Top photo: Cannabis plants in one of Canopy Growth Corp.'s specially designed flowering rooms. Photo courtesy of Canopy Growth Corp.
Canada’s licensed producers have been working hard to meet the upcoming demand of the legal adult-use market opening by July 1.
Canopy Growth Corp. has been preparing since Prime Minister Justin Trudeau was elected, according to Director of Communications Jordan Sinclair. He said Canopy has been focused on growing its production capacity to serve the new market.
Canopy Growth Corp.'s cannabis buds on drying trays. After harvest, the buds are trimmed, dried, cured and tested prior to sale. Photo courtesy of Canopy Growth Corp.
Canopy currently has six sites with licenses, and several others pending licensure. Sinclair said the company has a total of 4 million square feet of greenhouse space and another 900,000 square feet of indoor production space.
“We’re very fortunate that we’re an existing medical producer in Canada, so we have federally regulated production sites [and] an industry base that knows us and that we’ve been able to build a level of confidence with, and that puts us in a good position,” Sinclair said.
In addition, Canopy has announced expansion projects in British Columbia, Alberta, Saskatchewan, Quebec and New Brunswick, and will also add on to its existing facilities across Ontario, which Sinclair said will put the company in a good position to get products onto the shelves next year.
“That obviously requires the stars to align in some regard,” Sinclair said. “We’ve got to get the licenses and the retrofit and the genetics and all of those things in place, but we think we can do it. We’re up to the challenge, and we hope we can get it done by July.”
The company also hopes to sharpen its marketing strategies in time for recreational sales.
“We need to get our name out there,” Sinclair said. “We’re going to be competing with a lot of other cool companies and cool brands, and we just really hope that we can rise above all of that and introduce ourselves to the consumer base.”
Sinclair said much time and thought went into creating Canopy’s Tweed brand, which is its longest-standing brand.
“In the early days, we really stood out in the crowd because it was the one that didn’t look like it was trying to be a pharmaceutical company,” he said. “It’s got more of a classic look and feel, and a tone to it that is much more approachable and conversational.”
The front entrance of Canopy Growth Corp.'s headquarters in Smith Falls, ON. Photo courtesy of Canopy Growth Corp.
Canopy will focus Tweed toward the recreational market, Sinclair said, and will continue marketing Spectrum, the company’s global medical brand, to the medical market.
Sinclair said one of the company’s challenges in preparing for adult-use sales will be staying mindful of the smaller details along the way.
“We need to be much, much bigger, but we need to be able to stay elevated and take a look at the fine points and details that consumers are really going to pick up on,” he said. “We don’t just want to be the biggest. … We want people to choose us because our brand and our product resonate with them.”
Another Canadian LP, The Hydropothecary, is also expanding in anticipation of the recreational market. The company has broken ground on a 250,000-square-foot expansion in Quebec, which will create an additional 100 full-time jobs and bring total production capacity to 300,000 square feet, according to a company press release. The increased production space will allow The Hydropothecary to produce 25,000 kilograms of dried cannabis annually, and CEO Sébastien St. Louis said the facility will be ready by July 1.
The company has also recently received an expanded cannabis storage license, which increased its licensed storage capacity from 4,380 kilograms to 9,380 kilograms.
Like Canopy, The Hydropothecary has faced its share of challenges during its rapid expansion.
“We’re certainly feeling the effects of hypergrowth,” St. Louis said.
The company hired 50 new employees in the past year, and plans to hire an additional 100 in the upcoming 12 months, according to St. Louis.
Photo courtesy of The Hydropothecary
The Hydropothecary has also been working to overcome a Myclobutanil pesticide violation from last year.
“We took a hard look at our processes, [and] we upgraded them,” St. Louis said.
He said the company fired the employee who applied the pesticide, caged off its irrigation systems, put new quality-assurance oversight in place over every product that comes in, and it now double tests at third-party labs.
The Hydropothecary has also been keeping an eye on the provinces’ regulations as they continue to roll out.
“The federal government has given essentially the medical licensees … the power to produce and manufacture cannabis products under adult-use,” St. Louis said. “The provinces have been given the power to set up distribution schemes.”
There are a few different distribution models coming out of the provinces. Some have chosen a public model through the existing liquor boards, while others are pursuing a private retail model and looking for retailers to partner with. St. Louis said The Hydropothecary is working with most of the provinces in developing these models and forming its business practices accordingly.
St. Louis said the company differentiates itself through its innovative products. Federal regulations only allow for certain types of products, he said, and The Hydropothecary has applied for and received approvals for three different product lines to capitalize on all three types.
“Our Decarb CannaCap, a cannabis capsule for dried cannabis, … is unique on the market,” St. Louis said. “We’ve [also] achieved approval on our Elixir product, which is a sublingual spray. It goes under the tongue and is absorbed through the mouth, [and] tastes like peppermint.”
St. Louis said both products have also been approved for Kosher certification.
“We’re investing heavily right now in research and development to continue to innovate new products so that when adult-use comes on, we have a full breadth of product offerings to offer consumers,” he added.
