Cannabis Prospect Magazine - June '22 - Issue 21 by Straight Dope Media Inc. (Pulse Magazine)

Labelling Solutions

Alternatives to IPOs

Payments Systems

It’s a good idea for cannabis companies to spend time now making sure your labelling environment is flexible enough to withstand changes without disrupting operations and production, and ultimately your profitability.

If you’re ready to take your company public, you might think you’ve only got one route: an initial public offering (IPO). But it often isn’t ideal for a small or relatively new company, or one that’s fully financed.

Cannabis payment processors help customers find ways to pay for their products using various methods. They also provide a secure environment where transactions can happen without fear of compromising information.

Cannabis Prospect Magazine

VOLUME 4 ISSUE 3

YOUR SEED-TO-SALE PUBLICATION FOR THE CANADIAN CANNABIS MARKETPLACE

THE BUSINESS OF CANNABIS

IN THE JUNE ISSUE OF CANNABIS PROSPECT MAGAZINE WE LOOK AT THE BUSINESS OF CANNABIS WITH A FOCUS ON CULTIVATION WITH ARTICLES ON EXTRACTION, IPOs, CANNABIS PAYMENT PROCESSORS AND LABELLING.

JUNE 2022

Table of Contents/

June 2022

THE BUSINESS OF CANNABIS

EXTRACTION

TOP 50 VAPE PRODUCTS

SUSTAINABILITY

In the June issue of Cannabis Prospect Magazine we look at the business of cannabis with a focus on cultivation with articles on extraction, IPOs, cannabis payment processors and labelling.

The Canadian cannabis industry is constantly evolving. While the market is ripe with potential, cultivators have to navigate changing consumer demands and regulatory hurdles, all within a highly competitive space.

In the right hands, data can help identify emerging trends and guide operational decisions that drive major revenue and profits. Fortunately, you don’t need a degree in data science or access to comprehensive metadata to glean these valuable insights.

Every day, the cannabis cultivation industry grows in more ways than one. While that’s great for producers and consumers of cannabis, we all know big agriculture spells big issues for our most precious resource: the environment.

ON THE COVER REGULARS

If you’re ready to take your company public, you might think you’ve only got one route: an initial public offering (IPO), but it often isn’t ideal for a small or relatively new company, or one that’s fully financed.

4 6 8 22 28 36 38

From the Editor Events News Product Showcase Appointment Product Listings List of Advertisers

June 2022 | Cannabis Prospect Magazine

LETTER TO THE EDITOR

Growing Pains By David Halpert

s we head into summer 2022, I often debate, in the face of rampant consolidation between LPs and retailers alike, whether the same talking points keep resurfacing, or whether these are merely “growing pains” for the cannabis industry, unavoidable beyond reproach. It seems to be a latent consequence of summer, normally the chance to relax and kick back, but also, with inflation and added costs to the global supply chain, a time to refresh, perhaps to reboot as well. So for the sake of this letter to the editor, I wish to reiterate some talking points that require deeper introspection for the industry:

3. Cannabis Health Products and Medical Research - The forward regulatory plan for 2022-2024 is that the regulation of health products containing cannabis would not require practitioner oversight. With respect to research going forward, regulatory text should be amended to provide (1) greater clarity on the ability of licence holders to provide information to consumers and (2) guildelines on the grounds for refusing to issue, renew or amend a non-therapeutic research licence, according to the Cannabis Council of Canada. 4. Continued Advocacy for Non-Violent Cannabis Convictions - Almost four years after legalization, we’re still battling stigmas and preconceptions regarding cannabis and still have 50,000 Canadians with non-violent cannabis convictions. This affects many parts of their lives - from impeding travelling to renting a home and getting a job. Groups like Cannabis Amnesty and Pardons Canada are non-profit organizations continuing the fight for getting convictions overturned for cannabis convictions postlegalization as well as getting current criminal records expunged in a world where cannabis now legal domestically.

1. 10 mg Limit on Edibles and Beverages One of the bigger sticking points, edibles and beverages have been stifled in many ways due to harsh THC limits and packaging. Both product categories have been slow to grow against dried flower, especially when compared with more mature markets in the US. Domestically both categories represent roughly 5% of market share when compared with 13% in certain markets south of the border, leaving millions on the table in potential revenue. 2. Revised Excise Tax Framework - Increased excise taxes represent a constant thorn across the cannabis value chain, espeically when you take into account that in large respect, the cost per gram of dried flower is increasingly on a downward slope. For every $100 collected in excise taxes roughly 41% goes to government taxes and fees when compared with the retailer share (22%), the provincial distributor mark-up (18%), and the LP net share (19%), perhaps even more so. Shifting the conversation from stamp to rate seems to be the optimal argument going forward.

I’d like to take this opportunity to personally thank all the advocacy work the Cannabis Council of Canada and other organizations are tirelessly fighting for every day. Without you guys, none of this would be possible.

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

Cannabis Prospect Magazine | June 2022

Canadian Cannabis Retail Infrastructure

$70M+

800+

Provinces and territories

Monthly transactions

Canadian retailers

20+

2 min

$2.2M

Integration partners

Support response times

Greenline Capital loans given

Stay ahead of the competition Easy to start

Control

Compatible with your existing hardware including iOS, Android, and web. Data migration and training with a dedicated onboarding team gets you started properly.

Control everything in your business. Have full visibility into your inventory, control employee access, and see who made changes.

Efficiency

Funding

Save data entry time with our provincial product catalogues, bulk upload your purchase orders, and generate compliance reports with ease.

Expanding your empire? Access up to CAD $500,000 in funding via Greenline Capital.

sales@getgreenline.co | 866 845 6931 getgreenline.co

CONFERENCES & EVENTS

June 20-22, 2022 Grow-Up Conference & Expo Victoria Conference Centre Victoria, BC http://growupconference.com

November 2-3, 2022 Global Executive Cannabis Summit Sheraton Centre Toronto Hotel Toronto, ON https://canexecsummit.com

September 12-14, 2022 Grow-Up Conference & Expo Scotia Bank Conference Centre Niagara Falls, ON http://growupconference.com October 19-22, 2022 MJBizCon Las Vegas Convention Center Las Vegas, NV www.mjbizcon.com

To submit an event for inclusion in the Cannabis Prospect Magazine calendar, email media@cannabisproonline.com

Cannabis Prospect Magazine CANNABIS PROSPECT MAGAZINE VOL. 4, ISSUE 3 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.

Cannabis Prospect Magazine | June 2022

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 Vice President, Marketing Director Cliff Persaud Account Representative Michael Spencer Cannabis Prospect Magazine is published six times a year by Straight Dope Media Inc., 44 Valleywoods Road, Unit 1802, Toronto Ontario M3A 2R6 Canada ADVERTISING For advertising rates or inquiries please email sales@cannabisproonline.com

GREENTANK IS MADE THE MOST BEAUTIFUL EXPORT FROM CANADA SINCE THE NORTHERN LIGHTS.

FOR YOU Maybe it’s because we offer world class engineering that puts customer safety first. Or perhaps its our fresh customization offerings that lets your brand stand out. After all, Greentank ma is the only manufacturer to hold Canada’s first R&D license so it’s no wonder why more blue chip cannabis brands are built with Greentank. Find out why at www.greentanktech.com

It’s either Greentank It’s either Made Greentank Made or it’s not. or it’s not.

NEWS

Ayurcann Holdings Corp. - 1,000th Distribution Point of its Bestselling Products in Canada and Grants Options and RSUs Ayurcann Holdings Corp., a leading Canadian cannabis extraction company specializing in the processing and co-manufacturing of pharma grade cannabis and hemp to produce various derivative cannabis 2.0 and 3.0 products in the medical and recreational market, has grown its distribution to 1,000 with its vapes and tinctures products in Canada. Ayurcann has been on fire with its best-selling Fuego vapes in every province it has entered. Now, having crossed its 1,000th distribution point and with the introduction of new brands such as Bravo6, Xplor, Her Highness, Hustle & Shake, Joints, and Vida coming to market, Ayurcann is growing its exposure and market share throughout the country. The right product, the right value and access to a growing group of retailers in NB, ON, MB, AB, SK keeps Ayurcann on a continuous path of profitability and growth.

Canopy Growth Announces Cost Reduction Actions to Accelerate Path to Profitability Canopy Growth Corporation, a worldleading diversified cannabis, hemp, and cannabis device company, announced that the Company is undertaking a series of initiatives to reduce costs and drive efficiency in order to accelerate its path to profitability. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated. Aligned to Canopy Growth’s FY23 strategic review, the Company is conducting the following actions: reducing cost of goods sold (“COGS”) in the Company’s Canadian cannabis business by lowering per-gram cultivation costs through increased cultivationrelated efficiencies and facility improvements; implementing a flexible manufacturing platform inclusive of contract manufacturing for certain product formats; rightsizing indirect costs and generating efficiencies across the Company’s supply chain and procurement; aligning selling, general and administrative costs (“SG&A”) with short-term business expectations by reducing third-party professional fees and office costs; and further streamlining the organization to drive process-related efficiencies. HEXO Closes Belleville Facility HEXO Corp, a leading producer of highquality cannabis products, provided an update on its previously announced strategic plan, designed to solidify HEXO’s position as the number one cannabis company in Canada by recreational market share, with the goal of becoming cash flow positive from operations. The Company is announcing that it will close its Belleville facility and transition its operations to other sites to further streamline operations and capitalize on production efficiencies. As part of the transition, all 8

Cannabis Prospect Magazine | June 2022

manufacturing machinery and equipment currently located at HEXO’s Belleville facility will be transferred to other sites. A plan has been developed to facilitate this transition and ensure there is no impact on production or shipments. The transition is scheduled to be complete by the end of July 2022. HEXO is working closely with employees to reduce the impact of this decision, including offering career counselling and other transitional services. Approximately 230 employees will be affected by this announcement. The Truss Beverage Co. operations are not affected by this transition and will continue to operate out of the Belleville facility. Humble & Fume Inc. Establishes Joint Venture to Build Leading North American Cannabis Distributor Humble & Fume Inc., a leading North American distributor of cannabis and cannabis accessories, announced that, further to the Company’s press release of November 15, 2021, it has formed HC Solutions Holdings Inc., a Joint Venture (“JV”) with Green Acre Capital Distribution Corp. (“Green Acre”), for the purpose of distribution of cannabis throughout the United States, initially focused on accelerating the Company’s expansion into cannabis distribution operations in California. Subsequent the formation of the JV, Green Acre completed a US$2 million investment directly in the JV. Green Acre has funded its investment through an option agreement with Johnson Brothers, a leading wine, spirits and beer distributor in the United States. Ayurcann Receives Flower Sales Licence From Health Canada Ayurcann Holdings Corp., a leading Canadian cannabis extraction company specializing in the processing and co-manufacturing of pharma grade cannabis and hemp to produce various

derivative cannabis 2.0 and 3.0 products in the medical and recreational market, is pleased to announce that it has received its flower sales licence amendment from Health Canada effective April 19, 2022 (the “Flower Sales License”). The Flower Sales Licence will allow Ayurcann to sell dried cannabis flower products in Canada through authorized distributors and retailers. Canntab Engages Hamish Sutherland as Strategic Advisor Canntab Therapeutics Limited, a leading innovator in cannabinoid and terpene blends in hard pill form for therapeutic applications, announced that the Company has engaged Mr. Hamish Sutherland as a strategic business consultant to work with Canntab and develop additional sales and distribution channels for the extensive suite of Canntab’s products and to assist Canntab in reaching strategic partnerships in the cannabis industry with a view to enhancing shareholder value. Mr. Sutherland’s mandate is to maximize the potential of Canntab’s assets, intellectual property, and operations with the primary objective of identifying and negotiating partnerships to assist Canntab in expanding its product offerings in Canada, United States, and other international jurisdictions. In addition, Mr. Sutherland will be working with his extensive network in the cannabis industry to explore M&A opportunities. This process has not been initiated because of receiving any offer and there are no assurances that any additional transactions will be undertaken.

Have a news release? Send it to us. Forward to media@cannabisproonline.com

Legalization 2.001: What’s Your Biomass Worth? By Lincoln Johnson and Ryan Bernath

EnCann Solutions is a cannabinoid producer, using patent-pending technology to offer high-volume cannabis extraction with a focus on extracting the most revenue possible from your biomass. Learn more at encann.ca.

he Canadian cannabis industry is constantly evolving. While the market is ripe with potential, cultivators have to navigate changing consumer demands and regulatory hurdles, all within a highly competitive space. What works today likely won’t work tomorrow, which means being adaptable in order to be profitable. Three years post legalization, one of the biggest hurdles that the industry is facing is over-saturation. There are currently 861 companies1 that are licensed to cultivate, process or sell cannabis in Canada. Hyper-competition has driven down prices, and many companies have more biomass sitting in their vaults than they’ll likely ever sell. Canadian producers have destroyed nearly 450,000 kg2 of cannabis since legalization, and it’s estimated that only one-fifth3 of the cannabis produced has ended up in retail stores. In the aftermath of the rush, companies are reporting billions of dollars in losses. To fix this cash-flow problem, cultivators must identify where their value lies. If they are producing premium cannabis, they’ll need to align with a processor who can deliver true-toflower extracts. If their value is volume, then scalability and efficiency become most important. At the end of the day, focusing on profitability will be the difference between disappearing, surviving or thriving. EnCann Solutions is in the business of efficiency, volume and quality, isolating the raw ingredients used to manufacture consumer packaged goods (CPGs) and cannabis health products. HOW CANNABINOID INTEGRATION CAN BENEFIT CULTIVATORS Over the next five years, Canada’s cannabis market is expected to grow at a rate of 10% to $8.8 billion4. While the demand for full-spectrum prod10

Cannabis Prospect Magazine | June 2022

ucts remains high in the recreational market, we believe isolated cannabinoids have the greatest potential in surrounding industries. From food and beverage, to cosmetics, pharmaceuticals and supplements, affordable cannabinoid isolation will become imperative. In the US, where some product forms are approved by the FDA, CBD is already being infused into topicals and cosmetics. Adoption by major brands will continue to fuel demand, broaden access and normalize the integration of cannabinoids into consumer products.

“Instead of thinking in grams of flower, the transition to a commodity market means we need to start thinking of cannabinoids as active pharmaceutical ingredients (APIs).” - Ryan Bernath ESTABLISHING PROFITABLE PARTNERSHIPS In targeting an industry bottleneck, EnCann realized that it might not be the ideal solution for everyone as it is looking for cultivators who want to get the most active cannabinoids out of their biomass. Though many companies certainly appreciate small-batch, ‘cannabis-cup winning’ flower, its true value-add lies in high-volume production. To this end, EnCann’s sweet spot is producers with hundreds to thousands (or even hundreds of thousands) of kilograms of material to process. Focusing on the scale-of-economy side of the business, the company helps cultivators clear their vaults at a rate that is fair to the cultivator, the purchaser and ultimately, the consumer.

Although they will happily work with material in the high single-digit percentages of cannabinoids, from biomass purchases to hybrid or traditional postpaid splits (product or revenue based). TARGETING EFFICIENCY IN EXTRACTION Key to its strategy is focusing on converting the largest possible fraction of cannabinoids from the plant into usable ingredients, while incurring the lowest total cost. Applying engineering principles to the cannabis industry, EnCann’s proprietary extraction technology decreases operational cost and maximizes the throughput of the system. Many of the typical process bottlenecks, including winterization and chilling, have been engineered out of our process. This results in a massive reduction in required energy. In a commodities market, being the lowest-cost producer offers an incredible advantage. As of June 2022, the firm has an extraction capacity of more than 1,000,000 kg per year on a 24/7/365 basis, with a 125kg per hour throughput. In addition, its system offers a 90% reduction in energy consumption when compared with a high-efficiency ethanol extraction process. This allows us to produce more per hour than many companies are producing per shift, at an equal or lower cost. Holding the lowest cost-per-kilogram of output has major implications in corporate cost reductions. It also goes hand-in-hand with scalability and reducing environmental impact, which become increasingly important as we move toward the Cannabis Health Product regime. For EnCann, approaching extraction with a scalable, API-focused lens has been our guiding principle in the past, and is a clear path into our future. Legalization 2.001 is about thinking about our products in terms of milligrams of active ingredients, not in grams of flower.

Fanshawe’s Centre for Research and Innovation (CRI) is one of the few facilities in Canada with the experience and expertise in ultra-high purification and formulation of trace cannabinoids with potencies exceeding 99%.

UNLOCKING THE POTENTIAL OF CANNABIS R&D

We specialize in advanced chromatography and high shear micronization technologies for products in food, beverage, nutraceutical and pharmaceutical. Funding support of up to $100,000 is available for eligible projects.

LEARN MORE ABOUT CRI: research@fanshawec.ca | 519- 452-4430 x4586

fanshawec.ca/research

Payments is not one size ﬁts all. Conﬁdently accept payments in store and online today.

Purposely built to support businesses in the cannabis industry

merrco.com

Work with the best tech partners in the sector

First to market with the latest cannabis solutions

1-800-957-0534 info@merrco.com

EXTRACTION

ENCANN AS A CANNABINOID WHOLESALER Founded in 2018 in beautiful British Columbia, EnCann is a trusted supplier of wholesale cannabinoids. We are primarily an ingredients supplier, using patent-pending technology to offer high-yield cannabis extraction. By efficiently extracting cannabinoids from flower, trim and industrial hemp, we’re able to substantially lower costs for Canadian producers. We offer a scalable, energy-cost savings focus on extraction. Privately owned and operated, EnCann is made up of a well-rounded and passionate team of UBC engineers, quality assurance technicians, production support and scientific advisors. Our controller has 30 years of experience working with the Canada Revenue Agency, while our CFO brings 30 years of experience working in global finances. With more than 50 years of combined experience in food and beverage, natural health products and cannabis, efficiency is top of mind in everything we do. That’s all to say, “We stand by our quality and innovation. We take our contracts seriously and deliver on our promises, working from our base of experience for the betterment of the industry.”

Cannabis Prospect Magazine | June 2022

CANNABIS HEALTH PRODUCTS: WHAT’S ON THE HORIZON Health Canada currently regulates cannabinoids as APIs, which is how the industry needs to treat them as well. Legalization 2.0 changed the game and as regulations continue to evolve, the industry needs to be able to shift with consumer demand. Health Canada has recently shared plans to create a new regulatory pathway for Cannabis Health Products5. Unlike existing cannabis products, these products may be permitted to make authorized health claims.

“We believe that it isn’t currently possible, with existing technologies, for anyone to develop a system that produces CBD isolate in a more cost-efficient manner than EnCann.” - Lincoln Johnson As research continues around cannabinoids as health products, consumer confidence will increase. Understanding that broad-spectrum infusions introduce too many unknowns, isolated cannabinoids will become the focus of testing and implementation. In a commodities market, an API focus allows for standardization and price transparency. Their constancy will be the key to unlocking international opportunities and future research applications. SUPPLYING A COMMODITY MARKET As a cannabinoid supplier, CBD extraction will make up the majority of EnCann’s production

by volume. However, the company is excited to explore other minor cannabinoids, such as CBG and CBN, as those markets emerge and expand our horizons. Its focus on cannabinoids as commodity ingredients allows for adaptability in an ever-changing market, producing raw ingredients in realtime and adapting to consumer demand. With national and international reach, EnCann is making affordable ingredients accessible to a wider market, looking forward with a five-to-ten-year lens, taking a proactive approach so that it’s ready when expansion happens. For more information please visit www.encann.ca. Lincoln Johnson (CEO) and Ryan Bernath (COO) are the co-founders of EnCann Solutions. Learn more at EnCann.ca or find us on social media @EnCannSolutions.

References: 1 Government of Canada (May 2022). Licensed cultivators, processors and sellers of cannabis under the Cannabis Act. 2 Lamers, M. (December 2021). Canadian producers destroyed over 500 tons of cannabis since 2018. MJBizDaily. 3 Lamers, M. (December 2021). Canadian cannabis producers have sold less than 20% of output since adult-use legalization. MJBizDaily. 4 Brightfield Group (March 2022). Canada Cannabis Consumer Insights. 5 Government of Canada (September 2020). Summary report: Consultation on potential market for health products containing cannabis that would not require practitioner oversight.

How well do you know your market?

Get to know over 6 million cannabis users from Canada’s authoritative source for insights on consumer behaviour. With comprehensive cannabis consumer data and multiple ready-made, in-depth reports, Vividata can help you kickstart your product and marketing strategies with insights that delve deep into the cannabis consumer in Canada. Go in-depth with key demographic, psychographic and lifestyle data and insights on: • Current and potential cannabis consumers • Recreational and medicinal use • Motivations to use cannabis

• Usage and purchasing behaviours • Top cannabis brands and preferred forms • Consumer media habits, opinions and more

Request a demo, shop reports and more at vividata.ca

ACCESSORIES

WHAT DOES CANADA’S 2022 TOP 50 VAPE PRODUCT LIST TELL US ABOUT THE INDUSTRY? By Dave Kaplan, Greentank Technologies

ata literacy has never been a more valued or crucial skill set in the cannabis vape industry as it is today. To data illiterates, robust datasets often register as nothing more than cold, dense spreadsheets. To data connoisseurs, they can be more valuable than oil or gold. In the right hands, data can help identify emerging trends and guide operational decisions that drive major revenue and profits. After all, knowledge is power and no single tool keeps you more informed on the current state of our industry than the next day point-of-sale data offered by platforms such as Headset or BDSA. Fortunately, you don’t need a degree in data science or access to comprehensive metadata to glean these valuable insights. All that’s needed is an analytical eye for identifying patterns and anomalies as well as the instinct to act on your findings before your competitors do. To illustrate our point, we’re going to analyze a list of 2022’s 50 best-selling products in Ontario, Alberta, BC and Saskatchewan. This dataset is very basic and simple, yet provides a surprising amount of insight about what’s currently trending in our vape industry and the directions in which it is likely heading. HARDWARE TYPES The first thing that should immediately jump off the page when scanning this list is the abundance of a certain hardware format. For anyone not manually counting, 48 of the top 50 listed products—or 96%—were 510-threaded cartridges. Not only does that number align almost perfectly with the overall segment share of cartridges so far in 2022 (95.1%), but it’s a marked increase from the segment share cartridges held through the first four months of 2021 (91%). Although reports have recently emerged about the resurgence of disposables in certain provinces (e.g. Alberta), the reality is

Cannabis Prospect Magazine | June 2022

that cartridges are still king in Canada and their dominion continues to expand.

Canada that currently exceeds 1ml, came in at 21st on the list.

EXTRACT TYPES Despite all of the chatter about live resin and other specialty extracts in Canada over the last 12 months, only two cracked this list and just barely: General Admission’s 0.95ml Kootenay Fruit Kootenay Fruit Live Resin Cartridge (#47) and 0.95ml Guava Chemdawg Live Resin Cartridge (#49). Distillates may not be the most flavourful or potent extract type, but among consumers they’re clearly still the most popular as evidenced by the 42 listed among 2022’s top 50 best selling products to date. If nothing else, we suspect the sustained popularity of distillates is due to their widespread availability in retail locations across the country, as well as their lower price points relative to specialty extracts. Canadian consumers have demonstrated time after time that convenience and price are the two biggest variables driving vape sales. So unless specialty extracts catch up in both of these respects, it’s unlikely the metrics will shift away from distillates too considerably in the near future.

BRAND PARITY Of California’s top 50 best-selling vape products list, only 15 SKUs were not STIIIZY products. That couldn’t be further from the case in Canada this year, where 22 different brands were represented among the country’s top 50 products through April. Of these brands, General Admission led the way with seven product listings, followed by Back 40 Cannabis and Good Supply with six each, Verse with three, and several other brands with two apiece. The fact that there were four more brands relative to last year’s Top 50 list, as well as a couple handfuls of new brands that cracked the list, speaks to both brand parity in the Canadian vape market and a willingness on the part of consumers to try new products and brands as they come online. Yes, there are brand leaders in the space similar to any other industry, but there is no dominant Coke or Pepsi equivalent in the Canadian vape market at this time. That should be encouraging for any brands attempting to improve their standings. Obviously, no Top 50 product list tells the entire story of what any industry is doing. But this list does account for 47% of all units sold and 49% of all vape revenue so far in 2022*, so it gives us an extremely good idea of not only what is trending in the industry at the moment but also where the Canadian vape space will likely be in six months from now, or even a year. Of course, this is just the tip of the iceberg as it relates to industry data. There is an entire world of industry and market-specific metrics available that can provide your brand with a tremendous boon, and we’d love to chat more about them with you!

FILL VOLUMES On this list one year ago, exactly 22 of the top 50 products contained extract fill volumes of 0.95ml or higher. Through the first four months of 2022, that number has nearly doubled to 42. The fact that larger reservoir sizes are gaining in popularity should be no surprise to anyone who has been keeping tabs on the Canadian vape space, but the rate at which these products have overtaken the 0.5ml format as the product of choice among consumers has caught many in the industry off-guard. Moreover, none of the seven 0.45ml or 0.5ml products that made this year’s list—down from 26 total last year—ranked higher than 25th. Even BoxHot’s recently debuted 1.2ml Alien OG CO2 cartridge, the only vape product in

*More than 1100 distinct vape products have been sold in Canada so far in 2022, but the lion’s share of consumer sales are concentrated in these top 50.

ACCESSORIES

“

The first thing that should immediately jump off the page when scanning this list is the abundance of a certain hardware format. For anyone not manually counting, 48 of the top 50 listed products—or 96%— were 510-threaded cartridges. Not only does that number align almost perfectly with the overall segment share of cartridges so far in 2022 (95.1%), but it’s a marked increase from the segment share cartridges held through the first four months of 2021 (91%).

“

PARTNER SPOTLIGHT

Partner Spotlight: DQS Inc. By Phil Wong

ince 1985, DQS has been the trusted certification and assessment partner for quality-focused companies around the world. Part of the DQS Group, a global certification company, the company currently operates in 60 countries, with 2,500 auditors and has experts in virtually every industry sector. Its recent partnership with Purity IQ and CAPS (Cannabis Authenticity and Purity Standard) has firmly cemented its place in the cannabis industry. In this special spotlight, we sat down with the President and CEO at DQS Inc., Brad McGuire to get further insight into how DQS helps companies achieve sustainable business success. WHAT INDUSTRIES DOES DQS CURRENTLY DEAL WITH? “Our focus sectors include Automotive, Aerospace, Environmental, Health and Safety, Food Safety, Information Technology and Cyber Security, Medical Safety, Sustainability and Quality. Many of these standards are required by OEMs, regulators, large retailers and others to ensure the quality, reliability and safety in the supply chain. We perform, among many services, certification audits, supplier audits, compliance audits, inspection audits and performance audits. During each audit we identify strengths, weaknesses, risks and opportunities. We support organizations that strive for success based on quality-driven processes and systems. Audit objectives consider specific customer requirements and DQS auditors systematically assess the effectiveness and efficiency of systems and processes, beyond merely evaluating compliance. Management systems help our customers to improve business outcomes, organizational health and realize strategic goals.” WHAT INITIALLY ATTRACTED DQS TO THE CANNABIS INDUSTRY? “The industry is emerging in the US as far as legalization goes and we can learn from our Canadian counterparts. In Canada, cannabis is federally legal, whereas in the United States it is not. Many states have medical cannabis laws but less than half have legalized recreational use. Product recalls for quality and contamination failures have increased in the US in the past several years. Our interest is in the quality of the products, the ability of management systems to manage that quality over time and the

“

Product recalls for quality and contamination failures have increased in the US in the past several years. Our interest is in the quality of the products, the ability of management systems to manage that quality over time and the purity, authenticity and accuracy of consumer information presented in labelling. The supply chain can benefit from uniform application of quality systems and so along with Purity IQ and the CAPS program we can fill that void.

“

purity, authenticity and accuracy of consumer information presented in labelling. The supply chain can benefit from uniform application of quality systems and so along with Purity IQ and the CAPS program we can fill that void.” It should be noted that DQS holds international accreditations by DAkkS, ANAB, and UKAS and performs more than 125,000 audits per year and approximately €150 million in annual revenue. Its recent inclusion of the CAPS program by Purity IQ has allowed it to expand its reach into the North American cannabis industry.

Cannabis Prospect Magazine | June 2022

HOW DOES THE CAPS PROGRAM MEASURE UP AS AN AUTHENTICATION STANDARD FOR THE CANNABIS INDUSTRY? “The CAPS program offers our customers an opportunity to differentiate themselves in the cannabis industry through ensuring safety, authenticity and purity on a continuous basis. Current methods that rely on testing are point in time checks, while a management system ensures process consistency over time. The CAPS program, ANAB accredited with ISO 17065 is a great fit for our business and fills the needs of all users of cannabis, CBD and hemp for quality, purity and authentication of end products and processes.“ HOW DOES THE CANNABIS INDUSTRY DIFFER FROM OTHERS? “Probably the biggest difference is the lack of regulation and standards found in the Food Safety and Medical/Pharma industries. The industry is evolving and federal and industry regulation is evolving as well.” WHAT DOES DQS HAVE IN STORE FOR 2022? “One relevant project for this year is obtaining our accreditation from ANAB for the CAPS program, which would then permit us to certify customers to the CAPS standard. This will allow us to audit against the standard and help our customers improve quality, reliability and in the end, help them realize their growth aspirations.” Thank you for your time Brad, and your perspective on the cannabis industry. We will catch up with you in the near future! We wish DQS all the best on your upcoming 2022 projects. For more information please visit www.dqs.com

Hang - Dried Hand - Trimmed Slow - Cured Hand - Packaged

trurocanna.bis

www.trurocannabis.ca

SUSTAINABILITY

Full Circle: How Circular Farming Can Make Grow Operations More Sustainable

by Rudi Schiebel, CEO & Founder of Habitat Life Sciences

very day, the cannabis cultivation industry grows in more ways than one. Valued at $123.9 billion in 2019 and with legalization on the horizon in many countries, it’s predicted to expand by 14.3% by 2027. While that’s great for producers and consumers of cannabis, we all know big agriculture spells big issues for our most precious resource: the environment. Water consumption alone is a major concern for cannabis growers. For all its benefits, cannabis is a thirsty herb and outdoor cannabis cultivation consumes 5.5 gallons of water per plant every day. Moving cannabis growth inside helps alleviate this problem but doesn’t eliminate the use of fertilizers while adding intensive power needs. To offset this, we must embrace the emerging ideas of circular farming like aquaponics if we mean to sustain the current demand for Earth’s resources.

extreme weather becomes much less common (though not impossible), while better security, pest control and blight prevention are all examples of how indoor farming gives growers more control over every aspect of their operation. When buyers demand ample supplies of the highest-quality product, control is just too important an advantage to give up. So over time, it makes both ecological and business sense for growers to switch from outdoor to indoor farming. Indoor agriculture has its drawbacks. Gone is that natural sunlight, forcing indoor farms to consume much more power than their open-sky cousins. Every 25 square feet of indoor cannabis growth uses 360 kilowatt-hours per month, and that number rises during the growing phases. Only 20-25 plants can grow in that area, using as much power as 29 refrigerators. With such intensive power demands, grow facilities cannot be sustained by renewables alone.

OUTDOORS AND INDOORS Outdoor farming carries benefits we’ve known about since the first ditch dug in the Euphrates. Plants grown outdoors enjoy free sunlight and rain straight from the source. Regenerative agriculture practices can have a positive impact on biodiversity in the surrounding ecosystems and can help fight climate change by sequestering atmospheric CO2 in the ground through the plants’ need for photosynthesis. Space for crops is also less of a concern outdoors, and new innovations in water efficiency can reduce the rate at which outdoor farms use water. The concern today is extreme weather threatening the reliability of our traditional agriculture systems. Other macro forces are showing cracks in the global supply chain that could be relieved by growing closer to where crops are being consumed. Indoor farming remains the most water-efficient way to produce cannabis as each plant grown indoors only uses 1.5 litres of water a day. Indoor agriculture has other benefits as well. Crop loss from

NITROGEN NIGHTMARES On top of these challenges, all forms of agriculture today contribute to the environmental and humanitarian crises caused by nitrogen fertilizer. While it allows us to feed the world and sustain our current population, synthetic nitrogen fertilizer accounts for roughly 5% of yearly greenhouse gas emissions. As our reliance on nitrogen only grows with our population, supply chain issues (for example, sanctioned Russia produces more than 20% of the world’s nitrogen) could be facing a food supply crisis — not to mention a fertilizer shortage for cannabis agriculture.

Cannabis Prospect Magazine | June 2022

CIRCULAR SOLUTIONS Thankfully, none of these problems are insurmountable. New innovations in water usage and sustainable farming can make cannabis growth more efficient and eco-friendlier than ever before while also countering nitrogen emissions. In particular, emerging techniques

like aquaponics and circular farming can make cannabis agriculture, especially indoors, much safer for our biosphere. Also known as closed-loop agriculture, circular farming turns every farm into an efficient closed ecosystem where everything is reused and goes back into food production. Circular farming begins with revitalizing the soil to sustain plants, defend against extreme weather, and retain nitrogen in the earth rather than letting it pollute the air and water. Healthy soil minimizes the need for chemical and artificial fertilizers, while residual products and waste from one part of the farm can feed and fuel other aspects of the operation. Some waste is inevitable in any system, but a circular farming operation maximizes efficiency, reducing both the farmer’s overhead and the farm’s negative impact on the environment, whether that farm is indoors or out. HOOKED ON AQUAPONICS Aquaponics is one exciting new innovation in the field of circular farming and is especially relevant to indoor grow operations. A portmanteau of “aquaculture” and “hydroponics”, aquaponics combines the benefits of raising fish and growing crops by introducing nutrient-rich aquaculture water to hydroponically grown plants. Aquaponics uses roughly one-sixth of the water per acre compared with traditional agriculture. Fish waste adds important nutrients, especially nitrogen, to the horticulture process, removing the need for chemical nitrogen or manufactured fertilizers. As pesticides are harmful to the fish, cannabis grown this way is naturally free of such dangerous chemicals.

SUSTAINABILITY

“

Aquaponics uses roughly one sixth of the water per acre compared to traditional agriculture. Fish waste adds important nutrients, especially nitrogen, to the horticulture process, removing the need for chemical nitrogen or manufactured fertilizers.

“

Like cannabis agriculture, aquaculture is sensitive and electricity dependent. And enterprise scale cannabis growers require a proportional aquaculture facility to properly nourish their plants. Of course, smart growers can simply form a partnership with a willing fish farmer, expand their business to include aquaculture, or even build from the ground up to include aquaponics in their plan. Because aquaponics is best suited for water-intensive crops like cucumber and lettuce, it’s ideal for our very thirsty cannabis plants. Fish like largemouth bass, trout, salmon and tilapia are both common in aquaponics and popular food items, and until we can restore our natural fisheries

will fetch a good price all while helping grow the healthiest, most water-efficient cannabis. EMBRACE CHANGE We cannot solve every problem with agriculture-let alone cannabis agriculture-all at once. Over time, new innovations leveraged strategically will help alleviate and even eliminate the ecological harms of growing cannabis, whether indoors or outdoors. The eventual shift to high-output clean power sources will eliminate the emissions from electrical consumption. New techniques are drawing nitrogen out of the air we breathe or pulling excess from the soil. In the meantime, cannabis growers can embrace the new practices of aquaponics and circular farming, growing their crops in efficient, closed ecosystems that are both self-sustaining and sustainable. The fish dinners are just an added perk. Rudi Schiebel As the CEO and founder of Habitat Life Sciences, Rudi is creating a smart-farming brand that reflects his beliefs that the relationship between agriculture and the natural environment is a partnership, not an entitlement. His mission is to create a truly sustainable farming model that pairs today’s technologies to symbiotic farming models like aquaponics. Habitat’s pilot farm in Chase, BC, is the first facility of its kind to be certified organic under the Canadian Aquaculture Standard and produces organic coho salmon and organic craft cannabis together in Habitat’s proprietary aquaponics process.

June 2022 | Cannabis Prospect Magazine

This summer go blonde!

LEGALLY blonde

Nostalgic hashish tastes, smells, and experiences are available through select licensed Ontario and Saskatchewan retailers. Ask for HashCo Blonde Hash and enjoy the journey. #LegacyToLegal #HashPorn #HashCo

PRODUCTS SPOTLIGHT

Atlas Thrive™ CBD Gum

Atlas Biotechnologies Inc., a leading Canadian cannabis company, has announced the launch of Atlas Thrive™ CBD gum, Canada’s first CBD chewing gum, in partnership with NordicCan. This innovative addition to the line of Atlas Thrive™ products provides another convenient, easy-to-use, and discreet way for adults to integrate CBD into their existing health and wellness routines. Atlas Thrive™ CBD gum can be consumed along with complementary Atlas Thrive™ products, including the transdermal patch, gels and tinctures, which use patented pharmaceutical absorption technology. Offered in Vanilla Mint flavour, the gum contains 20 mg of CBD per piece and 200 mg of CBD per pack. First launching in Ontario, Atlas Thrive™ gum will also be available for purchase at various cannabis retailers, including all Canna Cabana locations in Ontario. It will also launch in Alberta along with various medical cannabis platforms, including Shoppers Drug Mart.

Four Fathers Collaborates with Lehua Brands

Four Fathers Brewing Co., located in Cambridge, ON, released its terpene-infused beer series called “You’re Dope,” available for purchase. The first “You’re Dope” series includes two strains: Lemon Kush Mints and Purple Wedding Cake. Both specialty beers include cannabis terpenes. Four Fathers Brewing Co. has been innovating the “You’re Dope” series by collaborating with PhenoTechTM, part of the Lehua Brands family from California. Relying on its years of experience and utilizing its patented, industry-leading technology, PhenoTech’s team extracts terpene oils from the cannabis plant that can then be infused into a variety of products. For this collaboration, terpene oil has been shared with Four Fathers Brewing Co. and infused into its “You’re Dope” series of beer, allowing the aromas and flavours of the selected strains to shine through. The “You’re Dope” series will be available at Four Fathers Brewing Co. at 125 Guelph Ave, Cambridge, Ontario, in its taproom and retail outlet.

Cannabis Prospect Magazine | June 2022

3 Premium Flower Offerings from 7ACRES

7ACRES Papaya is an indica dominant hybrid known for its highly pungent sweet and fruity aromatic notes. A cross of Citral #3 and Ice #2, Papaya produces beautiful light green buds densely coated with milky white trichomes. Originally bred by Nirvana Seeds as its take on Mango, you can expect a complex aromatic profile of fresh papaya, mango, guava and citrus combined with hints of earthy spice. 7ACRES Jack Haze is a bright green, sativa-dominant strain from 7ACRES in Kincardine, Ontario. It has very high potency potential, and its sweet citrus aroma is created by the terpinolene and nerolidol in its terpene profile.

4 XMG ALT Introduces Grape and Black Cherry

XMB has expanded its winning portfolio with new XMG ALT, delivering the same bold flavours and higher impact (at 10mg THC) as its predecessor, but now with zero sugar and zero calories. Its latest innovation, XMG ALT, answers the call from consumers seeking higher-dose cannabis beverages with low sugar, an insight found through social listening. The introduction of XMG ALT sparks the kick-off of what’s to come for the brand, including the launch of XMG Sodas, which will feature four new flavours: Cola, Cream Soda, Orange and Root Beer, and will be available to Canadians by late spring, in addition to XMG Blue Raspberry and XMG Iced Tea, flavour extensions of the current XMG offering. XMG ALT Black Cherry & XMG ALT Grape will be available at authorized local cannabis stores and authorized online retailers across Canada. To learn more about XMG ALT, visit www.trussbeverages.com/xmg.

SEE IT. EXPLORE IT. EXPERIENCE IT. The industry’s premier packaging and processing event is back in Chicago! To stay competitive and meet consumer demand, cannabis manufacturers need to keep up with the latest packaging and processing trends. From sustainability, compliance, customization, and automation, you’ll discover innovative packaging and processing solutions to ensure your company is positioned for long-term success. 2000+ LEADING SUPPLIERS

FULL-SCALE MACHINERY

100+ FREE SESSIONS

SUSTAINABILITY SOLUTIONS

LEARN MORE & REGISTER NOW FOR ONLY $30

October 23–26, 2022  Chicago, IL USA  McCormick Place  PACKEXPOINTERNATIONAL.COM

PRODUCTS SPOTLIGHT

Krypto Chronic #2 Flower Rosin

Created using Sugarbud’s exclusive genetics, Krypto Chronic #2 Flower Rosin embodies all attributes of this cultivar that have made the dried flower popular - sweet citrus and fuel aromas driven by a prominent rich Terpinolene terpene profile. Solventless extraction methods place a premium on maintaining the naturally occurring terpenes, flavors, aromas and cannabinoids throughout the entire process, ensuring that the full essence of the original dried flower is maintained. Sugarbud’s solventless concentrates are another example of our “House Style”, and embody the same quality, consistency, flavour profiles and aromas consumers have come to expect from the Sugarbud Craft Cannabis Collection. Indica-dominant Hybrid Og flower rosin THC Range: 600700 mg/g (60-70%) CBD: <0.2%.

Deep Space XPRESS Gummies

Deep Space XPRESS marks Canopy Growth’s first single 10mg THC-infused gummy in the Canadian market, offering maximum legal potency per gummy. Deep Space XPRESS is available in both the original Deep Space cola and Limon Splashdown flavours, designed deliberately to match the popular beverage flavours, in a gummy format.

Cannabis Prospect Magazine | June 2022

3 Tweed Fizz Beverages

Tweed Fizz is our THC-infused carbonated water with 5mg of THC. Tweed Fizz Watermelon is a refreshing sativa-dominant infused sparkling water with THC distillate, combining natural Watermelon flavour, THC and effervescent carbonated water. Tweed Fizz Mango is a naturally flavoured and refreshing sativa-dominant infused sparkling water with THC distillate. Its tropical floral taste is a perfect balance of sweet with underlying hints of sourness.

4 Kiva Confections

Kiva Confections announced its first international product and brand expansion plan into the growing Canadian cannabis market. Over the next year, Kiva Confections will work with Canada-based producer Greentone to bring the brand’s full portfolio of award-winning edibles to dispensaries across the Canadian market. Consumers can begin to find Kiva’s all-natural Camino and Camino Sours soft chews in select retail stores across Canada beginning this month, with their strain-specific, 100% live resininfused Lost Farm soft chews, cold water hash-infused Kiva Chocolate Bars and Terra Chocolate Bites, and microdosed Petra Mints arriving at retail stores throughout the remainder of the year. The brand’s award-winning, cannabis-infused chocolates, mints, gummies, and chews continue to raise the bar for edibles in the industry, with Kiva bringing the same level of integrity, passion, innovation, and craftsmanship to every new territory they arrive in. For more information on Kiva Confections please visit kivaconfectionscanada.com.

Cannabis Packaging Design Services Compliance Logistics

CANNABIS PACKAGING Eco-Friendly Options Sourcing & Logistics Innovative Solutions Customization

DESIGN SERVICES 3D Product Graphics Brand Development Packaging Design Label Design

COMPLIANCE GS1 Image Services Sales Amendments NNCP Submissions Packaging Review

We have you covered. A SINGLE-SOURCE SOLUTION FOR CANNABIS PRODUCERS, PROCESSORS AND EXTRACTORS

Proudly Canadian Owned and Operated Proud Member of

LOGISTICS Secure Cannabis Transport Complete National Network International Capabilities Dedicated Service

www.highdeal.ca

Highdeal Solutions ® Unit 119 – 19055 Airport Way, Pitt Meadows, BC, Canada, V3Y 0G4 | P: 604.457.3325 | E: sayhigh@highdeal.ca

FOUR CANNABIS LABELLING PROCESSES TO SET YOU UP FOR FUTURE GROWTH By Travis Wayne Cannabis companies – from cultivators to processors, labs, distributors and cannabis retailers – need to be agile enough to change quickly with new regulations or industry standards, and keep up with increased consumer demands. It’s a good idea to spend time now to make sure your labelling environment is flexible enough to withstand changes without disrupting operations and production, and ultimately your profitability. Here are four cannabis labelling processes you can implement today to set your business up for success and future growth. PRINT YOUR CANNABIS LABELS IN-HOUSE AND ON-DEMAND From design to printing, when you manage your labelling inside your four walls, you have full control over the process, as well as the flexibility to implement quick changes that may be required due to: »» »» »»

New THC or CBD products Regulatory or industry standard changes Acquisition of other brands or products

The ability to have more users from different workstations helps create a more flexible labelling environment and doesn’t have to come with a high price tag – subscription licensing is a cost-effective solution with predictable and lower up front costs. CONNECT TO MULTIPLE DATA SOURCES WITH SMART LABEL TEMPLATES Using smart label templates with database connections makes your cannabis label printing system resilient to changes within your business. Because the data that needs to be printed on the label is being accessed real-time, updates or changes to product information are automatically reflected on your label. There are two common ways to integrate your labelling software to pull cannabis product information (including strain, type, weight and THC or CBD levels) efficiently onto your label: 1.

Printing labels as you need them also helps cut down on wasted label stock and saves money overall. Instead of having to order excessive minimum quantities, you can print labels on-demand to ensure you never have to throw out rolls and rolls of pre-ordered labels that have become obsolete – and you don’t need shelves of label stock taking up space in your facility. INSTALL NETWORK LICENSING SO LABELLING ISN’T LIMITED TO ONE WORKSTATION You can have more than one user running barcode labelling software at the same time from different workstations without having to manage multiple single user licences through network licensing. Network licences function as “floating licences” and are hosted in a centralized location like a server. The software can be installed on an unlimited number of computers on the same network and multiple people can run the software simultaneously, based on the number of network users your licence includes. You can have a three-, five-, or ten-network user licence and increase the number users by increments of five as your staff grows.

Cannabis Prospect Magazine | June 2022

Use data from a database or your business system: Create fields within the design of your cannabis labels and connect those fields to the necessary database. Your business system already holds the variable data needed on your labels, such as product information, batch or lot code, shipping addresses, order numbers, etc. This connection allows you to select a key data element (such as order number) and all other data is automatically populated onto the label. Print labels directly from your business system: Trigger label print jobs directly out of your ERP system instead of opening a label design application. Having fewer systems to work in means a quicker and simpler label printing process, allowing production workers to focus on their primary tasks.

Beyond being able to connect your labels to BioTrack, Canix, another seed-to-sale or ERP system, an Excel spreadsheet, or another database to pull information into smart label templates, you can also automatically collect data at print time from a device connected via a port, such as a scale to capture and print product weight. When manual data entry is truly unavoidable within your barcode labelling process, you

Cannabis Prospect Magazine | June 2021

can use custom label printing forms to help users enter data correctly and reduce the risk of labelling errors. These print forms can be adapted to create your ideal printing process and can include a variety of field options, including text, radio button lists, incrementing numbers, sliders (to select data via a scroll bar), date pickers and more. You can also place data validation on fields, such as requiring a phone number to be in a specific format or only allowing a maximum of ten characters. LEVERAGE CLOUD TECHNOLOGY TO MANAGE CANNABIS LABELS FROM ANYWHERE Locally saved files limit accessibility. By connecting to cloud data and storing cannabis label files centrally in cloud locations, such as Google Drive or Microsoft OneDrive, authorized users can securely access label files from anywhere with an internet connection. Leveraging cloud technology also protects you from losing label files and production downtime due to hardware malfunctions. Taking leveraging cloud technology one step further, you can have your labelling software hosted in the cloud and centralize control of label printing at multiple locations. This allows any print user to access a simple label printing interface while removing the burden of IT maintenance, such as server management, software upgrades and local installations. Possibly the most beneficial feature in cloud-hosted label printing is the ability to print labels remotely from any location at any time to greenhouse or warehouse facilities, labs, distribution centres or cannabis retailers. Cannabis companies with centrally managed barcode labelling processes are extremely well-equipped to handle future growth and adapt to changes within the marketplace and the supply chain. To access a free trial and learn more about how TEKLYNX helps companies in the cannabis industry meet labelling regulations, decrease errors, increase efficiency and grow revenue, visit teklynx.com/cannabis. Travis Wayne is the Product Manager at TEKLYNX.

What’s Your Biomass Worth? CANADA’S CANNABINOID PRODUCER EnCann Solutions is a wholesaler of cannabinoids, using proprietary, patent-pending technology to offer high-volume cannabis extraction. With high efﬁciencies and substantially lower processing costs, we are committed to extracting the most revenue possible from your biomass. “We believe that it isn’t currently possible, with existing technologies, for anyone to develop a system that produces CBD isolate in a more cost-efﬁcient manner than EnCann.” Contact us today to learn more.

info@encann.ca (250) 999-0240 encann.ca

APPOINTMENTS

Entourage Health Corp., a Canadian producer and distributor of cannabis products, has appointed Vaani Maharaj, a seasoned financial executive with broad experience in corporate finance, healthcare and consumer-packaged goods (CPG). She joins the Company as CFO. Most recently, Ms. Maharaj served as Vice President of Finance and Operations at Amica Senior Lifestyles where she led the operations finance team across North America responsible for shared services, development accounting, business performance, and strategic analysis. An accountant with a CPACA Ontario designation, she brings more than 15 years of finance leadership experience at top-tier organizations including General Mills, Chartwell Retirement Residences, and BDO Canada.

The Canopy Growth Corporation is pleased to welcome Jonathan Di Tosto to the Executive Management Team as its new Chief Operations Officer (COO). Jonathan assumes the role of COO from Andrew MacCorquodale, who is building upon his five years of dedication to Canopy by transitioning into a strategic advisory role. Jonathan joined Canopy in May 2021 as Vice President, Supply Chain, where he has focused on optimizing Canopy’s global supply chain organization. Prior to Canopy, Jonathan spent 16 years with George Weston Limited, most recently as VP, Planning & Logistics, where he was accountable for the end-toend supply chain strategy, process, and execution throughout Canada and the U.S.

Cronos Group Inc., an innovative global cannabinoid company, has appointed Mike Gorenstein as Chairman, President and Chief Executive Officer. In addition, Mike is a CoFounder and passive Member of Gotham Green Partners. Before joining Cronos, Mike was the Vice President and General Counsel at Alphabet Partners, LP, a New York City based multistrategy investment management firm, focused on identifying mispriced assets across various industries, asset classes and geographies. Prior to Alphabet Partners, LP, he was a corporate attorney at Sullivan & Cromwell LLP, where he focused on mergers and acquisitions and capital markets transactions.

Canopy Growth Corporation, a world-leading diversified cannabis, hemp, and cannabis device company, has appointed Judy Hong as the Company’s Chief Financial Officer. With a proven financial and capital markets background built through more than 20 years of experience at Goldman Sachs & Co., Judy joined Canopy in 2019 as the Vice President of Investor Relations. Since arriving, Judy’s deep knowledge of the consumerpackaged goods sector has helped shape Canopy’s engagement with the financial community, as well as the Company’s overall commercial strategy.

Lifeist Wellness Inc., a health-tech company that leverages advancements in science and technology to build breakthrough companies that transform human wellness, announced its wholly owned U.S. subsidiary, Mikra Cellular Sciences Inc, has engaged Olympic medalist Ashley Wagner as Brand Ambassador. Ashley Wagner is a bronze medalist in figure skating at the 2014 Sochi Winter Olympics and a silver medalist at the 2016 World Championships. Since Michelle Kwan in 1999, Wagner was the first U.S. senior ladies figure skater to win three national championships (2012, 2013 and 2015).

Black Rose Organcis has appointed Joseph Davis M.Ed as Quality Assurance Manager at Black Rose Organics, a facility in Toronto that is quickly becoming known for their new brand The Gas Station. Joseph is well recognized in the Canadian cannabis industry, building out Medz Cannabis Inc. by the Toronto Pearson Airport, and opening the second Farm Gate cannabis retail store in Canada, called Royal Cannabis Supply Co. He was a key team member that created the CannSell retail training program in Ontario, as well as being lead faculty and curriculum developer for the cannabis programs at Durham College and Centennial College. Recently, Most recently, Joseph left his position as Director of Business Development for The Hash Corporation (CSE: REZN).

High Tide Inc., a leading retail-focused cannabis company, announced that Greg Fleury has joined the Company in the role of Chief Technology Officer. Mr. Fleury brings more than 20 years experience in developing and managing digital operations teams, web platform design, analytics, search engine optimization and e-commerce in the retail, oil and gas, and utilities sectors. In his most recent prior role as Vice-President of Digital and Technology for Edo Japan, a Canadian fast food restaurant chain specializing in Japanese Teppan-style cooking, he led the development of that company’s ordering app, website, data warehouse, and analytics systems.

Cannabis Prospect Magazine | June 2022

Did You Know that... ...Cannabis Prospect Magazine now mails to 2000 cannabis retailers! Beginning in 2022 Cannabis Prospect Magazine will be mailed to over 2000 cannabis retailers across Canada in hard-copy format as well as offered for free digitally on our website.

www.cannabisproonline.com

Cannabis Prospect Magazine

Culture. Community. Connec on.

THE BUDTENDER INFLUENCE AND THE ROLE OF COMMUNITY

99,000. That’s the average number of in-person interactions Budtenders Association (BTA) members have with customers every. single. day. So what does that mean for Budtenders? The sphere of influence and potential impact of each one of those encounters not only brings with it great responsibility but also a powerful opportunity. An opportunity for scalable and effective positive change, but before we dive in further, please allow us to introduce ourselves; Coming from all walks of life. Some of us have fought tooth and nail to get to where we are today, while for others the journey has proven much easier. Many of us have been educating on and advocating for plant medicine since the legacy market days, while some of us only recently joined the movement. Our community’s roots are Asian, Black, Indigenous, Latino and White. We are LGBTQIA+. We’re students, parents, grandparents, artists, musicians, health care workers, entrepreneurs, educators, researchers and so much more. We’re all Budtenders - just with different areas of expertise and skill-sets. Around half of us are consumer-facing all the time, which means we’re on the floor educating and helping at least seven in 10 customers who walk in our stores, while the other half of us are key-holders, managers, procurement experts, inventory specialists, in-store marketers and owners (a good portion of us wear many hats and do it all!) representing independent stores, franchised locations and retail chains across all provinces in Canada (except Nunavut, for now). Our members are storytellers and the beauty of this lies in the diversity of our stories which offer a different version of the same tale. Our community’s unique perspective–a full spectrum through, which we can view, measure and improve the efficacy of an intricate and delicate supply

chain as well as analyze consumer behavior– is our greatest strength. What’s the common thread that ties us all together? You guessed it! Our undeniable passion for cannabis and its potential. 99% of us consume regularly (daily even) and have formed a personal relationship with this magical plant. We can recall numerous anecdotes about the thousands of people we speak to who have healed, regained control of their lives and continue to manage their daily well-being with cannabis. Millions of dollars are transacted through our hands daily and while we watch the space grow, so do the assumed expectations of our roles. Our government, employers, licensed producers, communities and our customers…all relying on us, Budtenders, to keep it together and connected. So we do. Despite the unpredictable shifts, oftentimes unreasonable pay, being just another number on a corporate spreadsheet, a sounding board for unhappy customers, an extensive list of restrictions and faux pas, we still show up. We spend much of our time and late nights studying reddit reviews to find any info we can on the brands we want to share, we spend our wages on product research so we know what our customers are getting, and a lot of our energy goes into discovering compliant ways to sell a CBN gummy or CBD oil without “getting medical”. Why, you ask? Because we love cannabis and we love people. Also because we have the individual and collective responsibility of educating a nation with new information as it comes out. A nation who everyone is looking at to lead the way on the world stage. That’s a big responsibility. Right now in Canada, 77% of customers that come to the store place their trust in our personal knowledge and experience to guide their purchasing decisions. 58% of customers we connect with are returning because of the positive experiences we create and the way we (and cannabis) make them feel. You are more influential than you think, which brings us to that opportunity mentioned earlier: the ability and power to create a positive

and lasting impact on your customer, colleagues, employer, community, country and world. Causal sequence, commonly known as the ripple effect, can be used to describe the inevitable and profound impact of a single interaction. It starts with expanding our awareness of the interconnectedness of all people and plants, and coming to the realization that what we say and do contains messages that trigger emotions which determine how we make people feel. Those feelings will define the nature of a subsequent course and set of actions. Everyday, Budtenders connect with 33 customers on average, who (unknowingly) rely on us to listen to them and for all of us (government, employer, licensed producers, and communities) to work together from seed to sale, to deliver the most appropriate and effective experiences for them. By intentionally approaching every individual who walks in the store with empathy, compassion and understanding, we use our cannabis knowledge and social acumen to cast a positively charged stone into the water causing a ripple effect. By taking responsibility in our positions and leading with purpose and intention, the positive energy and emotions suddenly multiply and grow within the community. Now we’re mindfully creating positive change. Budtenders Association was founded in 2020 to do just that - create positive change by developing and nurturing opportunities for growth and development. A professional cannabis community on a mission to connect people, plants and businesses as we empower and inspire one another to share our stories while expanding our knowledge and ideas. Culture, Community, Connection and Collaboration are BTA’s guiding principles and with our ability to reach the lives of more than 35,937 every single day, we want to ensure we’re telling your story the right way.

Creating meaningful experiences between people, plants, and businesses.

“Herb is the healing of the nation” (Bob Marley) For more information please visit www.budtendersassociation.ca or contact Casey at hi@budtendersassociation.ca, 604-358-5525

CULTIVARS WANTED!

Creating intellectual property for brand protection

A $7000 VALUE FOR ONLY $499

Register for CAPS Identify authentic and consistent products by registering for the Cannabis Authenticity and Purity Standard (CAPS) certification program today and receive a $7000 value in testing, training and certification services, for only $499.

Send in Cultivars Submit up to 5 cultivars for free DNA and metabolomic identification of your mother plant, clone, and flower.

Get Results Protect your intellectual property and receive a Certificate of Analysis detailing DNA and metabolomic fingerprint data along with a Global Registration Certificate for each cultivar submitted.

www.caps-cert.com Email: christine.berry@caps-cert.com

GOING PUBLIC THREE ALTERNATIVES TO AN IPO By Julie Robinson

f you’re ready to take your company public, you might think you’ve only got one route: an initial public offering (IPO). An IPO is the traditional method of going public, and it’s a good route for an established, successful private company in need of additional cash flow – but it often isn’t ideal for a small or relatively new company, or one that’s fully financed. An IPO is where a private company offers its equity securities to the public for the first time. In Canada, the equity securities are issued under a prospectus filed with the applicable securities regulatory authorities. Theoretically, the IPO process seems straightforward: • •

•

The company wishing to complete the IPO engages an underwriter(s) to market the securities to the public. The company, working with its underwriters, files a preliminary prospectus with securities regulators, and also files a listing application with a stock exchange and meets its minimum listing requirements. The underwriter uses the marketing process, often conducted through “road shows”, and its own due diligence on the company to finalize the terms of the offering (price, size, and so on), following which the company files a final, longform prospectus. Upon closing of the offering, the company’s securities become listed for trading on the exchange.

Practically, however, an IPO is typically an expensive process, reducing the proceeds the company realizes from the offering. The cost/benefit trade-offs of an IPO means it’s not a good fit for every company seeking to go public. But you have options: 1. Non-Offering Prospectus (NOP) An NOP can be an attractive option where the company has sufficient funds to carry out its business plan for a year or more after going public, and already has a capital structure meeting the listing requirements of the exchange on which it intends to list. Process. An NOP is a direct listing involving a company going public and being listed on an exchange,

but without selling securities through an underwriter. Like a prospectus in an IPO, an NOP requires all the information and financial statements for a long-form prospectus and sign-off by both the securities regulators and the applicable stock exchange. Pros. The key advantages of going public via an NOP are: »»

»»

Management Focus. Without an offering, the company and its management team can devote less time to marketing and selling to potential investors, and more time to growing its business. Fewer Contingencies. It can be less risky than other alternatives to go public that are contingent on obtaining shareholder approval, like a reverse takeover or a transaction with a special purpose acquisition company (SPAC) or capital pool company (CPC).

Cons. The key disadvantages of going public via an NOP include: »»

»»

Regulatory Review. As in an IPO, the securities regulator will scrutinize the prospectus while the intended stock exchange will review the company against its listing requirements, so the company can expect to budget additional time and cost to satisfy two sets of regulators. No Incremental Cash. Although shareholders will have the benefit of increased liquidity for their shares once the company is listed, the NOP will not directly generate additional cash for the company, leaving it to cover the costs of going public from its existing funds.

2. Special Purpose Acquisition Companies (SPAC) & Capital Pool Companies (CPC) Several stock exchanges have programs that permit a “shell” company (a SPAC or CPC) with no business or assets formed by a sponsor group, usually consisting of a team of high-profile investors and industry leaders, to complete an IPO and become listed on the exchange. The sole purpose of both a SPAC and a CPC is to raise investment capital through its IPO and complete a transaction acquiring an existing business (the “target”), indirectly taking that target public.

While SPACs and CPCs are similar, there are key differences. In particular, SPACs are much larger than CPCs and therefore involve more stringent investor protections in the form of regulatory requirements. Process. Both SPACs and CPCs involve a two-step process: »»

»»

IPO. The SPAC or CPC undertakes an IPO, modified to meet the relevant stock exchange’s SPAC or CPC program requirements, including a minimum amount that must be raised in the IPO. Qualifying Acquisition. After it’s listed, the SPAC or CPC uses its pool of cash to identify and review assets or businesses with a view to completing a qualifying acquisition of a target before the deadline set by the exchange.

“

If you’re ready to take your company public, you might think you’ve only got one route: an initial public offering (IPO). An IPO is the traditional method of going public, and it’s a good route for an established, successful private company in need of additional cash flow – but it often isn’t ideal for a small or relatively new company, or one that’s fully financed.

“

Once the SPAC or CPC has completed its qualifying acquisition (which must meet the exchange’s listing requirements), the exchange treats it as a regular listed company. Pros. The key advantages of going public through a SPAC or CPC are: »»

»»

Clean History. A SPAC or CPC transaction provides access to a clean shell with no operational history and no potential liabilities associated with past operational activities. Expertise. SPACs and CPCs typically have an existing management team (the sponsors) with valuable industry expertise and connections to which the target will gain access. Time & Cost. A SPAC or CPC is often a less expensive and more efficient process than an IPO, while giving the target access to funds the SPAC or CPC previously raised.

Cons. The disadvantages of going public through a SPAC or CPC include: »»

Sponsor Expectations. The SPAC or CPC’s original sponsor team and the target’s owners could have different visions for the target business following the qualifying acquisition,

»»

causing conflict that can trickle down through the organization. Investor Loyalty. Many SPAC and CPC investors invest based on the perceived strength of the sponsor team, long before the ultimate target is identified. As a result, the target might not enjoy long-term loyalty from those investors once the qualifying acquisition is complete, increasing the target’s investor relations costs.

3. Reverse Takeover (RTO) An RTO is another option, most attractive for companies that don’t have an immediate need for significant additional capital. Process. Through an RTO, a private company goes public by being acquired by a “dormant” shell company (a public company that no longer conducts business and holds no or few assets) usually already listed on a stock exchange. There are different transaction

structures used to achieve an RTO. Typically, however, the private company becomes a wholly-owned subsidiary of the public company and the private company’s shareholders receive shares of the public company, resulting in a change of control of the public company. Following the RTO, the public company remains listed on its stock exchange or, if not listed before the RTO, applies to become listed in conjunction with the closing of the RTO. Pros. Key advantages of going public via an RTO include: »»

»»

Target Autonomy. The management team of the shell company may have limited industry expertise and is therefore unlikely to expect meaningful participation in the company’s operations post-RTO. Exchange Review. The disclosure document for the RTO transaction isn’t subject to review by securities regulators in the same way as a prospectus, so the company can focus its efforts on the stock exchange’s review.

Cons. Key disadvantages of going public via an RTO include: »»

»»

Inherited Liabilities. RTOs are potentially more risky than SPACs and CPCs (or direct going-public avenues like IPOs or NOPs) because the dormant shell company used in an RTO could have covert debt or other obligations. Consequently, an essential element of the RTO process is conducting comprehensive due diligence, which entails both time and expense. Capital. While it’s customary to raise funds through a private placement financing in connection with an RTO, the amount raised is usually much less than that raised in an IPO.

Julie Robinson is a Corporate Finance & Securities Lawyer 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, 2022. All rights reserved. June 2022 | Cannabis Prospect Magazine

5 THINGS YOU SHOULD LOOK FOR IN A TRUSTED CANNABIS PAYMENT PROCESSOR By Shakir Tayabali

payment processor is a partner that handles cashless transactions by acting as a mediator between your customer’s bank and your merchant account. Cannabis payment processors have become an integral part of the industry. They help customers find ways to pay for their products using various methods. They also provide a secure environment where transactions can happen without fear of compromising information. As the cannabis industry rapidly grows, more and more cannabis payment processors are entering the market, making it difficult to determine which payment processors are trustworthy and reliable. Let’s talk about the benefits of having a payment processor and the five things you should look for to ensure a payment processor is a good fit for your business needs. THE BENEFITS OF HAVING A PAYMENT PROCESSOR In order to promote business growth, cannabis businesses need a secure and straightforward way to accept payments from their customers. Working with a reliable cannabis payment processor benefits both your business and your customers in the following ways:

look for in a trusted cannabis payment processor: HIGH-RISK EXPERIENCE Cannabis businesses are a high-risk industry. This means it can be hard to find a payment processor willing to work with your business. Likewise, it can be difficult to find a payment processor that has experience with high-risk transactions. Dependable high-risk processors monitor transactions closely to flag the ones that look suspicious or fraudulent. High-risk processors like Merrco understand the needs of a high-risk business and ensure all transactions are processed in a secure and efficient manner. EASY INTEGRATION When selecting a payment processor, find one that can provide seamless integration with your existing e-commerce platform. Generally, a good cannabis payment processor will use API integration, which allows you as a business owner to monitor your business and see how the e-commerce store looks from your customers’ point of view.

Offer multiple payment methods for your customers. Faster transactions with support when issues arise. Easy integration with different business systems. Ability to securely process payments in-store and online.

REASONABLE CONTRACTS Every cannabis processor has different terms and conditions. Avoid long-term contracts if possible, just in case you find you are unhappy with the service or can no longer afford it. Most companies will say you can cancel at any time, but make sure to check if they charge termination fees. Before signing any contract, always read the fine print to know exactly what you agree to.

The number of payment processors on the market is growing. Because not all payment processors are alike, it’s essential to do your research and ensure you choose a processor that will support all your business needs. Here are the five things you should

CUSTOMER SUPPORT It’s not uncommon for a business to run into payment processing issues from time to time. Your business needs a cannabis processor that is not only available when you need them but also provides a quick

»» »» »» »»

Cannabis Prospect Magazine | June 2022

response time. Before choosing a payment processor, find out what customer support they offer. Is it personalized customer service? Or do they have a customer service support team? Terrible customer support is not only frustrating, it also reflects poorly on your business. Whenever possible, select a payment processor that offers 24/7 customer support. COMPETITIVE PRICES Every payment processor charges different fees according to the service they provide. Typically, payment processors will charge businesses several fees like chargeback fees, transaction fees, monthly fees, PCI compliance fees and setup fees. Be careful when comparing prices to ensure you understand all of the fees involved and look at the total cost for services. This will ensure there are no surprises and your business can cover the cost without profit losses. Every business has different needs and goals, so it’s crucial that you work with a qualified processor capable of providing what matters most to your business. The correct payment processor will help your business grow by allowing you to provide multiple payment methods to your customers, faster and more secure transactions, quick and easy integration with your system, and the ability for your customers to pay securely in store or online. Before selecting a payment processor, consider rates, high-risk availability, cost and integration. Shakir Tayabali is the Executive VP of Sales at Merrco Payments. Contact Merrco Payments at info@merrco.com or call us toll-free at 1-800-957-0534.

Visit the New www.CannabisProOnline.com

Access us anywhere, on any device. PLUS:

• • •

Daily News Items Exclusive Articles Product Marketplace

• • •

Business Directory Classifieds And More...

Cannabis Prospect Magazine

PRODUCTS SPOTLIGHT

CANNAVAULT™ CV Mini-S Plus

CANNAVAULT™ CVMini-S Plus is a high-quality, CO2 injected, secure storage system for cannabis flower, edibles, concentrates, herbs, spices and more. Keep your personal cannabis secure from child access while CO2 eliminates oxidation of turpenes and cannabinoids and stops the possibility of mold growth. Controlled and monitored by the CannaVault™ App. Built in BC, using 12 gauge stainless steel for the inner pressure vessel with drawer and 16 gauge stainless steel for the outside covering with LED indicators for instant status for CO2 and power. Drawer size: 8”x6.5”x2” Outside dimensions: 11”x9”x3.5” Weight: 15lbs.

Oberon Hydrocarbon (BHO) Extraction System

The Luna Technologies Oberon Extractor is a completely reimagined high-throughput fully automated hydrocarbon extractor with increased capacity to meet the needs of large-scale operators, offering greater energy efficiency, capacity and flexibility within the production process. The Oberon can process 36 pounds (16 kgs) of fresh-frozen cannabis flower per hour and conduct back-to-back runs with less than 60 seconds of downtime in between. The system can also utilize an infinite number of programmable extraction recipes available through the Luna Technologies proprietary recipe book. Oberon is designed to meet the unprecedented demand and increasing array of subcategory preferences in cannabis concentrates and extracts. For more information visit www.lunatechequipment.com

Cannabis Prospect Magazine | June 2022

3 Luna Technologies Elara Ethanol Extraction System

The Luna Technologies Elara Extraction System is an automated end-to-end ethanol-based cannabis extractor for high-volume producers featuring low-temp cryo extraction technology developed through a partnership with Verdara Technologies. Elara combines traditionally separate and manually operated processing steps between extraction, centrifugal separation, filtration, and evaporation, into one fully automated process. This enables operators to convert dried cannabis biomass into refined concentrated oil through cryogenic extraction without any additional manual operations, improving operational efficiency while empowering staff to closely monitor every step of the process remotely. In total, the system increases safety, improves quality, lowers costs, and reduces the overall equipment footprint. For more information visit www.lunatechequipment.com

4 Heavy Duty FGM-Series Mixers

Heavy Duty FGM-series mixers from INDCO feature a high-torque gear reducer to vigorously agitate heavy viscous materials. With a ring mount design and two opposing handles, this powerful mixer mounts directly to five-gallon pails up to 12 ¼” wide. A quick-change coupler and shaft design features a shaft pin that locks in place during rotation. Three 9” two-blade propellers made from 319 aluminum attach to the 15” long shaft with set screws. Powered by a 1 HP totally enclosed fan cooled motor that is ready to plug in to a standard outlet, the FGM-1T electric mixer operates at a fixed speed of 350 RPM. Additional motor options include fractional horsepower fixed and variable speed electric versions as well variable speed air-powered models. Additional impeller options are also available. The FGM-series FiveGallon Heavy Duty Mixers are ideal for mixing viscous materials such as adhesives and sealants, as well as CBD oils, cannabis infusions, chewables mixtures, and more.

The Canadian cannabis industry is everchanging. Cannabis Prospect Magazine is proud to offer multiple platforms to keep you up to date in this constantly evolving industry. Stay informed and grow with us!

Cannabis Prospect Magazine

Advertiser Index Budtenders Association....................................................................30 Cannabis Council of Canada............................................................37 Encann Solutions..............................................................................27 Fanshawe College.............................................................................11 Flow Scientific.................................................................................29 Greenline POS...................................................................................5 Greentank Technologies.....................................................................7 Hash Corporation........................................................................20-21 High North Labs..............................................................................39 High Deal.........................................................................................25 JC Green...........................................................................................40 Merrco Payments..............................................................................11 N2 Packaging Systems.......................................................................9 O’ Cannabiz ....................................................................................31 Pack Expo........................................................................................23 Sevenpoint Interiors............................................................................2 Truro Cannabis.................................................................................17 Vividata.............................................................................................13 38

Cannabis Prospect Magazine | June 2022

NEED YOUR COA TODAY? We got you.

OG LANDRACE

No sticks or seeds. Acapulco Gold is some badass weed. In 1964 this OG strain created the hippie. Jonny Chronic is proud to do justice for a timeless cultivar. Available in dried flower and cartridge (AB, BC, ON, SK, MB), and reefers (ON).

Cannabis Prospect Magazine - June '22 - Issue 21

Articles inside

From the Editor

Product Listings

Product Showcase