52% That's how many B.C. busi­nesses in a re­cent Ip­sos/ MNP LLP sur­vey said that hack­ers ac­cessed or may have ac­cessed their con­fi­den­tial in­for­ma­tion in the past year. As the June 12-15 Ig­nite con­fer­ence brings 4,000 cy­ber­se­cu­rity pro­fes­sion­als to the Vanc

BC Business Magazine - - Contents - by Melissa Ed­wards SOURCES: IP­SOS/ MNP LLP; PWC CANADA; BORDEN LADNER GERVAIS LLP

Peo­ple are the weak link when it comes to cy­ber­se­cu­rity

all ap­pli­cants to the ACMPR pro­gram, ex­plic­itly sell, or in­tend to sell, medic­i­nal cannabis. Some, like Van­cou­ver-based Aurora Cannabis Inc., a listed li­censed pro­ducer with a $1.1-bil­lion mar­ket cap­i­tal­iza­tion when it was trad­ing at about $2.60 in late April, have em­braced op­por­tu­ni­ties in the recre­ational mar­ket.

“This is some­thing that we planned on, and that's why we started con­struc­tion on this enor­mous fa­cil­ity,” Aurora's ex­ec­u­tive vice-pres­i­dent, Cam Bat­t­ley, told CBC News in March about the com­pany's 800,000-square-foot plant near Ed­mon­ton, which it bills as the world's largest. Oth­ers, such as Tan­talus Labs, a pri­vately held ap­pli­cant that is near­ing com­ple­tion of its 115,000-square­foot green­house in Maple Ridge, are more ret­i­cent. “We're fo­cused on a qual­ity prod­uct,” says Tan­talus founder Dan Sut­ton. “We want to be con­sis­tent in our pro­duc­tion no mat­ter what the mar­ket­place is.”

Then there are play­ers like True Leaf, which wants to stick with the med­i­cal mar­ket—and even tar­get spe­cific ail­ments. “Our fo­cus is on the medic­i­nal strains for peo­ple with hip and joint prob­lems, for ex­am­ple,” Bom­ford says. Har­court, his ad­viser, is pithier: “We're about `Get well,' not `Get high.'”

The Cana­dian mar­i­juana in­dus­try doesn't con­sist only of those look­ing to op­er­ate le­gal grow-ops. On the mar­gins, a host of small-cap com­pa­nies aim to serve the mar­ket in other ways. Burn­aby-based Cannabix Tech­nolo­gies Ltd., trad­ing at 80 cents in late April, is de­vel­op­ing a mar­i­juana breath­a­lyzer to meet U.S. and Cana­dian reg­u­la­tory stan­dards. Wild­flower Mar­i­juana of Van­cou­ver, an early ap­pli­cant in the Stephen Harper gov­ern­ment's Mar­i­huana for Med­i­cal Pur­poses Reg­u­la­tions pro­gram (re­placed last Au­gust by the fed­eral Lib­er­als' ACMPR) turned to the recre­ational mar­ket in Washington State to sell its cannabis-oil dis­pos­able va­por­iz­ers. An­other, Delta-head­quar­tered Vodis Phar­ma­ceu­ti­cals Inc., repo­si­tioned it­self as an ad­viser to Washington pot pro­duc­ers on their op­er­a­tions.

All of this has kept in­vestors in­ter­ested—if over-op­ti­mistic. “The fu­ture is bright, but if one were to take the cal­cu­la­tion of the mar­ket cap and then look at how much pot will be bought, you'll see that [the li­censed pro­duc­ers] are over­val­ued,” says Bray­den Sut­ton, a Chilli­wack-based in­de­pen­dent an­a­lyst who has cov­ered the med­i­cal mar­i­juana sec­tor since 2009. “We're in bub­ble ter­ri­tory, and peo­ple are buy­ing what they think is the fu­ture.”

In Jan­uary 2016, CIBC World Mar­kets es­ti­mated that the Cana­dian cannabis mar­ket could be worth $10 bil­lion a year once the recre­ational sys­tem is up and run­ning. Deloitte, in a re­port is­sued last spring, cal­cu­lated that pot sales alone could range from $4.9 bil­lion to $8.7 bil­lion, while the to­tal mar­ket size—in­clud­ing test­ing labs, se­cu­rity ser­vices, para­pher­na­lia and tourism rev­enue—could reach $22.6 bil­lion.

Deloitte based its re­sults on an in-house sur­vey that found one in five adult Cana­di­ans is a po­ten­tial con­sumer of reg­u­lated recre­ational cannabis. But with the fed­eral gov­ern­ment still to ta­ble leg­is­la­tion—and B.C. yet to in­di­cate what pol­icy it might de­velop around sup­ply chain, dis­tri­bu­tion and the re­tail mar­ket—no­body knows what the sys­tem will look like.

In the mean­time, Bom­ford and Har­court's com­pany has found a novel way to stay afloat: hemp-based dog treats. (Bom­ford's pre­vi­ous busi­ness was Dar­ford Oven Baked Treats.) With quar­terly sales of about $150,000, it's much smaller than other med­i­cal mar­i­juana oufits—but at least it's gen­er­at­ing rev­enue. Bom­ford draws a par­al­lel be­tween the two sets of cus­tomers, dogs and their own­ers. “They're look­ing at what they eat them­selves as they get old,” he says of the lat­ter, “at the aches and pains they get, and they look at their pets the same way.”

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