Canna360

The Rotation: Vol. 19

Psilocybin Lawsuit Filed, Loyalty Programs a Necessity for Retailers and British Columbians Turning to Legal Cannabis

Eight Canadians File Charter Challenge Fighting for Access to Psilocybin

Plaintiffs argue that the current process for accessing psilocybin violates Section 7 of the Canadian Charter of Right and Freedoms, reports the National Post.

The Breakdown

  • The plaintiffs include seven patients and one health-care practitioner and is supported by B.C. based non-profit TheraPsil.
  • There are currently three ways to legally access psilocybin in Canada for medical purposes which includes obtaining a personal exemption (section 56), receiving authorization through Canada’s Special Access Program, or enrolling in a clinical trial, which according to the challenge, is a lengthy and cumbersome process that doesn’t adequately serve the needs of patients.
  • Several plaintiffs have terminal diagnoses and TheraPsil has focused largely on fighting for patients with terminal cancer.

Our Perspective

This is a very important development in the battle for increased medical access to psilocybin. Several comparisons are being drawn to the charter challenge launched by Terry Parker which eventually led to the creation of Canada’s first medical cannabis laws. It appears this was almost inevitable, given that the current Minister of Health, Jean-Yves Duclos has not been as receptive to granting the section 56 exemptions and progress has been stifled since his appointment. Spencer Hawkswell, CEO of TheraPsil, is hoping for a resolution as quickly as possible, potentially even within the next month and thinks that this could be the most important course case in the history of psychedelic drug access.

Loyalty Programs Needed in Highly Competitive Cannabis Retail Market

In order to survive many retailers are turning to loyalty programs and price matching in order to retain customers and stand out in a competitive market, reports Sault Online.

The Breakdown

  • Steep discounts, price matching and loyalty programs are becoming commonplace amongst cannabis retailers in Canada, a crowded market where the average price of cannabis has fallen significantly over the last few years.
  • These sales tactics are receiving mixed reviews, with some industry experts describing it as a race to the bottom that could have detrimental effects on independent retailers whereas others seeing it as a natural part of business and staying competitive.
  • Jaclynn Pehota, executive director of the Association of Canadian Cannabis Retailers suspects that “many of the big cannabis chains are adopting a Starbucks-like model where they flood the market with stores, eventually cutting out the competition and becoming the dominant player”.

Our Perspective

Retail is a tough business, and this is especially true in cannabis with well over 1,000 stores in Ontario alone that are having difficulty differentiating themselves from one another. Furthermore, price is considered the leading factor that consumers consider when purchasing cannabis. Loyalty programs appear to be working well, with Canna Cabana seeing a 48% rise in same-store sales since they launched theirs in October. With that said, these larger franchises are clearly looking to dominate the market and despite these deals being great for customers, we would prefer a diverse cannabis retail market that allows independent operators to thrive as opposed to being pushed out.

Increase in British Columbians Purchasing Legal Cannabis

According to the BC Cannabis Use Survey, there are significant changes in consumer habits with more and more cannabis users turning to legal sources, per StratCann.

The Breakdown

  • The survey was conducted in 2018 and received responses from nearly 25,000 BC residents.
  • According to the survey, 71% of British Columbians who use cannabis now purchase it from the legal market. Another 40% report getting it from friends, 19% from family, and another 14% grow their own.
  • While the survey shows that the amount of people purchasing cannabis from an unlicensed store has declined significantly (17% compared to 56% in the 2018 survey), those who say they purchase from an unlicensed online source increased from 1% to 9%.
  • Fewer cannabis consumers now say they drive after using cannabis down to 14% compared to 27% from the previous survey in 2018.

Our Perspective

It’s encouraging to hear that British Columbians are gravitating towards sourcing cannabis products in the legal market. BC has long been the epicenter of cannabis culture in Canada, and transitioning users from this market is critical to the success of legalization. It’s also great to see that fewer cannabis consumers are operating a motor vehicle after consuming cannabis, another important mandate of the Cannabis Act. It is however interesting to see the increase in purchases from unlicensed online stores, something that has become far easier to access since legalization.

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