MJBiz - March/April 2024 - 16

INDUSTRY DEVELOPMENTS National & International
Cannabis News
Canada Destroyed
3.7 Million Pounds
of Cannabis Since 2018
Canadian operators destroyed
millions of packages of unsold
cannabis products and a record
amount of unpackaged dried
flower in 2022 and the first
half of 2023, largely because of
years of imbalance in supply and
demand, MJBizDaily found.
According to data shared
by Health Canada, the federal
cannabis regulator, 611.7 million
grams (1.3 million pounds) of
unpackaged cannabis was
destroyed by licensed producers
in 2022, an increase of nearly
44% over the 425.3 million grams
destroyed the previous year.
The data suggests that Canada's
regulated cannabis industry
continued to seek supplydemand
equilibrium after licensed
operators produced substantially
more marijuana than what consumers
were willing to purchase.
In 2022, the amount of cannabis
destroyed was equal to about
16% of total production, which
was approximately 3.8 billion
grams. Only partial data was
available for 2023.
In the first six months of 2023,
another 265 million grams of
marijuana were destroyed by
licensees, according to the Health
Canada data.
No data is available for the
second half of 2023, but if a
similar amount was destroyed
between July and December
2023, it could signal that the
industry already has reached its
peak supply-demand imbalance
and started inching closer to
equilibrium.
Canadian companies have
destroyed a staggering amount
16 March-April 2024 | MJBizMagazine
of cannabis since 2018. More
than 1.7 billion grams (3.7 million
pounds) of unsold, unpackaged
dried flower have been
destroyed since Canada became
the first large country to legalize
recreational cannabis sales.
That's equivalent to the weight
of approximately 1,252 Honda
Civics.
In addition to unpackaged
flower, approximately 24 million
packages of cannabis were
destroyed since 2018.
Small Cannabis Businesses
Subject to Reporting Rule
Many U.S. marijuana companies
will need to comply with a new
reporting requirement under
federal law, a cannabis attorney
warns.
The new beneficial ownership
reporting requirements under
the Corporate Transparency Act
likely will apply to " most small
cannabis businesses-(although)
there are certain exemptions, "
explained Rachel Gillette, a partner
with Denver-based law firm
Holland & Hart.
The Corporate Transparency
Act, passed in 2021, targets the
use of anonymous shell companies
to hide business ownership.
It requires certain companies to
file reports disclosing their beneficial
ownership with the Financial
Crimes Enforcement Network
(FinCEN), an agency of the U.S.
Department of the Treasury.
Gillette points out that disclosing
beneficial ownership to
the government will be familiar
to many marijuana companies
" because most state laws for
licensing of cannabis businesses
require the disclosure of beneficial
ownership. "
But the new federal beneficial
ownership reporting requirement
is separate from any state
reporting requirements.
Although the law is already in
effect, most existing cannabis
businesses won't have to report
immediately: Companies formed
before Jan. 1, 2024, have until
Jan. 1, 2025, to file their first
ownership report.
" But, if you form a company
this year, then that's when the
clock starts ticking, " Gillette
said.
Companies registered in 2024
must file within 90 days.
Germany Might Legalize
Marijuana by April
Germany's health minister
believes marijuana legalization
will become a reality in the
country this spring.
Health Minister Karl
Lauterbach set a target for
the Bundestag, the national
parliament, to approve the
nation's long-awaited cannabis
law in February.
Then, in April, Germany would
become the first country to
legalize cannabis in Europe,
according to German news
reports. The latest plan calls for:
* Decriminalization of
cannabis.
* Home cultivation and
possession starting
April 1, 2024.
* " Cultivation clubs " that
would launch potentially
in July.
Regional pilot projects with
commercial supply chains are
not included in the draft law,
severely limiting commercial
opportunities in the envisioned
adult-use industry.
MJBiz - March/April 2024

Table of Contents for the Digital Edition of MJBiz - March/April 2024
