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Can legal edibles take off

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Slowly and unevenly, legal cannabis edibles are starting to appear across Canada.

Many Canadians have told pollsters that they’re interested in trying edibles, and producers hope that ‘Cannabis 2.0’ will turn their businesses around after a rough first year.

But to succeed, legal edibles will have to hold their own against three sources of competition: the illegal market, customers themselves — who can make their own edibles in some cases — and the much cheaper gel caps and oils that have been available since legalization. 

Illegal edibles

The mail-order marijuana (or MOM) sector has been selling edibles for a while now.

However, their offerings tend to be very powerful — far more than federal rules would allow legal producers to sell.

 

This chocolate bar, for example, has 300 mg of THC, which would be overwhelming for an inexperienced user. (“Begin with 1/4 of the bar and allow 30-90 minutes before ingesting any more,” the seller advises.)

By contrast, legal edibles can’t contain more than 10 mg and typically come in 5 mg or 2.5 mg strengths.

In practice, what that means is that the MOMs cater to heavy users with high tolerances, and the legal market serves new or occasional users who may find that 5 mg is all they want or need.

“An experienced user, someone who is used to having 100-milligram dosages, is not going to be all that interested in a 10-milligram product,” says Brock University professor Michael Armstrong.

Jenna Valleriani, executive director of Hope for Health Canada, thinks the public needs an idea of a “standard dose” of THC, similar to a unit of alcohol. New users, who may not understand what a given number of milligrams of THC means for their personal experience, need guidance. 

“I think for most consumers, especially naïve and new consumers, they’re looking at 10 milligrams and that doesn’t really resonate as anything. It doesn’t really have a lot of meaning,” Valleriani says.

 

“I think that 10 milligrams is too high for a standard dose. The standard dose should be a lot lower, around 2.5 to 5 milligrams.”

 

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Valleriani agrees that legal edibles will have little appeal for heavy users.

“For users who need higher doses, really their only option is to buy those products illegally, or make them themselves so they can make them more potent.”

Low-dosed legal products do tend to protect inexperienced people from overconsuming, she argues.

“Generally policy is meant to safeguard the most amount of people. And most people are not actually cannabis users, so they don’t have that experience.”

However, that does leave the problem of how heavy users can be coaxed to start buying from the legal market.

Producers are just starting to cater to cost-sensitive heavy users: Hexo, for example, sells a bargain-priced 28-gram bag of dry flower in Ontario and Quebec.

“If you’re a heavy user, you’re going to feel that price more,” Armstrong says. “Getting products priced into the black market range, like Hexo started doing in October, with a $4.49 product in Quebec. We need more of those.”

Valleriani thinks legal producers will eventually be allowed to offer higher-strength edibles.

“It’s going to take time, and developing better products. Once these products are unrolled, and nothing catastrophic happens, I think that there will be movement there to be able to loosen up those regulations.”

In the meantime, buying the legal equivalent of the $26 black-market chocolate bar linked above would involve buying 30 chocolate bars from the B.C. Cannabis Stores for $209.70 plus shipping. (That goes a bit over the legal shipping limit, and also involves buying 480 grams of chocolate, or over a pound.)

 

Homemade edibles

Until they sold out, the B.C. Cannabis Stores were selling THC-infused cookies for $6 each.

Most of that price, of course, reflected the 5 mg of THC in the cookie, rather than the other ingredients.

But cannabis oils have been available since Day 1 of legalization. A bottle of oil containing 250 mg of THC costs about $30 at the Ontario Cannabis Store now, which works out to 60 cents for a unit of 5 mg.

Given that you can use the oil, plus normal baking ingredients, to make your own edibles in your own kitchen, there would seem to be no reason to spend anything close to $6 on a cookie with 5 mg of THC, if that’s what you want.

 

But both Armstrong and Valleriani doubt that many consumers will bother — it’s on a long list of things, like home canning and changing the oil on your own car, that most people could do but don’t.

“It’s similar to growing, right,?” Valleriani says.

“Even though we’re allowed to grow so many plants at home, a lot of people simply don’t do it, because it requires a little bit of effort and I think the same thing goes for making edibles on your own, as well. People do it sometimes. Most people maybe do it once or twice, if that, but generally people aren’t really taking advantage of that.”

Armstrong thinks that most people will put convenience over savings.

“If you can make a cookie that gives adults the taste they like and gives them the high they like, then they might be more willing to pay that $6. They’re willing to pay that price because it gives them exactly the sensation they want.

“They could make it at home, but there are lots of things they could make at home but they just buy off the shelf.”

Oils and gel caps

One surprise of legalization was that consumers had almost no interest in the oils and gel caps which for a long time were one of the few alternatives to dry flower. Producers produced too much, retailers stocked more than it turned out they could sell, and Canopy took an $8 million hit last year when provincial wholesalers returned millions of dollars’ worth of product that few people seemed to want.

Perhaps part of the problem is their look and feel: they look like something you might buy at a pharmacy, which is not surprising since they were originally developed for medical patients.

However, in a zero-charm sort of way, they’re the cheapest edible products legally sold.

For example, the B.C. Cannabis Stores sells a soft candy with 5mg of THC for $3, but 5 mg gel caps for a price that works out to 80 cents each. (You could measure out some oil and get the price down to 60 cents.)

“I wonder if most people are that aware in breaking down the cost/benefit saving,” Valleriani says. “People whose job it is to know — they’re medical patients and they’re on strict budgets — they probably make it their business to know.”

“People are simply not doing the math.”

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RBC warns house price correction could be deepest in decades | CTV News – CTV News Toronto

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A housing correction, which has already led to four consecutive months of price declines in the previously overheated Greater Toronto Area market, could end up becoming “one of the deepest of the past half a century,” a new report from RBC warns.

New data released by the Toronto Regional Real Estate Board (TRREB) last week revealed that the average benchmark price for a home in the GTA fell six per cent month-over-month in July to $1,074,754.

Sales were also down a staggering 47 per cent from July, 2021.

In a report published on Aug. 4, RBC Senior Economist Robert Hogue said recent data from real estate boards underlines that higher interest rates are beginning to take a “huge toll” on the market.

Hogue said that with further hikes to come, prices will likely continue to slide in the coming months.

That prediction, it should be noted, goes against a report from Royal LePage last month which painted a rosier forecast for sellers in which values would more or less holding for the rest of the year following some declines in the second quarter.

“Our expectations for further hikes by the Bank of Canada—another 75 basis points to go in the overnight rate by the fall— will keep chilling the market in the months ahead,” Hogue said. “We expect the downturn to intensify and spread further as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates. Canada’s least affordable markets Vancouver and Toronto, and their surrounding regions, are most at risk in light of their excessively stretched affordability and outsized price gains during the pandemic.”

The Bank of Canada has hiked the overnight lending rate by 225 basis points since March and has warned that further hikes will be necessary given that inflation remains at a near 40-year high.

In his report, Hogue pointed out that the housing correction “now runs far and wide across Canada” but he said that it is particularly pronounced in the costlier markets of Toronto and Vancouver.

In fact, Hogue said that housing resale activity in Toronto is at its slowest pace in 13 years, outside of the early days of the COVID-19 pandemic.

The stockpile of available homes is also up 58 per cent from a year ago, he noted.

“With more options to choose from and higher interest rates shrinking their purchasing budgets, buyers are able to extract meaningful price concessions from sellers,” he said, pointing out that the average price of a home in the GTA is down 13 per cent from March. “We expect buyers to remain on the defensive in the months ahead as they deal with rising interest rates and poor affordability.”

While Hogue did say that condos in the City of Toronto are likely to remain “relatively more resilient” he said that prices elsewhere will continue to fall for the time being, especially in the 905 belt “where property values soared during the pandemic.”

The July data from TRREB suggested that the average price of a home in the GTA was still up one per cent from July, 2021.

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Commuters face GO transit cancellations, possible strike – CityNews

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Canada Revenue Agency plans email blitz to get Canadians to cash outstanding cheques worth $1.4-billion – The Globe and Mail

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The Canada Revenue Agency (CRA) is planning a massive e-mail notification campaign to reach Canadians across the country who have uncashed cheques worth a net $1.4-billion.

The e-mail notifications will target recipients of the Canada child benefit and related provincial and territorial programs, as well as recipients of the GST/HST credits and the Alberta Energy Tax Refund.

The CRA said it plans to send approximately 25,000 e-mails in August, another 25,000 in November and a further 25,000 e-mails by May, 2023.

However, even without receiving an e-mail notification, the agency said a taxpayer can check if they have a cheque by logging into My Account, a secure portal on its website to check if they have an uncashed cheque over a period of six months. It added that representatives can also view uncashed cheques of their clients.

Each year, the CRA said it issues millions of payments to Canadian taxpayers in the form of refund benefits. These payments are issued by either direct deposit or by cheque.

“Over time, payments can remain uncashed for various reasons, such as the taxpayer misplacing the cheque or even a change of address which did not allow for delivery,” the agency said in a statement.

The CRA said since the e-mail notification initiative was first launched in February, 2020, about two million uncashed cheques valued at $802-million were redeemed by May 31, 2022.

The average amount per uncashed cheque is $158 with some of them dating as far back as 1998, the agency said.

As of May, 2022, there were an estimated 8.9 million uncashed cheques with the CRA. In May, 2019, about five million Canadians had an estimated 7.6 million uncashed cheques.

“As government cheques never expire or stale date, the CRA cannot void the original cheque and re-issue a new one unless requested by the taxpayer,” the statement read. “These upcoming e-notifications are to encourage taxpayers to cash any cheques they have in their possession.”

The agency said taxpayers can register for the direct deposit option on its website to receive payments directly into their bank accounts.

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