Not just govern­ment and ma­jor firms look­ing to make a buck off bud

The Telegram (St. John’s) - - BUSINESS - BY KENN OLIVER

Nova Sco­tia busi­ness­man Bill San­ford, very com­fort­ably sit­u­ated in the later years of his pro­fes­sional life, never en­vi­sioned be­ing in­volved in the cannabis in­dus­try at 65.

But here he is, days from sell­ing the first grams of recre­ational pot in Canada and play­ing an ac­tive part in the whole process.

“I'm on the pro­duc­tion floor with peo­ple ev­ery day, so I've done ev­ery job and do ev­ery job that they do,” says San­ford, CEO of the Went­worth Val­ley, Nova Sco­tiabased Breath­ing Green So­lu­tions. It's the province's first li­cenced med­i­cal cannabis pro­ducer.

“It builds a much bet­ter pro­duc­tion team when they see the old man sweep­ing and clean­ing, plant­ing and trim­ming plants, har­vest­ing bud and ev­ery­thing else.”

San­ford came to the bud­ding in­dus­try through his youngest son Joe and a busi­ness part­ner who came to him seek­ing back­ing. He put his own expertise in the in­vest­ment world to use, stud­ied the prospect, vis­ited a li­censed op­er­a­tion and opted to dive in.

A shade un­der a year later, Breath­ing Green is through its fifth har­vest, fo­cus­ing on per­fect­ing four strains to start with: high THC va­ri­eties clev­erly named Lemon Dory, Mi­rage and Nor'easter, and a mid-range CBD strain dubbed Shel­ter.

“We've got lots of fin­ished prod­uct in stor­age that's been ap­proved by ex­ter­nal labs and the qual­ity is as we hoped it would be, and we're re­ally just await­ing our li­cence to sell from Health Canada now,” says San­ford. “We've gone through all of those hoops, so it's re­ally just a wait­ing game now.” THE WAIT­ING GAME San­ford is just one of count­less en­trepreneurs look­ing to join gov­ern­ments and the ma­jor cannabis pro­duc­ers in mak­ing a buck off bud.

At the wa­ter's edge in Clarenville, N.L., Ralph Duf­fit is also await­ing ap­proval from Health Canada for CK Far­ma­ceu­ti­cal, the modest grow­ing fa­cil­ity he's build­ing in what used to be Thirsty's Ban­quet Room and My Rec Room, a ban­quet room and pool hall he took over from his father.

“I have one room that's done, about 900 square feet and it's all wired and it's only a

mat­ter of putting the pots in and start­ing the grow­ing. The base­ment is al­most done, it just needs the wiring,” says Duf­fit, who just fin­ished in­stalling a $20,000 vault to store his mer­chan­dise.

“If I got a let­ter to­mor­row that I can start, I could be grow­ing in a month or two.”

But Duf­fit hasn't been sit­ting idly by wait­ing for Health Canada's ap­proval. He's also get­ting into the re­tail side of the in­dus­try and is one of the first 29 in­de­pen­dent cannabis re­tail­ers con­di­tion­ally li­censed by the New­found­land and Labrador Liquor Cor­po­ra­tion. His shop, Puff Puff Pass, will be lo­cated in the same build­ing as the grow­ing op­er­a­tion. “My thought was if I'm go­ing to get an LP li­cence, I may as well grow it in the back of the build­ing and up­stairs and sell it out through the front,” he ex­plains.

Duf­fit also rec­og­nized an op­por­tu­nity to of­fer a one-stop-shop for his cus­tomers, so he's car­ry­ing a full line of grow­ing sup­plies as well as a wide va­ri­ety of cannabis con­sump­tion prod­ucts and para­pher­na­lia.

“Ev­ery­thing that you can think about, that you need for pot — and a lot of stuff that you would never think about — we have it. From seed to when you butt it out in the ash­tray … and we've even got the ash­trays.”

While he's been able to elim­i­nate a lot of costs for con­sul­tants and con­struc­tion by do­ing much of the work him­self or hir­ing lo­cal trades­peo­ple, Duf­fit is still in it for over a mil­lion dollars. MAKE A SQUISH Fur­ther east, nes­tled among banks, un­sold con­dos and law of­fices in down­town St. John's, N.L., Jon Keefe and his busi­ness part­ners haven't in­vested nearly as much into their cannabis-re­lated busi­ness. It's a shop that spe­cial­izes in the sale of equip­ment and sup­plies for cre­at­ing and con­sum­ing all-nat­u­ral con­cen­trates and ex­tracts, col­lo­qui­ally known in the com­mu­nity as rosin or squish.

“When I dis­cov­ered con­cen­trates and ex­tracts and these purer forms of cannabis, where you don't have to light things on fire and breathe in the smoke, that ended up be­ing more up my al­ley,” says Keefe. “I was in­stantly drawn to it be­cause af­ter hav­ing quit smok­ing a few years ear­lier and now be­ing able to give up smok­ing weed, for me, I felt like it was a health ben­e­fit not to have to deal with the stink of the smoke, the tar, the chloro­phyll, the wax … ev­ery­thing that comes with tak­ing a big piece of plant mat­ter and throw­ing it on a fire and breath­ing it all in.”

The Dab­ber Hash­ery started out as a con­sign­ment sales op­er­a­tion in­side an­other busi­ness set up in hopes of be­com­ing a li­censed cannabis re­tailer. But when the NLC re­leased its re­quest for pro­posal, he was in­stantly turned off and plans for High Street were aban­doned.

“My first re­ac­tion was, ‘They don't want peo­ple like me sell­ing cannabis.' My sec­ond re­ac­tion was, ‘There's no way I'm go­ing to give them all this in­for­ma­tion that they're look­ing for.' Com­plete fi­nan­cial dis­clo­sure from ev­ery­body in­volved and all this kind of stuff.”

The nail in the cof­fin, how­ever, was a profit mar­gin of eight per cent. By his math, af­ter tax, a li­censed cannabis re­tailer would only stand to make 62 cents for ev­ery $10 of cannabis sold.

“I'll prob­a­bly never know, but I sus­pect that what the pro­vin­cial govern­ment wanted was for fed­er­ally-li­censed grow­ers that have gone through this rig­or­ous ap­pli­ca­tion process to be the ones sell­ing cannabis, or ma­jor cor­po­ra­tions like Loblaws,” he says.

“I know they did give a few li­cences to in­de­pen­dent re­tail­ers, but I'm not 100 per cent con­vinced there's a busi­ness case there. It scared me off.”

In­stead, Keefe and com­pany are fo­cus­ing on find­ing their own place in the cannabis mar­ket by of­fer­ing expertise in a spe­cific prod­uct line.

“For my part, the niche we're try­ing to find here is help­ing peo­ple make their own con­cen­trates. We'll have some heat presses set up here that peo­ple can use them­selves in the back room to make their own squish.”


Jon Keefe shows off one of the squish presses and other cannabis con­sump­tion para­pher­na­lia he sells at the Dab­ber Hash­ery, a spe­cialty shop in down­town St. John’s, N.L. Keefe had ini­tially planned to ob­tain a li­cence to sell cannabis prod­ucts, but aban­doned that en­ter­prise when it be­came clear the eight per cent mar­gin paid to cannabis re­tail­ers in New­found­land and Labrador didn’t make for a strong busi­ness case for him and his part­ners.

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