Bunzl Canada Canadian Cannabis Industry

Industrial Supply Cannabit Market

Who is going to cash in on a market that Deloitte has estimated could be worth more than $22.6 billion


On a grey Friday morning early last month, the Mayor of Niagara Falls, Ontario, took the stage to deliver the welcoming address at the Grow Up Cannabis Conference and Expo, one of the bigger industry events that have sprung up around Canada’s burgeoning marijuana sector.


Sporting a tie with what he described as “green flowers,” Jim Diodati warmed up the audience with an anecdote about how as a politician he had braced for the “moment of truth,” when he would be asked by the press if he had ever smoked marijuana (he had experimented once upon a time, he told a reporter, but was no longer a user).


The mayor also made an observation about the crowd that had gathered in his city to network and learn more about the business of cannabis.


“I thought I was going to see a little more grunge today,” Diodati said. “And I can’t get over the suits I’ve seen.”


It’s a feeling that many in the potentially lucrative and soon-to-be legalized world of recreational cannabis might echo.


The federal government’s July 2018 target for legalization has brought professionals of all stripes flocking, looking to cash in on a market that Deloitte has estimated could be worth more than $22.6 billion.


At the Grow Up conference, for example, there were nearly 100 exhibitors offering up technical know-how to attendees, including booths set up by headhunters looking to help rapidly growing licensed producers find the right staff, security experts selling technology to protect crops, and an army of lawyers to help producers navigate rules that are still being written.


Among the latter were representatives of Bay Street firms giving talks with titles like “Complex Legal Issues That Raise Heads in Cannabis Deals” and “Protecting Your Intellectual Property During The Cannabis Boom.”


Big financial players are circling, too. Just last week, the industry received perhaps its biggest vote of corporate confidence when U.S.-based Constellation Brands Inc. — maker of Corona beer — struck a deal to buy a nearly 10 per cent stake in Canopy Growth Corp., Canada’s largest licensed producer of marijuana, for $245-million, a transaction some believe is the first in a wave of such investments.


The corporate influx, however, is not coming without some hard feelings, as the edgier — and even sometimes outlaw — elements of a decades-old counterculture are elbowed aside.


Those elements include dispensaries, which are illicit in Ottawa’s eyes and currently operate in a legal grey area; skilled growers, who may find themselves sidelined by criminal records acquired while perfecting their craft; and even small cannabis businesses, which could get squeezed out by bigger players with deeper pockets.


“It’s like cultural appropriation of cannabis culture, which people would laugh at,” said Jodie Emery, a cannabis activist and owner of Cannabis Culture, a brand that includes a magazine and dispensaries. “People think that it’s just a couple of stoners around the country who like to get high once in awhile, but it’s not. There’s a massive industry and a culture. We have music and art and symbols and history.”


Emery, who along with her husband — so-called Prince of Pot Marc Emery — has faced arrest and drug-related allegations, said when she first got into the cannabis culture in Vancouver in 2004, good news about the industry was scarce and getting your hands on the drug could be “pretty difficult.” Now, she sees government and big producers squeezing out those who have championed and built up the industry.


“It’s very sad to see that a lot of big money interests have been moving in to the cannabis industry without any regard or respect for the suffering that got us here.”


One example was a series of raids carried out on dispensaries in Toronto last year, an operation dubbed “Project Claudia.”


“It was a major shift, because suddenly, the activists and the patients and the advocates who had sacrificed relentlessly for years, were suddenly the target again,” Emery said. “A lot of people in the industry are desperately trying to find a way to go legal, and of course it’s nearly impossible if you don’t have the money and the connections.”


The question of who gets to go legal is one that could be decisive for many in the grassroots community.


Canada’s regulations for medical cannabis — a license under which may allow a producer to supply the recreational market, at least according to the Liberal government’s tentative legalization law — require security clearances for the senior persons in charge of a grow-op. The application for security clearance, however, involves a criminal-record check, something that many who have been involved with marijuana growing cannot pass.


For more reading on this excellent article by Geoff Zochodne of the Financial Post click here


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