Mirabel facility prepares for recreational pot
Canopy Growth has invested $15 million to retrofit greenhouses into grow-op
The trucks rolled into Mirabel around midday — dropping off a small fortune’s worth of cannabis plants at the Vert Cannabis greenhouse.
Two years ago, this 700,000-square-foot facility grew more pink tomatoes than any other greenhouse in North America. Starting Tuesday, it began the process of supplying Quebec’s cannabis retailers with 12 tonnes of weed each year.
After years of political wrangling over the cannabis question, Canada is on the cusp of a legal recreational market.
A vote on the federal government’s cannabis bill, C-45, is scheduled in the Senate for June 7 — putting the country one step closer to legalization.
While an exact launch date for the legal market is uncertain, operations like Vert Mirabel are going full steam ahead. Canopy Growth, which owns a majority stake in the farm, has invested $15 million to retrofit the tomato greenhouses into a state-of-the-art grow-op.
It also signed a three-year contract with the Quebec government to supply it with 36,000 kilos of cannabis. The first crops should be ready for a Health Canada inspection within four months.
“We can supply them with more if they need it,” says Adam Greenblatt, Canopy’s head of engagement in Quebec. “At full scale, this facility can produce 60,000 kilos a year.”
Canopy is the largest legal cannabis company in Canada; its stock was trading for $36.01 a share on the Toronto Stock Exchange Tuesday and it has been valued at $8 billion. With its facility in Mirabel and another one outside Drummondville, the company is betting big on Quebec.
The question, according to one expert, is whether legal weed will thrive in a place with such a strong black market.
“Quebec has some of the biggest smokers in the world and yet, unlike in Ontario or B.C., you barely see any dispensaries or shops,” says Ken Lester, who teaches behavioural economics at McGill University.
“There are more dispensaries in the city of Ottawa than all of Quebec. That’s because we have such a developed black market. It’s so efficient that it beats everything else.”
Among the amendments the Senate approved to the cannabis bill was a provision that will give provinces the power to outlaw homegrown pot. So far, Quebec and Manitoba have announced they would enforce this provision.
“I think Quebec knows how strong the black market is and it wants to give itself the tools to crack down on it,” Lester says. “It’s anyone’s guess how the black market and legal market will coexist, but there’s a possibility that the criminal side of things will continue to thrive.”
Lester points to several built-in advantages of the illegal cannabis trade. Growers don’t have to pay sales tax and submit to regulations, and they already supply a network of dealers and customers.
This could explain some of the reluctance, on the part of big business, to set up shop in Quebec. Outside of the two licences Canopy Growth owns in the province, there are only five additional licensed producers (LPs) in Quebec.
Meanwhile, Ontario (55) and British Columbia (22) have 79 LPs operating within their borders.
“All things being equal, Quebec is an ideal place to grow marijuana,” Lester says. “There’s low electricity costs and lots of smokers. There’s room to grow and we could see some major investments in the near future.”
Greenblatt says the Mirabel facility will bring one more advantage to the table: quality. As of Tuesday, the facility started growing six strains of organic cannabis.
By using a greenhouse that specialized in organic tomatoes, Greenblatt says the Mirabel cannabis will “put Quebec on the map as master cannabis growers.”
“This line of cannabis products will be recognized across Canada,” he says. “There’s a huge demand for certified organic cannabis and we want this place to be our engine for that.”
Beyond the obstacles of getting federal legislation signed into law, Greenblatt says Quebec comes with its own regulatory hurdles.
Rather than open cannabis to the free market, the province has put itself in charge of distributing the product through the Société québécoise du cannabis (SQC) Crown corporation.
“The (SQC) has to train hundreds of employees … they have a lot of infrastructure to get ready, they’ve got to hustle to get this ready in time,” Greenblatt says. “It’s a tricky thing to be in the cannabis business.”
Asked if Canopy and other licensed producers were disappointed in Quebec’s approach to selling cannabis, Greenblatt deferred to the wisdom of Snoop Dogg.
During a recent visit to Montreal, the legendary rapper and cannabis advocate offered Global News this nugget about state-controlled sale of cannabis.
“Give ’em time, give ’em time,” Snoop said. “It’s a start, you have to start from somewhere. Give ’em time.”