Politics is a harsh mistress, but it gets considerably harsher when the ruling party decides to let anarchy reign because it suits their plans for reelection.

Such was the case with the city of Vancouver allowing over 120 medical marijuana dispensaries to stay open, without business licenses, and contrary to the law of the land, over the last few years.

Vancouver has always been somewhat friendlier to the ganj than many other places around Canada, but when pot shops came out into the sunlight in 2012 or so and the city shrugged and looked the other way.

At first it was just a couple, and you almost expected they’d get ticketed or arrested or, something. But when they didn’t, a few more came along, then a few more still.

By the time the city could no longer ignore the issue, an election was in full swing and Mayor Gregor Robertson certainly didn’t want to be seen as an enemy of weed – so he not only called the police off, but quietly accepted donations from dispensary owners.

There was another issue pressing on His Mayorness – the issue that, with so many dispensaries suddenly taking up retail space, shutting them down would leave Vancouver with almost double its present (high) level of empty commercial properties.

So when he won reelection and was suddenly faced with a problem – a problem that no other city in Canada faces, by the way, because most of them have been closing dispensaries as soon as they’ve opened – the solution was not to enforce the law, but to talk about it.

And when the time to talk was over, the new solution was to charge a $30k license fee… for a business that was still technically illegal.

Imagine if the city of Vancouver suddenly started charging crackhouses or brothels $30k each to get a business license? What happens when they’re later shut down for breaking the law?

Exactly what’s happening in Vancouver. Bedlam.

Metro reported today that several dispensary owners are suing Vancouver for being rejected for licenses. There’ll almost certainly be a lot more. And should one of them win, all of them will be back looking for licenses, or money.

Now, the unintended consequence of all this, besides the city getting tangled in dumb litigation, is that the legal marijuana industry, consisting of some 30 companies who have obtained their MMPR approval, can’t sell for love or money right now. These companies have invested millions of dollars and several years into creating world’s best marijuana production facilities, while being told they can’t market themselves, can’t grow more than a bureaucrat has told them to, have to ensure everyone working for them is squeaky clean, have to get their product tested up and down, their SOPs checked and rechecked… seriously, anyone who has got an MMPR approval should line up and get back pats from all the activists for not only moving the business to legitimacy, but doing so in the face of incredible government interference, obfuscation and limitation.

But after all that, after jumping through the hoopiest of hoops, you’ve got knuckleheads all over Vancouver taking out the shopfronts that usually end up selling fireworks and Halloween costumes once a year because they can’t find anyone else to lease them otherwise, and setting up a card table, a couch, and a chalkboard price list.

You’ve got $5 vape hits, doctors prescribing weed via Skype from India, a laundry list of edibles and oils produced by who knows who, and who knows how, and big jars of what should be dollar store skunk, grown either by gangs or kindly old MMAR folks who are profiting from their medicine allotment.

This is a horrible time to be invested in MMPRs. When the Vodis Pharma (VP.C) crowd got permission to run their leaseback weed facility in Washington State, working a backdoor way into a market that has no idea what SOPs are and thinks lights are a novel technology, they told me they weren’t concerned their MMPr application hadn’t progressed because, “If we got it, we’d have to start operating in Canada and we’d lose millions doing that under the current rules.”

Of course, a few are making it work. Canopy Growth Corp (CGC.V) continues to stomp all over the market, with its fat war chest and connected board. And Aphria (APH.V) has run their share price up hard of late doing things with a very big boy stance. I have it on good authority they’ve looked at the realities behind acquiring every MMPR out there and determined few are professional enough to bother. Supreme (SL.C) just got its approval and is gearing up it’s humongous greenhouse grow in a manner that is winning fans both in the industry and outside it.

But then what?

Organigram (OGI.V) has gone cash flow positive, which is nice, though it’d also be nice if they settled some bills from over a year ago. Mettrum (MT.V) has just put out a preliminary short-form prospectus for a $7.5m raise which sounds awfully like acquisition money to me, a feeling that is exacerbated by that company’s inability to get their stock moving up over the last three months while others are spiking.

Emerald Health Therapeutics (EMH.V), formerly Thunderbird, has taken longer to get started than Affinor’s (AFI.C) strawberry farms (Nick says ‘any time now’), Pharmacan (MJN.V) practically trades by appointment, Vodis has more than halved since I last talked about them, InMed (IN.C) lost the thread on its market presence, Hydropothecary came out of the gate limping, and Invictus’ (IMH.C) big plan to roll up the business sputtered when the CEO became CFO of Lithium-X (LIX.V) and he started selling assets.

Meanwhile, some guys who initially had notions toward getting their MMPRs but ultimately opted for less onerous paths to production are also having trouble. The exception to that: Little old True Leaf, which opted to go with the CEO’s sector knowledge and create hemp dog treats and bore the scorn of a hundred daytraders for doing so, has announced their product will be available to over 6000 stores in the US going forward. And their stock is duly killing it.

But Worldwide, Nutritional High, Abba Medix, Wildflower, Matica, Abattis, have all run off the rails though, if you’d ask them, they’d all give you the thumbs up and say the market just doesn’t get it.

Cannabix (BLO.C), the kings of the one-month promote, continue to trade on the promise that the sketch of a breathalyzer they’ve got will some day soon turn into a machine that works, is approved by government, and will be purchased en masse – and they’ve rolled out a new face to the media over the last few weeks to repeat as much.

Kaneh Bosm’s (KBH.C) much vaunted dispensary vending machines never showed up at the fake dispensary they said they had licensed them to, which was registered as a company a few days before KBH’s press release went out announcing the deal and doesn’t appear to otherwise exist. So that’s promising.

THC Biomed (THC.C) has a license, but for some reason decided to put out a press release aligning themselves with Affinor’s vertical grow technology which, frankly, though I’ve seen it licensed a few times, I’m yet to see anything actually come of it.

The last company to do so was one-time miner, then weeder, then movie company Geonovus (GNM.C), which licensed the tech off Affinor while Affinor boss Nick Brusatore was a large stakeholder in GNM. They also bought his band’s music catalogue. For $400k. Because, obviously.

(Am told here’s a new team at Geonovus with a new plan, and that Bruiser isn’t a part of what’s coming, so that’s a positive)

The bottom line here is, the weed market is buried in schmutz right now. The big players provide little value due to their inflated market caps (Aurora worth $70m?! Not sure how that makes sense, but I’m sure I’ll get a 3AM email from the CEO explaining it) and bureaucracy-enforced limitations on doing business. The little guys have ridden the sector’s coattails to the point where their inability to actually move forward has become apparent. The value-adders have mostly failed to make markets for their new sub-sectors (Golden Leaf notwithstanding, though public market missteps and regulatory weirdness have contributed to drag on what should have been a straight up killer), and though recreational use will be a definite boost to the sector, nobody knows what that’s going to look like, who will get the big advantage, and how long it’ll take to get paid.

Weed, right now, is low priced and getting lower, especially with the big boys having to compete with the ditchweed/gangweed/mama’s medicine being sold in illegal/yet licensed storefronts.

I’ve talked about Veritas Pharmaceuticals (VRT.C) a little of late, and I like the pedigree of the guys in the backroom on that deal. But it’s a research play so, again, it won’t be a rocket over the next few months and it’ll take some time to make that story a revenue earner. Best hope is that the VRT pointyheads move quickly to prove out what they want to prove out, in terms of what strain is the magic answer to pain, nausea and vomiting. Enjoying the fact that the stock has legs, but it’s a 12-18 month play for sure.

Honestly, what the market needs right now is someone to come in with big boy pants and a bank balance and an honest idea of what the industry needs, wants, and what that’s worth, and to just start ‘old manning’ this business. If you’re going to eventually get taken over by big pharma and/or big tobacco, you need to grow quickly and efficiently, you need to appeal to investors and not daytraders, and you need to buy up best of breed, not the cheapest old rope lying about.

I hear rumours.

These rumours involve a large player taking a large stake in a large player-to-come. If these rumbles are even somewhat close to correct, the Canadian weed business will be very different in a few months to what it is today.

I’ll keep you updated.


And to those offended by any of the above, and who think I should write nicer things about them – feel free to be better at your jobs going forward.

–Chris Parry


FULL DISCLOSURE: I own stock in Golden Leaf, Veritas Pharmaceuticals, and I think I have a share cert of Worldwide around somewhere but it’s not worth the bus fare into town to sell it. And Organigram owes me ten grand, which I will never stop talking about because it’s douchey to not pay your bills, Denis.




Written By:

Chris Parry

A multi-Webster Award winner for excellence in BC journalism, Parry is the founder and publisher of Equity.Guru, which he built with the specific plan to blend old school reporting with stock promotion, in a way that puts the emphasis on truth, high standards, and ethics. Parry is a veteran of TV, radio, and print, and consults with public companies to help them figure out their storylines, lay down achievable milestones, and improve their communication with shareholders, while also posting regular deep dive analysis of companies in the public spotlight.

More By This Author
Health Science
Medical Marijuana Update
Abba Medix
Canopy Growth Corp
Emerald Health Therapeutics
Golden Leaf Holdings
Kaneh Bhosm
Matica Enterprises
Medical marijuana
Nutritional High
pump and dump
Supreme Pharmaceuticals
THC Biomed
Veritas Pharmaceuticals
Vodis Pharma
Worldwide Marijuana
0 0 votes
Article Rating
Notify of
Newest Most Voted
Inline Feedbacks
View all comments

hey chris,

glad to see that you are still keeping up with the pot biz. regarding the “rumours”–large player taking over a larger player to come. is that a licensed lp acquiring or merging with an unlicensed or newly licensed lp *cough sl cough*