MariCann expansion establishes Norfolk as primary site today, in future
Photo by Jeff Tribe
MariCann Inc. looks forward to ‘growing green with green’ in its state-of-the-art $8-million 180,000-square-foot expansion.
“This is the field of dreams,” said VP of Operations Richard Kropman, indicating a large, fenced rectangle dotted with heavy machinery.
On a drizzly January morning, the target area on the MariCann property southeast of Glen Meyer was a muddy expanse. But for what Director of Media and Investor Relations Shawn Alexander describes as a startup company in a startup industry, ambitious dreams are well on their way to reality.
“We refer to it as scaling up,” understated Alexander of a 700-per-cent expansion from the current 30,000 square-foot self-contained indoor grow, production and distribution facility.
“In eight months, you’re going to see roughly 180,000 square feet of buildings standing where that second dirt pile is,” added Kropman, pointing.
MariCann Inc. is a licenced producer under Health Canada Access to Cannabis for Medical Purposes Regulations (ACMPR), one of 23 in Ontario and 38 nationwide. Created in 2013 by a founder who believes in the therapeutic practicality and effectiveness of cannabis, the company says its expertise includes a track record of creating shareholder wealth combined with experience in the pharmaceutical sector. Although currently a private company, plans are for its listing as a public entity on the Toronto Stock Exchange.
The emergence of cannabis from black market to highly-regulated and quality-assured white market medical product with multi-billion-dollar potential is driving what MariCann CEO Ben Ward (who holds an MBA with a dual concentration in operations and finance from Bradford University School of Management in England) calls only the ‘first big new phase’ on the 97.5-acre property. There are 90 acres of buildable space in total says Ward, cradling the long-term goal of creating the largest operation in the world.
“Right in Norfolk County. Norfolk County offers all the opportunity and infrastructure to allow us to do that.”
MariCann’s roots were planted via a September, 2013 handshake deal with the former owner of a MMAR (earlier Medical Marijuana Access Regulations for smaller ‘cottage industry’ operations where patients grew their own cannabis or had it grown for them) site.
The existing MMAR facility assisted in the transition to contemporary ACMPR licensing on a property with ample access to water, electrical grid and natural gas. Combined with required facilities, Health Canada regulations create a significant financial barrier to entry into the medical marijuana business, Kropman indicating a generally accepted ballpark of $9-million, and MariCann’s own $8-million startup total.
“It’s not throwing seeds in the ground and watching money come in, it’s not easy,” says VP Information Technology and Security Stephen Lem, who has 30 years of experience including working with Fortune 500 companies DuPont, Amgen and Actavis. “It requires a lot of discipline and a lot of planning.”
MariCann began operations with roughly a dozen employees, received its licence to sell in December, 2014 and sold its first product on the 20th of that month. The operation currently employs 60 in a self-contained production, processing and distribution facility which doubled sales in its second year. Expansion was always part of long-term planning and the current phase began November 22, 2016.
“We’re moving to 205,000 square feet in total,” said general contractor Jeff Ayotte, noting the new facility will have a 30,000 square-foot nursery, equal in size to the current total. First production is scheduled for the end of March, 2018.
Employment is anticipated to rise from current levels to between 80 and 100 upon project completion says Kropman. Due to its higher-tech automated nature, a majority of the new hires will be in quality control and supervisory roles.
“It will be more operations.”
It was Ayotte who mentioned the phrase ‘growing green with green’ for a project which includes lowering carbon footprint as a design element. The possibility of installing solar panels on the production facility’s roof has been investigated says Ayotte, along with various options for the site’s operational natural gas well, including gas-fired co-gen electricity production under island (off the grid) or parallel (selling back to the grid) models.
“Energy conservation on this project is huge.”
MariCann’s No. 1 priority is producing top-quality cannabis under practices which not only meet, but exceed the high bar of standards set by Health Canada. But environmentally-responsible operations also lower significant input costs for its controlled-environment (greenhouse) agriculture base, display a leading-edge approach for Health Canada, and offer ‘green’ branding advantages for clients.
“It’s a comfort level with our customers as well,” said Ayotte.
The first expansion project’s size is only part of a story that includes evolving technology in creating consistent production of a consumable food-grade item destined for pharmacy-level processing inside a controlled but fluctuating growing environment. Ayotte touched on some of the more technical aspects of a facility that to sum up succinctly, will not rely as heavily on equipment or practices converted from other uses, but more so feature dedicated state-of-the-art cannabis-producing technology.
“It kind of puts Norfolk County on the map and sets standards for production facilities.”
The process has been assisted says Ayotte, not only by the county’s support, but its natural and human advantages.
“We have a large talent pool to draw from and support us in this expansion.”
The site is currently MariCann’s lone production facility and will remain the company’s key production facility moving forward, says Kropman.
“This is an exciting phase of the industry,” he concluded. “MariCann is looking forward to expanding in Norfolk County and being part of a long-term win-win situation.”
An increase in demand without an increase in production capacity, mixed with production issues and recalls, has lead to a shortage of legal medical cannabis
The availability of dried cannabis and cannabis oil in many of Health Canada’s licensed producers has decreased dramatically in the past few weeks and even months. Increasingly, some patients are reporting a decrease in the availability of their preferred products.
A mixture of factors are contributing to the shortfall, say several industry participants — namely a dramatic increase in new people registering to access medical cannabis, combined with a lack of new approved production space to satisfy it. Production issues and recent product recalls that have forced some producers to remove product from the market also impact availability.
Based on a scan by Lift on Jan 3, of the 21 producers currently licensed for sale, only one, Mettrum, had no dried buds for sale, though they had two varieties of cannabis oil. Four of 21 producers don’t currently carry any CBD options for dried buds, either in high CBD or a 1:1 ratio with THC. In addition to these current figures, some patients are seeing products selling out quickly from their licensed producers’ online shops.
However the snapshots also show some producers with the same amount of cannabis, or more, than they had a few months ago, showing the problem is perhaps not widespread. While some producers are maintaining a consistent supply and some are increasing product options, the issue has been prominent enough to prompt at least two clinics that specialize in medical cannabis access to work on helping patients find solutions.
Lift spoke with several patients about the issue, many who were expressing their frustration on social media. Most have asked to not be named on record. A common theme among patients was the anxiety of not knowing if the strains they need will be available when they need them.
One patient who only gave his first name and age, Paul, 42, registered with Tweed. He says the issue of changing availability has been ongoing for some time.
“I have been registered with Tweed since March 2015. At first they had a tremendous amount of product. Within 6 months everything disappeared. We were told more would come and it never did. When it eventually came, it would disappear within a day. I feel like the system has let patients down.”
Paul says he hopes to begin growing his own to avoid these issues as soon as he can get authorization.
“Due to system shortcomings and no end to this problem in sight, I am going the route of self growing this year once i can find a physician that understands the situation.”
“We’ve got a lot of patients complaining about the inconsistency, first of the product. For instance, they’re going to order something that will come out that morning… it will be gone by the end of the day.” -Terry Roycroft, MCRCI
Jordan Sinclair, a spokesperson for Tweed, said the producer is increasing expansion of both their Ontario facilities and expects to address any product shortfalls very soon.
“We hear the feedback from some of our customers who would like to see more variety in the shop and we’re expanding our operations in order to meet those expectations,” says Sinclair.
“A ten-fold expansion at Tweed Farms has already been harvested, some of this harvest has already been added to the shop and other strains will be added soon, as early as this week. We’re also doubling the number of rooms in Smiths Falls and expanding our extraction capabilities to get ahead of the demand curve.”
Tweed Farms is a 350,000 sq ft greenhouse facility in Niagara-on-the-Lake, with another 25,000 sq ft of processing and storage space. This is currently the largest, fully-approved facility in Canada in terms of sq ft of approved production and sales space. They have another ~160,000 sq ft of approved production space at their Smiths Falls facility in the former Hershey Factory.
“You can predict how much you can produce in your facility with some degree of accuracy, and use the statistical history to gauge how many clients you’re able to take. That’s how we gauged to stop taking on new patients. It’s just based on how much we can produce and how much the average person consumes. Of course we’d like to supply more, but there’s a limitation of how long it takes to scale up.” -John Moeller, Broken Coast
Another patient who also asked that only her first name and age be used said that she had been registered with Mettrum until recently and had a similar experience.
“When I first registered with Mettrum, the clinic I went through encouraged me to sign up with them, and not knowing much about the cannabis program, I just took their advice,” says Anne, a marketing professional in Toronto in her early 30’s. She’s now turned to dispensaries to find cannabis to treat issues with chronic pain and insomnia.
“At first I was able to usually find the product I wanted, but very quickly I began to notice the strain I liked the most, Mettrum Red No 1 (Tahoe OG), was often not for sale. After months of this I gave up even trying, and when my prescription ended I didn’t sign up again. Now I go to a few dispensaries in Toronto. They don’t always have what I need, either, but they have far more options for me to choose from to find something else that might work.”
As of last week, Mettrum was unavailable for comment. Mettrum LTD owns 3 separate facilities, including the Agripharm brand, with a total of about 100,000 sq ft of approved production space. Canopy Growth, the parent company of Tweed Inc., has recently entered into an agreement to acquire Mettrum.
Hard to shop around
Because Health Canada rules dictate that a person can only register with one licensed producer based on one signed document from a medical professional, patients are unable to shop around effectively if their producer is out or low on product.
While you can register for additional producers with a new medical document for each one, not all doctors are willing to sign multiple documents, and some private clinics will charge an additional fee for each new registration to cover their own operating costs.
“As of August, when we got the ability for people to grow product, [new registrations have] probably jumped up to ten or eleven thousand per month signing up to these LPs, which is far faster than they anticipated and all of a sudden they’re running short on product.” – Terry Roycroft, MCRCI
One medical cannabis clinic in Ontario that specializes in medical cannabis access, Simcoe Holistic Health, recently sent out an email to their clients addressing the product shortages. In the email, the clinic notes they can assist patients in registering with a new producer in addition to their current one, or moving on from their current producer and choosing new ones.
The email also noted that this is an expected short term issue and that an increase in supply is expected soon:
“We have fielded many phone calls and emails from patients inquiring about the status with different licensed producers. While we do not know more than we have shared, we have been told that new crops at many producers are expected to come online in the first few months of 2017. The sheer growth of the program and number of patients accessing the program have exceeded the expectations of many.”
Terry Roycroft, the President of the Medical Cannabis Centre Inc. (MCRCI), a private clinic in Vancouver that specializes in helping patients navigate Canada’s medical cannabis system, says his clinic is also hearing from many patients who are frustrated by a lack of availability.
Roycroft says some producers who, when patients initially signed up, had a dozen or more options of dried buds and even oils, are now often down to just a handful of options.
“We’ve seen that and there’s a lot of reasons why that’s happened. First and foremost is some of them have seen a lack of production. We’ve seen several LPs where they used to have 20 strains and products are down to three and five now.”
Roycroft says it’s not just what’s in stock, but the consistency of what is available. Some producers may introduce a strain for sale but in such limited supply that it quickly sells out. Many patients come to rely on a specific strain or THC/CBD level and different products available from their producer may not satisfy their own needs.
“We’ve got a lot of patients complaining about the inconsistency, first of the product. For instance, they’re going to order something that will come out that morning… it will be gone by the end of the day.”
Over 100,000 registrations
The other factor is the amount of people who are actually signing up for the system. Roycroft also says it’s the massive increase in people wanting to access medical cannabis that has caught the system off guard more recently. Whereas new registrations in the MMPR in early 2015 were around 1,000 or 1,500 a month, newer figures coming out of Health Canada more recently are showing well over 5,000 or more new registrations per month.
Based on recent figures, there are now well over 100,000 registrations under the ACMPR. The program has seen constant month-to-month growth since its introduction, with patient registration increasing exponentially.
The ability for more producers to now sell oil is also noted by many as a reason for an increase in patient registration. Physicians are reportedly far more comfortable working with the standardized, titrated dosages available via cannabis oils sold under the ACMPR, making them more likely to allow their patients to access these products.
Roycroft says he has also seen this increase even more through MCRCI since the government introduced new rules in August that allow registered patients to grow their own cannabis.
“As of August, when we got the ability for people to grow product, [new registrations have] probably jumped up to ten or eleven thousand per month signing up to these LPs, which is far faster than they anticipated and all of a sudden they’re running short on product.”
Despite this, Roycroft also says he believes the issue will be short lived and that in discussing the issue with different producers, he sees production increases reflecting the uptick in patient demand.
“Virtually every one of the LPs we talk to is on target to increase their growing amounts.”
New production space
One of those producers trying to increase their capacity to take on more patients is Broken Coast Cannabis. Located in Duncan, BC, on Vancouver Island, Broken Coast was licensed to produce in early 2014 and has been selling for over two years now, but in early 2015 put a cap on new registrations because of a lack of new production space to satisfy new demand.
Broken Coast currently operates inside about 12,000 sq ft, and began construction in 2016 on an expansion that will give them another 13,000 sq ft of production space, including grow rooms, drying rooms, mother rooms, and more. The expansion will allow them to potentially double their patient capacity over time.
Broken Coast’s General Manager, John Moeller, says they made a decision early on to stop taking on new patients to ensure they could provide for those already registered.
“You can predict how much you can produce in your facility with some degree of accuracy, and use the statistical history to gauge how many clients you’re able to take. That’s how we gauged to stop taking on new patients. It’s just based on how much we can produce and how much the average person consumes. Of course we’d like to supply more, but there’s a limitation of how long it takes to scale up.”
While new producers will help address the issue long term, say Moeller, one way Health Canada can better address it now is to issue sales licenses to those already licensed to produce and increase production licenses for those already selling to patients. There are currently eight producers still awaiting a sale license to the public.
“The quickest way to get production online would be to approve the sale license for a bunch of the producers they’ve already got. Approving a new producer means they are approved for production only. It’s probably another year before they’re going to be selling product, so it doesn’t solve any of the short term problems to approve new producers. Additional capacity for existing producers and approving sales licenses for production-only producers is going to be the quickest route to solve the supply shortage at the moment.”
As for their own expansion, Moeller says Health Canada’s response has actually been rapid. They had an inspection on the new space in the past few weeks and he says they expect approval to grow in the new rooms very soon.
Even if there is an end to product shortages in sight, for patients who rely on accessing cannabis through the legal system, these shortfalls show a serious issue with how well the current access program functions. They also highlight why dispensaries, both online and brick-and-mortar, continue to be in such high demand. As long as patients who take the time to access the legal system still can’t find the products they need consistently the stop-gap offered by the ‘grey market’ will continue to serve a purpose.
‘People in this community don’t want these popping up all over the place’
By Andrew Kurjata, CBC News Posted: Jan 10, 2017 4:11 PM PT Last Updated: Jan 10, 2017 4:11 PM PT
Prince Rupert’s mayor and council are hoping to ban all marijuana shops from the city until January 1, 2018.
“This gives us the opportunity to take our time, research what other communities are doing, figure out what the rules are going to be federally,” Mayor Lee Brain told CBC Daybreak North host Carolina de Ryk.
“And once it becomes legalized, then we’ll be able to make rules around that.”
The proposed bylaw would explicitly prevent any business from the commercial production, distribution or sale of marijuana within city limits.
Medicinal marijuana not affected
According to a city spokesperson, the new rules wouldn’t affect licensed users of medicinal marijuana or clinics helping licensed users access medicinal marijuana, as long as the drug was not being sold on site.
Terry Roycroft, president of the Medicinal Cannabis Resource Centre, said the new bylaw wouldn’t stop his plans to open up an office in Prince Rupert.
“That really doesn’t impact our business,” he said. “We deal specifically with the patients who are needing cannabis for any medical treatments that they do.”
Roycroft said he was more surprised by cities that are allowing commercial operations to set up before federal rules come into place.
Raids, fines and crackdowns
Communities across Canada have struggled with the proliferation of marijuana-based businesses ahead of the federal government tabling any laws about legalizing and regulating the drug.
In Vancouver, officials have turned to bylaws and business licences to regulate the industry, handing out fines to those who don’t comply.
In Toronto, Ottawa and Montreal police have cracked down on marijuana storefronts in an attempt to discourage them from setting up in the first place.
Prince Rupert hasn’t faced those problems yet, but Brain hopes explicitly banning commercial marijuana from the city will prevent future problems.
“If people set up a shop now where there’s no real rules and then it becomes legal, they have the risk of being grandfathered in,” he said. “Then we have no control.”
“I’m certain that people in this community don’t want these popping up all over the place.”
A public hearing on the ban is scheduled for January 23.
With files from George Baker and Meera Bains.
‘We are going to see more of that’: Insurer must cover man’s medical marijuana, human rights board says
Keith Doucette, The Canadian Press | February 3, 2017 10:01 AM ET
A human rights board has determined a Nova Scotia man’s prescribed medical marijuana must be covered by his employee insurance plan, a ruling that advocates say will likely have impact nationwide.
Gordon “Wayne” Skinner, of Head of Chezzetcook, suffers from chronic pain following an on-the-job motor vehicle accident, and argued that he faced discrimination when he was denied coverage.
In a decision Thursday, inquiry board chair Benjamin Perryman concluded that since medical marijuana requires a prescription by law, it doesn’t fall within the exclusions of Skinner’s insurance plan.
Perryman ruled the Canadian Elevator Industry Welfare Trust Plan contravened the province’s Human Rights Act, and must now cover his medical marijuana expenses “up to and including the full amount of his most recent prescription.”
“Denial of his request for coverage of medical marijuana … amounts to a prima facie case of discrimination,” the ruling states. “The discrimination was non-direct and unintentional.”
Deepak Anand, executive director of the Canadian National Medical Marijuana Association, said the ruling is significant and could see a number of people apply for coverage through their provincial human rights commissions.
“If they could start to use this avenue to try to get their employers or insurance providers to start covering it, I think that’s going to be significant and we are going to see more of that,” said Anand.
Anand said he knew of one other instance where an insurance company agreed to cover medical marijuana — for University of Waterloo student Jonathan Zaid in 2015.
In the Nova Scotia decision, Perryman said the marijuana was medically necessary for Skinner.
“Since the medical marijuana in this case was prescribed pain management, it seems there is prima facie support for its medical necessity, owing to the fact that conventional prescription pain management drugs are normally eligible for coverage.”
Anand said the reasoning is “significant on its own” because many private and public insurers don’t recognize cannabis and marijuana as a medicine.
I’m elated, I’m still in shock it’s really still sinking in to be honest with you
“They (the inquiry board) are finally recognizing that prescription has some value, which so far the Canadian Medical Association and others have decided not to look at,” he said.
The ruling states the medical marijuana must be purchased from a producer licensed by Health Canada or a person legally authorized to produce for Skinner under the Access to Cannabis for Medical Purposes Regulations. The claim must also be supported by an official receipt.
Skinner, a former elevator mechanic with ThyssenKrupp Elevator Canada has been unable to work since the August 2010 accident.
“I’m elated, I’m still in shock it’s really still sinking in to be honest with you,” Skinner said in a telephone interview from his home outside Halifax.
He argued his own case before the board last October after being denied coverage three times, and said he hoped the inquiry board’s ruling would set a precedent.
“Hopefully this will help other people in similar situations and eliminate the fight that myself and my family have had to endure and the hardship that this has resulted in.”
Perryman found that Skinner’s chronic pain has been under-managed as a result of the denial of coverage, resulting in “profoundly negative effects on the complainant and his family.”
He also found that the plan’s justification for non-coverage was “wholly inadequate.”
“There was no evidence presented to suggest that premiums would have to be increased or that the financial viability of the plan would be threatened,” he wrote.
The Canadian Life and Health Insurance Association wouldn’t comment on Skinner’s case, but said in general it’s up to employers to decide if they want to cover medical marijuana under their group medical plan.
“We do not anticipate any impact on group benefit plans as each plan is unique, but will be reviewing the ruling,” the association said in an email.
For his part, Skinner said the human rights ruling has lifted a large weight from his shoulders.
“Just to have that security of knowing that these medications that are absolutely necessary for me to have any functionality are going to be provided for, just alleviates so much stress and hardship on my family,” he said.