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Marijuana Legalization in Canada Has Chasing a Green Rush Companies



SMITHS FALLS, Ontario – Millions of dollars worth of marijuana plants being bristled over the noonday sun as employees of Canada's largest cannabis business bustled about the 47 giant growing rooms of its factory, which was once made by Hershey bars.

Now it's home to Tweed, whose parent company, Canopy Growth, is the first Canadian marijuana grower to debut on the New York Stock Exchange.

Valued at more than $ 10 billion, Canopy is worth more than Bombardier, the Canadian manufacturer that is one of the world's largest makers of planes and trains, offering a strong example of this nation's new get-rich-quick hope ̵

1; the marijuana industry.

On Oct. 17, Canada is set to become the second country in the world and the first major economy to legalize marijuana for all uses.

"It's like Seagram's back when Prohibition was in place and just about to end," said Deborah Weinstein, a lawyer in Ottawa who handled Canopy's move onto the Toronto Stock Exchange, with the stock symbol WEED. "But it's more than that. This has never been an industry. "

On the same day that marijuana becomes legal, the government wants to announce it will make it easier for Canadians to obtain a small amount of money, according to an official familiar with the plan.

The official, who spoke of the condition of anonymity. The jaws of marijuana or less are the legal limit of the new system.

The law limits the products that can contain cannabis; edibles, for example, does not want legal until next year.

But the companies are already lobbying for more permissive rules.

The fervor is a little reminiscence of the dot-com boom of the 1990s. The top 12 Canadian marijuana companies are now worth nearly 55 billion Canadian dollars, or $ 42 billion, and investors are snapping up the stock.

Profits, though, are a dream of the future. At Tweed, for example, sales last year from the medical marijuana business were just 77 million Canadian dollars. The company lost 70 million dollars.

Some investors may be sorry.

There are 120 businesses licensed to grow medical marijuana, which has been legal in Canada since 2001. They are now poised to serve people who simply want to get high.

Shoppers Drug Mart, the country's largest pharmacy chain, has taken out a medical cannabis producer license.

Most big alcohol players appear

Jakob Ripshtein, who used to head the Canadian operations of Diageo, the British-based liquor giant that makes Guinness beer and owns several of Seagram's brands.

In May, the chief operating officer of Aphria, which owns expanding and expanding marijuana greenhouse complex near Leamington, Ont.

"Do I believe there are going to be different players coming into the industry? "Mr. Ripshtein said. "I absolutely do."

Only dried cannabis, oils and seeds will go on sale this month. But the industry is dreaming of a future that will include products like cannabis-laced candies.

[ForfuturecoverageofmarijuanalegalizationinCanadaandotherCanadiannewssubscribetoourweekly Canada Letter newsletter .]

There is also an industry around the industry, already making money.

Businesses have jumped to create the software that allows growers to track their plants and final products, as the government requires. Marijuana growers are also voracious consumers of supplies like fertilizers, as well as energy.

And now they have a customer base over tomato and green pesticides.

Beyond that, abandoned factories, like the one Tweed operates in,

Even Canadian news organizations have joined in. In Toronto, The Globe and Mail has "hired" reporters and editors to produce "Cannabis Professional," a daily newsletter that will cost 2,000 Canadian dollars a year for a subscription

David Campbell is one of those profiting from the boom.

Mr. Campbell, 50, has a background in management that is known as "supercritical fluid botanical carbon dioxide extraction systems." They are also known as decaffeinate coffee.

But they are also ideal for squeezing the active ingredients out of marijuana plants create oil.

So in 2015, when Justin Trudeau's campaigning for recreational legalization (Uruguay legalized the drug in 2013), Mr. Campbell sets up Advanced Extraction Systems at Charlottetown, Prince Edward Island, just to serve the cannabis industry.

19659002] Mr. Campbell has not looked back. The company has sold 12 systems this year, including one to a medical marijuana company in Germany. Advanced has gone from one employee, Mr. Campbell, to 14, most of them engineers.

"We feel this is just beginning," Mr. Campbell said.

Tilray, a producer with headquarters in Nanaimo, British Columbia, said the food was "fortune-telling and Drug Administration in the United States has been given permission to export a cannabis compound to the University of California, San Diego, for medical research.

The value of the drug is declined to disclose it. Tilray's stock price up by 78 percent, adding billions to its value.

[Wherewillcannabisbesold?WhatwillhappenattheCanada-USborder? Canada

Meanwhile, the size of the industry is anyone's guess.

Statistics Canada, the census agency, estimated that last year Canadians handed over 5.7 billion Canadian dollars for marijuana, with 90 percent of that going to a vast black market of dealerships and underground websites.

No one knows what happens now with the illegal trade, although

The biggest players in Canadian marijuana, including Canopy, came out of the medical marijuana system, which was expanded about five years ago.

Bruce Linton, Canopy's chief executive, acknowledged

But hey, like most in the cannabis business, sees the government s tight limits on advertising and marketing as on obstacle to future profits.

The government requires did marijuana be sold in plain packages did feature large health warnings and tiny logos. Health Canada, the federal department that regulates cannabis, calls "information-type promotion" and "brand-preference promotion"

No ads are supposed to appear until Oct.

Health Canada said in a statement that it has cautioned several of the companies.

At the same time, a steady stream of lobbyists to Ottawa has been pushing for looser marketing rules, among other things.

Federal lobbying records show that public servants, political staff members and cabinet ministers have received 583 visits or phone calls from marijuana industry lobbyists since Mr. Trudeau What does sworn in prime minister in November 2015? That includes 92 lobbying visits alone by Brendan Kennedy, the president and chief executive of Tilray.

In the Tweed factory in eastern Ontario, where children buy broken bars from Hershey, Tweed has a dedicated visitors' center, museum, cafe and gift shop offering clothing and marijuana paraphernalia.

Visitors can learn that Louis Hébert and the first can nabis seeds in what would become Canada in 1606, and sniff the scents of the company's various strains of marijuana.

The atmosphere is a more successful tech startup than Cheech and Chong, with employees in white lab coats, disposable jumpsuits or black T-shirts, all bearing the company's retro script logo.

One recent day in the visitors' center, two of Tweed's 2,000 global employees talked about social media strategies at a long table of artfully distressed wood.

Mr. Linton was there, too, preparing to meet the civic leadership of Smith's case to discuss a mural for an outside factory wall.

He recalled when cannabis was hardly a sure bet.

Mr. Linton was involved with several tech start-ups in Ottawa.

In his early days, the company twice ran out of money, Mr. Linton said, and narrowly avoided being bankruptcy only because of a last -minute infusion of cash from hard-to-find investors.

Now investors have billions of dollars on his vision. And Mr. Linton declared that Oct. 17 wants to be a unique moment in Canada's history.

"The epicenter of the public policy is here, and everybody's coming to Canada from the other countries to see how we do it," he said. " Actually having home field for the first time ever in anything – this is amazing."

Follow Ian Austen on Twitter: @ianrausten

Catherine Porter and Lindsey Wiebe contributed reporting from Toronto , Kirsten Smith provided research.

A version of this article appears in print on on Page A 8 of the New York edition with the headline: As Canada Legalizes Pot, Green Rush Means Money, Too . Order Reprints | Today's Paper | Subscribe


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