Cannabis is still federally illegal in the US, and currently marijuana companies are not able to access stimulus funds in the country.
The cannabis industry continued to feel pressure from COVID-19 this week, with companies in the US and Canada beginning to parse out whether they will be able to access government benefits.
Meanwhile, Ontario reversed a decision made last week, allowing brick-and-mortar cannabis stores to reopen even as the province takes more drastic action to stop the spread of the coronavirus.
Read on for a closer look at some of the biggest cannabis news over the last five days.
US cannabis companies shut out of stimulus plans
Diverse sectors across the world are being affected by the coronavirus, but as government stimulus packages begin to roll out, many companies have been able to breathe sighs of relief.
Those in the cannabis space, however, are not necessarily getting that luxury.
The drug is still federally illegal in the US, and reports hit this week that even marijuana firms that are operating legally at the state level will not be able to get in on the country’s US$2 trillion stimulus effort.
According to MJBiz Daily, industry participants are unhappy with the news for a number of reasons. A key point is that cannabis businesses have been deemed essential in many states, allowing them to keep operating during COVID-19 shutdowns — this has raised the question of why they can’t get help.
“We think it’s inappropriate for the government not to include a business they now deem as essential,” Codie Sanchez, managing director of private equity firm Entourage Effect Capital, told the news outlet.
The situation in Canada is brighter. Although cannabis companies in the country originally thought they would be unable to tap funds made available through the Business Development Bank of Canada (BDC) and Export Development Canada, new information indicates that they should be able to do so.
Speaking to the Canadian Press this week, Michael Denham, president and CEO of the BDC, said that marijuana firms will be able to access the C$40 billion in funds being provided.
“Any legal business is eligible to be part of the program — that was what I think some industry groups were concerned about,” he said.
Denham’s statement comes after over 70 cannabis companies wrote and signed a letter to Canada’s finance and industry ministers, asking for access to wage subsidies being offered to small businesses.
Ontario cannabis stores back in action
While it’s clear the cannabis industry is facing a variety of issues due to COVID-19, brick-and-mortar stores are dealing with perhaps the most obvious obstacles due to the wide array of measures that different areas are taking to prevent the disease from spreading.
Ontario is one area where stores have faced a challenging and quickly changing landscape. While stores selling the drug were initially designated as essential businesses after a state of emergency was put in place, last week Ontario reversed course when it reevaluated its list of necessary workplaces.
The province ordered brick-and-mortar marijuana stores to shut their doors by April 4 at 11:59 p.m. EDT, although sales were still allowed via the government-run Ontario Cannabis Store.
However, store closures didn’t last long — by April 7, Ontario had changed its mind once again, this time passing an emergency order to allow stores to operate using a phone and online order system.
According to the Alcohol and Gaming Commission of Ontario (AGCO), buyers will be able to use curbside pickup at stores, or can opt to have their purchases delivered to them. Stores can only provide delivery if their employees are trained via CannSell, a regulated AGCO program.
The emergency order will last for 14 days, but could be extended if needed. According to the AGCO, the move to allow stores to operate came partially to prevent black market sellers from gaining traction.
Charlotte Figi passes away after illness
Charlotte Figi, whose story is widely credited for changing public perception of cannabidiol (CBD), passed away at the age of 13 this week.
Figi had Dravet syndrome, a catastrophic form of early childhood epilepsy, and at just a few months old suffered from hundreds of seizures each day. When traditional medications failed to improve her condition, her parents sought alternatives and ultimately ended up partnering with the Stanley brothers, who are Colorado marijuana growers.
Together they worked on a strain of cannabis that was low in THC and high in CBD; the former is the psychoactive component of cannabis, while the latter is its non-psychoactive component.
Figi’s parents were able to use the new strain, called Charlotte’s Web, to treat her seizures and drastically improve her quality of life. This success spurred efforts to make CBD more widely available medically.
According to a Facebook post written by her mother, Figi was treated as a likely COVID-19 case, although she previously tested negative for the disease.
Cannabis company news
Here’s a quick look at a few pieces of cannabis company news from this past week.
- GW Pharmaceuticals (NASDAQ:GWPH) announced that the US Drug Enforcement Administration has confirmed that Epidiolex is no longer subject to the Controlled Substances Act. Epidiolex was approved by the US Food and Drug Administration to treat seizures caused by Lennox-Gastaut syndrome and Dravet syndrome in 2018; it is currently the only CBD medicine approved by the government body.
- Organigram Holdings (TSX:OGI,NASDAQ:OGI) temporarily laid off about 400 employees as a result of COVID-19; that equates to about 45 percent of its workforce. In a note, Raymond James said it expects the company to reduce its overall cultivation and shift toward its established inventories. The firm also sees Organigram leaning on its Cannabis 2.0 products.
- Trulieve Cannabis (CSE:TRUL,OTCQX:TCNNF) released its financial results for the three and 12 months ended December 31, 2019. It achieved record revenue of US$79.7 million in Q4 and US$252.8 million for the full year. The company also announced a new flower product line with the Bellamy Brothers this week. It has two initial strains.
- Zelira Therapeutics (ASX:ZLD,OTCQB:ZLDAF) received the final clinical report for its Phase 1a/2b medicinal cannabis trial for insomnia. According to the company, its drug works for people who suffer from insomnia, and it will be able to launch a product to sell globally starting in the second half of the year. It expects to achieve revenues soon after that.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.