It was a busy start to this Wednesday in weed, with Canopy Rivers announcing its second investment in the agriscience space, Nova Scotia disclosing its latest cannabis sales figures, a major cannabis industry group committing to higher standards of social responsibility and CannTrust announcing its expansion plan for the United States.
- Jameson Berkow
Cannabis Professional’s daily recap of industry news. View archive here.
Table of contents Canopy Rivers gets stake in ZeaKal • Nova Scotia pot sales • New cannabis industry group • CannTrust into United States
Canopy Rivers buys 8.7% of plant R&D firm ZeaKal for US$10-million
The investment arm of Canopy Growth is spending US$10-million on research focused on improving crop yields to improve productivity and yields of cannabis crops. The investment buys Canopy Rivers an 8.7-per-cent stake and an observer seat on the board of directors of San Diego-based ZeaKal and will also see the company expand its program of trying to increase photosynthesis in agricultural products, called “PhotoSeed” to include cannabis. In February, ZeaKal also established an R&D collaboration with Corteva Agriscience, formerly the agricultural science division of DowDuPoint. This investment is actually the second foray into plant sciences for Canopy Rivers; the company spent US$1.5-million last month to be included in the Series A financing round for BioLumic, a firm focused on increasing crop yields through the use of ultraviolet light based in New Zealand. Canopy is also far from the only cannabis company pursuing advances in plant science. In April, the Supreme Cannabis Company launched a new R&D-focused subsidiary called Cambium Plant Science.
Nova Scotia sold $33-million worth of legal cannabis in under six months
The Nova Scotia Liquor Corporation reported a lower profit margin in its most recent fiscal year, but the results would have almost certainly been even worse if the government-owned booze retailer wasn’t also selling weed. NSLC sold a total of $33-million worth of recreational cannabis between Oct. 17, 2018, and the end of March 2019, the report said, comprised of 866,000 individual transactions with an average dollar value of $38.29 (fun fact: that is enough transactions to account for every single adult resident of Nova Scotia making at least one purchase of recreational cannabis over that time). The province currently operates 12 retail locations - most of which are located inside existing alcohol stores - but in February finance minister Karen Casey said the province would look at expanding the number of brick-and-mortar locations selling cannabis as online sales turned out to be lower than she had expected. Roughly 6 per cent of total sales were via the government-run e-commerce site, Ms. Casey said, versus expectations of about 10 per cent.
Cannabis industry group sets new environmental, ethical standards
Forty-five cannabis companies are collectively committing themselves to a common standard of social responsibility. The Global Cannabis Partnership, which includes some of the largest cultivators and processors of legal cannabis products, released its first responsible cannabis framework on Tuesday, which requires members to meet specific standards of environmentalism, corporate social responsibility and good governance principles. The concept of being a socially responsible corporate entity is still relatively new in the cannabis industry, with companies just now coming around to the ideas of encouraging boardroom and management diversity and minimizing water and energy usage.
CannTrust to expand south with initial $20-million plan
Toronto-based CannTrust became the latest licensed Canadian cannabis producer to announce an expansion into the United States on Wednesday. The company has signed a non-binding letter of intent with Elk Grove Farming Company to provide access to over 3,000 acres of farmland in California for hemp production. With the recent passage of the U.S. Farm Bill and subsequent legalization of CBD-based products, CannTrust is aiming to produce hemp-derived CBD formulations on a commercial scale and is planning to invest up to $20-million in what is expected to be a 50/50 joint venture with Elk Grove. The plan is to start small, targeting no more than 300 acres of the land to be cultivated by the end of next year. CannTrust will in many ways have to play catch up in the American cannabis space behind other Canadian players such as Canopy Growth, which earlier this year announced plans to spend up to US$150-million on hemp production in New York State. Canopy is also in the process of acquiring multi-state operator Acreage Holdings in a US$3.4-billion deal, subject to the results of an Acreage shareholder vote that is expected to be disclosed after markets close today.
Around the industry this week:
Monday, June 17: Around the industry: Cannabis One; BMO report; Choom; Neptune