Cannabis pro­duc­ers face push­back over light, odour emis­sions in On­tario farm­ing town

The Globe and Mail (BC Edition) - - REPORT ON BUSINESS - ARMINA LI­GAYA PEL­HAM, ONT.

David Ire­land is frus­trated by the “skunk smell” of pot that wafts down from two cannabis cul­ti­va­tion fa­cil­i­ties roughly five kilo­me­tres away and lingers out­side his home, even in the win­ter.

“On hot hu­mid days, it’s worse be­cause they have to vent more of­ten … You wouldn’t be able to open your win­dows,” he said.

The town of Pel­ham, Ont., where Mr. Ire­land lives – an hour away from Toronto, near Ni­a­gara Re­gion wine coun­try – has be­come a hot­bed for le­gal com­mer­cial pot grow­ers who have snapped up green­houses and con­verted them from flow­ers and veg­eta­bles to the more lu­cra­tive crop.

There are now six li­censed mar­i­juana pro­duc­tion op­er­a­tions in the com­mu­nity of 17,500 peo­ple, and an­other cannabis com­pany has ex­pressed in­ter­est in set­ting up an op­er­a­tion, ac­cord­ing to Pel­ham Mayor Marvin Junkin.

While the com­mu­nity is re­cep­tive to the jobs the com­pa­nies bring, mount­ing com­plaints about odour and light pol­lu­tion at night have prompted res­i­dents such as Mr. Ire­land to form a group aimed at keep­ing the in­dus­try in check.

As a re­sult, Pel­ham has banned any new cannabis cul­ti­va­tion fa­cil­i­ties and ex­ist­ing ones are pro­hib­ited from ex­pand­ing for one year, un­der an in­terim con­trol by­law put in place on Oct. 15.

“Un­for­tu­nately, the ones that are here haven’t been the best of cor­po­rate cit­i­zens,” Mr. Junkin said.

“It’s a two-edge sword right now,” the mayor said. “As a town we def­i­nitely like the jobs … if they can just meet a lit­tle bit more half­way on the emis­sions, light and odour.”

This ten­sion in Pel­ham high­lights the grow­ing pains of the cannabis in­dus­try as Cana­dian pot play­ers boost pro­duc­tion to meet do­mes­tic and global de­mand while bal­anc­ing the con­cerns of the com­mu­ni­ties where they op­er­ate.

The Green Or­ganic Dutch­man, based in Mis­sis­sauga, has also faced re­sis­tance in Hamil­ton where it has a planned green­house ex­pan­sion. Mean­while, more than 30 On­tario mu­nic­i­pal­i­ties have de­cided they do not want cannabis re­tail stores in their com­mu­ni­ties ahead of a Jan. 22 dead­line.

The do­mes­tic cannabis in­dus­try has ex­ploded in re­cent years in prepa­ra­tion for le­gal­iza­tion of adult-use pot last fall.

The cannabis mar­ket in Canada – in­clud­ing med­i­cal, il­le­gal and le­gal recre­ational prod­ucts – is ex­pected to gen­er­ate up to $7.17-bil­lion in to­tal sales in 2019, ac­cord­ing to a re­cent Deloitte re­port. Of that amount, le­gal sales are ex­pected to con­trib­ute more than half, up to $4.34-bil­lion, in the first year, the Deloitte re­port said.

Canada has emerged as the world leader in pot, with com­pa­nies ex­pand­ing their global reach as more coun­tries around the world le­gal­ize the drug for med­i­cal use.

The re­sult has been an eco­nomic bump in com­mu­ni­ties such as Leam­ing­ton, Ont., and Smiths Falls, Ont., help­ing to fill a void left be­hind by fac­to­ries that once pro­duced Heinz ketchup and Her­shey choco­late, said Ry­er­son Univer­sity busi­ness pro­fes­sor Brad Pou­los.

“It’s had a huge im­pact, ba­si­cally brought these com­mu­ni­ties back to life,” Prof. Pou­los said.

There were 10,400 peo­ple em­ployed in cannabis-re­lated jobs in Canada in Novem­ber, up 7,500 or 266 per cent from a year ear­lier, ac­cord­ing Sta­tis­tics Canada.

Mean­while, de­mand for le­gal recre­ational cannabis since Oct. 17 across Canada con­tin­ues to out­strip sup­ply, with wide­spread short­ages that prov­inces and ter­ri­to­rial sup­pli­ers have warned may last for months.

The push­back against the in­dus­try in Pel­ham is a con­straint on li­censed pro­duc­ers such as Can­nTrust, ham­per­ing their abil­ity to ex­pand and cash in on the cur­rent sup­ply crunch.

“Over­all, we con­sider this to be a po­ten­tial neg­a­tive de­vel­op­ment as a de­lay in Can­nTrust’s ramp to full pro­duc­tion would limit its abil­ity to cap­i­tal­ize on the near-term un­der-sup­plied Cana­dian mar­ket,” wrote Bank of Mon­treal an­a­lyst Tamy Chen in a re­cent note to clients.

Can­nTrust opened a hy­dro­ponic fa­cil­ity in Pel­ham last June, which the com­pany has said is ca­pa­ble of pro­duc­ing up to 50,000 kilo­grams of cannabis an­nu­ally. The pro­ducer had also planned to ex­pand the fa­cil­ity, in two phases, which would even­tu­ally in­crease its out­put to 100,000 kilo­grams.

The com­pany has not yet re­ceived the needed per­mits for the lat­ter phase of its ex­pan­sion

The com­pany has taken “sig­nif­i­cant pre­cau­tions” to con­trol odour at its Pel­ham fa­cil­ity and it hasn’t re­ceived any smell com­plaints, Can­nTrust chief ex­ec­u­tive Peter Aceto said, but it has been con­tacted by the county about light pol­lu­tion.

“It’s al­ways been re­ally im­por­tant to us to be a good mem­ber of that com­mu­nity,” Mr. Aceto said. “So if there is some­thing that is mak­ing peo­ple un­happy, we want to rem­edy it.”

Le­viathan Cannabis Group had an­nounced plans for a green­house in Pel­ham, and has made an ex­emp­tion ap­pli­ca­tion to the town, said its CEO, Martin Doane.

The Toronto-based com­pany, which is still await­ing its li­cence from Health Canada, in­tends to build a sealed green­house with full shad­ing to con­tain odour and light, he said.

“Our com­pany em­pathizes … We don’t want to be lumped in with these ear­lier-gen­er­a­tion fa­cil­i­ties.

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