Industry experts discussed business development and economic impacts of growing Canada’s cannabis industry at the Vancouver Island Economic Summit this week.
Moderator Peter Guo, B.C. leader for enterprise risk services and cannabis industry services with MNP; Jeff Guignard, executive director of the Alliance of Beverage Licensees; Katrina Marquez, Tilray senior patient services manager; Allan Lingwood, chief compliance officer of Victoria-based cannabis retailer Original Farm gave presentations and fielded questions from the audience Thursday in Nanaimo, talking about the cannabis industry’s massive and rapid growth and its possible product and economic spinoffs.
“Pharmaceuticals, consumer products, retail, marketing, wholesale distribution, all those are playing and integrating and causing great disruption in this emerging service industry,” Guo said.
Nanaimo-based Tilray Canada now has products in 12 countries.
“What we are witnessing right now is a global paradigm shift and we’re very lucky to be Canadians and leading the world in this change,” Marquez said.
With that shift is a projected $150 billion worldwide industry and the winners will be the players with the most recognized and trusted brand names and the ones that have sound and secure multinational supply chains and partnerships, she said.
The big names in alcohol, tobacco, soft drinks and other are already establishing their turf through multimillion-dollar deals and partnerships with cannabis producers. Tilray, which now employs 250 people at its 60,000-square-foot Nanaimo facility, has joined with pharmaceutical company Sandoz Canada to help market to and educate doctors, pharmacists and hospitals about Tilray’s medicinal products.
Shoppers Drug Mart and Pharmasave have applied for cannabis licences and some insurance companies, Marquez said, are now covering prescribed medical cannabis products.
story continues below
Panel from industry and regulation discuss the near future of cannabis industry in Canada at Vancouver Island Economic Summit. #cannabiscanada #VIEA #Nanaimo @NanaimoBulletin pic.twitter.com/wQed6rsB9P
— Chris Bush (@ChrisBushphotog) October 25, 2018
The recreational cannabis industry is expected to have a major economic impact in B.C.
There are currently 132 licensed Canadian producers. The B.C. Liquor and Cannabis Distribution Branch has signed agreements to retail products from 32 of those, 15 of which are in B.C., five on the Island.
Meanwhile, commercial growers are scrambling to meet demand for recreational cannabis. There is currently not enough cannabis to supply the Canadian recreational market, which according to statistics presented by MNP, consisted of 4.9 million cannabis-consuming Canadians in 2017 that created a estimated $5.7-billion market. As of June 2018, annual production of dried cannabis product and oil was 97 metric tonnes and the anticipated demand for cannabis by 2021 is expected to hit 734 metric tonnes.
The potential tax revenue is higher than for liquor sales. Colorado, which legalized cannabis, now takes in more tax revenue from cannabis than from liquor.
Marquez said Tilray and other producers are expanding existing facilities and acquiring properties – such as Tilray’s High Park, a former hot house pepper farm in Ontario – to increase production in Canada and abroad and will be hiring more people. Companies are also developing new methods and technologies for growing marijuana on a massive scale.
“It is critical that we have systemized production processes that we believe are efficient, scalable and replicable … If you guys are watching the news, there’s not enough cannabis in Canada right now, so we need to scale up very, very quickly,” she said.
Guignard pointed out some of the unknowns around new kinds of cannabis products, such as THC-infused soft drinks, wine and beer and determining how combining alcohol and THC, the psychoactive component of cannabis, impacts level of intoxication, which is of particular interest to police and insurance companies.
“It’s money. It’s liability,” Guignard said.
story continues below
Susan Mowbray of MNP on #cannabis: "What we are pretty sure of is that there is going to be a vibrant cannabis industry here on Vancouver Island and I would fully expect that there will be several strains that are branded as 'Island Good.'" https://t.co/h7rMp3SEkv pic.twitter.com/X2fuAlffDQ
— Nanaimo Bulletin (@NanaimoBulletin) October 25, 2018
There is also the issue of “political courage” politicians and industry leaders will need, he said, the first time they are faced with a cannabis-associated fatal accident, while trying to defend the creation and expansion of a multi-billion-dollar industry with products designed to be safe for consumers while eradicating, through legalization and legislation, the black market and crime associated with illicit trade.
“It’s going to take some courage when the first bad thing happens,” Guignard said. “We’re going to see – I hate to say it – some 16-year-old, high out of his mind, drives his car, kills somebody and that’s going to be a massive pushback. How dare you legalize cannabis? You killed my son … that’s a tough conversation and it’s going to take a lot of political courage to get through that and to stick with what we’re trying to do because it’s about public safety.”
The economic summit, put on by the Vancouver Island Economic Alliance, was held Wednesday and Thursday at the Vancouver Island conference centre.