Canopy Growth Corp. aims to ‘dom­i­nate’ world weed mar­ket: CEO

Ottawa Business Journal - - RETAIL - BY DAVID SALI david@obj.ca

The head of Canada’s largest med­i­cal mar­i­juana pro­ducer had a clear mes­sage for a crowd of busi­ness­peo­ple at Ot­tawa City Hall ear­lier this month: le­gal­ized weed is com­ing soon, and his com­pany is ready to be No. 1 in that space as well – and not just in Canada.

“We didn’t want to stand around and wait and have a big com­pany form in an­other coun­try to come take us over,” Bruce Lin­ton, the chief ex­ec­u­tive of Smiths Falls-based Canopy Growth Cor­po­ra­tion, said in his key­note speech at the Mayor’s Break­fast event spon­sored by OBJ and the Ot­tawa Cham­ber of Com­merce on Sept. 15. “We want to dom­i­nate the world.” Mr. Lin­ton said Canopy is al­ready work­ing on new prod­ucts to com­pete di­rectly with al­co­hol, in­clud­ing bev­er­ages in­fused with THC, the ac­tive in­gre­di­ent in mar­i­juana. Such drinks could come in a mul­ti­tude of flavours and in dif­fer­ent strengths com­pa­ra­ble to beer, wine and spir­its, he added, but with­out the nasty side-ef­fects of booze such as hang­overs and weight gain.

“The al­co­hol mar­ket’s a funny one,” Mr. Lin­ton told OBJ af­ter the speech. “It’s very fickle. Some ge­nius in­vented flavoured vodka. Now ev­ery­body’s spend­ing their money on brown al­co­hols that are stored for long times. I think be­cause of its fickle na­ture, (al­co­hol) is sus­cep­ti­ble to dis­rup­tion from other prod­ucts. The prod­ucts that we’re bring­ing to mar­ket are sub­stan­tial dis­rup­tors.”

Founded in 2014 as Tweed Mar­i­juana, Canopy Growth Cor­po­ra­tion cur­rently con­trols more than 25 per cent of the Cana­dian med­i­cal mar­i­juana mar­ket. It now sup­plies med­i­cal cannabis to more than 16,500 cus­tomers across the coun­try un­der the Tweed brand and owns pro­duc­tion fa­cil­i­ties in Smiths Falls, Toronto and Ni­a­gara-on-the-Lake.

The first med­i­cal mar­i­juana pro­ducer in Canada to go pub­lic when it de­buted on the TSX Ven­ture Ex­change, the com­pany grad­u­ated to the TSX in July of this year. Since its de­but on the TSX, Canopy’s stock has risen nearly 25 per cent.

The com­pany has inked agree­ments to dis­trib­ute cannabis abroad in Aus­tralia, Brazil and Ger­many and has raised more than $140 mil­lion in cap­i­tal, much of it from U.S. in­vestors.

In Au­gust, Canopy re­ported rev­enues of $7 mil­lion in the first quar­ter of fis­cal 2017, a whop­ping 300 per cent in­crease from a year ear­lier and a 39 per cent rise from the pre­vi­ous quar­ter.

$7-BIL­LION IN­DUS­TRY

But Mr. Lin­ton said the com­pany sees a whole dif­fer­ent level of growth po­ten­tial in the recre­ational mar­i­juana mar­ket, which he es­ti­mated is al­ready worth at least $7 bil­lion a year even be­fore le­gal­iza­tion.

The fed­eral Lib­eral gov­ern­ment has said it plans to in­tro­duce leg­is­la­tion next spring to be­gin the process of le­gal­iz­ing and reg­u­lat­ing mar­i­juana for recre­ational use.

Mr. Lin­ton con­ceded he is “a bit afraid” of po­ten­tial com­peti­tors from the al­co­hol, to­bacco and phar­ma­ceu­ti­cal sec­tors, adding he sees big to­bacco as Canopy’s big­gest threat.

“To­bacco com­pa­nies have tons of money, and they have re­ally no fu­ture busi­ness,” he said. “The cig­a­rette guys are go­ing to be a bit des­per­ate, and they’ve got lots of money.”

De­spite that, he said Canopy is still in the driver’s seat be­cause “right now we have the mo­men­tum and a bunch of prod­ucts.”

FILE PHOTO

Canopy Growth CEO Bruce Lin­ton.

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