Burning retail market lights up Canada’s cannabis vape race!

Canada’s major tobacco companies are aiming high in the cannabis e-cigarette market.

by Kristine Owram • Bloomberg
With declining cigarette sales, many tobacco companies are turning to cannabis and vape markets [David Mercado/Reuters]
With declining cigarette sales, many tobacco companies are turning to cannabis and vape markets [David Mercado/Reuters]

Ontario will triple its pot-store count beginning in October, just two months before the introduction of new product formats that are expected to significantly boost sales in Canada’s most-populous province.

While chatter about the next wave of legalization in Canada tends to focus on products like edibles and beverages, many of the biggest players entering the space say consumers will opt for the more conventional format of vapes.

The Canadian market for vapes could be as big as C$600 million ($451 million) by 2021, according to Tim Pellerin, Pax Labs Inc.’s general manager of Canada.

San Francisco-based Pax, which split from e-cigarette company Juul Labs Inc. in 2017 to focus on cannabis, captures about 17% of the U.S. market for pot vape devices. It’s the top seller in the extremely fragmented market, and hopes to capture at least as much share in Canada. Pax has partnered with Aphria Inc., Aurora Cannabis Inc., Organigram Holdings Inc. and Supreme Cannabis Co. to sell their oils in its devices.

“We’ll be disappointed if we’re not able to match or exceed our performance in the U.S. market” in Canada, Pellerin said in an interview.

It’s shaping up to be a fierce fight, with two tobacco giants joining the fray via investments in Canadian pot companies.

Marlboro-maker Altria Group Inc. bought a 45% stake in Cronos Group Inc. via a C$2.4 billion investment that closed in March, while Imperial Brands Plc announced last month that it will invest C$123 million in Auxly Cannabis Group Inc. by way of a convertible debenture.

Imperial decided to invest in cannabis after conducting a strategic review to identify new opportunities to offset declining tobacco sales, according to Chief Financial Officer Oliver Tant.

“It’s relatively obvious to most that the tobacco sector is ex-growth and over the longer term that inevitably presents some challenges,” Tant said in a phone interview. “We looked at caffeine, we looked at high-energy drinks, it wasn’t limited to cannabis, but cannabis seemed like the one we had the most obvious overlap and connectivity with.”

Oxford deal

Imperial dipped its toe into the sector last year with an investment in closely held Oxford Cannabinoid Technologies Ltd. and decided to investigate the Canadian market after it legalized recreational pot in October.

“I think we probably talked to the majority of the larger listed entities” before settling on Auxly, Tant said.

Auxly will be Imperial’s exclusive global cannabis partner and will gain access to its vaping technology and Liverpool-based R&D lab Nerudia, which is already licensed to work with cannabis.

“The vape IP is a huge portion of the non-financial value in this transaction and ensures that Auxly is going to have best-in-class vape devices,” said Hugo Alves, who will replace Chuck Rifici as Auxly’s chief executive officer this week.

Imperial’s technology won’t show up in Auxly’s vape devices when they’re first released on Dec. 16, the day vapes, edibles and beverages will join dried flower and oils on legal Canadian store shelves.

Vape market

“We’ve been at it now for close to a year, so I’m happy to report that our vapes are designed, our oils are formulated, our pens are tuned to our specific oil and the hardware is ready,” Alves said. “Our collaboration with Nerudia is forward looking.”

Tant believes the Canadian market for derivative products like vapes will be worth about C$6 billion by 2025. Although Imperial is taking a go-slow approach for now, he sees future opportunities to expand its investments in cannabis.

“We’re taking a pretty cautious approach to investing in the space, we haven’t spent the $1.4 billion that Altria spent in Cronos,” he said.

Tant said he wishes Canada’s pot regulations were less fragmented across provinces, while Pellerin at Pax said he wishes advertising rules made it easier to communicate with the consumer.

“We continue to be in an environment which I’ll say is the worst it’ll ever be from a category standpoint,” Pellerin said. “It’s still very difficult to talk to the consumer through all the constraints and controls in place right now.”

Maine: Casco’s Kate Hall wins national long jump title

STATEN ISLAND, N.Y. — Casco’s Kate Hall added another title to her trophy case, winning the women’s long jump at the 2019 Toyota USATF Indoor Championships in Staten Island, New York Saturday.

Hall won the long jump with a 6.51m leap.

RELATED: Catching up with newly hired coach Kate Hall

RELATED: Olympic hopeful Kate Hall gets personal about her diabetes

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Congratulations to Kate Hall on winning Women’s Long Jump at ! pic.twitter.com/j3ECwkF1ko

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The Casco native, who had an impressive career start while at Lake Region High School, will be forgoing her senior season at the University of Georgia to train in Maine for the 2019 World Championships and a shot at qualifying for the 2020 Olympics in Tokyo.

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High court to decide if medical marijuana covered by workers’ comp

The Maine Supreme Judicial Court will decide if state law requires Workers’ Compensation Insurance to pay for a millworker’s medical marijuana or if the insurer could be charged as an accessory in a drug deal under federal law.

Justices are set to hear arguments in the case Wednesday at the Capital Judicial Center in Augusta, which will be the first time the state’s highest court has considered the question of insurance reimbursement for the cost of medical marijuana.

The case pits a former Madawaska mill employee, injured on the job, against the company that administers the mill’s insurance for injured workers.

Gaetan Bourgoin, now 58, of Madawaska, in 2015 sought reimbursement for medical marijuana prescribed for pain due to a back injury suffered in 1989 when he was 29 and working at what is now Twin Rivers Paper Co.

Bourgoin tried a variety of opioid-based painkillers over the years without relief, according to briefs filed in Portland.

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Vetoes, bonds and late LePage surprises

The Legislature is back in Augusta on Wednesday for what’s set to be the last official day of the 2017 session.

They’re mostly back to vote on overriding 27 vetoes from Gov. Paul LePage, including bills that would set long-term solar policy, increase Maine’s tobacco-buying age to 21 and prohibit handheld cellphone use while driving.

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Trump allegedly looking into ways that he could pardon HIMSELF for his evil deeds.

Donald Trump boards Air Force OneThe US president says he has “complete power” to issue pardons

A lawyer for Donald Trump says the US president’s legal team is not looking at ways he could pardon himself.

“I don’t know where this came from. There is nothing to pardon,” Jay Sekulow said.

On Saturday, Mr Trump said he had “complete power” to issue pardons, following reports he had asked advisers about the scope of his authority.

Criminal and congressional inquiries are underway into alleged collusion between Russia and Trump’s campaign.

SHOCKER: U.S. Representative Bruce Poliquin votes in favor of tougher ozone standards

U.S. Rep. Bruce Poliquin won praise from the environmental community Tuesday when he announced his opposition to a bill that seeks to delay the implementation of stricter ozone standards.

The Ozone Standards Implementation Act of 2017, which passed 229-199 Tuesday evening with Poliquin and 10 other Republicans against it, is similar to a nearly identical measure that Poliquin and 9 other House Republicans opposed in 2016. The bill passed 234-177 in the House in 2016 but went on to fail in the Senate, where this year’s bill is now headed.

The 2017 act, which has been dubbed the Smoggy Skies Act by its opponents, would delay new ozone standards developed in 2008 and 2015 for the National Ambient Air Quality Standards and loosen review standards for a variety of air pollutants. It would also change criteria for pollution determinations from being based on protecting public health to consideration of “technological feasibility.”

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Poliquin said it goes too hard against important air quality standards.