By Connor Lynch
For a greenhouse grower, upcoming marijuana legalization might seem like an opportunity to diversify into a crop with serious cash potential. But that’s highly unlikely.
Legalized pot growing is dominated by large companies. Two of Canada’s largest medical marijuana firms recently closed a $1 billion deal, when Alberta-based Aurora finished its once-hostile takeover of CanniMed.
Medical marijuana firms are typically raising the capital to buy and upgrade huge indoor growing spaces to high-security standards, a necessary component of getting a grower’s licence. Ontario companies hold the majority of Canadian medical marijuana licences and are poised to start supplying marijuana for recreational use when it becomes legal in July. Of the total 88 licences across the country, 48 are in Ontario. Nine are held by companies based in Eastern Ontario.
A joint venture in Quebec, where an Ontario-based medical marijuana company took over a greenhouse, saw that company invest $15 million in upgrades, according to the Globe and Mail. A takeover in B.C. of a greenhouse came with a $50-million bill to convert and upgrade the plant for marijuana.
Canadian companies have partnered with greenhouses and farmers to grow marijuana. But it’s an arrangement where a company with capital and a licence is looking for growing knowledge and sometimes but not always a facility it can upgrade. Medical marijuana company Aphria partnered with a greenhouse, Double Diamond, in Western Ontario last month. The company holds the majority of the partnership, which will purchase a 1.3 million-square-foot greenhouse, and also holds the licence from Health Canada.
