💸 The Tape

The Exicise Tax Might Be Gettign Re-Evaluated

Don’t pop the champagne (or spark that celebratory joint) just yet—but there’s a glimmer of hope on the Canadian cannabis horizon. In this week’s ‘2024 Fall Economic Statement,’ the Federal government flirted with the idea of switching from a confusing mosaic of province-and-territory-specific cannabis excise duty stamps to a single national stamp. Cue the collective sigh of relief from producers who’ve been drowning in enough admin work to make any accountant’s eyes water.

Currently, licensed producers juggle 13 different stamps—one for each of our nation’s beloved provinces and territories. It’s like having to collect 13 different loyalty cards just to buy the same cup of coffee. Industry pundits have pointed out, repeatedly, that this system piles on unnecessary costs and logistical nightmares. With the prospect of a single national stamp, we’re talking fewer headaches for producers and more breathing room to focus on what they actually do best: growing and selling cannabis.

What’s less rosy are the other elephant-sized problems that still haven’t been tackled. Canada’s excise tax formula—one dollar per gram or 10% of the selling price, whichever is higher—continues to be a massive thorn in the side of legitimate businesses. This burdensome tax regime has propped open the door for an ever-thriving illicit market and nudged a growing number of Canadian producers to shift their gaze overseas in hopes of better margins. In fact, the backlog in excise tax payments has soared to staggering levels, with reports suggesting the CRA was owed around $200 million by mid-2023.

Earlier this year, Canada’s House of Commons Standing Committee on Finance recommended setting the tax at a neat 10% “ad valorem,” presumably to quell the discontent in the industry. Hopes were briefly elevated when the government released its final review of the Cannabis Act with 54 recommended changes, including adjustments to the excise rate. But those hopes took a beating in April when Budget 2024 conspicuously lacked any mention of tax relief.

Now, with the new Economic Statement dangling the promise of “more details” in Budget 2025—likely arriving around February—producers may finally dare to crack a smile. While a unified stamping system is a step in the right direction, the real question remains: will Ottawa dial back the tax pressure that’s been squashing the legal market?

From small craft growers to well-oiled corporate machines, everyone’s watching to see if this long-sought tax reform makes the final cut. If the government follows through, we could see Canada’s legal cannabis industry get the breathing room it’s needed since day one.

📈 Dog Walkers

Michigan Is Cranking Out Cannabis Sales

Bucking any spillover concerns from Ohio’s fresh adult-use rollout, Michigan’s cannabis market continues to rake in the green. November set a new flower record, hitting 103,129 pounds sold—beating the 100,894-pound milestone from August. The extended five-weekend months of August and November apparently did wonders for dispensary ledgers, although August still holds top honors for overall sales revenue at $295.4 million.

Ascend Wellness Retires Shares

Ascend Wellness Holdings just handed its shareholders a jolt of confidence by scooping up 11 million of its own Class A shares—over 5% of its total float—at a tasty discount. This move, unanimously approved by the Board, is designed to toss out some excess supply and shine a spotlight on the real value lurking beneath the ticker symbol. With the blessing of term loan holders, Ascend is making a statement that its current market price just isn’t measuring up to its tangible worth.

The Proof Is In The Data

Teen marijuana use has apparently bucked the “legalize-it-and-teens-will-party” narrative, according to the latest Monitoring the Future Survey funded by NIDA. The big surprise? Even with more states than ever handing out adult-use licenses like hotcakes, teens aren’t exactly raiding the cookie jar. In fact, usage levels among 8th, 10th, and 12th graders are hitting lower marks than they did way back in 2012, the dawn of the legal cannabis era. Rather than fueling an adolescent buying frenzy, ID checks and regulated storefronts seem to be keeping most kids on the sidelines. Even vaping rates held steady this year, while old-fashioned smoking reported a dip—somehow teens are finding better things to do. Delta-8 THC? Barely a blip on the youth radar, according to the expanded questionnaire. For all the doom-and-gloom predictions from certain corners, it looks like the fast-growing legal market isn’t exactly turning America’s youth into the next generation of Cheech & Chong after all.

🗞️ The News

DEA Judge Says Agency Made A Critical ‘Blunder’ In Attempt To Force FDA Officials To Testify At Marijuana Rescheduling Hearings

Ohio adult-use program was only new cannabis market launch in 2024

New York marijuana regulators to ponder ‘limit’ on retail licenses

Out-of-state companies score again, land nearly all Kentucky marijuana dispensary licenses

📺 YouTube

Cannabis and Bitcoin Collide | Trade to Black

What we covered:

✅ On Trade of Black, hosts Shadd Dales and Anthony Varrell will tackle this week’s top stories in the cannabis, crypto, and marijuana reform space. From Bitcoin integration to policy updates, we’ve got you covered.

First up, VP of Strategy Jamie Warm from LEEF Brands, Inc., will join us to talk about the companies decision to adopt Bitcoin as a treasury reserve asset. With a $5 million Bitcoin-backed bond offering and a bold strategy for integrating cryptocurrency, LEEF is setting a precedent for the marijuana movement and cannabis stocks. We’ll discuss how this approach could redefine cannabis finance.

In other news, Pennsylvania lawmakers, spurred by Governor Josh Shapiro, are gearing up for another push to legalize recreational marijuana in 2025. With growing pressure from neighboring states and a focus on justice and equity, will this be the breakthrough year?

Plus latest news involving the ALJ hearings. The NCIA is pressing for clarity on its ability to cross-examine the DEA in rescheduling debates under the Biden administration. Could this impact the cannabis reform agenda?