What I saw in 2023 and what I expect for 2024

So, you came for some insights…well, I’m happy to share some with you.

First, I want to re-cap the year that was; I had the good fortune of hitting up lots of events and had many conversations with cannabis folks around the world. I am always amazed by how good I feel whenever I come home to a federally regulated market. We really do have so much to be grateful for, yet we spend most of our time here in Canada complaining about the current system...sure it’s far from perfect but so much better then nearly everywhere else. I always enjoy bringing Canadians with me to attend international events and then afterward listening to them speak about how much better they feel after seeing things from a global perspective. And I love seeing those who return again, year after year to continue building their international strategy. I’ve always said that an international strategy is not a ‘one and done’ thing but a multi-year plan. Initially you have to “plant” some seeds (no pun intended), then when you return you “water”, and then return again with some “sunshine”. In that time you will see these relationships grow. And just as importantly, you will get to know who you want to work with (or don’t), plus get a REAL sense of what is going on in that market, not just by reading about it from at a distance.

In 2023 I really enjoyed my time in Spain and Germany for Spannabis and ICBC, I found a lot of things there but one that stuck out the most for me is just how many new markets are coming into the industry with many of them having great support from their respective governments. It was refreshing to see and I’m hopeful we will see more of that from Canada. Those two shows were quite different, since they were both in markets that were growing at different speeds and in different directions, but still moving forward. I also had the pleasure of checking out a U.S. market when I went to Los Angeles. It was a very eye-opening experience for many reasons, and it didn’t disappoint. From a consumer perspective I see how great it is with the selection of product, but also I can see how tough it is for a business out there to generate profits. It is a good example of “be careful what you wish for”…for instance, in Canada we constantly complain about the lack of marketing that companies can do and the problem with “plain-packaging”…well in LA I saw some of the most beautiful branding and eye-catching packages, but the problem is when you walk into a store and see all these beautifully colourful packages it’s overwhelming and you end up asking the retail staff what they recommend (which is the same problem we have here). I’m not suggesting that allowing for better ways to distinguish brands is unnecessary, but it should be more than just cool logos and colours. One thing that I loved about the market in California is how open they are with consumption spaces and selling cannabis at events. Hoping to see that here in the near future.

Speaking of here in Canada, we now have nearly 4,000 stores, or about one store for every 10,000 people (which is not too bad), and with that type of convenience, mixed with improvement in product quality and selection, plus prices coming down, it takes the industry one step closer to not needing the illicit market, which I always said was the only way to get rid of it - not thru policing (because that never works). As well, in Canada more then 70% of the total value of cannabis consumed was from legal sources as opposed to 22% when legalization was first implemented. Some of us got a bit overexcited when Justin Trudeau seemed to turn his attention to helping the industry flourish and asked on March16th - “What do we do then to make sure that this is a beneficial industry?“ No matter how many ideas people gave him, it doesn’t seem like he’s figured it out yet ??

So those are some of the things I saw last year, and here are certain things that I am excited about for the future:

• Regulatory changes in Canada – Yes the cannabis act review is going slow but it’s anticipated to result in improvements, leading to a brighter future for the industry. I’m hopeful for changes like an increase to maximum amount of THC in a package for edibles which would save so much packaging waste with an added bonus would be bringing more consumers from the illicit market.
• Minor cannabinoids – This is one of the most exciting things that have been happening in cannabis in a while. My mom is taking a CBN gummy to help her sleep and it nearly brings a tear to my eye when I hear her tell people how much it helps her.
• International movement gaining momentum - I have been traveling to countries around the world to talk about cannabis since 2017 and here are a few countries that I’m keeping on eye on for 2024:

o Switzerland with their pilot project, which saw the first cannabis sales happen at years end. This program allows for Cannabis trials with the most recent one approved having sales in dedicated retail stores as opposed to just pharmacies/clubs.

o Germany has gone back and fourth with their regulations with new ones coming out soon that will move their industry forward (even if slower than many hoped). The regulations are expected to be announced in April outlining how they intend to make cannabis possession and cultivation for personal use legal: right around ICBC Berlin (perfect timing).

o Netherlands had a few cities be the first to take part in trials there that has LEGAL cannabis sold inside their coffee shops for the first time ever! (contrary to common misconceptions).

o Malta launched their cannabis club program (they're calling them Cannabis Harm Reduction Associations) and have now handed out 5 licenses for such groups which will create cannabis access similar to the clubs in Spain.

o U.K continued support for medical cannabis and although the government currently doesn't release stats on the program we do know that as of this past September - the UK had imported almost 24,000 Kg of cannabis (in base drug form) which is more than triple the 7,762 Kg of cannabis that was imported in 2022. Patient #'s are estimated to be around 30,000 and the total industry is believed to be worth ￡143 million a year

o France has approved a bill in October which is set to see medical cannabis brought into the country’s general medical framework and the government has committed ￡10 million which will allow patients to continue accessing their cannabis and be reimbursed during the transition from the "medical cannabis experiment" that started in 2021.

o Ukraine passed many hurdles after President Zelensky said in June he supported legalization of medical cannabis and it seems to be heading to his desk for signature early in the new year. With all the benefits of cannabis for PTSD and war veterans this seems like a natural fit and couldn’t come soon enough.

o Australia is continuing to do things to be proud including lots of imports/exports and expectations that their medical cannabis industry will surpass Canada’s soon with estimates of over 300,000 patients currently. As well they introduced a bill to legalize cannabis beyond just medical.

Plus, many other new markets are coming online and moving the industry forward…slowly…except in some places like Thailand which is going backward by rushing out of the gate and then shutting everything down (as many expected) and Japan which had a good news/bad news scenario when they passed a bill to legalize medical cannabis products but also made possession (without medical purpose) and any cultivation of it as grounds for 7 years in jail.

• Closer to home the United States is making big moves (finally) – with estimates that cannabis added $100 billion to the economy ($3 billion in taxes collected in 2022 alone), recreational cannabis being legal in 21 states (37 medical) and 88% of adults supporting legalization there is a lot to be proud of. This is all just the beginning with the DEA confirming that they are conducting a review into reclassification of cannabis (ordered by Joe Biden) but don't be surprised if this potential federal legalization comes with an excise tax.
• Last thought I wanted to share is there are finally some publicly traded companies that are profitable and not kept alive by investor $$ (although they aren’t worth very much in terms of market cap). I’m not going to mention which ones because I don’t want to be seen as giving out investment advice and then I will have to include a disclaimer ?? This is something that investors have been waiting for and once the stink of previous failed companies subsides we should see some investment pouring back in again.

So that’s the recap of my year and a summary of what I am looking forward to in 2024. A special thank you to all my friends and peers in the cannabis industry! Thanks to all of those that answered my calls, replied to my emails/texts and chatted with me while we were out and about at various events either in Canada or internationally. You helped shape my optimism and strategy, while building my network of great people around the world. Feel free to reach out to me with any comments and look forward to connecting with you all in the future.