👊🏽 The Fight For Cannabis In Spain

A Catalan high court has ruled that cannabis clubs cannot “promote the consumption, sale or cultivation” of cannabis...

Welcome to Four PM — a daily newsletter that provides cannabis industry news & insights from cannabis industry leaders.


Did you know that according to statista, there are over 250,000,000 cannabis consumers in the world? Better yet, this number grows higher each year.

In Today’s Issue 💬

→ The End Of Spanish Cannabis Clubs?

→ Canopy’s Celebrity Endorsements.

→ The 19th State To Legalize Cannabis.

The Fight To Keep Cannabis Clubs Alive In Spain

Despite operating since 2009, the Spanish High Court is seeking to end cannabis clubs.

Cannabis might not be legal in Spain, however, this hasn't prevented some 500 cannabis clubs from openly operating in the region.

In 2009, the first-ever private cannabis club opened its doors in Barcelona, and in the time since the city has seen a staggering increase in the number of clubs due to the lack of enforcement.

Members of these clubs work together as a “cannabis collective” whereby members grow the required quantity of cannabis on behalf of the club.

Increased Oversight…

In response to the proliferation of these clubs, law markers in the region introduced regulations in 2016 such that they could obtain some level of oversight of these businesses that are estimated to sell over $71,175,000 USD worth of cannabis annually.

Obtaining a membership of said cannabis clubs was restricted to Spanish residents over the age of 21, and a period of two weeks must pass from joining a club to being able to purchase cannabis.

Lastly, cannabis clubs were not allowed to open within a minimum distance – between 100 and 150 meters of schools and children’s playgrounds. 

Legal Loopholes….

How exactly are these stores able to operate in broad daylight you ask?

The answer lies in a ruling from the Catalyn Court whereby they determined “private consumption of cannabis by adults … is part of the exercise of the fundamental right to free personal development and freedom of conscience”.

Unfortunately, this loophole has also attracted organized crime to take with a Chinese gang known as “Bang of Fujian '' using these clubs in Barcelona and other Spanish cities to sell cannabis products.

The End Of Cannabis Clubs?

As a result of this, the Spanish government’s tolerance for these cannabis clubs who collectively have 165,000 members is sharply declining.

Despite having the full support of the city of Barcelona, the future of these cannabis clubs is now very uncertain as the Spanish High Court has ruled that these cannabis clubs can no longer sell cannabis, allow the consumption of cannabis, or promote cannabis in any capacity.

Our Take

It seems very likely that history will repeat itself.

In 2017 Vancouver faced many of the same issues as Barcelona, however, in the end, they decided to operate in direct defiance of the federal governments wishes in favor of regulating these stores.

Canopy’s Celebrity Brand Deals Are Going Sour 📉

Seth Rogen and team joins Drake in leaving Canopy Growth in favor of operating independently.

In 2019 Houseplant — a brand founded by Seth Rogen & Evan Goldberg which they had been working on for 5+ years launched in Canada.

To support the launch of the brand, Houseplant partnered with Canadian cannabis giant Canopy Growth in a deal that provided Canopy with a minority ownership stake in Houseplant.

In return for this minority take, Canopy took on the responsibility of producing all of Houseplants products to supply the Canadian market.

Trouble In Paradise

Many Canadian cannabis consumers were optimistic that Houseplants products would live up to the hype.

That said, as consumers began sharing their feedback online, it became clear that Houseplants products weren’t matching expectations.

As per Jeremy Jones, the CEO of the leading cannabis retail stores in Yukon Canada — “We stopped selling Houseplant. It was mediocre, expensive, the packaging was terrible, and often the exact same cultivar was in Canopy's much cheaper Twd. generic products.”

Flower

In the race to become the biggest cannabis producer in the world, many Canadian cannabis producers focused on expanding their cultivation capacity so that they could “supply the entire market”.

Unfortunately, this approach doesn’t seem to be paying off with less than 20% of the cannabis that Canadian cannabis producers have produced to date having being purchased.

Larger producers are now facing intense competition from smaller craft cannabis producers in Canada whose ability to focus quality as opposed to quantity has allowed them to produce much higher quality dried cannabis flower — as is to be expected.

Beverages

The silver lining for Canopy is that their investments in cannabis beverages appear to be paying off, with more than one million cans of Houseplant beverages sold in Canada in 2020.

The problem is that dried flower accounts for upwards of 70% of all cannabis products that are currently being purchased in Canada, and consumers don’t hold the flower Canopy was producing for Houseplant in very high regard.

Going Independent

Houseplant recently expanded into the U.S, and seemingly with great success as is evident by the positive consumer feedback being shared online.

"The recent launch of Houseplant in the United States has given us a clear benchmark for what Houseplant stands for, and how we plan to bring the brand to life globally," Michael Mohr, co-Founder, and CEO of Houseplant.

Following its success in the U.S, Houseplant made the decision to terminate its relationship with Canopy Growth in favor of sailing its own ship.

What’s Next?

We await confirmation as to what’s next for Houseplant in Canada, however, they will certainly be facing an uphill battle to regain consumer’s trust.

In the meantime, consumers will still be able to purchase Houseplants products until the end of September — at which point consumers can expect to see some big changes.

Our Take

A celebrity endorsement may be enough for a consumer to try out a product, however, if the quality of said product doesn’t match consumer’s expectations then they won’t be in any rush to purchase this product again.

If Houseplant has ambitions of establishing itself as a brand held in the same league as say, Cookies — then this separation was long overdue.

Is Ohio On Track To Legalize Adult-Use Cannabis?

Law markers in Ohio have officially filed a cannabis legalization bill for adult-use purposes.

Cannabis is currently legal for medical purposes in 37 States, in addition to being legal for adult-use purposes in 18 States.

Earlier today, lawmakers in Ohio introduced a bill to legalize cannabis possession, production, and sales for adult-use purposes.

Leading The Charge…

Two Democrats; Casey Weinstein and Terrence Upchurch — both members of the Ohio House of Representatives filed the legislation.

Should this bill receive sufficient support, adults in Ohio could legally possess up to five ounces of cannabis, in addition to allowing Ohioans to cultivate 12 plants for personal use.

A 10% excise tax would be imposed on cannabis sales, with this revenue being used to cover the cost of the implementation of this new program.

This bill also includes provisions to expunge prior convictions for the possession and cultivation of cannabis.

“It’s time to lead Ohio forward”

“This is a big step for criminal justice reform, for our veterans, for economic opportunity, and for our individual liberties.” — Casey Weinstein.

Who’s In Charge…

The Ohio Department of Commerce would be responsible for overseeing this new program, in addition to issuing licenses.

Individual municipalities in Ohio will be given the choice if they would like to permit cannabis retail stores to open within their boundaries.

The Challenges…

Ohio currently has a Republican governor Mike DeWine who remains opposed to legalizing cannabis for adult-use purposes.

“It would really be a mistake for Ohio, by legislation, to say that marijuana for adults is just ok," DeWine said.

In spite of his disapproval of cannabis, 22 jurisdictions in Ohio have already reduced the penalty for low-level cannabis possession from a misdemeanor punishable by jail time and a fine to the “lowest penalty allowed by state law.”

Our Take

With cannabis already being legal for adult-use purposes in both Illinois and Michigan — direct neighbors of Ohio, law markers in the region will continue to face pressure until they follow suit.

There remains a high chance that Gov. Mike DeWine blocks this bill given his previous comments on cannabis, however, on November 8, 2022 Ohioans will then be given the opportunity to vote DeWine out of office.

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