Federal illegality is stopping cannabis companies making profits

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STRUGGLING TO PROFIT

Federal illegality is stopping cannabis companies making profits: Politico

Despite ever growing sales and more states continuing to reform cannabis laws, companies are still struggling to turn a profit, reports Politico

The issues: 

  • Of the over two dozen US publicly traded companies analyzed, POlitico reports they collectively lost more than $550 million in the first six months of this year on revenues of nearly $4.5 billion.
  • ‘Sky-high taxes’ impact companies profits.
  • As cannabis can’t cross state lines, businesses must run separate operation state to state.
  • Companies spent a lot of money with the optimistic view that Biden would change the federal status of cannabis, something he’s yet to do.

“It all stems from federal illegality,” said Anita Famili, who heads the cannabis and CBD industry group at Manatt, a law firm and consultancy. “The cost of doing business for weed companies is just much higher than any other business.”


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HIGH HOPES

Vancouver gives medical cannabis distribution license to harm reduction program

High Hopes, a harm reduction program in Vancouver, has been given a license to distribute medical cannabis that’s been prescribed by a doctor, per CBC.

The program aimed to reduce the use of harder street drugs by distributing medical cannabis but the program was suspended with the legalization of adult-use in 2018. Now Health Canada has approved a licence to distribute prescribed cannabis. Founder Sarah Blyth noted that some patients are finding it difficult to access prescriptions without the use of computers or credit cards and that she  “would be willing to advocate for them” with their doctors.

“People who are using cannabis are much less likely to use drugs from the unregulated supply” said Dr. M-J Milloy, an assistant professor of medicine at UBC, “We are hopeful that if we expand access to cannabis — through programs like Sarah’s — then that might mean … less use of drugs like opioids or fentanyl or heroin.”


AN UNMITIGATED FAILURE

Italy’s military monopoly on domestic cultivation doesn’t serve patients’ needs

Italy is both one of the earliest and largest medical cannabis markets in Europe, but new data has revealed the ongoing inability of its monopoly domestic producer to ‘serve patients’ needs’, per BusinessCann.

The details:

  • Cannabis patients in the country are thought to number well over 20,000. 
  • In 2021, the Italian military grew 101.904kg of medical cannabis, marking a 175% increase on the previous year, but this was a 17% decline on the more comparable 123kg in 2019. 
  • Despite the recovery from such a dramatic decline in 2020, this represented a fraction of the total medical cannabis sold in Italian pharmacies that year
  • The government continues to tender all production in the country, and is understood to have granted only five companies a licence to distribute medical cannabis so far. 


Prohibition Partners’ Industry and Data Analyst Conor O’Brien told BusinessCann: “The government monopoly over medical cannabis production in Italy has been an unmitigated failure.”


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