Recently, the Canadian government and the 10 provinces agreed on a deal on how to split a proposed federal tax on the sales of marijuana once the drug is legalized.

Finance Minister Bill Morneau told reporters that for an initial two years, 75% of the revenue would go to the provinces and 25% to Ottawa. Morneau expects the federal cannabis tax to initially raise around $400 million per year. After the initial two-year period has ended, the government and provinces will meet to determine if this method is working.
 
This meeting was an important development for Canada’s cannabis industry and we are glad to see the government and the provinces agree on the terms of the deal. We expect Canada’s legal cannabis industry to show strong growth over the coming years as companies capitalize on the country’s recreational market as well as international medical markets.
 
The international opportunity is significant and several Canadian medical marijuana producers are well positioned to capitalize on this.
 
Aurora: Provides Update on Germany Operations
Aurora Cannabis Inc. (ACB.TO) (ACBFF) traded higher after the Canadian marijuana producer received European Union (EU) Good Manufacturing Practices (GMP) certification for the production, handling, storage and packaging of cannabis flowers. The certificate covers both Chapter I II of the EU GMP regulations, certifying Aurora to produce active ingredients and their formulation into a pharmaceutical drug.
 
EU GMP certification is the highest such recognition attainable by companies in the pharmaceutical space, and is a requirement for companies to supply EU markets with medical cannabis.
 
Additionally, Aurora’s wholly-owned subsidiary, Pedanios Gmbh, Germany’s largest distributor of cannabis to pharmacies, has received EU GMP certification pertaining to the import, release and distribution of dried cannabis flowers. Aurora is the second Canadian company with wholly owned subsidiaries possessing an EU GMP certification for production, handling, storage and packaging in Canada, as well as, for the import, release, and distribution in Germany and beyond.
 
Aphria: Looks to Decrease Exposure to the U.S. Market
When it comes to international exposure, Canadian licensed marijuana producer Aphria Inc. (APH.TO) (APHQF) has more questions than answers.
 
Earlier this month, Aphria announced plans to reduce exposure to United States medical marijuana markets as it undergoes a de-listing review by the group which operates the Toronto Stock Exchange. Aphria’s CEO Vic Neufeld said the company is in discussions with TMX Group and planned to submit a brief on its stance before the holiday season.
 
Earlier this year, Aphria announced the launch of its United States expansion strategy through a lead investment in Liberty Health Sciences (LHS.CN) (LHSIF). In 2016, Aphria made its first investment in U.S. market via an investment in a medical marijuana producer in Arizona called Copperstate Farms, LLC.
 
CEO Neufeld said that Aphria is looking to shift its direct stake in Copperstate Farms into Liberty Health Sciences, thereby making it an indirect investment. He said that Aphria has been working on this for the last three months and made its request to Copperstate’s Board last month. Over the last quarter, Aphria has decreased its stake in cannabis technology platform MassRoots through the sale of stock.
 
Canopy Growth: A Global Opportunity
Canopy Growth Corp (WEED.TO) (TWMJF) has been executing on all cylinders and the company has been laser focused on international opportunities.
 
While we are favorable on Canopy’s leverage to the German medical marijuana market, we are also very excited about its Australian cannabis assets. In 2016, Canopy Growth acquired 15% of AusCann Group Holdings Ltd (AC8: ASX) (ACNNF), which is a cultivator, manufacturer and supplier of Australian-produced medical marijuana.
 
Earlier this month, AusCann was granted a manufacturing license from the Office of Drug Control for its Tasmania site. The license was granted to AusCann’s strategic partner and allows for the joint manufacture and supply of medical cannabis products in Australia. AusCann and Tasmanian Alkaloids are the only Australian integrated operation holding cultivation and manufacturing licenses, with an approved manufacturing facility. This puts the partnership in a firm position with operations starting in 2018.
 
In September, Canopy Growth entered a supply agreement with AusCann and will act as AusCann’s exclusive supplier of medical cannabis for the Australian market. We are favorable on this relationship and it is already proving to be a very strategic investment.
 
The Australian market continues to present attractive growth opportunities for medical cannabis and we are favorable on Canopy’s minority ownership stake and excellent working relationship with AusCann.


As a child, Stephanie Myers vividly remembers the “This is Your Brain on Drugs” anti-drug PSA sponsored by the Partnership for a Drug-Free America in the 1980s. Those PSAs and the image of the egg in a frying pan, representing drugs and your brain, became a cultural phenomenon. Like many people her age, the ads had an impact on Myers’ opinion on drugs.

But her attitude changed when it came to legalizing marijuana. Myers, a Democrat running for Florida House District 93, a seat now held by Republican George Moraitis who is term limited, began to appreciate the fact that marijuana was a better and natural alternative for people who experienced pain from debilitating illnesses.
 
“If people are going to self-medicate anyway, it should be with something that is more safe for their bodies and for society,” she says.
 
Myers’ change of heart reflects a shift among the broader population nationwide. In 2006, only 32 percent of people surveyed in a Pew Research Center survey supported marijuana legalization. Ten years later that number rose to 57 percent.
 
Myers sees medical marijuana as a much better alternative to opioids as well.
 
“We need to get people on more natural substances especially when you consider the current opioid epidemic,” she explains. “A recent report by the National Center for Health Statistics has found that life expectancy in this country has declined again for the second year in a row. Much of that has to do with the opioid epidemic—there’s been a 21% increase of drug overdoses in the past year.”
 
According to the report referenced by Myers, a baby born in the United States in 2016 could expect to live 78.6 years. This is a decrease of more than a month from 2015 and more than two months from 2014.
 
If elected, Myers hopes to improve accessibility to medical cannabis. Last year, Amendment 2 – the ballot initiative approved by over 71 percent of Florida voters in November passed allowing non-euphoric cannabis use for a select group of patients. While medical cannabis was approved by a majority of the state’s electorate, access to it remains an issue. Currently only 21 dispensaries have been approved to open across Florida’s 67 counties.
 
Myers says that is not enough dispensaries.
 
“Twenty-one dispensaries is too little for as many counties we have,” she says. “The state overwhelmingly passed this and we need to provide accessibility to patients.”
 
In addition, the process of applying for and receiving a medical marijuana identification card has been taking too long. Soon after the legislation was passed last year, the Florida Department of Health, began the process of issuing ID cards for residents. The application for patients and caregivers requires a $75 fee, a copy of a government-issued ID, and a passport photo. All patients must have the ID card to purchase medical cannabis.
 
These are the medical conditions that qualify for a medical cannabis card:
• Cancer
• Epilepsy
• Glaucoma
• HIV/AIDS
• Post-Traumatic Stress Disorder (PTSD)
• Amyotrophic lateral sclerosis (ALS)
• Crohn’s disease
• Parkinson’s disease
• Multiple sclerosis
• Conditions of the same kind or class, or comparable in pain and chronicity as the previous conditions
• A terminal condition which a doctor has diagnosed to cause significant impairment and is irreversible, is not considered treatable, and will result in death within 1 year after diagnosis.
 
Upon approval of your submitted application, the state will email the card ID number. This will allow you to purchase and possess cannabis until your patient card arrives in the mail. However, it’s been taking an average of 45 days for residents to receive that initial email with your ID card number.
 
“We need to speed up the process for people to gain access,” says Myers. “One issue is that there’s not enough staff to process the applications. We need to staff it correctly to get these applications processed faster.”
 
Finally, Myers hopes to improve the quality control over medical cannabis as well.
 
“Patients are putting this into their bodies,” she says. “The end product is important so we need to take care of it and regulate what is being dispensed. It should be of high quality and not have harmful ingredients in it.”
 
A native South Floridian, Stephanie Myers is a former board member of the Broward County ACLU, a member of the Broward DEC, and the Broward Progressive Caucus. Previously, she served as the lead organizer of the 2017 Women’s Rally in South Florida.


The Florida Department of Health’s (DOH) top priority is the health and safety of Florida’s families. Through the DOH Office of Medical Marijuana Use (OMMU), we are working diligently every day to implement the many requirements in Amendment 2 and those set by the Florida Legislature in Senate Bill 8A and are dedicated to ensuring patients have safe access to low-THC cannabis and medical marijuana.

We remain committed to moving this process forward, and will do so in an expedient and thoughtful manner. To keep the public informed of the latest updates, DOH will issue a weekly update on this issue.
 
OMMU by the Numbers
Patients in the Registry: 54,251*
Processing Time for Complete Paper Application: 30 days
Qualified Physicians: 1,233
Processing Time for Complete Online Application: 18 days
Approved Medical Marijuana Treatment Centers: 13
Approved ID Card Applications: 34,197*
Approved Retail Dispensing Locations: 22
 
Implementation Updates
• Card Program – On Tuesday Nov. 21, the department executed the contract with Veritec Solutions, LLC, to outsource the Medical Marijuana Use Identification Card Program. OMMU has immediately begun work to transition the program to Veritec.
• On September 28, 2017, the Florida Medical Association and Florida Osteopathic Medical Association issued the new course titled Florida Physician Medical Marijuana Course. All physicians who previously qualified to order medical marijuana are required to take the new course by December 26, 2017.
• Notice of Proposed Rule 64-4.013 – Pesticide Use on Marijuana has been submitted and was published in the Florida Administrative Registry on November 22, 2017.
*Note, not all patients entered into the medical marijuana use registry apply for medical marijuana use identification cards.
 
Legal Updates
The implementation of Amendment 2 and Senate Bill 8A continues to be frequently litigated. While some of these lawsuits have little impact on our progress, others – particularly those regarding the constitutionality of the law we are tasked with executing – have significant impact on DOH’s ability to implement certain requirements of Senate Bill 8A.
 
Home Grow
Redner v. DOH, et. al., 13th Judicial Circuit Case No. 17-CA-5677
Smoking Ban
People United for Medical Marijuana v. DOH, et. al., 2d Judicial Circuit Case No. 2017-CA-1394
Constitutionality of Black Farmers Provision 381.986(8)(a)2 F.S.
Smith v. DOH, 2d Judicial Circuit Case No. 2017–CA-001972
Awaiting injunction hearing to be scheduled
Constitutionality of Citrus Farmers Provision 381.986(8)(a)3 F.S.
Tropiflora, LLC v. DOH, 2d Judicial Circuit Case No. 2016-CA-1330
 Awaiting injunction hearing to be scheduled
MMTC Licensure
Nature’s Way v. DOH Case No. 17-5801
 
General Background Information
Medical Marijuana ID Card Application Process: Once a patient has been diagnosed by a qualified ordering physician and entered into the Medical Marijuana Use Registry, they can immediately begin the identification card application process. The department encourages applicants to complete the process online as this decreases processing time. Patients receive an email from OMMU once their email is added to the registry by their qualified ordering physician which directs them to the application. Once an application is reviewed and approved, patients receive an approval email which can be used to fill an order at an approved MMTC while they await their physical card.
 
Medical Marijuana Use Registry: All orders for medical marijuana are recorded and dispensed via the Medical Marijuana Use Registry. The Medical Marijuana Use Registry is accessible online, with real time information to ordering physicians, law enforcement and medical marijuana treatment center staff. Patients and caregivers may also access the Medical Marijuana Use Registry to submit a Medical Marijuana Use Registry Identification Card application, and check the status of their application.
 
Medical Marijuana Treatment Centers: Approved medical marijuana treatment centers are the only businesses allowed to grow, process, or sell medical marijuana in Florida. Each medical marijuana treatment center must receive authorization at three stages, (1) cultivation authorization, (2) processing authorization, and (3) dispensing authorization, prior to dispensing low-THC cannabis or medical marijuana. Medical marijuana cannot be mailed.
 
Medical Marijuana Treatment Centers
Trulieve
Tallahassee, Tampa, Clearwater, Pensacola, Miami, Edgewater, Lady Lake, Jacksonville, St. Petersburg, Bradenton, Fort Myers, Gainesville, delivery
Surterra Therapeutics
Tallahassee, Tampa, delivery
Curaleaf
Miami, Kendall, delivery
Knox Medical
Tallahassee, Gainesville, Orlando, Jacksonville, Lake Worth, St. Petersburg, delivery
Aphria
Dispensing via delivery
The Green Solution
Dispensing via delivery
GrowHealthy
Dispensing via delivery
3 Boys Farm N/A
Loop’s Nursery & Greenhouses, Inc.
Cultivation Authorization only
Plants of Ruskin, Inc.
Cultivation Authorization only
Sunbulb Company, Inc. N/A
Treadwell Nursery
Cultivation Authorization only
Keith St. Germain Nursery Farms N/A


You could hear the cheers throughout the Florida marijuana industry on June 23, 2017, when Governor Rick Scott signed SB8A in to law. While the bill drew its fair share of critics with some of its limitations (more on that later), things were going to happen and Floridians who voted overwhelmingly on November 8th for Amendment 2 were finally going to see some action. Almost one year after the historic vote, where do things stand?

To understand where we are, we need to understand how we got here. In November 2017, 71 percent of registered Floridians voted in favor of Amendment 2-the 2016 addition. This amendment essentially allowed for medical use of marijuana as determined by a physician for a number of specified conditions. It took some time and a special session of congress to hammer out the details. In June of 2017, the Florida legislature passed SB8A and it was signed into law, changing the landscape of marijuana in Florida as we know it. The Florida Department of Public Health would be responsible for regulating the new law.
 
One of the highlights of SB8A is that it expanded the number of dispensing organizations, now known as MMTC’s beyond Seven to Ten additional vertical licenses (meaning the license holder controls the process from cultivation through retailing a final product). Five of the new licenses were for Applicants from the 2014 Compassionate Use program. The additional Five were allotted for one African American Farmer, two were to be given as a preference for Applicants that owned Citrus Processing Facilities that they would convert for the processing of medical cannabis, and the remaining two were to go to regular Applicants. The new licenses were set to be issued by October 3, 2017. Although the law capped the number of retail locations at 25, it allowed an additional five if the number of active patients statewide increased to over 100,000.
 
While SB8A expanded the number of Licenses, there were some areas of the new law that caused controversy. For example, patients are prohibited from any form of smoking medicinal marijuana, although smoking has been proven to be the most effective way to alleviate certain ailments. Critics are also fighting the portion of the law that prohibits patients from growing for their own personal needs. Other states allow some medical marijuana patients to grow for personal use citing financial and accessibility reasons. Groups have filed lawsuits to change the law to include smoking and growing marijuana for personal use.
 
Another group facing challenges with the bill are the local municipalities. The new law forces local governments to treat marijuana dispensaries like pharmacies. In response to the law, some counties have enacted a moratorium while they determine how to implement the law. Local governments like the Village of Estero are seeking to ban dispensaries all together due their community’s small population. Other cities and counties have been more receptive to the law and have changed their ordinances to align dispensaries with pharmacies. Many counties and cities have struggled with the preemption aspects in particular how they relate to cultivation and processing versus retailing and in turn what they may actually control via zoning or otherwise.
 
As local governments scurry to figure out how to implement SB8A, the Florida Department of Public Health has struggled to meet key deadlines outlined by the new law. One of those deadlines affected patient cards. The state was required to issue all patient cards by October 3, 2017, however; patients are experiencing months long delays while a second contractor is selected to administer the cards. It is believed as of the writing of this article the patient count sits around 62,000 patients.
 
Potential Applicants are facing delay challenges for licensing. The state missed the deadline to issue new licenses. There were five approved in August but there have been delays in issuing the licenses for all ten. Hurricane Irma and pending lawsuits have been blamed for the delay. One area, regarding black farmers has been very controversial. SB8A guarantees that one of the licenses be issued to a black farmer but that famer must be a party in the Pigford v. Glickman class action suit from 1999 and a member of the Black Farmers Association. A farmer out of Panama City has filed suit claiming that this limits the license to a small pool of black farmers as he was not granted access to the Association.
 
The director of what is now known as the Office of Medical Marijuana Use (OMMU), Christian Bax has appeared in front of a number of legislative sub-committees over the past months to explain where the program is and discuss the delays. Legislators have been visibly frustrated with Bax and the Department’s failure to implement SB8A. Lawmakers are putting pressure on Public Health administrators to resolve these issues as soon as possible. While the OMMU certainly has been deficient in moving forward timely and seems to have dragged its feet early in the implementation process, they certainly weren’t given the tools nor direction by the legislature in a timely and coherent manner. Ultimately, despite a mandate by the citizens of Florida, the legislature is responsible for dropping the ball on implementing the will of the people by perpetuating an uninformed and patchwork bill crafted in a manner clearly attempting to satisfy special interests and indicative of political back dooring.


In the August issue, we highlighted Reliq Health Technologies (RHT.V) (RQHTF) as a cannabis investment opportunity and since then, the company has been nothing short of an execution story.

Reliq Health has been a very profitable opportunity. Since August 1st, the shares have rallied more than 350%. Although this rally has been significant, we continue to view Reliq as an attractive investment opportunity at current levels.
 
About Reliq Health Technologies
Reliq Health Technologies is a healthcare technology company that specializes in developing innovative, secure mobile software solutions for the multi-billion-dollar community healthcare market.
 
Reliq also has a partnership with a licensed Canadian cannabis producer, Invictus MD Strategies (IMH.V) (IVITF: OTC) to capture high value data on strain, dose, mode of administration, symptom relief and side effects from medical marijuana users.
 
A Free Cash Flow Story
Over the last two months, Reliq has significantly advanced its story and the company is quickly becoming a free cash flow story.
 
In mid-August, Reliq announced that its remote patient monitoring and telemedicine solution with Paz Home Health LLC in Texas went live. Reliq already has more than 1,000 paid subscribers and this number continues to grow at better-than-expected rates.
 
A few weeks later, Reliq announced another milestone after it went live with its remote patient monitoring, care coordination and telemedicine platform with Rio Grande Valley Health Alliance, which is made up of 15 independent practices and has more than 30,000 registered patients. Once these platforms are at full deployment, Reliq will be generating over $26 million in recurring annual revenue.
 
Last month, Reliq received the first payment of $200,000 from NextGen Applications (total value of the contract is $1.22 million). When you combine the growing number of paid subscribers, with the recent payment, and the new contracts, Reliq is quickly becoming a major free cash flow story.
 
A Stock with Several Significant Catalyst for Growth
Reliq has several pilot programs with leading hospitals and networks in North America and Europe. If the company closes at least one of its pilot programs, we expect to see significant share price appreciation.
 
We are very bullish on this part of the story and believe the potential revenue from these deals is underappreciated by the street. Reliq is currently working with:
 
1. Sioux Lookout – Meno Ya Win Health Center (SLMHC) – SLMHC is a fully accredited 60-bed hospital and a 20-bed extended care facility that provides health services to 30,000 people living in 28 First Nations communities and the four municipalities.
 
2. Hamilton Health Sciences (HHS) – HHS is a family of seven unique hospitals, a cancer center and an urgent care center serving more than 2.3 million residents in and around the city of Hamilton, Ontario. HHS treats over 50,000 patients and performs over 28,000 surgeries each year.
 
3. The National Health Service (NHS) – NHS is the publicly funded healthcare system for England. It is the largest and the oldest single-payer healthcare system in the world, providing coverage for over 54 million United Kingdom residents.
 
4. Sacred Heart – The health system is northwest Florida’s leading provider of high-quality health care to children and adults. Sacred Heart admits more than 30,000 patients annually and has more than 4,000 employees.
 
5. The Feldman Institute – The Louisiana institute is an interventional pain management clinic and surgical center, and is a regional center that serves a large group of patients within Louisiana and its surroundings. The Feldman institute performs thousands of pain management surgeries annually.
 
Increases Size of Private Placement Due to Demand
Last week, Reliq Healthsignificantly strengthened its balance sheet after the technology firm reported an engagement agreement with Canaccord Genuity and Gravitas Securities to act as co-lead agents on a $4 million brokered private placement offering of up to 10,000,000 units at $0.40 each.
 
This raise generated massive interest and Reliq increased the size of the offering to $5 million. This financing will provide Reliq with enough capital to execute on its current pipeline.
 
The company plans to use the capital for customer acquisition opportunities and to open new accounts, for working capital purposes, and for accretive investment and acquisition opportunities.
 
A Stock Investors Need to Watch
Reliq has expanded its reach and geographic diversity over the last year and the company has secured pilot programs with hospitals, organizations and cities in the United States, the United Kingdom, and Canada. We are favorable on the recent rally as it has been supported by continued execution on all levels and are bullish on the long-term opportunity.
 
When you look at the recent rally, many factors stand out. However, one of the most eye popping metrics is the change in trading volume. Prior to the August Paz announcement, Reliq was trading less than 200,000 shares a day on average. Over the last month, this number has increased to almost 800,000 per day.
 
Much of this increase is on the buy side and the improved liquidity has been beneficial to shareholders and is a testament to the quality of the rally. We remain bullish on Reliq and believe it is a stock that investors need to watch.