolling their joints to perfection. However, the contemporary cannabis landscape has witnessed a notable shift in consumer preferences, with convenience taking centre stage.
The cannabis-infused beverage category has immense potential for future growth. As regulations become more streamlined and consumer awareness increases, we can expect a significant increase in demand.
In the fiercely competitive cannabis industry, licensed producers and brands are constantly seeking ways to gain an edge. Amidst this race, one key factor emerges as a gamechanger: comprehensive and insightful vape sale data.
ON THE COVER REGULARS
12
In the evolving landscape of Canadian cannabis, the distinction between medical and recreational access has been a point of confusion. Despite the widespread legalization, consumer apprehensions linger, fueled by overwhelming regulations, and lack of education surrounding cannabis.
24
Understanding and navigating the intricate web of cannabis regulations in Canada are crucial for retail store owners in the burgeoning cannabis industry.
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4 From the Editor 6 Events 8 News 21 Product Showcase 25 Product Spotlight 28 Provincial Updates 30 List of Advertisers
Privacy is crucial to every business in every sector at every stage. The consequences of getting privacy wrong can be significant, and for a startup or a growing business even fatal. The answers to these five key privacy questions will help you get started. February 2024 | Cannabis Prospect Magazine
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LETTER TO THE EDITOR
A Little Less Complicated By David Halpert
T
his February issue of Cannabis Prospect Magazine (CPM) celebrates our five-year anniversary in the industry as a published trade magazine and while this is a remarkable achievement in its own right, I feel like this milestone is more a whimper than a bang. When I began putting together the first issue (back in early 2018 when, at the time, cannabis legalization was very much still up in the air) I envisioned a bimonthly pub with 10 to 15 ads featuring cannabis brands that would be delivered to cannabis retailers across Canada and other industry stakeholders. Sadly, that hasn’t come to be. Well, not entirely. While Cannabis Prospect Magazine has a few mainstay advertisers in every issue (who I’m eternally grateful for) each issue is usually an uphill battle in order for that issue to make a profit. Since CPM relies on the lifeblood of its repeat advertisers in order to survive I feel compelled to examine this further while doing my best to make this not come off as a rant, but rather an introspective look into the nature of cannabis trade marketing as a whole. At the time of this writing, there have been 1,000+ licenses issued for cultivators, processors and sellers by the federal government alongside hundreds of brands created over the years. Based on the laws of average it should be easy to sell 10 ads in any given issue right? At the time of writing this CPM has two ads from cannabis brands. If this were just happening to me I’d think this way an indictment of my own sales abilities, however this isn’t the case. Cannabis Retailer, a similar industry mag catering to cannabis retailers on the trade side, has only two cannabis brands as well, which I believe speaks to something more endemic when it comes to cannabis marketing overall. So why is this the case? The first reason is fairly obvious. Cannabis has always been a consumerfocused industry so it only makes sense that its marketing is more consumeroriented on the whole, largely in the form of events and consumer magazines. KIND is a perfect example of this, as it offers both annual events as well as its own consumer mag distributed to stores and to their credit they do a fantastic job.
While trade magazines will always play second fiddle to events, this tendency for the cannabis industry to be so consumer-focused with very little interest in the trades baffles my mind to this day. Why this blindspot exists to deeply I haven’t been able to pinpoint even five years in. Having worked in other industries (from automotive to hardware to pensions on the trade magazine side of the things), I can tell you this is far from the norm. Secondly is a focus towards digital marketing. While the ratio of print to digital marketing varies in any given industry, cannabis is especially digitalheavy when it comes to marketing from social media to email marketing to web banner display, usually but not always with the assistance of third-party creative/ sales agencies. Again, not unheard of when it comes to B2B marketing, however the sheer volume of money spent on digital advertising far exceeds those of print. The third reason is something more bred in the bone when it comes to cannabis. For one if licensed producers set aside any funds when it comes to trade marketing it rarely goes into industry pubs but rather in-house material like sell sheets, goes to hire more sales reps (either internally and from a third-party sales agency) or gets reinvested into the company itself. That said the explanation can be simpler than everything I’ve mentioned so far, and that’s that in many cases smaller LPs and cultivators simply don’t have the large budgets to compete on. Regardless, I’m looking at this five-year anniversary as less of a milestone and what I hope will become a turning point in this now-mature cannabis industry, one that makes the proper investments into marketing and not leaving its B2B marketing off by the wayside.
President / CEO, Straight Dope Media Inc. @cannabispromag
FOLLOW US ONLINE Stay up to date on all the latest cannabis news by joining Cannabis Prospect Magazine on social media. Follow us on Twitter and Instagram @cannabispromag or sign up for our Daily News Alerts at http://eepurl.com/gdjKUP
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Cannabis Prospect Magazine | February 2024
Categories Order
The Cannabusiness
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Name
Compliance
CBD Heavy Strains
Dried flower
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Category recommendations Dried flower
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Subcategories: Sativa, Hybrid, Indica, CBD Compliance: Dried Flower
Pre-rolls Extracts - Ingested
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Papers
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Subcategories: Sativa, Hybrid, Indica, CBD Compliance: Dried Flower
Extracts ingested Subcategories: Capsules, Oils/Tinctures, Sp rays Compliance: Extracts ingested
Extracts inhaled ?
Overview
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Summary Financials Payment types Day of week/hourly Gift cards
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Subcategories: Vape pens, Vape cartridges Compliance: Extracts inhaled
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Edibles Jan 1, 2021
~
Topicals
Jan 31, 2021
Subcategories: Chocolate, Gummies/Candies, Baked goods, Teas
Topicals
Compliance: Edibles solids
Beverages
Products Products Categories Categories Vendors
Export as csv
Extracts - Inhaled
Extracts inhaled
Edibles - Solids
Edibles solids
Edibles - Liquids
Edibles non-solids
Bongs
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Pipes
Non-cannabis
Extracts - (other)
Extracts other
Subcategories: THC, CBD, 1:1 Compliance: Edibles non-solids
$350.00 $300.00
Topicals
$250.00 $200.00 $150.00 $100.00 $50.00 $0.00 Jan 1 2021
Jan 6 2021
Subcategories: Rolling papers, Grinders, Bongs, Pipes, Lighters, etc.
Need to view your old repo rts? Click here
Financial overview Export as csv Gross sales Refunds Discounts Net sales
Purchase orders
GST PST (BC) Vape PST (BC)
Point-of-sale, compliance, e-commerce, hardware, payments, capital
Deposits Gift cards Penny adjustments Total Costs Profit (net - costs)
Number of sales 48 sales Group by day
Export as csv
8 6 4 2 0 Jan 1 2021
20 Jan 6 2021
Jan 11 2021
Jan 16 2021
Jan 21 2021
Jan 26 2021
Jan 31 2021
0 Jan 1 2021
Jan 6 2021
Jan 11 2021
Jan 16 2021
+
Jan 21 2021
Jan 26 2021
Jan 31 2021
+
9
900
$100M
Provinces and territories
Canadian retailers
Monthly transactions
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2 min
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Integration partners
Support response times
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CONFERENCES & EVENTS February 14-17, 2024 CHAMPS Trade Shows Las Vegas Convention Center Las Vegas, NV https://champstradeshows.com
May 27-29, 2024 Grow Up Toronto Delta Hotel by Marriott Toronto Airport Toronto ON https://growupconference.com/toronto/
March 8, 2024 Radicle Femmes Soluna Toronto ON http://tinyurl.com/radiclefemmes
June TBD Lift & Co. Victoria Vancouver Conference Centre Victoria BC https://liftexpo.ca/lift-vancouver-2024
March 22-24, 2024 CannExpo EnerCare Centre Toronto ON https://www.cannexpo.ca
September 29 - October 1, 2024 Grow Up Edmonton Edmonton Convention Centre Edmonton AB https://growupconference.com/alberta
To submit an event for inclusion in the Cannabis Prospect Magazine calendar, email media@cannabisproonline.com
Cannabis Prospect Magazine CANNABIS PROSPECT MAGAZINE VOL. 6, ISSUE 1 SUBSCRIPTION SERVICES For subscription services visit www.cannabisproonline.com or email david@cannabisproonline.com. For change of address, please include the old address and new address, along with an address label from a recent issue, if possible. If an address is not updated when the magazine is mailed, we are not responsible for delivery of your magazine. If the Post Office alerts us that your magazine is undeliverable, we will suspend our subscription until a correct address is received.
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Cannabis Prospect Magazine | February 2024
EDITORIAL For editorial submission requests or article ideas please email media@cannabisproonline.com Cannabis Prospect Magazine assumes no responsibility for any claims or representations contained in the magazine or in any advertisement. All materials contained are for educational purposes and intended for the legal marijuana business. Cannabis Prospect does not encourage the illegal use of any of the products contained within. ISSN 2562-1033. CANADIAN PUBLICATIONS MAIL PRODUCT AND SALES AGREEMENT NO. 43596516
Publisher and Editorial Director David Halpert Account Representative & Contributor Christina Michael Cannabis Prospect Magazine is published six times a year by Straight Dope Media Inc., 44 Valley Woods Road, Unit 1802, Toronto Ontario M3A 2R6 Canada ADVERTISING For advertising rates or inquiries please email sales@cannabisproonline.com
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NEWS
Canopy Growth Announces Completed Sale of BioSteel Business Canopy Growth Corporation provided an update that pursuant to the proceedings under the Companies’ Creditors Arrangement Act involving BioSteel Sports Nutrition Inc. (BioSteel Canada) that two sale transactions transferring the assets of BioSteel Canada and BioSteel Manufacturing, LLC (BioSteel Manufacturing) have been completed for aggregate gross proceeds of $30.4 million. “With the completion of these two sale transactions, we have completed another critical action to focus Canopy Growth’s business on our core cannabis operations and can now realize the proceeds of sale to further improve the Company’s balance sheet,” said Judy Hong, Chief Financial Officer, Canopy Growth. “We wish the new owners the best in the future operation of the brand and assets.” For more information visit www.canopygrowth.com.
BLAZE® Announces Revolutionary InStore Shopping Experience and SelfCheckout for Dispensaries BLAZE® Solutions, Inc., a trailblazer in the cannabis retail technology space, announced its new In-Store Shopping experience. This innovative solution completely reinvents the in-store shopping process. Retail customers can easily use their smartphone camera to scan product QR codes, add them to their cart, and prepay independently. BLAZE ECOM™ In-Store Shopping offers cannabis customers a convenient, fast, and independent way to shop using their smartphones. The selfguided mobile shopping experience eliminates lengthy queues and significantly reduces the wait time for customers. This allows retailers to enhance customer satisfaction, ultimately increasing sales and reducing the amount of staff needed on the floor. With the launch of the new BLAZE ECOM™ In-Store Shopping experience, it once again leads the way in providing innovative solutions for cannabis retailers in the US and Canada. String of Cannabis Store Robberies Strike Calgary According to an article in the Calgary Herald, Calgary police are looking for help to identify multiple suspects they believe are connected to a series of cannabis store armed robberies. Since Nov. 14, a dozen cannabis store robberies have happened in Calgary, including one where police said the suspects kicked the store clerk unconscious and brandished a knife. Police said other weapons like a handgun and a hammer were used in other incidents. The Calgary Police Service released CCTV images on Thursday in an effort to identify the suspects and to “encourage the public to be wary of suspicious behaviour or activity near cannabis retail stores.” The suspects are described as males wearing dark clothes, hoodies with the hood pulled up, masks and gloves. Investigators believe the 8
Cannabis Prospect Magazine | February 2024
suspects target cannabis stores for cash and goods that can be re-sold illegally, and believe they are the same group responsible for the series of similar robberies. CPS encourages business owners and members of the public to be aware of safety and security protocols and to be vigilant of suspicious individuals or activity around stores. An immediate call to police is suggested if people notice things unusual or if a crime is in progress. Anyone with information about the incidents or the identities of the suspects is asked to call 403-266-1234. Anonymous tips can be provided to Crime Stoppers. BZAM completes acquisition of Final Bell’s Canadian Operation BZAM Ltd. announced that, further to the news release dated December 6, 2023, it has completed the acquisition of all of the issued and outstanding shares of Final Bell Canada Inc. (“FBC”) from Final Bell Holdings International Ltd. (“FBHI”) (the “Transaction”). The Transaction combines BZAM’s cultivation, production, and sales infrastructure with the portfolio of international brands that Final Bell is bringing to market in Canada. The combination of BZAM and FBC creates a Canadian cannabis powerhouse, significantly advancing core tenants of BZAM’s mission: (i) to deliver the brands and products consumers want; and (ii) to be a favoured partner of the retailer community nationwide. “It has been our vision to be Canada’s favourite source for cannabis. Bringing FBC under the BZAM umbrella takes us forward in realizing this vision as we combine our broad flower and 2.0 product portfolio with some of the biggest international brands and products in the cannabis universe including Jeeter, Cookies, Sherbinskis, and our existing Canadian JV partner Wyld,” said Matt Milich, BZAM’s CEO. As part of the Transaction, Greg Boone has
joined BZAM as President and Jennifer Maccarone has joined as VP of Operations, while Christy Zhou assumes the role of Chief Legal Officer at BZAM. Matt Milich will remain as Chief Executive Officer of BZAM. In addition, FBHI appointed a nominee, being Kay Jessel, to the board of directors of BZAM (the “Board”), joining existing BZAM board members Bassam Alghanim, who continues as Chair of the Board, Chris Schnarr, Sherry Tross, Keith Merker, Wendy Kaufman, and Sean Bovingdon. RAW Rolling Papers Donates $100,000 to The Last Prisoner Project RAW Rolling Papers (BBK/HBI), the independent international brand of high-quality rolling papers and smoking innovations, announced on Giving Tuesday that it made a $100,000 donation to The Last Prisoner Project, a non-profit dedicated to repairing the harms of the criminalization of cannabis through legal intervention, advocacy, and awareness. The $100,000 is allocated toward two different goals. Half the funds will go to individuals who were recently released from prison on cannabis-related charges to provide them with the reentry resources to help them get back on their feet. The other half will fund programs intended to assist individuals who were incarcerated under non-violent cannabisrelated crimes. The Last Prisoner Project (LPP) was founded in 2019 out of the belief that no one should remain incarcerated or suffer the collateral consequences of offenses that are now legal. LPP was brought together by a group of justice-impacted individuals, policy and education experts, and leaders in the worlds of criminal justice and drug policy reform to work to end the fundamental injustice that is America’s policy of cannabis prohibition and the War on Drugs. Greenway Announces Leadership Update The Board of Directors of Greenway
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NEWS
Humble & Fume Inc. Files for CCAA Protection Humble & Fume Inc., announced that the Company and its subsidiaries, Humble & Fume Inc. (Manitoba), P.W.F. Holdco, Inc., Windship Trading LLC, B.O.B. Headquarters Inc., Fume Labs Inc., and Humble Cannabis Solutions Inc. (together collectively as the “Humble Group”), have initiated proceedings (the “CCAA Proceedings”) in the Ontario Superior Court of Justice (Commercial List) (the “Court”) under the Companies’ Creditors Arrangement Act (the “CCAA”). The Humble Group’s application under the CCAA was heard earlier today. Following the hearing, the Court granted an order, which, among other forms of relief: (i) granted a stay of proceedings in favour of the Humble Group up to and including January 15, 2024; and (ii) appointed Deloitte Restructuring Inc. as Court-appointed monitor of the Humble Group (in such capacity, the “Monitor”). After extensive consultation with legal and financial advisors, and thorough consideration of all available alternatives, the directors of the Humble Group determined that it was in the best interests of the Humble Group to seek creditor protection under the CCAA.
Greenhouse Cannabis Corporation, a cultivator of high-quality greenhouse cannabis for the Canadian market, announced that Darren Peddle has resigned from his role as Chief Financial Officer and as a member of the ciompany’s Board of Directors effective immediately for medical reasons. The search for a replacement Chief Financial Officer has commenced. In the interim, the role and duties of the Chief Financial Officer will be shared among the members of Greenway’s team of experienced professionals. “I would like to thank Mr. Peddle for all of his dedication and hard work. Darren has been with the company since its inception, and has been instrumental in all aspects of the company.” Jamie D’Alimonte, CEO of Greenway. GrowerIQ Completes Acquisition of Ample Organics, Establishing Market Leadership in Cannabis Technology GrowerIQ, a prominent cannabis technology company, has acquired Ample Organics, a pioneering force in Canadian cannabis technology. The strategic acquisition, finalized in December 2023, signifies a major expansion in GrowerIQ’s footprint within Canada and on the international stage, introducing exciting technological options to the portfolio available to licensed cannabis producers worldwide. This significant all-cash acquisition positions GrowerIQ as the market leader in Canada and Europe, boasting the largest market share in the sector. The company is pleased to confirm that all members of Ample Organics’ team have joined GrowerIQ, further enhancing the combined entity’s capabilities. Andrew Wilson, Founder of GrowerIQ, shared his vision for the combined entity, stating, “The acquisition of Ample Organics is a strategic move that aligns with our mission to provide the most effective management solutions for our incredible producers around the world. We are excited to welcome the talented team from Ample 10
Cannabis Prospect Magazine | February 2024
Organics and look forward to our journey together.” Founded in 2014, Ample Organics is a pioneer in the cannabis technology ecosystem. The technology platform makes compliance easy by tracking individual plants from seed to consumer and reporting every detail of the growth, production, and sales processes. The software continues to be a trusted solution for cannabis producers, manufacturers, distributors, physicians, clinics, laboratories, retailers, and educators. For more information, visit www.AmpleOrganics.com. Cronos Enters Australian Cannabis Market Cronos Group Inc. is expanding distribution into the Australian market with its first shipment of cannabis flower to Vitura Health Limited. Cronos owns approximately 10% of the common shares of Vitura, formerly known as Cronos Australia, and will supply cannabis for Vitura. “Supplying the Australian market, which has grown significantly in the past three years, is a great milestone for Cronos as we aim to enter and expand within international markets,” said Mike Gorenstein, Chairman, President, and CEO, Cronos. “We look forward to working closely with our partners at Vitura to provide patients with high-quality cannabis products and establish our presence in Australia as a trusted cannabis partner.” Hara Supply Announces Landmark Production of Three Billion Cones Hara Supply, the largest pre-rolled cones and combustibles manufacturer in the world, announced the landmark achievement of producing three billion cones since its inception in 2015. The company, which has scaled its capacity to meet exploding international demand, currently manufactures more than one billion cones annually for the market’s top multistate operators, dispensaries, and CPG brands. At a time when pre-roll
category growth is one of the most significant trends in the cannabis industry, Hara Supply stands out for its commitment to excellence in production, quality, compliance, safety, and unmatched customer support. Employing 250,000 square feet of ISO, GMP, and HACCP production space across 15 manufacturing facilities, the company crafts premium prerolled cones derived from refined French wood pulp. Each cone is fully customized to meet the needs and style of any brand, and extensive quality control processes ensure all products meet rigorous safety and compliance standards. Health Canada Releases New Data on Cannabis Use in Canada The 2023 Canadian Cannabis Survey provides important insights into Canadians’ knowledge, attitudes and behaviours on cannabis use. Health Canada published the results of the 2023 Canadian Cannabis Survey (CCS). The data was collected from May 2 to July 20, 2023. This is the seventh cycle of the Canadian Cannabis Survey, which Health Canada has conducted every year since 2017. The Government of Canada collects data to better understand how Canadians view and use cannabis. Through the collection of this data, it can better monitor Canada’s national framework for controlling the production, distribution, sale and possession of cannabis under the Cannabis Act. The results will help Health Canada better understand habits and behaviours relative to cannabis use over time and will support the development of policy and program initiatives.
Have a news release? Send it to us. Forward to media@cannabisproonline.com
Empowering Choices: Unveiling the Shared Landscape of Medical and Recreational Cannabis in Canada By Christina Michael
I
n the evolving landscape of Canadian cannabis, the distinction between medical and recreational access has been a point of confusion for many consumers. Despite the widespread legalization, consumer apprehensions linger, fueled by overwhelming regulations, an abundance of choices and lack of education surrounding cannabis. This editorial aims to clarify the difference between medical and recreational cannabis, break some barriers and find the path that works best for adult-use consumers whatever their need and intention. To access medical cannabis a patient must go through the application process. Requirements for obtaining access to medical cannabis under The Cannabis Act lie in a prescription from healthcare practitioners. This path mandates patient registration with licensed producers forging a unique patient-producer relationship and the barrage of emails from licensed producers' flood in contributing to a sense of complexity adding another layer of confusion for the patient. The patient is often left on their own to choose products and often dosing. Patients authorized by their healthcare provider are still able to access cannabis for medical purposes by: » buying directly from a federally licensed seller » registering with Health Canada to produce a limited amount of cannabis for their own medical purposes » designating someone to produce it for them
Subject to the legal age limit in their province or territory, they are also able to buy cannabis: » at provincial or territorial authorized retail outlets » through provincial or territorial authorized online sales platforms A stark contrast emerges in the recreational domain, where adults dependent on the province and territory can explore cannabis without the prescription prerequisite. Licensed retail stores become the accessible conduits for recreational consumers. POSSESSION LIMITS: QUANTIFYING CANNABIS OWNERSHIP Medical cannabis possession limits are intricately tied to the patient's daily authorized amount, a metric shaped by the healthcare practitioner's discernment. Medical cannabis patients are allowed to possess 30x their daily prescription limit or up to a maximum of 150 grams, whichever is less, plus they can carry an additional 30 grams of recreational product. The lim-
it for purchasing and possessing recreational cannabis in Canada is 30 grams on your person in public. PRODUCT DIVERSITY The reality is there are very few differences between medical- and adult-use cannabis. Contrary to popular belief, the majority of products available for medical use can also be found in licensed retail cannabis stores. This challenges the conventional wisdom that a prescription is necessary to access a comprehensive selection of cannabis products for personal adult-use. Understanding this shift is pivotal in dismantling barriers and empowering consumers to make informed choices. The overlap in product availability between medical and recreational channels signifies a pivotal turning point in the Canadian cannabis landscape. This integration allows consumers to explore a wide array of options, tailored to their specific needs, without the perceived complexities associated with medical cannabis. Licensed cannabis retail stores offer a bridge between these two worlds, providing a seamless experience for individuals seeking therapeutic benefits without navigating a labyrinth of regulations. A lack of education remains a significant hurdle in fostering confidence among consumers. Robust educational initiatives that demystify medical cannabis, elucidate the similarities between medical and adult use offerings, and emphasize the potential benefits can empower individuals to make
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Despite the widespread legalization, consumer apprehensions linger, fueled by overwhelming regulations, an abundance of choices and lack of education surrounding cannabis.
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informed decisions about their integrating cannabis for recreational and/or health and well-being intentions. Prevailing regulations restrict licensed cannabis retailers and their personnel from articulating potential benefits or endorsing therapeutic use of cannabis. It is noteworthy that, in practice, the distinctions between medical- and adult-use cannabis are minimal. The majority of regulated cannabis products are accessible through both medical channels and licensed cannabis retail stores, though only a limited number of products are specifically tailored for addressing medical conditions. It's important to navigate these nuances and make informed choices, recognizing the regulatory constraints while
accessing cannabis products through legitimate channels. It's essential to prioritize your well-being, especially if you're dealing with a medical condition. If your primary concern is a health issue, it is crucial to seek advice from a qualified medical professional before considering any cannabis products. While cannabis may offer potential therapeutic benefits, its effects can vary, and individual health conditions require personalized guidance. Additionally, conducting thorough research is key, and when purchasing cannabis, ensure you do so from licensed retail cannabis stores. These establishments adhere to regulatory standards, providing assurance of product quality and safety. Your health is paramount, and consulting with healthcare experts and obtaining cannabis from reputable sources ensures a responsible and informed approach to integrating cannabis into your holistic health journey. As Canadians navigate the intricate landscape of cannabis access, breaking down barriers between medical and recreational avenues becomes paramount. The revelation that a plethora of products is accessible without a prescription highlights a shift toward a more inclusive and user-friendly system. By dispelling myths, addressing perceived barriers, and prioritizing education, we can empower consumers to embrace safely integrating regulated cannabis products for therapeutic potential and recreational purposes without fear, confusion and unnecessary hurdles.
February 2024 | Cannabis Prospect Magazine
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2024 Product Report
In the February issue of Cannabis Prospect Magazine we take an introspective look at various product categories including market reports for the Canadian pre-roll and vape markets, why beverages are poised for growth in 2024 and an insider’s perspective of the current edibles market.
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We are Cannabis Prospect Magazine! Companies across Canada are adapting to new changes brought on by this pandemic, and the cannabis industry is no exception. Even though most provinces have named cannabis cultivators and retailers alike an essential service, reaching the right people has never been more important.
Is your business ready? Whether you’re a licenced producer, retailer, manufacturer or service provider to the industry Cannabis Prospect Magazine will help you reach your customers, stakeholders and other industry professionals across Canada. We’ll make sure your message is heard loud and clear to this new, burgeoning market!
Advertise Today! To inquire about advertising opportunities or to request a media kit visit www.cannabisproonline.com or send an email to media@cannabisproonline.com.
2024 Report
An Insider’s Perspective on the State of Canadian Edibles By Alexandre Poulin, Chief Innovation Officer Of Gayonica
O
ur industry is slowly maturing despite the pressure of heavy regulations. All the while consumer -buying patterns are adapting, and LPs are diversifying. Combined data of medical and non-medical sales of packaged units show a steady increase in the edible cannabis piece of the pie, with an all-time high of 22% market share. Similarly, the edibles segment shows promising signs of innovation with collaborations playing a growing part in their market strategies. Regardless of product quality, communication and brand awareness have proven to be key for the successful commercialization of cannabis edibles. But in a world where brand education is framed by convoluted rules and regulatory legalese, much of which is provincially specific when it comes to the application of the law, messaging gets muddled in the process. Against all odds, various groups, fueled by a strong sense of community and purpose, have managed to pull off the improbable, paving a way for good communication channels for brands in the industry. Whether it’s retailer/consumer-focused events or recognizing each other’s trailblazing work, there’s no shortage of creativity when it comes to the cannabis community shedding light on regulations, no matter how bleak at times they may seem. On the one hand, you have provinces like Ontario and BC leading the way in terms of their flexible, progressive approaches to communication with respect to education, consumption and brand awareness, alongside (for the most part) tolerant, mindful provincial officials. On the opposite side of the spectrum, we have Quebec, where many types of communications when it comes to cannabis messaging are strictly prohibited. In this insular landscape, many forms of
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consumer marketing, including representation and direct education, are illegal, the advantage being that LPs and cultivators deal with one client, the SQDC. In this particular legislative playground, even the ingredients used to craft edibles are strictly regulated. This could be taken as a barrier or an obstacle. Yet, the last year teaches us that the ones that will thrive in these highly-regulated markets are the ones that will see these impediments as incentives to collaborate and innovate. Innovation and collaboration play a central part in this maturing edible segment. As stated in a previous article written for this esteemed publication, the simplicity of edibles in the first days of legalization was directly linked to the realities of the Prohibition Era. The simple formulations that occupied much of the early legalized edibles market are meant to make room for a more diversified product offering. Through innovation and cultural inspiration, brought by the rich history of the cannabis plant and its uses, we are now witnessing increasingly diversified shelves with varied products, ingredients and cannabinoid profiles. Some minor cannabinoid niches are seeing increasing consumer interest in the marketplace as well. Education and communication regarding ingredients, effects and dosages are important in building strong relationships with retailers and consumers. Evidently, this diversification of the segment is stronger in markets that allow for efficient communication channels all along the supply chain. Another interesting trend in the field is the co-branding of edible products with extract suppliers alongside highlighting the qualities of the extracts being used in the formulation of edible products. We are now evolving from a distillateand isolate-fueled edible market to a more complex and subtle use
Cannabis Prospect Magazine | February 2024
of extracts in the narrative behind the products. This change in marketing narrative is directly linked to increased knowledge of consumers as well as licensed producers’ research & development teams. Established brands are reaching out to solventless extractors to push a diversified line of their flagship brands. Wellness-oriented edibles are pushing their full-spectrum crude extract and superfood at the centre of their marketing narrative. A beloved infused-chocolate brand is co-branding live hash rosin extract with their extract supplier. All these new practices seem to allow for credibility to circulate throughout cannabis supply-chain ecosystems. These practices, benefiting the industry and its consumers, are a testimony to progress and maturation of the segment, embracing both past uses and modern knowledge of cannabis. Knowledge seems to progress in the regulatory landscape as well. Health Canada recently updated its guidance regarding the definition and uses of intoxicating cannabinoids. Updating both the list of qualified molecules and recommending new understanding and uses of
these cannabinoids in the various product categories. Whether we agree with the new statements or not, it shows a will to deepen the understanding of plant chemistry as well as to act on that scientific knowledge. These recommendations have yet to take place in the law, but it’s a sign for licensed producers to plan ahead and adapt their commercial and R&D strategies. The cannabis industry in Canada remains undaunted in the face of post-prohibition regulations, demonstrating noteworthy resilience and an impressive surge of creativity. Despite navigating a regulatory landscape shaped by evolving legal frameworks, businesses and entrepreneurs within the industry have not only adapted but also showcased an ability to innovate. The challenges posed by regulatory changes have acted as catalysts for creativity, prompting the exploration of novel approaches and the development of inventive solutions. This resilience, coupled with a commitment to compliance, positions the industry for sustained growth and success, reflecting a dynamic and adaptive response to the evolving legal environment.
S AMP LE K IT S B Y O2 O C al l in g al l C a n a d ia n c a nn a b i s re t a i l w or k er s. A s t he f ro n t lin e of th e i nd u s tr y it i s im p o r ta n t fo r yo u t o s t a y u p t o da t e o n n e w p r odu c ts hi tti ng y ou r m a rke t . Bu t wi th a n ev e r g ro w i n g li st of re s p o ns a bi li t ies , a n d m os t e ve nt s in m a j or c i tie s f a r fr o m y o u r s t o re , i t c a n o ft e n be h a r d t o tr y n e w p r od u c t s be f or e ma k in g th e d e c i si o n t o p u r ch a s e fo r y o u r s tor e. Tha t ’s whe r e S a m pl e K it s B y O 2O c o m e s in .
HOW IT WORKS R eg is ter - C omp l e t e t h e q ui c k s i g n u p a t th e Q R co de be lo w A p p l y - Whe n n ew op p or t un i ti e s fo r s u r ve y k it s a r e h e re , O 2 O wi ll r e a ch o u t b y ema i l l e tt i ng y ou k n o w . A p p ly fo r t h os e op p o r t u n i t i es u s i n g th e l ink s in tho s e e ma i l s . E x p er ie nc e - O 2 O wi l l se n d o u t k i t s t o r eta i le rs t o t ry p ro du c ts fr o m b rand s fr o m a c r o ss t h e c o un t r y . U n f o rt u n a t el y n o t ev er y r et a i le r t h a t ap p l ie s t o o p po r tu ni t ie s w il l be s ele c t ed , b u t a s O 2 O co n t i n u es to r o l l the se o ut , w e ho pe t o i n c lu d e a s m a n y p eo p le a s w e c a n ! R es pond - P r o vi d e O 2 O pr o d u c t fe edb a c k t o le t u s k n o w wh a t y o u th o u g h t o f the p rod u ct s i n c l ud e d . The mo r e f e edb a c k w e re ce i v e t he mo r e k i ts w e wil l be ab l e t o sup p l y i n t h e f u t u re . T h o se wh o s u p p ly f eed ba c k wi ll h a v e a hi gher c h a n c e o f r e c e i v ing t h e n ex t k i t t h ey a p p ly f or !
2024 Report
The Surging Demand Propelling Canada’s Cannabis Pre-Roll Market
By Harrison Bard, CEO & Co-Founder, Custom Cones USA
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eyond being a method of consuming cannabis, cannabis enthusiasts often enjoy the art of hand-rolling their joints to perfection. However, the contemporary cannabis landscape has witnessed a notable shift in consumer preferences, with convenience taking centre stage. In Canada, the demand for prerolls has risen as consumers seek a hassle-free, efficient and readyto-enjoy experience regardless of hand-rolling abilities. In response to recent regulatory clarifications, the classic pre-roll has evolved into a cutting-edge sensation with infused pre-rolls entering the Canadian cannabis market, and according to data from Custom Cones USA in collaboration with Headset, the numbers speak volumes. SURGING PRE-ROLL SALES AND MARKET SHARE Pre-rolls are the fastest-growing product category in the entire cannabis industry with year-over-year growth in the US and Canada. In fact, in 2022 Canada experienced a 54% increase in pre-roll sales revenue and an impressive 31.5% market share takeover, marking a significant departure from the traditional flower and concentrate consumption. This remarkable surge in sales was observed across every tracked province, from Saskatchewan and
Alberta, which saw growth rates of 33% and 37%, respectively, to British Columbia, with nearly 54% growth, and a remarkable 69% increase in Ontario, the country’s most populous province. REGULATORY CLARIFICATIONS FUEL A PRICE REVOLUTION The growing demand for pre-rolls was a result of regulatory changes from Health Canada,, which clarified restrictions to allow the sale of infused pre-rolls. Infused pre-rolls have emerged as the game-changer in this evolving market, boasting a staggering year-over-year increase of 1426% from 2021 to 2022, making them the fastest-growing segment in the Canadian market. This rapid expansion has not only redefined consumer preferences but also had a profound impact on pricing dynamics for the entire category. Despite expectations of falling prices in a mature market, the average price of Canadian pre-rolls has risen. This phenomenon can be attributed to consumers’ enthusiastic embrace of infused pre-rolls, which naturally carry a higher price tag due to their concentrated content. PRE-ROLL PRODUCT VARIETY While infused pre-rolls have taken centre stage, we’d be remiss not to mention the impact of pre-roll multipacks, a set of multiple pre-rolls
in a ready-to-go pack. The rise of multi-packs has greater savings for producers and consumers alike as it uses less packaging, and takes less time to pack and label a multi-pack than it does for an individual pre-roll. The cut in labour and material costs helps producers keep their margins healthy and their prices low for customers. Multi-packs are perfect for consumers who enjoy a specific strain or those who like to mix it up with a variety pack. With pre-roll quality constantly improving and the latest in pre-roll-making machinery allowing producers to make them quickly and easily, it’s a situation that benefits both manufacturers and consumers. The clear favourites for consumers have been multi-packs that include two or five grams of cannabis—each having seen an almost 400% growth in the past two years. The great thing about 2-gram packs is that they are typically two full-gram pre-rolls that fit in a single tube, cutting down production costs. With the “doob tube” becoming a standard packaging option for individual pre-rolls, it makes sense that they would become even more popular once producers started putting two pre-rolls in them. PRICE COMPRESSION IN PREROLLS Although there is a lot of opportunity in cannabis, overall sales will always be capped by demand. Growth isn’t infinite as price compression has had a huge impact on all cannabis product categories in both the US and Canada. However, pre-rolls show the least amount of price compression in both markets. Similarly,
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Cannabis Prospect Magazine | February 2024
pre-rolls are the only product segment to see an increase in equalized price in Canada. This is partially due to pre-rolls being a manufactured item and less of a pure commodity and therefore tend to be less price elastic. This anomaly is more likely explained by the boom in infused pre-rolls. It’s clear that Canada isn’t only seeing incredible growth in the pre-roll market, but it is setting the pace for infused pre-roll growth for the entire industry. As Canada’s cannabis market undergoes a remarkable transformation, infused pre-rolls are leading the way, turning the classic pre-roll into a premium product. The data is clear, this trend shows no signs of slowing down, making infused pre-rolls and multi-packs a captivating and integral part of Canada’s cannabis culture. About Custom Cones USA Founded in 2017 by Harrison Bard and Fredrik Rading, Custom Cones USA is a leading pre-roll resource in the cannabis industry. The team has a wealth of knowledge about all aspects of pre-roll manufacturing and the entire pre-roll sector of the cannabis space. From custom-branded pre-rolled cones and wholesale bulk cones, to completely customized pre-roll packaging projects and pre-roll machines, it offers expertise and solutions to companies big and small in all sectors of the pre-roll space. Custom Cones USA wants to help its customers operate with relative ease and ensure both the companies and their customers to have the highest quality smoking experience.
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Cannabis Prospect Magazine
2024 Report
Cannabis Beverages: A Category Poised for Growth By Karen Young, Founder of Sense & PurposeTM
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he cannabis-infused beverage category is currently experiencing significant growth. However, despite being one of the fastest-growing segments, the category still represents a small percentage of the overall cannabis market (2-2.5%). The cannabis-infused beverage category has immense potential for future growth. As regulations become more streamlined and consumer awareness increases, we can expect a significant increase in demand. Currently, the category is favoured by cannabis enthusiasts seeking novel experiences, but there’s also the potential to tap into a broader consumer base.
THE CANNABIS BEVERAGE CONSUMER Current cannabis beverage consumers in Canada are often early adopters, curious about the novel experiences offered by these products. They typically enjoy cannabis-infused beverages in social settings, as part of their wellness routines, or during relaxation moments. While these consumers are essential for the category’s initial growth, the true potential lies in attracting future cannabis beverage consumers. Future cannabis beverage consumers may include health-conscious individuals seeking natural remedies, younger consumers looking for alternative social experiences and older adults prioritizing wellness. Many new consumers may engage with cannabis-infused beverages for medical purposes such as pain management, stress relief, sleep aids or post-workout recovery. The versatility and potential benefits of cannabis-infused beverages make them attractive to a wider audience. THE BENEFITS OF CANNABISINFUSED BEVERAGES Cannabis-infused beverages offer several advantages over traditional alcoholic beverages, energy drinks and functional beverages. Firstly, they provide a viable alternative to alcohol consumption, especially for 20
individuals who want to socialize without the negative effects associated with alcohol, such as impaired judgment, hangovers and liver damage. This aligns with the growing trend of reducing alcohol consumption among health-conscious individuals. Secondly, cannabis-infused beverages can offer a more controlled and predictable experience compared with edibles or smoking cannabis. With labeled dosages, consumers can easily manage their cannabis intake, reducing the risk of overconsumption. Additionally, with the evolution of infusion technology and use of nano-emulsification, cannabis-infused beverages can provide a quicker onset than traditional edibles, making them suitable for those seeking a more controlled experience. Furthermore, cannabis-infused beverages can offer functional benefits beyond what’s available in traditional energy drinks or functional beverages. By incorporating functional ingredients like adaptogens, antioxidants or herbal extracts, these beverages can provide additional health benefits such as stress reduction, focus enhancement or immune support. Ultimately, the versatility of cannabis-infused beverages allows for a personalized experience that caters to individual needs and preferences. FITTING WITH CURRENT TRENDS AND EDUCATING CONSUMERS Cannabis-infused beverages seamlessly align with prevailing consumer trends, making them an appealing choice for a diverse audience. The rise of functional beverages and wellness-focused products has created an ideal environment for the growth of this category. Cannabis-infused beverages not only provide relaxation and social enhancement but also offer additional health benefits that meet the evolving demands of health-conscious consumers. However, to expedite the growth of the cannabis-infused beverage category, educating consum-
Cannabis Prospect Magazine | February 2024
ers is crucial. Many individuals are curious about these products but lack knowledge about their effects, dosing and consumption methods. It’s imperative to educate consumers about responsible consumption practices, potential benefits and the importance of selecting low-sugar options. Comprehensive marketing campaigns, digital resources and partnerships with healthcare professionals can help dispel misconceptions, provide accurate information and build trust in cannabis-infused beverages. REALIZING THE POTENTIAL To realize the full potential of the cannabis-infused beverage category in Canada, certain factors must be considered: 1. Regulations and Compliance: Streamlining regulations, especially regarding labeling requirements, dosing and safety protocols, will encourage innovation and create a favourable environment for the category’s growth. Collaboration between beverage manufacturers and regulatory bodies like Health Canada is crucial in ensuring compliance while fostering innovation. 2. Product Innovation and Accessibility: Continual product innovation is essential to cater to evolving consumer preferences.
Manufacturers should focus on developing a wide variety of flavours, potencies and functional ingredients to meet individual needs. Establishing effective distribution networks and ensuring accessibility across various retail channels will also play a pivotal role in driving category growth. 3. Consumer Education: Addressing misconceptions and providing accurate information to consumers is vital in accelerating adoption rates. Educating consumers about responsible consumption practices, dosage guidelines and the benefits of lowsugar options will help build trust and fuel category growth. The cannabis-infused beverage category in Canada is experiencing significant growth, with immense potential for the future. As regulations evolve, consumer awareness increases and product variety expands, this category is expected to thrive. By incorporating infused beverages into their product strategy and ensuring budtenders are fully versed on product attributes, Canadian cannabis retailers will benefit from superior margins and fully capitalize on trends toward alternative consumption while meeting the evolving needs of today’s consumers across a diverse range of personas and preferences.
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2024 Report
Embracing Data-Driven Strategies: The Power of Vape Sale Analytics in the Canadian Market By Derek Champoux, VP Brand and Marketing, Greentank Teechnologies
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n the fiercely competitive cannabis industry, licensed producers (LPs) and brands are constantly seeking ways to gain an edge. Amidst this race, one key factor emerges as a game-changer: comprehensive and insightful vape sale data. As the market evolves, the ability to analyze and interpret this data has become invaluable for those aiming to stay ahead of the curve. The Canadian cannabis vape market, a segment rich in diversity and consumer preferences, offers a treasure trove of data for astute market players. By meticulously dissecting vape sale trends, LPs and brands can unlock a deeper understanding of consumer behaviour, preferences and emerging patterns. This information isn’t just numbers on a spreadsheet; it’s the compass that guides strategic decision-making, product development and marketing efforts. For LPs and brands, vape sale data is much more than a retrospective glance at performance. This proactive approach empowers companies to align their strategies with the trajectory of consumer demands, ensuring they remain relevant and competitive. Moreover, leveraging this data effectively allows businesses to identify niche opportunities and gaps in the market. Whether it’s the rising popularity of specific extracts like Diamonds and Live Resin or the shifting preference toward allin-one devices, each data point offers a clue to the next big trend. By staying attuned to these shifts, LPs and brands can develop innovative products and marketing strategies that resonate with current and future consumers. In essence, the key to navigating the competitive landscape of the Canadian cannabis market lies in understanding and utilizing vape sale data. As we delve deeper into the specifics of these trends across various provinces, it becomes clear that data isn’t just power—it’s the
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cornerstone of innovation and market leadership in today’s dynamic cannabis industry. ALBERTA (AB) In 2023, Alberta’s cannabis vape sales rose by 19.4%, indicating a growing market. The most notable surge was in the ‘all-in-one’ device type, which skyrocketed by 68.0%, possibly due to the convenience these devices offer. However, there was a sharp 30.7% decline in the sales of smaller capacity vapes (0.50ml and under), but a significant uptick of 32.2% for vapes over 0.50ml capacity, suggesting a consumer shift towards larger, possibly more cost-effective options. The extract types reveal a staggering 2942.0% increase in Diamond sales, suggesting a newfound popularity or increased availability of this product. Meanwhile, CO2 extracts experienced a solid growth of 32.4%. However, there was a contrasting performance in the Distillate category, with a modest 11.0% growth, indicating a plateau in its popularity. Live Resin’s robust growth at 51.3% showcases a demand for higher-quality, potentially more potent products. Highlights: • 5,624,066 vapes sold in 2023 • 68% increase in all-in-one vapes sold • 4,958,602 vapes sold with over 0.5ml • 2942% increase in liquid diamond vapes BRITISH COLUMBIA (BC) British Columbia experienced an impressive 39.5% increase in overall vape sales. The ‘all-in-one’ devices were the star performers with a 162.0% jump, possibly reflecting a preference for ease of use and discreetness. The province also saw considerable growth of 42.2% for larger capacity vapes (over 0.5ml), while smaller vapes (under 0.5ml) did increase but at a lower rate. BC’s extract market was dynamic,
Cannabis Prospect Magazine | February 2024
with Diamonds seeing an extraordinary 1557.5% increase, suggesting a surge in consumer interest or enhanced marketing efforts. CO2 extracts doubled, likely due to their perceived purity and taste. Highlights: • 3,823,768 vapes sold in 2023 • 162% increase in all-in-one vape sales • 42% increase in vapes over 0.5ml • 2,238,871 distillate vapes sold ONTARIO (ON) Ontario’s vape market expanded by 15.2%, with ‘all-in-one’ devices again leading the way with a 94.3% increase. However, there was a significant drop in sales of smaller capacity vapes (under 0.5ml) by 52.3%, while larger vapes (over 0.5ml) grew by 34.3%, echoing a trend seen in other provinces. The Diamonds extract category saw an astronomical 4103.5% increase, a trend that is worth investigating for underlying causes such as market changes or consumer preferences. Live Resin also more than doubled, suggesting that consumers in Ontario are increasingly turning toward high-quality extracts. Highlights: • 9,381,798 vapes sold in 2023 • 94% increase in all-in-one vape sales
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8,52,217 vapes solde with over 0.5ml 4103% increase in liquid diamond vapes
SASKATCHEWAN (SK) Saskatchewan saw a solid 31.8% increase in vape sales. The ‘all-in-one’ devices increased by 41.2%, which, while significant, is less than the other provinces, hinting at a different market dynamic. The larger capacity vapes (over 0.5ml) enjoyed a substantial 58.7% growth, outpacing the smaller capacity vapes (under 0.5ml) which saw a decrease. The Diamonds extract category in SK saw a monumental 4361.1% increase, suggesting a rapid adoption of this extract type. Rosin/Solventless experienced a 1001.4% increase, possibly due to a surge in consumer demand for premium and natural extracts. Across all provinces, the data points toward a growing consumer preference for high-quality extracts like Diamonds and Live Resin, as well as a shift toward larger capacity and all-in-one vape devices. Highlights: • 1,710,567 vapes sold in 2023 • 31% increase in 510-cartridge vape sales • 58% increase in vapes with over 0.5ml • 1,194,775 distillate vapes sold
PRODUCT SHOWCASE
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‘BOOST’ from RIFF Cannabis
The Saber Recycler
Highland Special™: Paulander Purple
Sense & Purpose Beverage Line
Tilray Brands, Inc. debuted the new RIFF BOOST™ beverage collection, featuring two new ready-to-drink THC and CBG-infused drinks from premium cannabis brand, RIFF. The new RIFF BOOST drinks are available in two new flavours, Tropical Burst (shown) and Vanilla Frost, each infused with a blend of nano-emulsified cannabinoids containing 10mg THC and 10mg CBG, ginseng extract, and 30mg of naturally occurring caffeine from guarana extract. RIFF BOOST cannabis beverages are now available in easy-drinking 355 mL cans crafted for next-level elevation. Vanilla Frost: feel the liftoff with this smooth throwback of a classically electric, white frozen treat. Tropical Burst: enjoy the jolt of this Hawaiian punch with a sweet berry kick. RIFF’s cannabis-infused beverages are now available in Canada across select regions and retailers, including Alberta, Manitoba, and Ontario. Find your fuel and grab RIFF BOOST™ with RIFF at www.whatisriff.ca.
The Saber Recycler ($99.99 USD) exemplifies Hitoki’s commitment to redefining the art of smoking, balancing laser technology and a twochamber glass bong. The glass accessory designed for the Saber provides an extra layer of filtration to deliver the smoothest hit from Hitoki’s devices. Hitoki’s patentpending laser technology eliminates butane and other harsh chemicals, instead vaporizing your favourite flower. Hitoki’s relentless pursuit of superior smoking experiences adds the Saber Recycler to its accessory offerings, which include a Portable Attachment and carrying case. Please let us know if you have any questions or need additional information.
Named after the nearby Paulander Drive in Kitchener, Ontario, where many of Highland’s customers reside and their delivery drivers frequent, Paulander Purple is a unique and locally inspired strain that embodies the spirit of the community. Working in collaboration with a prominent Southern Ontario cannabis grower, Highland Cannabis’s dedicated budtenders meticulously sampled various purple strains, ultimately selecting a super purple, very heavy Indica for its distinctive qualities. Master grower Zane Roberts took charge of perfecting the cultivation of the Paulander Purple strain, resulting in beautiful frosted nugs that glitter with trichomes and boast a rich terpene profile. The inaugural batch of Paulander Purple impressively registers at 27.96% THC and 3.3% Terps, ensuring a potent and aromatic experience for cannabis enthusiasts.
Find refreshment that fits your mood and your lifestyle with thoughtfully crafted beverages made using natural ingredients. Real ingredients is our difference. We believe that you get out what you put in. Which is why we only use what’s right and what’s best in our beverages. Now’s the time to experience refreshment catered to you. From all natural ingredients to our commitment to no refined sugar added, you’ll love our deliciously bare and balanced Sense & Purpose beverages. These include Recover - Apple Juice + Organic Cider Vinegar Juice Shot (THC 2mg | CBD 2omg | 60 ml), Refocus - Sparkling Green Tea Lemonade with Ginger (THC 2mg | CBD 20mg | 330 ml), Recharge Orange, Pineapple & Passionfruit Sparkling Water + Juice (THC 10mg | CBD 10mg | 330 ml) and Relax Grapefruit Yuzu Sparkling Water + Juice (THC 5mg | CBD 5mg | 330 ml). For more information visit https://senseandpurpose.ca
February 2024 | Cannabis Prospect Magazine
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REGULATIONS
NAVIGATING CANNABIS REGULATIONS: A GUIDE FOR RETAIL STORE OWNERS
By Chris Jones, Founder & President of CANNABIS XPRESS
CANNABIS XPRESS is a chain of cannabis retail stores with 14 locations in Ontario and two locations in New Brunswick (one additional store opening in New Brunswick in 2024) which will make it the largest private retailer in the province of New Brunswick. It’s in the top 5% of retailers based on store count, and in the top 1% of licensed cannabis companies that are profitable in Canada. CANNABIS XPRESS prides itself on offering our customers a quick, easy, hassle-free cannabis shopping experience.
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nderstanding and navigating the intricate web of cannabis regulations in Canada is crucial for retail store owners in the burgeoning cannabis industry. With the legalization of recreational cannabis, the market has witnessed substantial growth, but strict regulations are in place to ensure responsible use and compliance. In this guide, we will explore six key aspects that cannabis retail store owners need to consider to successfully navigate the regulatory landscape in Canada.
to ensure consumer safety and information transparency. Store owners must familiarize themselves with these regulations, which may include guidelines on child-resistant packaging, standardized labeling and health-warning messages. Compliance in this area not only prevents legal issues but also enhances consumer trust. Store owners must ensure that they are only selling cannabis products that come from a licensed producer.
1. Licensing and Compliance The foundation of any successful cannabis retail business in Canada lies in obtaining the necessary licences and ensuring compliance with municipal, provincial and federal regulations. Store owners must familiarize themselves with the specific requirements of their province, which may include security measures, employee training and record-keeping. Staying abreast of any changes or updates to regulations is essential for maintaining compliance and avoiding legal issues.
Understanding and navigating the intricate web of cannabis regulations in Canada is crucial for retail store owners in the burgeoning cannabis industry. With the legalization of recreational cannabis, the market has witnessed substantial growth, but strict regulations are in place to ensure responsible use and compliance.
2. Age Verification Protocols One of the critical aspects of cannabis regulation in Canada is preventing access to minors. Retail store owners must implement robust age verification protocols to ensure that only individuals of legal age purchase cannabis products. This includes proper identification checks and training staff to handle age verification responsibly, minimizing the risk of regulatory violations, which may include warnings, financial penalties, or even having a licence revoked or suspended. 3. Product Packaging and Labeling Cannabis products in Canada are subject to strict packaging and labeling requirements 24
Cannabis Prospect Magazine | February 2024
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4. Inventory Control and Reporting Cannabis retail store owners are required to maintain meticulous inventory control and reporting systems. Regular reporting to regulatory bodies is essential to track product movement and prevent diversion to the illicit market. Implementing efficient inventory management software can help store owners streamline their reporting processes and en-
sure accuracy, reducing the risk of regulatory non-compliance. Store owners will also need to do frequent inventory counts to ensure that the federal reports they submit are accurate. 5. Advertising and Marketing Restrictions While promoting products is essential for business growth, cannabis retail store owners must be aware of the strict advertising and marketing regulations in place. These regulations aim to prevent the promotion of cannabis to minors and restrict misleading information. Adhering to guidelines on permissible advertising channels, content and promotions is crucial for maintaining a positive image and staying within the boundaries of the law. 6. Social Responsibility and Community Engagement Cannabis retail store owners in Canada should prioritize social responsibility and community engagement to foster positive relationships with local communities. Engaging in educational initiatives, supporting responsible cannabis use and addressing community concerns can contribute to a favourable public perception and help build a sustainable business in compliance with regulations. Navigating the cannabis regulations in Canada is a complex but necessary task for retail store owners. By focusing on licensing, age verification, product packaging, inventory control, advertising compliance and community engagement, cannabis retailers can create a successful and compliant business in this rapidly evolving industry. Staying informed, adapting to regulatory changes and prioritizing responsible practices will position cannabis retail store owners for long-term success in the Canadian market.
PRODUCT SPOTLIGHT
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Custom Mixing Systems from INDCO
Ziel Microbial Control Solution for Cannabis Receives EU GMP Certification
AROYA Unveils Cannabis Cultivation System for Home Growers
DENIOS RFP Buildings Ideal for Hazardous Storage Applications
Careful consideration of the full range of mechanical operating parameters ensures process results while avoiding vibration at critical speeds. If standard INDCO mixers are not ideally suited for the task, engineers can customize one. All components are carefully considered, including impeller type and size, motor horsepower and speed, weight, resulting flow throughout the vessel, materials of construction, and more. Close collaboration between customers and INDCO’s engineering team, attention to detail, and immediate response times, are critical to the success of custom mixer projects. All INDCO products are made in the USA with industry leading warranties and lead-times. In addition to custom mixer systems, they manufacture a full line of standard and custom mixers. Its team of mixing engineers is available to provide selection and application assistance at any stage of the process. Full information is available on its comprehensive website, www.INDCO.com, by calling (800) 851-1049, or via email at info@INDCO.com.
Ziel’s Radio Frequency (RF) technology received Good Manufacturing Practice (GMP) certification in the European market for the control of microbial pathogens in cannabis flower. GMP defines the minimum standard that medical manufacturers must meet in their product processing operations under the European Medicines Agency (EMA), which coordinates and standardizes GMP activities at the European Union (EU) level. All entities that import, produce and/or process, or export cannabis to and within the EU are required to be GMP certified. Ziel introduced its next generation cannabis microbial control solution, the RFX, in November 2023 at the MJBiz Conference in Las Vegas. The RFX has a greater than 99% pass rate and the highest volume throughput in the industry with the capacity to process 160 lb of cannabis in an eight-hour shift. To learn more about Ziel or the RFX, please visit www.ziel.com.
AROYA, a division of ADDIUM, Inc., introduced AROYA GO, the most advanced cannabis grow kit to ever hit the consumer market. AROYA GO brings the company’s industryleading sensors, data science and intelligence, and weather station technology to at-home and craft cannabis cultivation. The plugand-play system does not require in-person support to set up. Users can effortlessly install sensors that sync with ease, ensuring a truly seamless launch experience. Featuring an intuitive web interface that is purposely designed with the craft grower in mind, AROYA GO offers an approachable and friendly user experience. The onboarding process is straightforward, allowing for quick review of data and the flexibility to segment your grow into different rooms and zones, tailoring the technology to specific needs. A convenient smartphone app provides on-the-go access to cultivation data presented in an easy-to-digest format, with automatically organized charts and graphs that provide an instant overview of cultivation operations.
DENIOS US has received FM approval for its Rack Fire Protect (RFP) non-occupancy buildings. Fire rated for two-hours at 2192°F (1000°C), they minimize the risk of fire spreading, making them ideal for the storage of flammable chemicals, lithium-ion batteries, and other volatile materials. Designed in Germany and proven in hundreds of installations worldwide, they are now manufactured in the U.S. A variety of standard sizes are manufactured in the Louisville factory with industry leading lead times. DENIOS chemical storage RFP buildings offer secure and legally compliant storage solutions for flammable, corrosive chemicals, and lithium-ion batteries. The adjustable racking system can accommodate up to 48 drums or 12 IBC’s. Whether in single or doubletiered configurations, these designs effectively organize hazardous materials, ensuring proper segregation. For additional info on DENIOS US, visit www.DENIOS-us. com, via email at info1@DENIOS-us. com, or call (877) 388-0187.
February 2024 | Cannabis Prospect Magazine
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5 Key Privacy FAQs for Startups & Growing Businesses By David Fraser & Sarah Anderson Dykema
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rivacy is crucial to every business in every sector at every stage. The consequences of getting privacy wrong can be significant, and for a startup or a growing business even fatal. The answers to these five key privacy questions will help you get started. 1. ISN’T PRIVACY REALLY ONLY RELEVANT TO INFORMATION TECHNOLOGY OR LARGE BUSINESSES? If you have users or customers, or in any way collect, use or disclose personal information, “privacy” is critical to your business: Privacy Law Compliance. Canada has a mosaic of privacy laws. You must understand which apply to your business – and it’s probably more than one: »
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Private sector privacy laws. PIPEDA (Personal Information Protection and Electronic Documents Act) regulates the collection, use and disclosure of personal information by private sector businesses; Quebec, Alberta and British Columbia each has its own private sector privacy law applicable to businesses operating wholly within those provinces. Meanwhile the federal government has proposed replacing PIPEDA with the Consumer Privacy Protection Act (CPPA), likely to take effect within the next 24 months and likely to impose additional obligations on businesses. Businesses across Canada must also comply with data breach response obligations under PIPEDA and the Digital Privacy Act, as do businesses subject to Alberta and Quebec’s private sector privacy laws. Public sector privacy laws. There are also privacy laws applicable to public sector organizations governing the collection, use and disclosure of personal information and the public’s right to access information. These laws can affect private sector organizations that do business with any public sector organization subject to them. For example, if you submit a proposal to a
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public body, the law could permit its public disclosure. Health privacy laws. Each province and territory has a privacy law dealing specifically with personal health information. These laws regulate health sector organizations but if you provide services touching health information you must build privacy protection into your services. Operators in the medical cannabis sector must comply with both health information and private sector privacy laws. Anti-spam laws. Canada has a complicated and onerous anti-spam law (Canada’s Anti-Spam Law [CASL]). The rules are tricky and complex and the fines for failing to comply are hefty. Civil law. Courts are recognizing a growing number of civil privacy breach claims that expose organizations to civil lawsuits–or even a class action lawsuit–that could lead to costly litigation, settlement payouts and negative publicity. Non-Canadian privacy laws. In today’s digital business world, you must also consider the countries where your customers are and their privacy laws.
Customer Perception. It’s important your customers feel your business’s privacy practices and use of their personal information is transparent and in line with their expectations. If you use personal information in a way they don’t expect, in addition to possibly being illegal, customers can perceive your business as creepy and invasive. Investor Readiness. Investors are acutely aware of privacy and data security and the liability risks of breaches. Sophisticated investors include privacy in any due diligence investigations. If you’re looking to attract investors, you need to understand how privacy issues affect your business and ensure your privacy practices are legally compliant and commercially sound. 2. WHAT IF I GET “PRIVACY” WRONG? The consequences can be significant, and for a startup or a growing business even fatal:
Failed Due Diligence. Failing to pass privacy muster will likely lead to failing due diligence inquiries of an investor or a purchaser and could ultimately cost you the deal. Lost reputation, customers & value. Media is all over a data or privacy breach and isn’t always sympathetic to the affected company. Digital and social media make it easier than ever to spread negative publicity further than ever. That can immeasurably harm a business’s reputation and lead to lost customers, and ultimately lost business value. Costly Fixes. There are upfront costs to baking privacy compliance into business practices and processes at the building stage that can be especially discouraging to startups and growing businesses. But these costs are significantly lower than the cost to fix those same practices and processes later. Impossible (or Impossibly Expensive) Insurance. B2B customers are increasingly demanding service providers have cyber-risk insurance coverage. Unless you can demonstrate your privacy and cybersecurity diligence, this insurance is extraordinarily expensive (or impossible) to obtain. Expensive Defences. Upfront costs are also significantly lower than both the legal costs to defend a privacy or data breach civil lawsuit or regulatory complaint and the related financial liability exposure. It’s about risk mitigation: advance planning reduces the chances a breach (and thus a lawsuit or complaint) will occur at all, and if it does your business will have a better shot at successfully defending any claims. Serious Business & Personal Fines. Fines for breaching privacy laws can be serious. For example, a business that fails to comply with the Digital Privacy Act’s breach response regulations exposes both the company and its corporate directors personally to fines of $100,000 per incident. In 2015, the Canadian Radio and Television Commission (CRTC) fined Compu-Finder $1.1M, and in 2019 fined the President and CEO on nCrowd Inc.
$100,000 personally, for breaching CASL. Also, the CPPA will authorize the imposition of administrative monetary penalties and fines of up to 5% of global revenue or $25M, whichever is higher, for the most serious offences. Quebec’s recently amended private sector privacy law also includes significant non-compliance penalties. 3. WHEN SHOULD A BUSINESS START THINKING ABOUT “PRIVACY”? Start right from day one – or if you didn’t start then, start right now. 4. WHERE DO I START? Start with “Privacy by Design” (or PbD): the concept that a business can’t rely only on regulatory compliance to ensure privacy but must make privacy its “default mode of operation”, “embedded in every standard, protocol and process”. Developed by Dr. Ann Cavoukian, Ph.D. and former Ontario Information & Privacy Commissioner, PbD (for which McInnes Cooper’s David Fraser is an “Ambassador”) advocates that businesses can achieve this objective by practicing “Seven Foundational Principles”: » » » » » » »
Be proactive and preventative – not reactive and remedial. Make privacy the default setting. Embed privacy into the design – of everything. Privacy is a positive-sum goal: it’s privacy AND, not privacy OR. Employ end-to-end data security. Practice privacy visibility and transparency. Keep it user-centric and human-centered.
5. HOW DO I IMPLEMENT PBD IN MY STARTUP OR GROWTH-STAGE BUSINESS? Startups and early-growth-stage businesses are in the best place to implement PbD because they can build it into their culture from the ground up. To help build a “privacy first” culture, keep these key issues in mind: Data. Think about it, track it, understand its full cycle and who has access to it throughout.
Marketing. Balance data analytics goals with user privacy. Human Resources. Train your employees on privacy issues. Vendors/infrastructure. Think about your vendors and third-party suppliers (for example, cloud service providers) and know and understand their privacy policies. Developers. Make sure developers you work with understand privacy issues. Privacy Design Documentation. For every single element of each and every project ask yourself these questions, understand the answers and document them: » » » »
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Collection. What information from or about users do we collect? Is it personal information? How sensitive is the information? Use. How do we use each data element? Sharing. Do we ever externally expose the information? How and for what purpose. Notice & Control. How are we telling our users what’s going on with their personal information and how do we make sure they have control over their information and how we’re using it? Storage & Access. Where do we store the information? On a device? In the cloud? Whose cloud? How is it secured? Who has access to it? Retention & Deletion. How long do we keep the information? Why?
David Fraser and Sarah Anderson Dykema are Privacy and Technology lawyers at McInnes Cooper. This article is information only; it is not legal advice. McInnes Cooper excludes all liability for anything contained in or any use of this article. © McInnes Cooper, 2021. All rights reserved.
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Provincial Updates/
Ontario
The Ontario Cannabis Store (OCS) has announced the first partner projects selected to receive funding as part of its inaugural Social Impact Fund (the Fund). This year’s recipients are: Centre on Drug Policy Evaluation, The Cannabis Social Equity and Equality Development (S.E.E.D.) Initiative, Princess Margaret Cancer Centre, University of Calgary, Canadian Students for Sensible Drug Policy, and McMaster University. In this pilot year, OCS has allocated $500,000 to support programs, services and research by incorporated not-for-profits, registered charitable organizations and researchers affiliated with academic or research institutions that contribute positively to the Ontario public and legal cannabis industry.
Manitoba
Last May, Manitoba suspended its 6% Social Responsibility Fee from retailers. To the frustration of many, in October, a Manitoba court upheld the province’s ban on growing cannabis at home. The ruling is being appealed. Although the Manitoba NDP said it wanted to make several changes to the province’s cannabis policy, including saying it did not support the provincial ban on growing cannabis at home prior to this year’s election, since it formed the government in October the province has been mum on the subject.
Alberta
Alberta’s AGLC said cannabis producers can now provide samples to retailers and in October, it announced several changes to its cannabis rules and regulations, including enabling self-attestation for age-gating for retailers, providing producers with more information about where their products are selling, and allowing cannabis stores to use specific terms in their signage. Previously, Alberta had one of the strictest age-gating rules of any province in Canada, with retailers only able to show product information on their websites if users had verified their age with an ID, either inperson or through an online form. Most provinces simply require a selfattestation, such as entering a date of birth or answering yes or no to a simple age prompt.
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Quebec
The Société québécoise du cannabis has reported net and comprehensive income of $24.9 million for its business operations during the second quarter of its current fiscal year, which ended September 9, 2023. The amount is remitted in full to the Québec government and reinvested primarily in cannabis-related prevention efforts and research. To that figure can be added business-related tax revenues in the form of consumer and excise taxes, estimated at $51.2 million ($36.5 million to Québec and $14.7 million to the federal government). In all, $76.1 million is being paid to the two governments, $61.4 million of which is destined for the Québec treasury.
Saskatchewan
The SLGA announced in June that all cannabis retail stores in the province were no longer required to ask for proof of age on every retail transaction for in-store purchases and pickups. In addition, effective immediately, the SLGA will only require personal and corporate disclosures for the applicant and any individuals, corporations, and other entities with an ownership stake of at least 10% of the applicant. Also, Saskatchewan retailers who have received a cannabis store permit from First Nations Cannabis Licence Authorities (FNCA) are able to purchase cannabis from registered suppliers and permitted wholesalers in the province. With FNCA approval, they can also sell cannabis wholesale to other provincially-approved retailers.
British Columbia
British Columbia says it is considering several changes to its cannabis regulations, especially around the rules for cannabis retailers. It has been seeking feedback on its plan for modest changes to rules that could see cannabis consumption on patios. Last May, the province repealed its requirement for cannabis stores to use window coverings, and in September, it announced that cannabis producers could provide samples to retailers. BC also announced funding to support Indigenous cannabis businesses.
Prince Edward Island
Canadians want and deserve a healthcare system that provides timely access to health services whenever and wherever they are needed. That is why the Government of Canada is investing more than $200 billion over 10 years, which includes $25 billion for tailored bilateral agreements with provinces and territories, to support the Working Together to Improve Health Care for Canadians plan.
Nova Scotia
According to an article by the CBC in early December, the Canada Revenue Agency is claiming the 39-year-old Halifax-area man Chris Enns and his company didn’t report more than $2.5 million worth of sales at his illegal dispensaries a decade ago, according to court records. From April to the end of August, the agency said specialized teams have completed 90 audits, identified $74 million in unreported income and $24 million in tax owing, and issued $7 million in penalties. The CRA acknowledges in court records his circumstances were “unique,” as he held no assets and had no bank accounts. But in court records the federal government does level significant allegations against Enns, arguing that he “deliberately structures his finances so that the government cannot determine the taxable income of his businesses and himself,” an allegation he denies.
Newfoundland & Labrador
New Brunswick
According to a report in Stratcann on the number of Canadian cannabis licenses, Newfoundland had the least number of producers on a percapita basis, with one for every 77,000 residents followed by Manitoba with one for every 64,000 residents, and Ontario with one for every 55,000 residents. With 951 federal licences and a population of nearly 40.5 million people, Canada has approximately one licence for every 43,000 residents.
Cannabis NB released a strategic framework for 2024-2026 stating as follows, “Cannabis NB’s future is built on a strong foundation anchored in an unwavering commitment to customer experience, education, and responsibility. Cannabis NB believes that these things cannot be delivered effectively without a truly aligned, passionate, and engaged team committed to delivering results to our stakeholders and communities. This foundation is what our mission, vision, and values are built on.” Visit www.cannabis-nb.com for more info.
Yukon / Northwest Territories / Nunavut According to an article in The Carillon, a Niverville company is earning a reputation as a great distribution hub for a wide swath of Canada, and maybe soon the world. Lineage Distribution — formerly Rogue Processing — doubled the size of its warehouse and distribution centre in Niverville to meet the growing demand from cannabis growers and processors to get their products to retailers in Manitoba, Saskatchewan, Yukon, Northwest Territories, and Nunavut. The federal approval for doubling its physical size in Niverville came Nov. 28, after the application was sent in August. / The Yukon’s member of parliament is initiating further study of drug-related deaths across Canada through a federal standing committee. Following a motion in parliament by Brendan Hanley, parliament’s standing committee on health will study “Canada’s opioid epidemic and toxic drug crisis.” The motion was made earlier this year, but work on the study began last December; it will continue into 2024.
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Cannabis Prospect Magazine | February 2024
Growing Influence C3 is the national voice of the Canadian cannabis industry. Working with our Members we are pushing for urgent change to ensure the financial viabilty of our sector. Learn more about our current priorities or apply to join at cannabis-council.ca.
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