National Post (National Edition)
CANNABIS INDUSTRY RACES TO SCALE UP PRODUCTION.
AMID POT SHORTAGES, DEBATE LINGERS OVER VOLUME VERSUS QUALITY
At first glance, The Supreme Cannabis Company’s facility in Kincardine, Ont., looks something like a trailer park in the middle of a construction site.
The only real giveaway that it is the site of a cannabis farm is the pungent smell of pot as one approaches.
But behind the handful of trailers, which are serving as makeshift boardrooms until the company’s site expansion is complete in the summer of 2019, are a dozen white greenhouses filled to the brim with cannabis plants in various stages of growth.
Each greenhouse roughly the size of half a basketball court and can produce about 500 kilograms of dried cannabis flower per year.
By the standards of major Canadian licensed producers, that’s a pittance. But for Supreme, it’s entirely by design.
“We don’t want our greenhouses to get too big, because we know that it’s just not that easy to fill them up, and what’s more, to fill them up with plants that have consistent quality,” said John Fowler, the company’s 31-year-old chief executive.
It’s an approach that puts Fowler and Supreme at odds with many of Canada’s largest licensed cannabis producers, who are racing to scale up with bigger and bigger greenhouses that can be up to a million square feet in size.
In some cases, these greenhouses used to be home to tomatoes, or orchids, and have been modified to fit the needs of the cannabis plant; in other cases, they have been designed from scratch.
But Fowler and other skeptics argue that growing cannabis in such an environment may be more of a struggle than many realize, with challenges that range from bugs to the very genetics of the cannabis plant itself.
It’s a debate that is taking on added resonance amid the supply shortages that have plagued the industry in the months since recreational cannabis was legalized in Canada, with some reports suggesting producers are having difficulties reaching lofty production targets
Tom Flowr, current CEO of The Flowr Corp. and a cofounder of licensed producer Medreleaf, believes like Fowler that his company’s strategy of growing “high quality” cannabis on a smaller scale is simply more sustainable in the long run.
“I would say getting a large-scale greenhouse to produce premium, high-end flower is almost impossible, or not possible at all,” Flowr told Financial Post in a recent interview.
“In a controlled environment that is smaller in size, we have the ability to control every parameter that might affect the growth of the cannabis plant. You don’t have as much control in an expansive greenhouse.”
The reasons could go beyond just external factors. In North America, cannabis, because of the its illegal past, has never been grown in large greenhouses, or even outdoors on large swaths of farmland.
The best kind of cannabis, Fowler noted, has come from indoor grow rooms, not much larger than a bedroom, for instance.
“It was grown by trial and error in small heated rooms. And some of the best bud out there is still on the black market.”
Indeed, it’s not a stretch to infer that because cannabis has traditionally been grown in smaller spaces with artificial light, there were a selection of strains developed to thrive in those environments, according to Jonathan Page, a well-known cannabis scientist who recently took on the role of chief science officer at Aurora.
“That doesn’t necessarily mean that those plants are unable to grow elsewhere. It just means that the genetics that are available in cannabis plants currently are definitely able to thrive in smaller, indoor grow spaces,” Page said.
Page was quick to note that Aurora has not had issues with building harvest capacity, and emphasized that the positives that come with scale, such as financial might and the ability hire the best growers, outweigh the negatives.
But more generally, he said, attempting to build scale in cannabis production brings with it a number of challenges.
First among them is that the cannabis plant has not developed the kind of resistance to disease that other crops have, simply because the plant has barely been researched, let alone bred to be disease-resistant.
“Pests and pathogens are a problem in all agriculture. But the particular pathogens that attack the modern cannabis plants, they’re just not equipped, at this stage to fight back against,” Page said.
Cannabis also attracts specific insects, such as spider mites, that seem to love nibbling on its roots, though Page pointed out that such pests are very infrequently seen in modern licensed producers.
“This is exactly the kind of problem that can be solved by science,” he said. “We can probably breed cannabis plants that actually have a natural resistance to insects because we’ve noticed that depending on strain, there’s a different degree of insect infestation.”
Hermaphroditism, in which male flowers are produced on female plants, is another issue that is known to be a problem for black market growers.
Flowr, meanwhile, noted that cannabis producers are also limited by the inability to use pesticides because cannabis is consumed by inhalation.
“That separates how you can grow it from most other agricultural products,” he said. “Health Canada regulations have really restricted the use of pesticides so when you’re growing in larger and larger environments and you have hundreds of thousands and millions of square feet of greenhouse space, those pests become harder to control, harder to mitigate.”
So far, none of Canada’s biggest licensed producers have acknowledged having problems in scaling up.
Bruce Linton, the CEO of Canopy Growth Corp., Canada’s largest cannabis producer, said to the contrary, that his company’s four-year history of cultivating the plant has taught them a great deal about how to grow cannabis in a way that yields the most cannabis per square foot.
Bigger spaces, he said, offered other advantages too, such as a continuous output and economies of scale.
“There’ll always be some new area producing and finishing,” he said, “which will give you much more consistent product and also a much lower cost of operation.”
For Linton, the cannabis shortage is merely a shortterm issue, ones that will be ironed out over time. But he also noted that he believes the future of cannabis lies not necessarily in producing the best quality flower, but in expertly and efficiently extracting cannabinoids, or other molecules in the cannabis plant, for use in oils, gel capsules, and eventually, food and beverage products.
“Cannabis is an ingredient. At the end of the day, if you can get your head on track that what you’re doing is creating an input-ingredient process, what you really want to think about is not the environment it grows in — greenhouses, or whatnot — but how to make the plant only produce say THC,” he said. “It’s the molecules that matter. That’s what I get excited about.”