Bigger than beer — cannabis industry taking off in Windsor/Essex

\Bigger than beer\ — cannabis industry taking off in Windsor/Essex
Cannabis capital Leamington chosen for inaugural weed industry conference
Hundreds attended the WECann 2018 cannabis industry conference in Leamington at the Roma Club on Tuesday.

Almost 300 delegates attend the sold-out WECann 2018 cannabis trade conference at Roma Club in Leamington on Tuesday, November 6, 2018. Doug Schmidt / Windsor Star

Vic Neufeld, CEO of Aphria, said the market potential for cannabis products is unknown at this point, but it would require new product forms of intake to be allowed, such as vape pens and infused beverages.

For years and years, the automotive sector was the economic bread and butter for MAC Coatings, a Windsor producer and supplier of paints and surface coatings to the city’s main industry.

Leading up to legalization, there were talks of potential cannabis supply shortage. However, Rosy Mondin, CEO of Quadron Cannatech, said the problem stemmed from some provinces being a bit slow.

Then came the greenhouse boom in the county, and the company with city roots stretching back to 1892 pivoted to this new business opportunity.

“It’s absolutely huge for us,” account executive Steve Koski said of pot’s early impact on his company’s fortunes.

According to her, the municipality will be a hub for the industry because greenhouse production of marijuana had its start in Leamington with Aphria taking the gamble years ago.

Farmers have long relied on his company for painting everything from tractors to packing warehouses, but now, said Koski, successful third-generation tomato farmers are eyeing the immense potential being unleashed by an agricultural product that was only legalized for recreational use a few weeks ago.

Not only that, he would like to see the "tomato capital of Canada" sign changed to "cannabis capital" at the entrance to the municipality.

Steve Koski, account executive, MAC Coatings, attends the sold-out WECann 2018 cannabis trade conference at Roma Club in Leamington on Tuesday, November 6, 2018. Doug Schmidt / Windsor Star

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Like tomatoes, cannabis-growing greenhouses need “extremely clean facilities,” said Koski, and that means floors, ceilings, pipes (many kilometres per greenhouse operation) and pretty much any other structural element need to be coated. That’s MAC’s job, and Koski said the company has seen a big new demand and is currently churning out 5,000 gallons of product a shift.

Vic Neufeld, CEO of Aphria, said his business is built on the right foundation for sustained growth, and he feels lucky to be situated in Leamington.

“What they’re talking about is doubling the capacity over the next five years — it’s massive,” he said.

"It's a future there when you've got that many young people and bright minds working in the industry," said MacDonald.

Billions of new dollars are available to be invested and to be made was the message delivered again and again to a packed house of close to 300 delegates who paid $250 a ticket to attend WECann 2018, the area’s first cannabis trade conference, at Leamington’s Roma Club.

Farmers, bankers, industrialists and politicians joined pot professionals from across North America on Tuesday for the day-long event co-hosted by TheCannalysts and Grant Thornton LLP.

The current industry has about 120 to 130 licenses, which "is not an industry whatsoever," said Mondin.

While the focus has been on cultivation — growing the pot — Aphria CEO Vic Neufeld, the conference’s keynote speaker, said cannabis will soon be seen as a mere “ingredient” to other consumer products. The Leamington-based licensed producer, with a market capitalization of about $3 billion, is already spending millions on research and development towards that future — cannabis-infused drinks and foods and health and wellness products.

"[Aphria is] capable of really servicing a lion's share of the Canadian marketplace," he said.

“It’s not allowed yet, but it will be — consumers will be demanding that,” said Neufeld, who foresees grannies dropping cannabis teabags in their mugs for a quick pick-me-up or athletes taking cannabis-infused drinks for exercise recovery.

"Once we get licenses going, that's really I think the answer to all of this," she said.

Cannabis in a few years, Neufeld predicts, “will be bigger than the beer market in Canada.”

Rosy Mondin, CEO, Quadron Cannatech, attends the sold-out WECann 2018 cannabis trade conference at Roma Club in Leamington on Tuesday, November 6, 2018. Doug Schmidt / Windsor Star

“This is just the beginning … the economic opportunities for this region are huge,” said Vancouver-based Quadron Cannatech’s Rosy Mondin, one of the rare female CEOs in the cannabis industry.

No stranger to the region — Mondin earned a law degree from the University of Windsor — she compares the cannabis sector to oil and gas, with what’s grown like the raw crude taken out of the ground, with further value being subsequently added. With delegates from the local tool and die industry taking notes, Mondin and others described the wealth-generation potential in such fields as manufacturing and in packaging.

“Everyone is turning their minds to the incredible opportunities with extraction,” she said, referring to the process of turning harvested bud into such products as oils for use in other commodities, like creams and vaporizers.

In a presentation on financing the new industry, Windsor Family Credit Union executive David Woodfull answered his own question about why the big banks had largely shunned cannabis companies by playing a pot prohibition-era video clip that described “the burning weed with its roots in hell” that triggers murder, suicide, even “hopeless insanity” in its users.

The hall filled mostly with men in suits laughed. (One speaker noted that 80 per cent of cannabis users in California, a state where recreational pot is also legal but which has a bigger population than Canada, are men)

Knowing the principals involved in Aphria and their backgrounds in greenhouse agriculture and pharmaceuticals, Woodfull said his credit union was an early backer of the legal cannabis sector and now has loans out in the $35-million range.

Craig Wiggins, The Cannalysts Inc., managing director, attends the sold-out WECann 2018 cannabis trade conference at Roma Club in Leamington on Tuesday, November 6, 2018. Doug Schmidt / Windsor Star

Both Leamington and Kingsville, two hotspots for cannabis in Canada, sent teams of delegates to the conference. The growth in the sector has been fast-paced and is causing some concerns, particularly from residential neighbours.

The expansion, said Kingsville Mayor Nelson Santos, “has been rapid. We’re now trying to address the potential impacts.” Lighting up the night skies with grow lamps and stinking up neighbourhoods with the sometimes-skunky odour that can escape from a pot grow-up are two of those concerns.

Mary Fox, a Leamington-based consultant to the cannabis sector across Canada, said licensed producers from across the nation have set their eyes on Leamington as the place to be for expansion.

Leamington mayor-elect Hilda MacDonald said the new industry is “bringing a lot of bright young minds to our community.”

While not wanting the town “to be a hindrance” to the local cannabis sector, she said the new council must still debate and decide on how (or if) retail outlets will be permitted. Each municipality has until the end of January to tell the province whether it wants local retail sales, and Fox said about a dozen have already said no.

“I don’t have a problem with retail,” MacDonald told the Star, adding it’s not a unanimously held view locally. “I know I’m going to pay for that comment.”

One speaker pointed out to the fact the Roma Club conference hall was still packed at the end of a long day of presentations as an indication of how keen local industry is on cannabis.

Of Tuesday’s turnout — latecomers had to be turned away at the door — and the local response to a budding new industry, organizer Craig Wiggins, managing director of TheCannalysts, said: “I’m overwhelmed. I want to see our advanced manufacturing sector take a good hard look at this.”