The US cannabis market received a boost in confidence this week thanks to the announcement of a new potential legalization bill.
Meanwhile, a report shows cannabis producers in Canada have been forced to get rid of over 500 tons of product due to low demand, adding to the list of struggles for the Canadian market.
Keep reading to find out more cannabis highlights from the past five days.
What’s next for US market after new bill?
A draft of the Cannabis Administration and Opportunity Act was introduced this week by a group of Democratic senators led by Senate Majority Leader Chuck Schumer (D-NY).
The proposed bill would remove cannabis from the Controlled Substances Act 60 days after being enacted; however, it would not legalize the drug across the nation. As part of the bill, a federal tax would be proposed on all cannabis products.
Among other changes, cannabis regulation would be taken away from the US Drug Enforcement Administration and given to a collection of federal agencies, including the US Food and Drug Administration, which would become the primary regulatory authority when it comes to the manufacturing and marketing of cannabis.
According to Marijuana Moment, the bill would also help from a business perspective as it would “remove any penalties that financial institutions currently potentially face as a result of working with licensed cannabis businesses because those operations would no longer be federally illegal.”
It’s our legislative proposal to end the federal prohibition on marijuana and repair damage done by the War on Drugs—especially in communities of color
— Chuck Schumer (@SenSchumer) July 14, 2021
Health Canada data shows cannabis destruction
MJBizDaily reported that nearly 447,118 kilograms of unpackaged dried cannabis were destroyed by Canadian producers between the years 2018 and 2020.
This sum doesn’t take into account destruction of packaged products — between 2019 and 2020, 6 million packages were tossed. These losses aren’t a one-time case situation either, since the number of destroyed products has been on the up and up since 2018.
“In 2020, Canadian licensed producers destroyed 279,837 kilograms of unpackaged cannabis, or almost 20% of the 1,473,767 kilograms of dried cannabis produced that year,” the report states.
The destruction has been attributed to myriad factors. The report cites subpar product quality caused by poor scale-up practices in growing facilities, as well as distribution line obstructions due to the fractured and slow rollout of stores across the country.
“Publicly traded producers who have product that is unsaleable will store it and destroy small amounts quarterly so it doesn’t affect their financial statements,” Mary Durocher, president of Fox D Consulting, told MJBizDaily. “There are producers out there who have had product for four years sitting in their vaults. They’re waiting to destroy it so it doesn’t look bad and it doesn’t affect their books.”
According to the report, cannabis companies in Canada eliminate cannabis using two methods: by mixing it with cat litter before disposal, and by incineration or composting.
Cannabis company news
- Tetra Bio-Pharma (TSX:TBP,OTCQB:TBPMF) confirmed the Central Ethics Committee has approved its proposal for a study comparing opioids to a cannabis-based formulation for breakthrough pain treatment.
- Nova Cannabis (TSX:NOVC) obtained approval to graduate and begin trading on the Toronto Stock Exchange starting on July 15.
- Inner Spirit Holdings (CSE:ISH,OTCQB:INSHF) secured the votes needed from its investor base in favor of a proposed acquisition deal with Sundial Growers (NASDAQ:SNDL).
- Aurora Cannabis (NASDAQ:ACB,TSX:ACB) delivered a shipment of medical cannabis products worth close to C$8 million to Israel thanks to its strategic supply agreement with Cantek Global.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.