Front companies being used to launder illicit cannabis cash in Canada, financial intelligence agency says
Dubbed Project Legion, the report is a public-private partnership initiative led by Toronto-Dominion Bank (TD), supported by Canadian law enforcement agencies and FINTRAC. The project aims to “improve the detection of the laundering of proceeds from illicit cannabis.”
“Through the dedicated efforts of Canada’s largest banks, in particular, and the financial transactions they report, FINTRAC is able to harness the power of financial intelligence to help identify and target the criminals and organized crime groups engaged in illicit cannabis activities and other financial crimes,” Sarah Paquet, director and chief executive officer of FINTRAC, said in a statement.
The most frequently observed businesses used in money-laundering operations also included e-commerce businesses in the beauty and wellness industry, the food and beverage wholesale sectors and marketing, advertising and consulting businesses. Email money transfers (EMTs), cheques, bank drafts and cash deposits and withdrawals were the primary methods used to move funds derived from illicit cannabis activities, according to the report.
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Ontario made $520M from pot last year. So why do retailers say they’re struggling?
Part of the provincial cannabis cash is coming from a mark-up of about 31 per cent that the provincial supplier, Ontario Cannabis Stores (OCS), is charging legal retailers.
The province’s pursuit of cannabis profits is also making it tougher for legal retailers to stay in business, he said, because legal buyers are probably paying more than their neighbours who continue to get their supply from the black market.
Sean Kady, who owns a pot dispensary west of downtown Toronto, agrees with Armstrong.
“Our cheapest ounce is about $100 and you can get the same ounce about the same quality from these black markets for about 50 to $70,” said the owner of Cosmic Charlies at the corner of Queen Street West and Niagara Street.
Canada’s July Cannabis Sales Numbers Are Out & They’re Juicy
The province of Manitoba experienced the biggest monthly increase by percentage, jumping 20% to CA$17.1 million in retail sales.
On a dollars basis, the biggest monthly increase was in Ontario, where sales rose CA$6.8 million to CA$159.5 million in July.
Quebec’s cannabis sales grew a disappointing 1% month-over-month to about CA$50 million.
So far this year, roughly CA$2.55 billion worth of recreational cannabis has been sold.
In the remaining provinces, July sales totals and month-over-month sales were:
- Alberta: CA$69.1 million (+3%).
- British Columbia: CA$57.3 million (+6%).
- Manitoba: CA$17.1 million (+20%).
- Nova Scotia: CA$9.1 million (+4.3%).
- New Brunswick: CA$7.2 million (+6.2%).
- Newfoundland and Labrador: CA$5.7 million (+10%).
- Saskatchewan: CA$15.8 million (+1.5%).
- Prince Edward Island: CA$2.1 million (+14%).
By city, Toronto continued to lead the country with CA$54.1 million in sales, up 5% over June.
Montreal was the only city in Canada where sales fell in July: Sales in Quebec’s largest city dropped under 1% to CA$26.8 million.
July cannabis retail sales in selected Canadian cities and monthly sales changes were:
- Edmonton, Alberta: CA$22.8 million (+4.4%).
- Vancouver, British Columbia: CA$18.7 million (Flat).
- Calgary, Alberta: CA$19.5 million (+6.6%).
- Ottawa, Ontario: CA$14.5 million (+4.7%).
- Winnipeg, Manitoba: CA$9.7 million (+18.6%).
- Quebec City: CA$4.7 million (+2.9%).
- Gatineau, Quebec: CA$1.7 million (+4.1%).
The number of pot stores in Alberta reaches a potentially unsustainable high
An analysis of the Canadian retail cannabis market, done earlier this year by data firm Cannabis Benchmarks, concluded that Alberta has too many retail outlets based on comparable data from Colorado and Oregon, two U.S. states that legalized the sale of cannabis in 2012 and 2016 respectively.
Het Shah, who compiled the data, says Colorado has one recreational retailer for every 9,600 residents, while in Oregon there is one store for every 6,150 people.
Alberta has roughly one retail outlet for every 5,911 people. By comparison, the national number is pegged at one store for every 12,184, according to Shah’s research. He says there is room for expansion across the country, just not in Alberta.
“On average, we found that Alberta had roughly 27 per cent more stores than required to serve the population,” he said.
Cannabis Weekly Round-Up: Aurora’s Quarterly Losses Pile Up
Canada’s Aurora Cannabis reported a net loss of C$618.8 million in its latest quarterly report. Meanwhile, the Canadian government officially announced a review of the country’s cannabis program.
Aurora blamed its higher net loss on non-cash impairment charges “triggered by changes in cannabis market conditions, and in the current capital market environment including higher rates of borrowing and lower foreign exchange rates.”
Canada on track to spend $200M per year on medical cannabis for veterans
Ottawa is reimbursing a record number of veterans for medical marijuana, with new figures showing the federal government shelled out more than $150 million in the last fiscal year — more than double the amount just three years ago.
And that is only the beginning as the figures from Veterans Affairs Canada reveal the government is on track to spend nearly $200 million this year as more and more former service members ask the government to pay for their cannabis.
While experts and advocates are uncertain about the reasons for the surge, they agree about the need for more information on the real benefits and potential harms of medical marijuana for veterans — and taxpayers paying for it.
High Tide to Acquire Jimmy’s Cannabis Shop, Adding Two Established Retail Cannabis Stores in British Columbia
Calgary, AB, September 29, 2022 / CNW / − High Tide Inc. (“High Tide” or the “Company”) (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA), a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets, is pleased to announce that it is taking yet another step to expand its bricks-and-mortar retail cannabis operations, by entering into a definitive agreement (the “Acquisition Agreement”) pursuant to which High Tide will acquire 100% of the equity interest of 1171882 B.C. Ltd., operating as Jimmy’s Cannabis Shop BC (“Jimmy’s”), as well as assignments of the vendors’ shareholder loans, resulting in High Tide’s acquisition of two of the five retail cannabis stores currently operated by Jimmy’s in British Columbia (the “Stores”) for $5.3 Million (the “Transaction”). The Stores are located at 1225 Cranbrook Street North, Cranbrook and 1543 Victoria Street, Prince George.
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