Canadian cannabis companies have had a leg up on the rest of the world thanks to their federal government wisely legalizing medicinal use across the Great White North. With the backing of the national government, Canadian medical cannabis companies have had the advantage of being treated the same as any other business, including a listing on the country’s stock exchange (even on the NASDAQ) and without draconian tax policies that have prevented American cannabis businesses, for instance, from meeting their full potential.
Investors could easily see that Canada was going to be one of the first nations to end prohibition for all adults, providing Canadian companies with the financial backing to export to other countries like Germany, be prepared for full legalization across the nation, and invest in other countries with the foresight that they would also legalize relatively soon. With licensed and regulated commercial commerce just months away, the Financial Post spoke with a few of the top CEOs to discuss whether their companies are ready to meet the demands of consumers.
Q. Are you going to have enough product to meet your supply commitments?
A. If you look at our last quarter, we produced more cannabis than almost all of the companies in the sector have in their operating history. That means our ability to have inventory and supply the agreements is not something we’re going, ‘Oh my god.’ We’re saying, ‘Execute, organize, logistics, supply chain,’ those kinds of words.
Q. What are you doing to secure supply?
A. We have about $100 million of inventory and we’re ramping up our production. About three weeks ago we took an aircraft full of baby plants to our 1.3 million square foot greenhouse in British Columbia. Our other greenhouse is now getting closer to being 1 million square feet and we have 650,000 square feet of other stuff. Our production assets have been running, some of them for four years, so we have inventory and the ability to expand inventory.
Q. What are you doing to create brand recognition for the recreational retail market?
A. Your first move is to occupy the Hershey’s factory, and get international media coverage. You have a name that’s a good name: Tweed. You bring in people who reach out to you, for example Snoop. Brand isn’t a name, it’s a bunch of actions that support something where you can say, ‘I like that.’ Whether it’s resurrecting a town, saving a building, distributing economic opportunity across the country. When people walk in the door and want Tweed, it could be for half a dozen reasons.
All of the Financial Post interviews are certainly worth reading. The answers the CEOs give not only show the work that has gone into the preparation for legalization, but also the significant benefit the Canadian cannabis industry has received from having a national law; companies in other countries could only dream of scaling up as these businesses have. Linton told the Financial Post that Canopy Growth’s workforce has increased by about 50% in the past year alone and that it is set to increase by 33% to 50% in the near future.
The economic benefits of regulated cannabis to Canada have been great are only about to improve. Legal cannabis is already a billion-dollar industry, with a billion dollars worth of Canadian cannabis being sold overseas just last year. While a large portion of the estimated $5.6 billion Canadian citizens spent on marijuana last year has gone to the unregulated market, the regulated system is about to see a huge uptick, from both Canadians and tourists alike.
Even with a favorable federal government, there have been some setbacks and there will be more obstacles and hurdles to overcome in the future. Hopefully, the federal government and provincial officials don’t strangle the burgeoning industry with overly restrictive rules and over time finds the proper balance that will allow small businesses and craft farmers to compete in the market as well. It will be a struggle to find the balance, but it is undeniable that the future of cannabis revenue and job creation across Canada is very bright.
There has never been a better time to learn from, and network with, the top advocates, entrepreneurs, and investors (like Canopy Growth) in Canada and around the globe, so you will not want to miss the International Cannabis Business Conference in Vancouver, British Columbia, this June 24th and 25th. Fresh off the heels of an amazing event in Berlin, the ICBC is looking forward to another spectacular conference in Vancouver, just ahead of Canada legalizing cannabis for all adults. Get your tickets by June 3rd to save $200!