(AP) Colorado Springs — As Colorado becomes the second state to legalize psychedelic therapy this week, a clash is playing out in Colorado Springs, where conservative leaders are restricting the treatment over objections from some of the city’s 90,000 veterans, who’ve become flagbearers for psychedelic therapy to treat post-traumatic stress disorder.
Colorado residents voted to legalize the therapeutic use of psilocybin, the chemical compound found in psychedelic mushrooms, in a 2022 ballot measure, launching two years of rulemaking before it could be used to treat conditions such as depression and PTSD.
This week, companies and people will be able to apply for licenses to administer the mind-altering drug, though treatment will likely not be available for some months as applications are processed.
Colorado joined Oregon in legalizing psilocybin therapy, though the drug remains illegal in most other states and federally. Over the last year, a growing number of Oregon cities have voted to ban psilocybin. While Colorado metros cannot ban the treatment under state law, several conservative cities have worked to preemptively restrict what are known as “healing centers.”
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At a City Council meeting in Colorado Springs this month, members were set to vote on extending the state prohibition on healing centers from 1,000 feet (305 meters) to 1 mile (1.6 kilometers) from certain locations, such as schools. From the lectern, veterans implored them not to.
“We have an opportunity to support veterans, and it’s a really easy one to say ‘Yes’ to,” said Lane Belone, a special forces veteran who said he’s benefited from his own psychedelic experiences. Belone argued that the restrictions effectively limit the number of centers and would mean longer waiting lists for the treatment.
Veterans have pulled in some conservative support for psychedelic therapy — managing to set it apart from other politically charged drug policies such as legalizing marijuana.
That distinction was made clear by Councilmember David Leinweber, who said at the council meeting both that marijuana is “literally killing our kids” and that he supported greater access to psilocybin therapy.
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Psilocybin is far more restricted in Colorado than marijuana, which the state legalized in 2014. Psilocybin is decriminalized but there won’t be recreational dispensaries for the substance, which will be largely confined to licensed businesses and therapy sessions with licensed facilitators.
Patients will have to go through a risk assessment, preliminary meetings, then follow-up sessions and remain with a facilitator while under the drug’s influence. The psilocybin will also be tested, and the companies that grow them regulated by a state agency.
Still, allowing broader access to the treatment hasn’t been easy for most of the city councilmembers, including three who are veterans. Colorado Springs is home to several military installations, including the U.S. Air Force Academy, and local leaders have touted it as an ideal community for retired service members.
“I will never sit up here and criticize a veteran for wanting to find a medical treatment to fix or to help with the issues that they carry,” said Council President Randy Helms, a veteran himself.
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Still, he continued, “Do I think that it’s helpful to not just veterans but to individuals? Probably so. Do I think it still needs to be tested under strict requirements? Yes.”
The Colorado Springs City Council passed the proposed restrictions.
While research has shown promise for psychedelic drugs such as psilocybin and MDMA, also known as molly, in helping people with conditions such as alcoholism, depression and PTSD, the scientific field remains in its relatively early stages.
“I’m very positive about the potential value, but I’m very concerned that we’ve gotten too far ahead of our skis,” said Jeffrey Lieberman, a professor of psychiatry at Columbia University, who’s been involved in studies of psychedelic drugs’ therapeutic efficacy.
The risks, said Lieberman, include customers being misled and paying out of pocket for expensive treatments. He also said there are cases where the drugs can exacerbate some extreme mental health conditions, such as schizophrenia.
In Oregon, where the treatments started in June 2023, costs can reach $2,000 for one session. Of the over 16,000 doses administered in the state, staff have only called 911 or taken a patient to the hospital five times.
Other Colorado Springs city councilmembers raised concerns that the Food and Drug Administration has not approved psilocybin to treat mental health conditions and, in August, rejected the psychedelic MDMA to treat PTSD. A number of clinical trials are still underway for both drugs.
Some researchers, advocacy groups and veterans worry that waiting on slow-moving bureaucracy — namely the FDA — carries its own risks as people continue to struggle with mental illnesses. Advocates argue that psychedelic therapy offers an option to those for whom talk therapy alone and antidepressants have not helped.
“This is a crisis that we are in, and this is a tool that we can add to our toolbox,” said Taylor West, executive director of the Healing Advocacy Fund, which advocates for psychedelic therapy.
Belone said he’s carried his military experience long after leaving the special forces. It started when he first heard artillery sirens wailing in a U.S. base in Iraq, his breath catching with fear for a few thudding moments.
That fear kept him on edge when he returned stateside and found himself always keeping his back to the wall, looking for exits to the room he was in, never quite able to give himself fully to the music at a concert.
A psychedelic experience with psilocybin, said Belone, helped him connect the fear that attached to him in the war zone to the ceaseless anxiety at home. It didn’t solve everything overnight, he said, but it allowed him to better identify when that humming fear was getting in the way of a joyful life.
Meanwhile, the export market into and through Germany is heating up, while Aurora and Tilray/Aphria operate two of the country’s three production facilities. Mother Labs also announced a plan to bring branded cannabis genetics to the German market.
The move, expected to begin in September, comes as several other provincial distributors have made similar moves to handle a growing number of products in limited storage space at central distribution warehouses and slowing market growth as demand seems to be reaching a saturation point.
To address this, provincial distributors, like the OCS, LDB, AGLC, and MBLL, have been paring down their offerings and shortening the time they give products to grab consumer interest.
In December, the AGCOissued a Notice of Proposal to suspend the Cannabis Retail Store Authorization for Montrose Cannabis in Pickering, Ontario, following inspections that revealed significant breaches of the Cannabis Licence Act, 2018 (CLA) and its regulations.
The Victoria Cannabis Buyers Club, an unlicensed medical cannabis dispensary that has been operating in Victoria since the 1990s, was issued a $3.2 million fine from the province.
New laws in the United States are making it possible to include THC in beverages, offering what some see as a potential alcohol alternative. While this development is being met with optimism by some, others believe its benefits may vary.
Policies enabling the sale of THC-infused drinks are becoming more common, often placing them in venues that sell alcohol. Minnesota, for instance, passed legislation last year permitting the sale of THC beverages in liquor establishments, and these products have since started appearing across the country.
The 2018 Farm Bill included a loophole that lifted federal prohibitions on hemp-derived products with trace amounts of delta-9 THC. Since 2019, Texas has been licensing establishments to sell hemp products, including liquor stores and bars.
Connecticut implemented a law that confines the sale of THC drinks to licensed dispensaries and liquor stores. Meanwhile, in states without explicit regulations, retailers like Total Wine and More have begun selling these beverages in regions where they are not specifically prohibited.
The popularity of alcohol alternatives has been growing steadily. Yet, whether THC drinks will gain acceptance as a lasting replacement for alcohol or remain a novelty remains uncertain.
Meenakshi Subbaraman, a researcher at UC Berkeley’s Public Health Institute, has studied the possibility that marijuana could aid those who suffer from alcoholism in cutting back on their use. According to her research, marijuana satisfies the majority of requirements for a suitable alternative. However, substituting THC beverages for alcohol’s social component presents a special difficulty.
Subbaraman points out that people who successfully switch from alcohol to marijuana often do so for specific reasons, such as managing pain, improving sleep, or reducing alcohol intake intentionally.
THC beverages often take longer to produce noticeable effects, sometimes exceeding an hour, unlike alcohol. Manufacturers are investing in nanoemulsion technology to shorten this time.
Marijuana and alcohol share similar risks, including impaired driving. As more cities allow marijuana consumption lounges, managing intoxicated driving may become a significant issue. For instance, The Artist Tree, a California-based dispensary with two lounges, trains staff to recognize intoxication, cut off customers if necessary, and even help them arrange transportation. Despite these efforts, marijuana lounges face stricter regulations and higher taxes compared to businesses selling hemp-based THC drinks.
Another obstacle is price. A six-pack of THC beverages starts at around $30, making them less accessible for casual or frequent occasions, such as tailgating events. It is now up to marijuana players like Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) to assess the long term market prospects of THC drinks and if they find it a viable line, find innovative ways to bring down the current price of these products.
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The past couple of years have been rough on America’s state-level cannabis industry. Cannabis businesses enjoyed healthy demand during the COVID-19 pandemic, particularly in states where cannabis was deemed an essential product, but the industry has been plagued with market oversaturation, low prices, and increasing black market competition in the years since.
Investors have been especially wary of putting their funds into the industry, even with a Democratic president at the helm, and could be even more unwilling to invest in the sector under a second Trump presidency. The period of post-pandemic purchasing that was characterized by unusually high demand has run its course and demand has become easier to predict as customers go back to pre-pandemic purchase behavior.
Input costs will undoubtedly impact the segment in 2025. After being forced to dig deeper into their pockets to deal with higher input costs, many cannabis firms have increased efficiency and leveraged delivery services such as curbside pickups that led to higher revenues per employee. Many firms have also found various ways to cut their costs to adapt to a 10-month cash-flow period designed to deal with the sector’s history of delinquent payments.
Price compression will also increase the need for higher efficiency and fiscal discipline in 2025 and beyond. Cannabis prices will normalize as more states regulate marijuana programs until they eventually converge, making efficiency and fiscal discipline even more crucial. Cannabis players who learn how to do ‘more with less’ are the ones who will come out on top.
Marijuana firms may finally have access to low-cost capital in 2025. Several consecutive benchmark interest rate hikes by the U.S. Federal Reserve left marijuana operators dealing with significantly higher capital costs and many of them struggled to attract the capital they needed to maintain their operations and grow. High rates of up to 30% were common for those operators that chose to use debt financing.
The result was poor growth in new markets that tried to prop up small businesses with limited capital access as well as delayed cannabis businesses and store openings. Fewer open stores limited the number of customers engaging with regulated cannabis markets and reduced the overall revenue businesses and states could have generated from cannabis sales.
With interest rates projected to fall through 2024 and 2025, cannabis operators could finally access low-interest debt to further their business objectives. Low interest rates will also benefit businesses by reducing rates on credit cards and making it cheaper for consumers to buy products on credit.
Established firms like Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) may already have their own plans for navigating any regulatory or market conditions that emerge as the new year unfolds. Those strategies will then be tweaked to accommodate the specifics of any situation that arises.
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Areca catechu is a plant belonging to the Arecaceae or Palmae family and its nuts are widely consumed in Asia thanks to their stimulant and psychoactive properties. It is commonly known with several names, depending on the country of consumption. Among these are chikni supari (Hindi and Bengali), Kamuku (Malayalam), Pukkumamaram (Tamil), areca nut, and betel nut (English).[1]
Psychoactive substances from North and South America (e.g. coca leaf, marijuana, tobacco…) are generally more popular in Western Society than the ones from Asia. Apart from Asian poppies, there is little to no knowledge of psychoactive substances coming from more eastern countries. [2] It is even more impressive if the fact that 10% of the world’s total population consumes areca nuts, making it the fourth most widely used drug after nicotine, , and caffeine. [3], [4]
The use of betel nut chewing has been widespread and is highly valued for its psychoactive properties. Furthermore, Areca catechu holds an important place in medicinal systems such as Ayurveda, Traditional Chinese Medicine, Homeopathy, and Unani [5]. Although it has many beneficial effects, in particular on the gastrointestinal apparatus, this substance has shown several drawbacks and governments have tried to take measures to reduce its consumption. Among these, Areca catechu, which is usually chewed in the form of gum, facilitates the development of oral cancer. [3]
Botany and phytochemistry
Areca catechu is an approximately 15-20 meters-high megaphanerophyte belonging to the family of Arecaceae. The plants’ solitary stems are erect, 10-20 cm in diameter, “woody” and gray with conspicuous nodes. The leaves are generally 8-12 in number and are on the top of the stem, they are binate and light green to green in color. Areca catechu is hermaphrodite and staminate and pistillate yellow flowers are clustered within the same inflorescence. The fruit is a fibrous, ovoid drupe, 5–10×3–5 cm in dimensions, with the color ranging from yellow to orange and turning to red when ripe. [1], [5], [6]
A. catechu is a native species of South and Southeast Asia and it is cultivated in many of this region’s countries. It needs loamy soils and it is usually cultivated in the plains, hill slopes, and low-lying valleys. The plant is mainly exported from Sri Lanka, Penang, Singapore, and Madras in large quantities [5].
More than 59 compounds have been isolated and identified from this plant. These chemical constituents are distributed in different parts of the plant and are distributed into alkaloids, fats, polyphenols, and starch. [5], [6] However, pyridine-like alkaloids and condensed tannins have been identified as the characteristic constituents of this plant.
In particular, it has been reported that A. catechu is the only species belonging to the Arecaceae family that presents alkaloids. In particular A. catechu’s most abundant alkaloid is arecoline (7.5 mg/g weight), a volatile and colorless compound resembling to nicotine for both structure and biochemical activity, followed by arecaidine (1.5 mg/g weight), guvacine (2.9 mg/g weight), and guvacoline (2.0 mg/g weight). Among polyphenols, both flavonoids (e.g. isorhamnetin, chrysoeriol, luteolin, and quercetin) and tannins (mainly catechin and epicatechin) are found. [1], [5], [6] catechu extract is generally obtained using polar organic solvents, but the result is a mixture of different compounds.
However, many studies have been made to separate arecoline from the polyphenol extract and the total polyphenol content (TPC): arecoline is an important parameter to evaluate the safety of the extract. Indeed, while polyphenols are considered value-added compounds for their many beneficial biochemical activities, there is increasing literature on arecoline’s carcinogenicity. Hence, it has been found that acetone results in a maximum extraction of polyphenols and also in a minimum yield of arecoline, showing a maximum ratio of TPC: arecoline. On the other hand, arecoline’s maximum yield is obtained with water and alcohol. To increase the ratio TPC: arecoline innovative techniques such as ultrasound-assisted extraction (UAE) are used, selecting the based on polyphenols’ solubility. [7], [8].
Traditional medicinal and recreational uses
The first record about betel nut use is a Ceylonese document dated back to 504 BC in which there is a story of a princess rewarding her nurse with a present of betel nut chew. A. catechu is frequently referred to in the Sanskrit ayurvedic medicinal tradition and later also in Hindu and Buddhist writings. [2]
In the actual ayurvedic therapeutic system, A. catechu is considered:
a nervine tonic,
a cardiotonic,
an antiparasitic,
wound-healer,
good for many gastrointestinal diseases. [5]
It is also widely used for oral care as a toothpaste ingredient since it is believed to strengthen teeth, increase salivation, eliminate bad breath, improve taste, and is used as a mouth freshener. With the expansion of Buddhist practice, the use of betel nut spread out in southern Tibet and in southern China, where Traditional Chinese Medicine (TCM) monographs report the use of this plant already 1700 years ago. [2], [5], [6]
Furthermore, since 1953 the areca nut has been listed in the Pharmacopeia of the People’s Republic of China. The seed is the part of the plant most commonly used as a medicine. They can be processed (generally carbonized by stir-frying) or raw when administered as a decoction, an , or a powder.
Currently, TCM uses the areca nut for the treatment of various gastrointestinal diseases (including abdominal distension, dyspepsia, dysentery, and constipation), parasitic diseases, and edematous disease. [6] During the Middle Ages betel nut was also popular in Arabic countries and in the 10th century Avicenna used it as a medicine. However, its diffusion was hampered by Islamic traditional prohibition against alcohol and other central stimulants. [2]
Besides medicinal uses, betel nut’s popularity is due to its psychoactive effects. Indeed, chewing the so-called “betel quid” reduces tension, produces a sense of well-being, and provides a means of social interaction and ritual.
Despite some variations, betel nut preparations (the chew, the quid) consist of three major ingredients: the nut of the palm tree Areca catechu, quicklime, usually in the form of burnt shell or coral, and the psychoactive leaf of certain plants such as Mitrogyna speciosa, Myristica fragrans, Piper methysticum and Piper betle. Even though largely unknown to the West until recently, it has been estimated that betel nut “chewers” might be around 200-400 million. [2], [9]
Biochemical activity and neurological effects
Areca nut biochemical activity is mainly related to the presence of the alkaloid arecoline and its derivatives. However, both Areca catechu and the other plants constituting betel quid contain compounds such as polyphenols that contribute to global biochemical activity
The main mode of arecoline metabolism is through hydrolysis to arecaidine. Other significant arecoline urinary metabolites are N-oxide derivatives and nitrosamines. [3] In addition, the alkalinity of lime itself causes a reduction of both arecoline and guvacoline to arecaidine and guvacine, respectively. [2]
Arecoline’s main activity is on the central and autonomic nervous system. Indeed, it possesses parasympathomimetic properties, stimulating both muscarinic and nicotinic receptors. Habitual users claimed effects such as:
euphoria,
a sense of well-being,
warmth, increased alertness,
salivation,
palpitation,
anti-migraine,
enhanced capability to work.
Furthermore, areca nut causes habitual users withdrawal syndrome whose symptoms are similar to those of amphetamine use. Among them, insomnia, mood swings, irritability and anxiety. [3] Many studies have shown that betel quid chewing causes facial flush, a warm sensation of the body and sweating. The increased skin temperature from 0.5 to 2 °C is due to the areca nut-induced release of catecholamines from adrenal cromaffin cells. [3], [9]
Physiologically, these compounds coordinate the responses to environmental, metabolic, and emotional/psychologic stressors. Arecoline also blocks the high-density lipoprotein receptor and inhibits the uptake of low-density lipoprotein, thus leading to enhanced atherogenesis and coronary artery diseases. Finally, arecoline also presents endocrinal activity. Indeed, in large doses, it activates the hypothalamic-pituitary-adrenal (HPA) axis, similar to stress response, and in regular use causes hypothyroidism. [3]
Besides arecoline activity, arecaidine, guvacine, and guvacoline block the receptor and inhibit the uptake of gamma-aminobutyric acid (GABA). These results have been supported by studies on mice’s brain, where arecoline and guvacine have been shown to be substrate-competitive inhibitors of GABA uptake. This neurosuppressive activity contributes to the euphoric effect. [2], [3]
Finally, as previously mentioned, arecoline metabolism leads to the formation of nitrosamines in the mouth. These compounds are responsible for the increase of the probability of developing oral cancer in habitual users. This has been the main concern about betel nut use for governments that have tried to undertake a war against this substance [3]. Several studies have been to try to isolate arecoline from A. catechu extract to make it safer, but the resulting preparation would probably at least partially lose its narcotic effect and thus not be competitive with actual betel quid. [7]
References:
[1] A. Ansari et al., “Areca catechu: A phytopharmacological legwork”, 2021, John Wiley and Sons Inc. doi: 10.1002/fft2.70.
[2] N.-S. Chu, “Effects of Betel Chewing on the Central and Autonomic Nervous Systems,” 2001. [Online]. Available: www.karger.com/journals/jbs
[3] A. Garg, P. Chaturvedi, and P. C. Gupta, “A review of the systemic adverse effects of areca nut or betel nut”, 2014, Georg Thieme Verlag. doi: 10.4103/0971-5851.133702.
[4] R. J. Sullivan, J. S. Allen, C. Otto, J. Tiobech, and K. Nero, “Effects of chewing betel nut (Areca catechu) on the symptoms of people with schizophrenia in Palau, Micronesia”, 2000, British Journal of Psychiatry, 177, pp. 174–178, 2000, doi: 10.1192/bjp.177.2.174.
[5] M. Grover, “Areca catechu L. (Chikni Supari): A Review Based Upon its Ayurvedic and Pharmacological Properties”, 2021, The Journal of Phytopharmacology, 10 (5), pp. 338–344, Sep. 2021, doi: 10.31254/phyto.2021.10510.
[6] W. Peng et al., “Areca catechu L. (Arecaceae): A review of its traditional uses, botany, phytochemistry, pharmacology and toxicology”, 2015, Elsevier Ireland Ltd. doi: 10.1016/j.jep.2015.02.010.
[7] Y. V. Chavan and R. S. Singhal, “Separation of polyphenols and arecoline from areca nut (Areca catechu L.) by solvent extraction, its antioxidant activity, and identification of polyphenols”, 2013, J Sci Food Agric, 93(10), pp. 2580–2589. doi: 10.1002/jsfa.6081.
[8] Y. Chavan and R. S. Singhal, “Ultrasound-assisted extraction (UAE) of bioactives from arecanut (Areca catechu L.) and optimization study using response surface methodology”, 2013, Innovative Food Science and Emerging Technologies, 17, pp. 106–113. doi: 10.1016/j.ifset.2012.10.001.
[9] N. S. Chu, “Neurological aspects of areca and betel chewing”, 2002, Addiction Biology, pp. 111–114. doi: 10.1080/13556210120091473.
As we begin 2025, the cannabis industry continues to offer a variety of opportunities for professionals across the sector. January is a time when many businesses are focused on strengthening teams to set the tone for the year ahead.
In our January 2025 roundup, you’ll find openings spanning cultivation, retail, operations, compliance, and more. Whether you’re looking to grow your career or explore a new role, these positions could be a great fit.
Here’s what we’ve found for new job postings in Canada’s cannabis industry.
Also in Winnipeg, Manitoba, Post Life Inc. is looking for a full-time Budtender and Chronic Canada is seeking a part-time Budtender for their store on Ness Avenue.
Located in St. John’s, NL, Mernova Medicinal Inc. is recruiting for a Territory Sales Representative working remotely/on the ground promoting Mernova and the Ritual Green brand in Newfoundland.
Marigold PR, a B2B public relations agency specializing in cannabis, technology, construction, and manufacturing, has an opening for a remote, temporary, full-time PR Coordinator.
Located in Atholville, NB, SNDL has a full-time posting for an HVAC Technician.
The Saskatchewan Liquor and Gaming Authority (SLGA) is seeking a temporary part-time Minor Test Shopper, to join its Cannabis Licensing and Inspections branch.
Three people face charges after the seizure of 47 kilograms of suspected cocaine and over 45 kilograms of illicit cannabis in Ottawa and Prince Edward County.
In September, the OPP-led Biker Enforcement Unit (BEU), Ottawa Police Service (OPS) Drug Unit and Brockville Police Service (BPS) Intelligence Unit began Project MIDFIELD to address drug trafficking activity in Ottawa and Eastern Ontario, with a nexus to the Greater Toronto Area.
On November 27, 2024, four search warrants were executed at residences and vehicles in Ottawa and Milford by members from the BEU, OPP Provincial Asset Forfeiture Unit, OPP Emergency Response Team, OPS Drug Unit, OPS Neighbourhood Resource Team and OPS Tactical Unit.
A combined total of 39 charges were laid against three individuals. Two of the accused remain in custody and one was released. They are scheduled to appear before the Ontario Court of Justice in Ottawa on a later date.
In addition to the suspected cocaine and cannabis, the following items were seized:
CanadaBis Capital Inc. reported gross revenue of $9.6 million and net revenue of $5 million for the three months ended October 31, 2024 (Q1 2025), with net income of $321,569.
CanadaBis is the parent company of cannabis brands like Stigma Grow and Dab Bods, as well as companies like Stigma Roots, Goldstream Cannabis, and the INDICAtive Collection.
Gross and net revenues for the company were up year over year compared to the same reporting period in 2023 ($9 million and $5.7 million). Net income and comprehensive income were down from $707,117 in Q1 2024, but up from a $326,557 loss in the previous quarter of Q4 2024.
The company attributes this increase in net revenue to continued growth and demand from its new and existing SKUs launched under the Dab Bod brands.
The company attributes the decrease in its net income to increased competition, especially among higher THC products, leading to price compression in the market.
CanadaBis’ cultivation and wholesale business generated $2.4 million in gross revenue, with the bulk of its revenue, $7.2 million, coming from extract sales. The company reports a 19% decrease in its overall sales of extracts to provincial bodies, although it says it increased demand in Manitoba.
CanadaBis incurred more than $4.5 million in excise duty in the most recent quarter.
In addition to the company’s sale of cannabis concentrates and extracts, flower and pre-rolls, CanadaBis provides third-party and white-label processing contracts, including product development R&D.
The company currently owns a 66,000-square-foot facility, of which approximately 44,000 square feet of the building has been developed and equipped for the capacity to grow 225 kg of cannabis per year. The majority of its footprint is equipped and being used for the production of cannabis products such as extracts and infused pre-rolls.
CanadaBis is also in the process of shipping its first international products to the European market.
On May 21, 2024, SNDL Inc. issued a notice of intention to enforce security under section 244 of the Bankruptcy and Insolvency Act as a result of defaults under the applicable secured loan facilities made available to the Delta 9 Group by SNDL.
This was based on a $10 million loan to Delta 9 Cannabis Inc. by SNDL on March 30, 2022. The financing was structured as a 10% senior secured second lien convertible debenture with a maturity date of March 30, 2025.
On May 21, 2024, SNDL, by and through its counsel, issued a demand upon Delta 9 for repayment of its total indebtedness of $12,512,876.71 plus additional accrued interest, legal fees and expenses and additional costs or amounts recoverable by SNDL Inc.
On July 5, 2024, SNDL announced that it had acquired Delta 9 Cannabis’ debt, making it Delta-9’s senior secured creditor, bringing Delta 9’s total indebtedness owing to SNDL to $40,653,352.
On July 15, 2024, the Delta 9 Group sought and obtained its initial order under the CCAA, granted on July 24, 2024, which, among other things, extended the initial stay period until September 15, 2024, and approved a sales investment and solicitation process (SISP) in respect of the business and/or assets of Bio-Tech.
On July 15, 2024, Delta 9 also announced that it had entered into a binding term sheet for the FIKA Company to act as a plan sponsor to its CCAA proceedings. Through this process, FIKA would acquire Delta 9’s retail cannabis and distribution business while also assisting with a sale and investment solicitation process for the assets of the licensed cannabis production business. In exchange, Delta 9 would receive equity in FIKA.
Under that deal, FIKA would participate in and fund the costs of Delta 9’s CCAA proceedings through interim financing and present one or more plans of compromise or arrangements to Delta 9’s creditors. Under the agreement, FIKA would also provide up to $3 million to fund the costs of the CCAA proceedings and up to $13 million to repay the secured obligations owing to SNDL Inc.
That extension, granted after a court hearing on July 24, 2024, by Delta 9 and its subsidiaries—Delta 9 Logistics Inc., Delta 9 Bio-Tech Inc., Delta 9 Lifestyle Cannabis Clinic Inc., and Delta 9 Cannabis Store Inc.—includes the approval of the $16 million FIKA has offered in interim financing and a key employee retention plan in the amount of $650,00.
On September 11, 2024, a court granted an order extending the stay of proceedings pursuant to the Amended and Restated Initial Order (ARIO) up to and including November 1, 2024.
On September 12, 2024, Delta 9 paid $11,696,814.00 to SNDL for the debt outstanding under the Debenture. The court will determine the remaining portion of the amount due and payable to SNDL Inc., which Delta 9 disputes, on January 10, 2025.
On November 1, 2024, the court granted another order further extending the stay of proceedings pursuant to the ARIO up to and including January 31, 2025.
Bio-Tech had until July 26, 2024, to create a list of known potential bidders following the granting of the SISP Order, with a bid deadline of October 28, 2024. The SISP began on July 31, 2024, with 16 prospective bidders filing an NDA.
On November 11, 2024, Bio-Tech and its Monitor selected the highest and only serious bid: one for 17 of Delta 9’s grow pods and related intellectual property. This transaction closed on December 2, 2024. The bid price has been redacted in the monitor’s report.
Bio-Tech, with the assistance of its monitor, also recently selected a qualified bid tendered within the SISP by Simply Solventless Extracts for the purchase of Bio-Tech’s associated land, real property, and specific enumerated property, but excluding the property being retained by Simply as part of the retained assets under the terms of the sales and purchase agreement (SPA).
Simply’s bid was said to be the best overall for the property, taking into account the purchase price, the certainty of Simply’s ability to close, and other material terms of the transaction.
Pursuant to the SISP, Bio-Tech is also seeking the court’s approval of the applicant’s request for a vesting order at an application (ARVO) to be heard on January 10, 2025.
The proposed ARVO to be considered is a reverse vesting order that approves the vesting structure of the Simply Transaction.
The primary purpose of the reverse vesting structure is to preserve Bio-Tech’s various federal licences by facilitating an efficient operational transfer of Bio-Tech’s ongoing business and operations following the closing of the Simply transaction. Under a traditional asset sale transaction structure, the licenses are not transferrable to a purchaser.
If approved, Delta 9 expects the Simply transaction to result in a going-concern outcome that will be beneficial to multiple stakeholders, including the retention of some of Bio-Tech’s 113 employees, as well as vendors and customers being able to continue to do business with Bio-Tech’s new owner.
As of the date of the initial filing, Bio-Tech’s listed tax liabilities of $7,831,515 (excise), $657,056 (GST), and $18,000 (source deduction liability), for a total of $8.5 million.
The Canada Revenue Agency (CRA) registered the amounts outstanding for the Excise Tax Liability ($7.8 million) on the title for Bio-Tech’s land. The Excise Tax Liability is registered subsequent in priority to the amounts owed to SNDL Inc. pursuant to its first mortgage and the second mortgage registered against the land.
Based on Bio-Tech’s current liquidity and the proposed transactions, Bio-Tech says it will not have sufficient funds to satisfy its total tax liability.
The ARVO seeks to provide for the release of Delta-9’s directors and officers for pre-filing claims including in connection with both the Excise Tax Liability, the GST Liability and the Source Deduction Liability.
Because of Delta 9’s tax arrears, the CRA moved to only renew the company’s excise licence on a 30-day basis, beginning in December 2023. Delta 9 Bio-Tech was also required to enter into a payment plan to address its owed excise tax in monthly payments of $50,000.
To keep the licence renewed, the company must pay the $50,000 payment and the monthly excise tax amount going forward, which Arbuthnot says is a significant financial strain on the company.
(GLOBE NEWSWIRE) New York – Tilray Brands, Inc. invites you to celebrate the new year with its refreshing non-alcoholic beverages from Liquid Love, Herb & Bloom, Happy Flower, Runner’s High, and Montauk Brewing Company.
Liquid Love sparkling water brings triple-filtered hydration with electrolytes and B-vitamins for a crisp and clean experience with environmentally conscious packaging. Plus, five cents is donated to non-profits causes focused on clean water and conservation for each sold to support a healthier and happier planet. Liquid Love comes in a series of four delicious natural flavors.
Liquid Love Sparkling Grapefruit: Zesty and invigorating, with the tangy freshness of grapefruit.
Liquid Love Sparkling Lemon + Lime: Natural ginseng and guarana extracts complement classic citrus flavor.
Liquid Love Sparkling Ginger and Prickly-Pear: Exotic sweetness of prickly pear with the warm, spicy notes of ginger.
Liquid Love Sparkling Wildberry: Bursting with vibrant tart notes of wild berries.
Herb & Bloom Elevate your mocktail game with Herb & Bloom, a super-premium line featuring a blend of refreshing fruit notes with 5mg of hemp-derived Delta-9 THC per can. Providing a smooth balanced experience, Herb & Bloom is the choice for a relaxing social evening. Savor the re-imagined classic tastes and celebrate any moment.
Herb & Bloom Non-Alcoholic Margarita: The brightness of citrus flavor balanced with a hint of sweetness. Make it your own by garnishing it with an herbal twist.
Herb & Bloom Non-Alcoholic Strawberry Daiquiri: Reimagining the classic rich and ripe juicy strawberry flavor of the original daiquiri. Add a sugar rim to complement the fruity notes.
Herb & Bloom Non-Alcoholic Peach Bellini: Luscious, sweet refreshing peach flavor. Garnish with some fresh fruit or edible flowers for an added hint of sophistication.
Happy Flower Get out of your head and into the moment with Happy Flower, a delightful trio of hemp derived Delta-9 THC cocktails. Happy Flower offers a relaxing and refreshing social experience, with 5mg of hemp-derived THC in every uplifting, bubbly beverage.
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Happy Flower comes in three varieties:
Runner’s High is created with the active social running community in mind. Bringing an elevated craft offering to the fast-growing non-alcoholic beverage space, each brew is a unique blend of natural ingredients to support and lift hop terpenes to deliver a premium beer-like experience, alcohol-free, without compromising taste.
Golden Wheat: Featuring a bright golden to orange color with a white-collar foam, its aroma is a refreshing mix of orange, pine needles, and pink grapefruit. The taste offers a balanced blend of slight sweetness, orange zest, clean bitterness, and black tea notes.
Raspberry Wheat: A refreshingly crisp brew with a bright ruby-red color and off-white to slightly pink head, with a hazy American wheat base, its aroma is rich ripe raspberries and kush terpenes for a mild, sweet finish.
Dark Chocolate: Boasting a rich dark brown appearance, this brew is reminiscent of a stout or porter, with an off-white to tan creamy foam, its aroma is a decadent blend of moist chocolate cake, cocoa beans, and kush terpenes.
Montauk Brewing Company’sN.A. IPA is the brand’s first-ever full-flavored non-alcoholic brew which debuted in Spring 2024. Montauk’s N.A. IPA is for those who want the experience of drinking a great-tasting IPA, but without the aftereffects of traditional beers.
Montauk N.A. IPA: Meticulously brewed to the same high standards as its alcoholic counterparts, this well-balanced brew blends the clean bitterness of hops with a subtle sweetness. Crafted with Citra, Mosaic, and a blend of Cryo hops, it offers a fresh aroma of orange and pink grapefruit with less than 0.5% ABV.
About Tilray Brands
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Tilray Brands, Inc. (“Tilray”) (Nasdaq: TLRY; TSX: TLRY), is a leading global lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection. Tilray’s mission is to be a leading premium lifestyle company with a house of brands and innovative products that inspire joy and create memorable experiences. Tilray’s unprecedented platform supports over 40 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and craft beverages.
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