Welcome to Four PM — a newsletter that provides the top cannabis industry news from Canada to California.
In Today’s Issue 💬
→ WADA vs Pro Athletes. 🌿
→ The Problem For Plus. 💰
→ Red Flags For Delta 8. ❌
Can Professional Athletes Consume Cannabis?
The World Anti-Doping Agency may change its stance on cannabis…
In July 2021 Sha’Carri Richardson tested positive for cannabis — just weeks before she was expected to compete for gold in the Olympics.
As a result of her decision to consume cannabis weeks before the competition, the World Anti-Doping Agency issued Richardson with a ban which prevented her from competing in the Olympics.
This ban sparked significant backlash, however, despite the outpouring of support for Richardson, WADA maintained its stance on cannabis.
Cannabis in sport…
Almost every major sports league in the world has changed its policy when it comes to cannabis:
→ The NHL (hockey) stopped banning players for cannabis in 2019.
→ The MLB (baseball) stopped banning players for cannabis in 2019.
→ The NBA (basketball) stopped banning players for cannabis in 2020.
→ The NFL (football) stopped banning players for cannabis in 2020.
→ The UFC (martial arts) stopped banning players for cannabis in 2021.
Every major sports league in the world is quickly coming around to allowing adults to consume cannabis.
Albeit in certain cases players are prevented from consuming cannabis during the day of competitions.
Next on this list…
WADA has announced they will conduct a “scientific review of cannabis next year to determine whether they will continue to impose an international ban on consuming cannabis.
The organization’s executive committee on Tuesday said it had “accepted a recommendation” from a drug list advisory board to reexamine the science.
Should they conclude cannabis does not need to be on this list — athletes competing at the 2024 Olympic games could then consume cannabis.
For now, they added cannabis will remain prohibited throughout 2022 while the review is being completed.
The rate of change currently occurring in favor of allowing people to consume cannabis is happening in record-breaking time.
Granted, these regulations should have been updated many years ago such that every athlete could decide for themselves whether or not to consume cannabis, just as they have the same choice to consume caffeine or booze.
The Problem For Plus Products
Founded in 2015, Plus Products has filed for creditor protection in Canada…
Plus products might produce some of the sought after edibles in North America, however, the company founded less than 6 years ago has announced they are filing for creditor protection.
Having lost $8.3 million USD in 2020 & $24.8 million in 2019 the company once valued at close to $200 million is now valued at less than $20 million.
The harsh reality….
California may be the most mature cannabis market in the world, however, there are several issues making life incredibly difficult for cannabis companies operating in the region.
→ Companies are being over-taxed.
→ A majority of towns in California don’t allow cannabis retail stores.
The sum of these issues results in consumers purchasing products from non-legal sources.
“The slow rollout of legal dispensary licenses in California, and the structure of the California market have made it difficult for independent brands to remain competitive in this state.” Jake Heimark — Plus CEO.
What’s next for Plus?
Plus currently has $13.78 million of debt on its balance sheet.
Despite racking up losses in the millions in 2018, 2019 & 2020 — Plus was well on its way to achieving profitability, and even in light of today’s news, the company still has a number of ways out.
To resolve this issue, Plus could seek to convert the debt it owes its creditors into equity, which would dilute existing shareholders.
They could sell assets they own, however, the value of its assets are worth just over $2 million USD.
Plus products are likely the canary in the coal mine for cannabis companies in California today.
It’s very unfortunate that Plus finds itself in this position today, however, it provides a valuable lesson that cannabis companies cannot sustain substantial losses without consequences.
The FDA Calls Out Delta 8 THC
Delta 8 has become a big talking point as the FDA joins the conversation…
“Delta 8 THC has serious health concerns”
This is the title of a recent announcement the food and drug administration (FDA) made.
The primary active ingredient responsible for producing the effects consumers seek out from consuming cannabis is delta 9 THC.
The problem, however, is that delta 9 THC is only available in 18 States for adult-use purposes.
Without the means to add delta 9 THC to their products, many businesses began adding delta 8 THC into their products instead.
What is delta 8 THC?
Delta 8 THC is an isomer of the naturally occurring delta 9 THC found in cannabis which means these molecules have identical molecular formulas, and consequently, they produce similar effects.
Delta 8 THC can occur naturally, however, it's found in such small quantities that many brands are instead opting for a synthesized version.
The most common method of producing delta 8 THC is to convert CBD to delta 8 THC, however, unlike CBD which is non-impairing — delta 8 THC produces very similar effects to delta 9 THC.
Why is the FDA concerned?
The problem with delta 8 THC is that it’s not a controlled substance in the U.S.
This hasn’t prevented the FDA from gathering data to understand the risks associated with delta 8 THC.
The following is the data they have shared:
→ The National poison control centers received 661 “exposure cases” of delta-8 THC products between 2018 & 2021.
→ 90% of these cases occurred between January 2021 and July 2021.
→ 41% of the 661 cases involved unintentional exposure to delta 8 THC.
→ 77% of unintentional exposure cases affected people aged under 18.
→ 18% of the 661 cases resulted in hospitalizations.
Until such a point as new laws are passed that could outlaw delta 8 THC at a federal level, there is limited action the FDA can take.
Per its announcement:
“The FDA is actively working with federal and state partners to further address the concerns related to these products and monitoring the market for product complaints, adverse events, and other emerging cannabis-derived products of potential concern.”
“The FDA will warn consumers about public health and safety issues and take action, when necessary, when FDA-regulated products violate the law.”
Should they outlaw the sale of products containing delta 8 THC, it’s likely brands would simply seek out another variation of delta 9 THC such that they can continue to sell products that emulate the effects cannabis products produce.
Where there is demand there will always be supply, and unless there is a safe supply available then consumers will choose the next best alternative.
It was only ever a matter of time until the FDA took a more active role in this conversation.
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