Last year’s Liberal win launched Canada’s medical weed producers to a new high.
A report published shortly after the 2015 federal election estimated 35,000 to 40,000 patients enrolled in Health Canada’s medical marijuana program with a total market worth $80 million to $100 million. Dundee Capital Markets analyst Aaron Salz estimated that with legalization, the market could be worth as much as $5 billion.
It's no surprise then that businesses involving prominent Canadians are cashing in.
On Wednesday, a federal court decision ruled that patients could grow their own medicinal cannabis at home. But rather than creating competition for multi-million-dollar marijuana production facilities, the new ruling will tighten up supply and dispel some of the murkiness of the current system, former Ontario health minister George Smitherman says.
“There’s a tremendous amount of marijuana in the system that has nothing to do with being consumed for medicinal purposes,” he says. “When you hear about dispensaries propping up in the neighbourhood, they’re all illegal. Where are they getting their marijuana? They’re not allowed to grow it. They’re operating off of what I would describe as seepage.”
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Seepage, he explains, is marijuana in excess of what a person needs for medicinal purposes. It may be from a legitimately grown source for personal use, but because you can’t control how big a marijuana plant will get, people are often left with extra that they then sell to illegal dispensaries. The effect of the ruling, according to Smitherman, will hopefully be to clarify the law and the existence of dispensaries.
Smitherman is on the board of Alta Vista Ventures Ltd., listed on the Canadian Securities Exchange with the symbol AVV. Currently awaiting a licence from Health Canada, the Vancouver-based facility has 15,000 square feet of greenhouse space to grow and sell medical marijuana. Smitherman, who ran for mayor of Toronto in 2010, is also an investor in and director of a second medical marijuana company called THC BioMed International (listed as THC) which just got its production licence last week. He once cautioned, however, that “not even the strongest weed can numb us against the effects of a second stint under Rob Ford.”
He isn't the only one getting into the medicinal pot business. Despite the perception that purveyors of weed are marginalized groups affiliated with criminal gangs, what’s happening can be described as an Elvis Presley syndrome, as criminal defence lawyer John Struthers said on a Canadaland podcast.
“For many years, there was great music being played by minority communities which was being ignored by the public at large,” he told host Andray Domise, “until Col. Tom Parker got a white boy to sing the stuff and all of a sudden it went nuts and they made the money. This is about money.” Here are some noteworthy people cashing in:
Call John Turner Spiderman, because he’s into Mary Jane. While the 86-year-old former prime minister says he hasn’t smoked medical marijuana, he’s a board member of Toronto-based Muileboom Organics Inc. with a growing operation in Niagara Region, and he fully supports it as a federally regulated business venture. Muileboom president Marc Kealey is also former president of the Ontario Pharmacists Association.
Chuck Rifici probably doesn’t mind being a volunteer CFO for the Liberal Party of Canada because in the days following the election, he saw the value of his shares in a medical marijuana company soar $5 million. Rifici is the co-founder and former CEO of Canopy Growth Corp., which operates the Tweed plant in Smiths Falls as part of three properties totalling 500,000 sq. ft. of growing space. Rifici is the largest shareholder, with 7.8 million shares in the company, which was also the first licensed grower to go public on the stock exchange. Tweed’s president is Mark Zekulin, who was senior advisor to former Ontario finance minister Dwight Duncan.
Former Progressive Conservative premier Ernie Eves is the chairman of Timeless Herbal Care, a Jamaican-based medical marijuana company, that has ties to both Canada and Israel. The company’s CEO also happens to be Courtney Betty, a former crown attorney with the federal justice department.
Who said pro athletes don’t get high? Former Olympic snowboarding champion Ross Rebagliati smokes joints just to keep “an even keel.” The 1998 gold medallist and Whistler resident is the chief pitchman and namesake behind Ross’ Gold medical cannabis. The company’s hemp products are available online and will soon be in storefronts in Michigan and southern California with expansion plans into Ohio and Georgia. The brand is awaiting licensing in Canada.
Is there a better endorsement for the industry than having a former deputy chief of Toronto police on board? Kim Derry is the senior advisor of safety and security at the aforementioned AVV, after a 38-year career in law enforcement. Derry performed uniform, undercover and investigative duties and oversaw policing operations in Toronto for all 17 divisions, managed in excess of 4,000 personnel and managed divisional policing budgets of $490 million. It’s probably safe to assume no one’s breaking in to that grow house.
Also check out Toronto Life’s guide to investing in publicly traded medical marijuana companies.
This article has been updated with additional attribution.