Doug Schmidt – Windsor Star – December 28, 2017
“Not in my wildest dreams.”
Vic Neufeld can’t believe how fast and far the health venture he helped launch has grown since a single Leamington greenhouse switched three years ago from flower production to pot production.
Aphria Inc. has mushroomed into a $2-billion corporation with 150 local employees — and Neufeld continues to dream bigger.
The demand for his company’s medical cannabis has exploded, and, in just six months, Ottawa opens the doors wide on the sale of marijuana for recreational purposes to all Canadian adults.
Aphria can currently produce 10,000 kilograms a year of medical marijuana in a 100,000-square-foot operation. That production space, however, will triple in size by January, and the company is hopeful Health Canada will approve the corresponding tripling in pot output by the spring.
But the company is already halfway through construction of its next expansion phase, with another 700,000 square feet in greenhouse marijuana growing space to be ready by July or August 2018. Completion of that stage, and approval by Health Canada for the additional output, would mean jobs for about 400 in Leamington, said Neufeld, the company’s CEO.
And even that isn’t the end of it for Aphria.
“We’re already on the prowl to add greenhouse capacity,” Neufeld said. He’s aware of at least three other established licensed pot producers hunting for greenhouse space in the Leamington area.
Anticipating a surge in pot demand in 2018, the federal government has been racing ahead with the issuing of new medical marijuana production licences, the holders of which will be permitted to sell into the various provincial models of retail distribution.
With Shoppers Drug Mart recently signing a supply deal with Aphria for medical marijuana, Neufeld anticipates continued big growth in that sector.
Just as Aphria and other commercial pot producers are gearing up for a new multibillion-dollar industry, Windsor and another 13 Ontario municipalities chosen to host the province’s first marijuana retail outlets are having to hustle to be ready by the anticipated July 1 start.
The province has asked those municipalities to help pinpoint the most suitable locations for the stores, which will be operated by a new LCBO-controlled cannabis retail agency. A Windsor planning official said the province wants an existing commercial building it can lease in an area not requiring rezoning.
It won’t be easy.
Windsor’s planning department has been tasked with creating a map of the city showing where such a retail outlet might be most suitably located. But here’s the catch: the map must identify “sensitive land uses” such as schools, parks, community centres, emergency shelters and addiction treatment centres near which the sale of pot will be a no-no. That likely precludes a downtown location, at least for the initial retail outlet.
Because the province is running the show, city council has a say but no veto on where the retail outlet is located. After the province selects its preferred site, a notice will be posted on the targeted building for a period of public feedback. Given the tight timelines, the single retail store of about 2,500-square-feet and serving the entire region (the closest currently approved host municipality is London) will likely be leased, with upgrade work to commence by late-February.
At a recent meeting with representatives from the Ministry of Finance and the LCBO, local officials, including police and health unit, were told Windsor’s retail outlet will sell both dried marijuana and cannabis oils, as well as seeds and even seedlings. Under the Trudeau government’s proposed legislation, every Canadian adult will be permitted to grow four plants at home. Ontario has announced it is also setting up an online option for retail purchases of pot.
Leamington Mayor John Paterson said town staff there have met with several companies interested in starting commercial marijuana grow operations in the municipality.
“We’re preparing ourselves for the possible expansion of the industry in Leamington,” he said. The southern climate and more sunlight hours are big positives, and marijuana grow ops are permitted on lands zoned for agriculture, unlike many Canadian municipalities where they have to be on industrially zoned land. This translates into big savings in property taxes. Farms are taxed at a rate that is 75 per cent lower than residential land in the Windsor-Essex region.
From a tourism perspective, Canada’s legalization of marijuana in the new year “could have a huge impact on our region,” said Adriano Ciotoli of award-winning WindsorEats.
“We’re right on the border and the numbers are huge,” said Ciotoli, whose business draws thousands of visitors to the Windsor area annually with its culinary tourism events.
Michigan next door has a third more patients registered to use medical marijuana in that state than Canada has as a nation, second only to California in the USA.
WindsorEats currently draws more than a quarter of its clientele from across the border, and Ciotoli said there’s “definitely” potential for the local economy to cash in on recreational marijuana tourism.
But he cautions that it’s something that needs to be analyzed and that it’s unlikely to be a worthwhile expansion for him if the pursuit of marijuana tourists alienates his business’s existing clientele, who love the food-and-drink social aspects of the current WindsorEats offerings.
Another issue he sees is that the proposed government controls threaten to “put a stranglehold on it from a tourism aspect.”
The proposed legislation will all but forbid the use of marijuana products in public. And with a threatened clampdown on establishments that currently offer non-residential settings for medical marijuana users to toke up, where are tourists supposed to go to get high?
“We still have to look into this further,” said Ciotoli.
Jon Liedtke, co-owner of downtown Windsor’s Higher Limits medical cannabis lounge, wonders what legalization will mean to such groups as apartment and condo dwellers and students in dorms if using recreational marijuana is restricted to private residences.
“Cannabis lounges would be ideal to allow us to take part in this industry we helped establish,” he said. Liedtke, a pot advocate, said a lobbying campaign will be launched in the new year to put pressure on the government to loosen restrictions on where cannabis can be consumed.
The Windsor-Essex County Health Unit, meanwhile, is seeking supplementary funding to hire and train enforcement officers and health promotion staff to crack down on cannabis use in prohibited areas to “ensure … populations are better protected from the negative effects of cannabis use.”
Ottawa has promised to share tax revenues from pot sales with the provinces to fund public education and enforcement, and city council in early-December approved a resolution in support of the local health unit’s request.
Some municipalities have informed the province they want nothing to do with the cannabis retail stores, and the willing host communities, like Windsor, are seeking a slice of the profits to invest in education, awareness and enforcement.
Kingsville’s Bob Hanes has no doubt local government and police authorities will have their hands full once Canadian adults start buying and growing marijuana.
“I want to see the government impose rules so that this doesn’t affect you or me,” he said.
About two years ago, new neighbours moved into the home across the street from his Cottam property and they’ve been growing their own medical marijuana, which is legal with a special Health Canada licence. Hanes said he’s been suffering headaches ever since from the “skunk-like odour” emanating from that address. Complaints to the police and the town’s administration and politicians did nothing, he added.
“Control the odour … keep it respectable,” Hanes said, adding he anticipates many more complaints such as his to surface when pot goes legal in Canada.
Demand grows for medical marijuana
— In the first 11 months of 2017, Health Canada authorized 41 new licensed medical marijuana producers, more than the total number approved in the previous three years.
— Of the 80 licensed producers as of the beginning of December, 45 are in Ontario.
— During the first quarter of the 2016-17 fiscal year, 5.5 tonnes of dried marijuana and cannabis oil were purchased by Canadians with medical marijuana prescriptions.
— By the last quarter of 2016-17, sales had shot up 210 per cent, to 11.5 tonnes, according to Health Canada.
— The number of Canadian medical marijuana purchasers at the end of June was a little over 201,000, up from 130,000 just six months earlier.