Business
B.C. firm walks back talk to commercialize cocaine after drawing Trudeau’s ire
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A British Columbia company that received federal approval to produce and sell cocaine has revised its original statement that outlined plans to commercialize the controlled substance.
Adastra Labs issued a clarification Friday that said the Langley, B.C., company is “not currently undertaking any activities with cocaine,” and its amended Controlled Drug and Substances Dealer’s Licence does not permit the firm to sell cocaine to the general public.
Adastra Labs CEO Michael Forbes said in the original statement on Feb. 22 that the company would “evaluate how the commercialization of this substance fits” with the firm’s business model. That reference was removed in the latest statement.
Health Canada approved Adastra Labs’ licence amendment to allow the production, sale and distribution of cocaine on Feb. 17. Under the licence, Adastra cannot produce more than 250 grams of cocaine in 2023.
Scrutiny on the issue began Thursday when B.C. Opposition leader Kevin Falcon brought up Adastra’s original statement on commercialization plans during question period at the provincial legislature.
The issue quickly triggered responses from both Prime Minister Justin Trudeau and B.C. Premier David Eby.
Trudeau said Friday he was “as surprised as” Eby about Adastra’s plans. He said that the federal government was “working very quickly” with Adastra Labs “to correct the misunderstanding” caused by the company’s statement on commercialization.
Trudeau said Adastra did not have permission to sell cocaine on the “open market,” while Health Canada said the firm could only sell to other licence holders.
“I was as surprised as the premier of British Columbia was to see that a company was talking about selling cocaine on the open market or commercializing it,” he said, adding that Adastra’s licence was “not a permission to sell it commercially or to provide it on an open market.”
Trudeau also said commercializing decriminalized cocaine “is not something that this government is looking at furthering.”
Eby said on Thursday he was “astonished” by Adastra’s plans, and the province had not been notified or consulted by Health Canada on the matter.
The premier said Friday that he has spoken to the federal government, and that he is “further disturbed” to hear from Health Canada that Adastra may have “significantly misrepresented the nature of the licence” in an irresponsible manner.
“I find it more than a little bit frustrating that Health Canada is not apparently in line with us in terms of the direction we’re going,” he said. “We need to work together on the toxic drug crisis and our response to it.”
In a written statement, Health Canada says it “thoroughly reviews applications” to ensure licensees follow all existing policies on public health and safety.
“Health Canada has contacted the company to reiterate the very narrow parameters of their licence,” it says regarding Adastra Labs. “If the strict requirements are not being followed, Health Canada will not hesitate to take action, which may include revoking the licence.”
Meanwhile, a second B.C. company says it is now also licensed to produce, sell and distribute cocaine, as well as opium and MDMA, also known as ecstasy.
Victoria’s Sunshine Earth Labs, a biosciences firm that “aims to bring safer supply of drugs to the global market,” said in a news release it obtained an amended Controlled Drug and Substances Dealer’s Licence to include MDMA and cocaine last year.
It said received an amendment to possess, produce, sell and distribute opium and morphine in January.
On Friday, Sunshine Earth also issued a revised statement, saying the company is licensed to conduct activities with these controlled substances “under tight limitations imposed by Health Canada.”
When asked how many other companies have received similar amendments to their licences, Health Canada said it does not share or publish the list of companies who have received licences, nor does it discuss the status of applications for licensing amendments due to safety, security and privacy reasons.
Health Canada spokesman Mark Johnson said it is “not new” to have companies getting licence amendments such as these, and “some companies have had this substance on their licence for 20-plus years.”
B.C.’s drug decriminalization policy went into effect at the end of January, allowing individuals who are 18 and over to possess up to 2.5 grams of opioids, cocaine, methamphetamine and MDMA without criminal penalties.
The decriminalization is a three-year pilot project and a part of the province’s ongoing effort to stem the overdose death rate, with an average of more than six people dying every day in B.C. last year.
For its part, Sunshine Labs said it “does not engage in promoting or launching safer supply initiatives” and defers the implementation of policy on decriminalized cocaine, opium and MDMA to experts.
But the company also said the elevated overdose death rate in B.C. coincides with public health officials’ reports that the majority of deaths came from occasional, rather than chronic, users.
That means decriminalization may not be enough, Sunshine Labs’ statement says, and points to some experts suggesting providing users with “an opportunity to purchase certified drugs with known levels of purity and quantity” as a way to prevent deaths.
“While this notion may be difficult for some to accept, it represents the rational next step,” the statement said.
Safe-supply drug policy advocates, however, said Health Canada’s decision to issue cocaine-related licences to private companies does little to address the actual issues on the streets.
John Braithwaite, supervisor and former board member at the Vancouver Area Network of Drug Users, or VANDU, said the group saw its own plan for safe supply rejected by the province a few months ago.
To see companies receive licences for substances like cocaine, he said, felt like a “slap in the face” because VANDU does not believe for-profit firms have the drug users’ best interest at heart or an understanding of how their products would affect the community.
“Our plan involves the community,” Braithwaite said. “The Downtown Eastside knows what they want and knows what they need to save lives.”
Adastra Holdings Ltd., Adastra Labs’ holding company, saw its share price on the CSE rise from $0.85 on Thursday morning to $1.33 at closing Friday, a 56.5 per cent increase.
— By Chuck Chiang in Vancouver
This report by The Canadian Press was first published March 3, 2023.
UK consumer prices jumped by 10.4% in February compared with a year ago, as food inflation hit its highest level in more than 45 years, and as the cost of visiting restaurants and hotels increased, official data showed Wednesday.
Food prices soared 18.2% through the year to February, the sharpest rise since the late 1970s. The Office for National Statistics noted particular increases for some salad and vegetable items, partly caused by shortages, which led to rationing by supermarkets.
The surprise uptick in inflation in February follows months of deceleration since the pace of price rises reached a 41-year high of 11.1% in October.
The latest figures could make it more likely that the Bank of England hikes interest rates again when it meets Thursday.
Although recent turmoil in the banking sector is expected to weaken economic activity, as lending criteria are tightened, and so dampen inflation, “the Bank of England may well want to see hard evidence of that before it stops raising interest rates,” said Paul Dales, chief UK economist at Capital Economics.
“It’s still a very close call, but these figures give us a bit more confidence in our forecast that the Bank will raise interest rates from 4% to 4.25% tomorrow.”
But Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said increases in food inflation and catering services inflation accounted for all of the rise in the headline rate and both were linked to the jump in the price of fresh food as a result of bad harvests.
“This boost should unwind over the coming months,” he said on Twitter. “It makes little sense to hike rates to counter a weather-related jump in food prices.”
Core inflation — which strips out volatile food and energy costs — also rose, coming in at 6.2% in the year to February, up from 5.8% in January.
The data complicates the central bank’s decision over whether it should raise rates for the 11th consecutive time Thursday — and makes it harder for the government to deliver on its January pledge to halve inflation this year.
And Britons are still getting poorer. Wages rose 6.5% in January compared with a year prior, far below the inflation rate both that month and in February.
U.S. stocks wavered early Wednesday as Wall Street awaits for the Federal Reserve’s latest interest rate decision amid of a fast-moving banking crisis.
The S&P 500 (^GSPC) ticked down near the flatline, and the Dow Jones Industrial Average (^DJI) edged higher. Contracts on the technology-heavy Nasdaq Composite (^IXIC) edged down by 0.1%.
U.S. government bond yields edged up. The benchmark 10-year Treasury yield increased to 3.6%, while on the front end of the yield curve, two-year yields rose 4.2%. Oil prices gained, with WTI crude up to $70 a barrel.
The Federal Reserve’s policy-making committee, headed by Chair Jerome Powell, will take center stage Wednesday. Market expectations have skewed firmly toward a 25-basis point rate hike or no move at all. The shift has been spurred by recent turmoil in the banking sector and the European Central Bank’s decision to hike rates by 50 basis points last Thursday.
Jim Reid and colleagues at Deutsche Bank believe that the “ECB’s decision last week offers a relevant blueprint for the Fed: Raise rates in line with expectations, drop forward guidance, but signal a continued tightening bias.”
This move came amid calls for central banks on both sides of the Atlantic to dial back on policy tightening in light of the banking crisis. Ahead of the U.S. policy meeting, markets are pricing in an 87% probability of a 25-basis point hike by the Fed – according to the CME FedWatch Tool.
The Fed releases its decision and economic projections at 2 p.m. ET, and Powell gives a statement and takes questions starting around 2:30 p.m. ET.
“Powell’s challenge in the press conference will be to maintain focus on fighting inflation while signaling flexibility in how they deal with the banking crisis,” Michael Feroli, Chief U.S. Economist at JPMorgan, wrote in a note to clients.
Regulators have taken pains to emphasize the banking system is stable. On Tuesday, Treasury Secretary Janet Yellen said the U.S. banking system is “sound” but additional rescue arrangements “could be warranted” if new failures pose risks to financial stability.
Bank sentiment slid on Wednesday after surging Tuesday amid Yellen’s comments. Regional bank stocks including First Republic Bank (FRC), PacWest Bancorp (PACW), Western Alliance Bancorporation (WAL),Regions Financial (RF), and Zions Bancorporation (ZION) all traded lower.
Separately, PacWest said it secured $1.4 billion in new cash from a firm backed by Apollo. The regional lender saw deposits drop 20% since the start of the new year.
Big bank stocks slipped, as Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) all traded down Wednesday morning.
Meanwhile, despite a $30 billion cash lifeline last week to First Republic, news reports are swirling that Wall Street executives and US officials are in talks over a new rescue plan to restore investor confidence and potentially ensure a buyer.
UBS Group AG (UBS) has offered to buy back 2.75 billion euros ($3 billion) worth of bonds that were issued days before the weekend’s forced marriage between UBS and Credit Suisse, Bloomberg reported. At the same time, Credit Suisse (CS) was ordered by the Swiss government to temporarily suspend certain forms of variable bonuses for its employees.
Here are other trending tickers on Yahoo Finance:
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Nike (NKE): The sports apparel brand announced a dramatic fiscal third-quarter revenue beat of 8%, while earnings per share came in higher at 79 cents compared to expectations of 54 cents. Bloated inventory levels had been a concern for the company, but that appears to be reversing.
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GameStop (GME): The meme stock reported after hours Tuesday sales came in 2% ahead of estimates. The retailer posted a surprise adjusted earnings per share of 16 cents compared to analysts expectations of a loss of 15 cents per share.
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AMC Entertainment Holdings, Inc. (AMC): Shares are trading higher amid the strength posted by GameStop earnings. Both stocks often move in tandem, as this duo is popular among retail investors who tend to heavily short stocks.
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Coinbase (COIN): Bitcoin’s rally is fueling a bounce in shares of Coinbase amid reignited interest in digital assets.
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XRP USD (XRP-USD): The altcoin ripple has surged 13% in the past 24 hours to $0.45 amid ongoing case between XRP and the Securities and Exchange Commission (SEC) in the US.
On the earnings calendar, results from Chewy (CHWY) and KB Home (KBH) are set for release on Wednesday.
—
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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Shake Shack Inc. is expanding to Canada, with its first location planned for Toronto next year.
The New York-based restaurant chain made the announcement in a press release Wednesday, saying it will partner with two Toronto-based investment firms — Osmington Inc. and Harlo Entertainment Inc. — to open its first Canadian location in 2024.
The burger-and-fries chain first opened in New York in 2004 and has since expanded to have 290 locations across 32 U.S. states, and 150 international locations including London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo and Seoul.
The Toronto location will be its first in Canada, but the chain says it plans to have up to 35 locations across the country by 2035.
“We have been eyeing this incredible opportunity in Canada for quite some time,” said Michael Kark, the chain’s global licensing officer.
Osmington is a privately held commercial real estate investment fund owned and controlled by David Thomson, chairman of Thomson Reuters. Osmington’s assets also include the Winnipeg Jets, which it acquired when the NHL franchise was relocated from Atlanta. Osmington also owns the retail concourse at Toronto’s newly refurbished transit hub, Union Station.
“Shake Shack has long been a brand that we admire,” Osmington CEO Lawrence Zucker said in the release. “Their emphasis on community building, enlightened hospitality and exceptional food quality aligns with our values and we are thrilled to be bringing them to Canada.”
Burger wars heating up
Shake Shack’s long-awaited entrance into the Canadian market comes amid a wave of U.S. fast food brands expanding to Canada over the last decade.
Five Guys, Carl’s Jr., Wahlburgers and Blaze Pizza all flocked to Canada before Chick-fil-A and Dave’s Hot Chicken headed north in recent years.
The newest entrants leaned heavily on chicken, a category that has increased in popularity as some consumers become more health-conscious and shift their diets away from red meat.
Chicken sandwiches were included in 7.3 per cent of all restaurant orders in Canada in 2020, data released by research firm NPD Group found. That amounts to 386.4 million servings.
Some 17.6 million BBQ chicken sandwiches were ordered in Canada in 2020, up 40 per cent from the year before, while 228 million breaded chicken sandwiches were gobbled up, down three per cent from the year before.
However, burgers, the star of Shake Shack’s menu, still reign supreme. They were included in 9.6 per cent of all Canadian restaurant orders in 2020, which translated to 739.3 million servings of burgers.
Canadian companies have coped with the onslaught of American counterparts by expanding their own fast-food offerings. Several added chicken sandwiches and all-day breakfast menus, while Tim Hortons partnered with pop superstar Justin Bieber to launch three new Timbit flavours — called Timbiebs — and experimented with flatbread pizza.
But drawing in customers has become even more challenging after inflation reached a near 40-year high last year, making the cost of dining out harder for consumers to stomach.
Statistics Canada’s latest data shows the cost of food purchased from takeout restaurants increased 8.6 per cent since last February.
Visits to fast food joints in Canada were up nine per cent in 2022, just shy of the 11 per cent gain they saw in 2021, NPD Group research shows.
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