Market Date:23 January, 2021

Meet Canada's marijuana moguls

Cannabis goes world and these six entrepreneurs are main the cost.

As 1000’s of entrepreneurs scramble to make a buck off legalized marijuana, six CEOs main Canada’s largest hashish corporations have already put their plans for world domination into motion.

Amongst them are two American enterprise capitalists who determined hashish is the following huge factor. There’s additionally the longtime CEO of a vitamin firm, an funding banker who was answerable for enterprise growth at Toronto’s Mount Sinai Hospital, and a hockey dad who began out as an electrician.

What they share is a perception that the regulated system in Canada offers them a aggressive head begin as marijuana legal guidelines world wide evolve and new markets open up.

CEO brings small-town idealism to hashish behemoth 

Bruce Linton is the CEO of Canopy Growth, which operates out of the former Hersey chocolate factory in Smiths Falls, Ont. (Evan Mitsui/CBC)

Bruce Linton is the CEO of Cover Progress, which operates out of the previous Hersey chocolate manufacturing unit in Smiths Falls, Ont.

Bruce Linton
Firm: Cover Progress
Age: 51
Hometown: Gads Hill, Ont.

With regards to hometowns, they do not come a lot smaller than Gads Hill, which is little greater than a huddle of homes alongside a secondary freeway west of Kitchener, Ont.

However Gads Hill’s most well-known son now leads the world’s largest marijuana firm, Cover Progress.

Bruce Linton’s small-town idealism led him first to a level in public coverage at Carleton College, then to a profession constructing wastewater methods in far-away lands akin to India, China and Peru. The work taught him how efficient public coverage may enhance folks’s lives, and conversely, how unhealthy coverage may very well be ruinous.

It was Linton’s curiosity in public coverage that sparked his need to determine considered one of this nation’s first medical marijuana producers. The concept started taking form in 2012, when he learn a newspaper article in regards to the Harper authorities’s plan to determine a regulated system for medical marijuana.

“As I started digging in, it was going to be governed in a way that you could create platform companies that could also do medical research and really turn this into something,” Linton says.

Linton wanted companions and a spot to develop marijuana. So he teamed up with Chuck Rifici, who on the time was chief monetary officer of the federal Liberal Get together, and collectively they struck a deal to take over an deserted Hershey chocolate manufacturing unit, a 170,000-square-foot facility in Smiths Falls, southwest of Ottawa. When Rifici left the corporate within the fall of 2014, Linton took over as CEO.

A number of months later, Linton engineered the primary of many acquisitions, slicing a take care of Dutch producer Bedrocan to take over its Canadian manufacturing and the rights to promote its marijuana strains within the Caribbean and South America. Bedrocan BV, primarily based in Veendam, Netherlands, is the one producer outdoors of Canada with the capability and regulatory approvals to export to the increasing world medical market.

With the addition of Bedrocan’s Canadian operations, Linton started to transition the corporate into the conglomerate now referred to as Cover Progress. It encompasses six licensed producers, 32 distinct firms working in six nations, and is price greater than a billion {dollars}. His ambition is nothing wanting establishing the world’s main hashish company.

“And so you’ve got to be early, otherwise you’re chasing and that’s not usually a winning approach.”  

Marijuana clippings at Canopy’s facility in Smiths Falls, Ont. These offshoots of Canopy’s proprietary genetics were clipped from mother plants and are bound for new facilities in B.C. (Evan Mitsui/CBC)

Marijuana clippings at Cover’s facility in Smiths Falls, Ont. These offshoots of Cover’s proprietary genetics have been clipped from mom crops and are sure for brand spanking new amenities in B.C. 

A lot has modified within the business since Linton and Rifici turned the chocolate manufacturing unit right into a grow-op. Most vital, Linton says, is worldwide regulatory adjustments pushed by the medical analysis now underway. The commercialization of hashish that started 5 years in the past with Canada’s medical laws was the catalyst for that analysis, he says.

“Did you really expect organized crime or the black market to pay for those studies?” he asks, earlier than answering his personal query. “There was no structural capacity, and now there is, because you have substantial companies like Canopy that can actually fund them.”

One among his corporations, Cover Well being, filed 27 patents within the closing months of 2017. Among the many situations the corporate hopes to beat are insomnia, nervous system issues and ache administration. The corporate is even wanting into veterinary merchandise for pets.

Linton pegs the worth of the world medical marijuana market at round $180 billion. He says it’s all being made doable by the topic he studied at Carleton: public coverage.

“All we’re doing is changing from an illegal supply chain to a normalized supply chain that’s regulated,” he says.

There’s little competitors world wide, however it’s a problem to vary attitudes.

“Our competitors are principally public perception after 80 years of prohibition.”

A brand new sort of oil riches for Alberta

Terry Booth, CEO of Alberta-based Aurora Cannabis, will soon be the owner of the world’s largest marijuana greenhouse, located in Edmonton. (Terry Reith/CBC)

Terry Sales space, CEO of Alberta-based Aurora Cannabis, will quickly be the proprietor of the world’s largest marijuana greenhouse, situated in Edmonton. 

Terry Sales space
Firm: Aurora Cannabis
Age: 53
Hometown: Edmonton

In a province the place billionaires made it huge playing on petroleum, Terry Sales space is betting on a brand new sort of oil in Alberta.

The founding father of Aurora Cannabis is constructing the world’s largest marijuana-focused greenhouse in Edmonton and his firm has a stake in Radient Applied sciences, which has developed a brand new expertise to extract hashish oil at an industrial scale.

Aurora Cannabis goes huge on manufacturing and acquisitions. Sales space is most considering selecting up corporations which can be already up, operating and bringing in money.

“You don’t want to buy a lot of startups because then you’re just going to burn your money getting them going.”

Along with Radient, Sales space’s firm has bought a 50 per cent stake in Hempco, an organization that processes uncooked hemp; Pedanios, a German-based pharmaceutical distributor; BC Northern Lights, a maker of hydroponic develop containers; and it not too long ago took over Saskatoon producer CanniMed. It additionally has a 55,000-square-foot rising facility in Cremona, Alta., that serves Canada’s medical marijuana market and a 20 per cent stake in Australian producer Cann Group.

Sales space was truly able to retire again in 2013. He deliberate to hit the golf course after spending his profession constructing six profitable corporations and amassing a private nest egg of some million {dollars}. An electrician by commerce, he created companies that match niches within the building, transportation and petroleum industries. Superior Security Codes, for instance, supplies permits and inspections to the development business.

However a brand new alternative knocked 5 years in the past, when a gaggle of old-school marijuana growers seeking to construct a enterprise below the Harper authorities’s medical marijuana laws approached him for an funding. After Sales space appeared on the proposal, he determined to begin his personal firm. He put up $2.5 million of his personal cash and satisfied household and pals to take a position tens of millions extra.

“I love the business,” he says. “I had to make myself believe in the medicine. Once I saw the difference it was making in people’s lives, it was pretty easy to become passionate about it.”

To start with, Sales space constructed a enterprise primarily based solely on Canada’s medical market. When the Trudeau authorities introduced its plans to legalize the leisure use of marijuana, he pushed ahead with an enlargement that included Aurora Sky, the 800,000-square-foot facility on the Edmonton Airport. Then the worldwide medical market started to emerge, including tens of tens of millions of potential prospects and billions in potential income.

“Did I predict it? No, but I sure felt good about it as we got into the industry and that wave just continued to build.”

At the moment, Aurora Cannabis is likely one of the world’s largest marijuana growers, with a complete home manufacturing capability of 200,000 kilograms per yr and worldwide gross sales in Europe and Australia. The corporate offered $2.5 million price of hashish in Germany within the final three months of 2017, and not too long ago signed a deal to provide medical marijuana to Italy.

However Sales space doesn’t suppose the shortage of international competitors will final. He expects new corporations to emerge in Israel and the Netherlands, the place he has already established a partnership to construct an enormous rising facility.

He hopes by the point others enter a discipline now dominated by Canadians, Aurora might be a longtime world model, offering experience in rising and processing to new worldwide companions. Over time, he additionally hopes to appreciate a dream of building his hometown of Edmonton as a world centre of excellence in hashish.

CEO left Silicon Valley to dominate the worldwide hashish market

Brendan Kennedy is an Ivy League-educated investment banker who shifted focus from Silicon Valley to medical marijuana. Based in Seattle, Kennedy’s cannabis financing company, Privateer Holdings, is behind some of Canada’s largest licensed producers, including Tilray in Nanaimo, B.C. (Evan Mitsui/CBC)

Brendan Kennedy is an Ivy League-educated funding banker who shifted focus from Silicon Valley to medical marijuana. Based mostly in Seattle, Kennedy’s hashish financing firm, Privateer Holdings, is behind a few of Canada’s largest licensed producers, together with Tilray in Nanaimo, B.C.

Brendan Kennedy
Firm: Tilray
Age: 45
Hometown: San Francisco

Former carpenter Brendan Kennedy is constructing an organization he hopes would be the world chief in medical marijuana.

He admits he didn’t know a lot about marijuana in his youthful days engaged on job websites to pay his method by means of college. His early desires of a profession in structure quickly gave solution to new aspirations as his Ivy League training opened doorways to Silicon Valley finance. It was there, working with expertise startups, that he was launched to the chances of medical marijuana.

“I was really skeptical of medical cannabis,” he says. “It took a year of having conversations with patients and physicians and hearing the same story, repackaged but essentially the same, over and over and over again, where my skepticism eroded and I became a believer.”

He moved to Seattle in 2011 as a result of the state of Washington had a medical marijuana program. There, he based Privateer Holdings, an organization devoted to financing marijuana-based companies. However he quickly got here to the conclusion that Canada could be a greater venue for constructing a world model.

In 2013, Kennedy and his companions at Privateer utilized for a manufacturing licence from Well being Canada and launched Lafitte Ventures in Nanaimo, B.C. The corporate was later renamed Tilray.

“In Canada, we liked the fact that the [Marijuana for Medical Purposes Regulations] was being created under a very conservative government at the time,” he says, so there gave the impression to be little danger of the nationwide program being eradicated by a future authorities.

Tilray’s amenities in Nanaimo and Enniskillen, Ont., have a mixed annual manufacturing capability of 65,000 kilograms.

In 2016, Kennedy got down to flip his firm into not only a grower, however a medical analysis agency. Tilray partnered with Toronto’s Hospital for Sick Youngsters for trials utilizing medical marijuana to deal with childhood epilepsy; with Montreal’s McGill College for trials on power obstructive pulmonary illness; and with the College of British Columbia to review marijuana’s impact on post-traumatic stress dysfunction.

He additionally set his sights globally, exporting medical marijuana to Croatia, after which to Australia, Cyprus, New Zealand, Germany and the Czech Republic. In September, Tilray introduced it had been granted a licence to arrange a 270,000-square-foot greenhouse plus 32,000-square-foot processing facility in Portugal to serve the burgeoning European market.

Portugal has tariff-free entry to the European Union, he says, together with Germany, which not too long ago established a nationwide medical marijuana program however has but to start home manufacturing. It additionally offers Tilray higher entry to different European nations which can be legalizing medical use, together with Poland, Greece and Italy. Paradoxically, Tilray can’t promote marijuana in Portugal.

Kennedy expects by the top of 2018, Tilray might be making extra money from worldwide gross sales than from home manufacturing for Canada’s leisure market.

He says Canada has a definite benefit within the worldwide market. However over time, different nations will step up manufacturing — and at a decrease price in additional temperate areas. He says the way forward for Canadian producers lies in expertise and genetics, fairly than rising for export.

Cronos CEO sees Canada as ‘launch pad’ for marijuana experience

Michael Gorenstein is the founder of Cronos, a growing conglomerate of marijuana businesses that includes licensed grow operations in Armstrong, B.C., and Stayner, Ont. He's seen here at the new Cronos offices on King Street in Toronto. (Evan Mitsui/CBC)

Michael Gorenstein is the founding father of Cronos, a rising conglomerate of marijuana companies that features licensed develop operations in Armstrong, B.C., and Stayner, Ont. He is seen right here on the new Cronos places of work on King Road in Toronto.

Michael Gorenstein
Firm: Cronos Group
Age: 31
Hometown: Columbus, Ohio

By the point he was in his mid-20s, Michael Gorenstein was dwelling the American dream.

A clean-cut child from Ohio, he’d labored his method by means of one of many nation’s most prestigious enterprise colleges, the College of Pennsylvania’s Wharton Faculty, by promoting bar examination preparation programs after which earned a regulation diploma of his personal from UPenn earlier than heading off to New York to make it huge.

Straight out of college in 2011, he landed a job as a company lawyer within the mergers and acquisitions division at Sullivan and Cromwell, a behemoth in worldwide company regulation. From there, he branched out to assist set up Alphabet Ventures, a hedge fund, in 2015. 

Then he found marijuana.

The younger entrepreneur noticed an enormous alternative. However the contradictions between federal and state legal guidelines within the U.S. made him uncomfortable as an investor, so he determined to take his cash north.

“Loved the framework, loved the program, loved the opportunity and made an investment into a company in Canada, which later turned into Cronos,” he says.

In October 2016, Gorenstein, a twin citizen with household in Winnipeg, left New York for Toronto with about $2 million raised from companions in his former agency and got down to conquer the Canadian marijuana market. Amongst his first acquisitions have been In The Zone Produce, a greenhouse in Armstrong, B.C., and Peace Naturals, a licensed marijuana producer in Stayner, Ont.

Peace Naturals was one of many first Canadian producers licensed by the federal authorities and was already properly established within the medical marijuana discipline. In The Zone, now named Authentic BC, was retrofitted to provide for the leisure market.

Gorenstein then firmed up his Canadian base by means of strategic partnerships. He teamed with former Meeting of First Nations chief Phil Fontaine to determine Indigenous Roots, which goals to deliver jobs and manufacturing to First Nation communities within the marijuana enterprise. He purchased stakes in natural boutique producer Whistler Medical Marijuana Company, together with ABcann Medicinals, and picked up a minority curiosity in Quebec’s Hydropothecary.

However to Gorenstein, the true prize is the worldwide market.

“What I saw in Canada is basically the launch pad and the headquarters for global opportunity,” he says.

Like different Canadian producers, he was fast to leap on the chance to export marijuana to Germany, forging a distribution settlement with Pohl Boskamp, a well-established pharmaceutical producer.

Gorenstein sees the best potential in Israel, which occurs to be the nation the place THC, the intoxicating ingredient in marijuana, was first remoted. Cronos is partnering with Hebrew College of Jerusalem and the Volcani Institute, an agricultural analysis station close to Tel Aviv, to additional medical analysis and manufacturing strategies. Together with Israeli companions, Cronos has additionally begun manufacturing at Kibbutz Gan Shmuel, a farming settlement close to Haifa, which guarantees decrease manufacturing prices than Canada due to its local weather.

Now simply coming into his 30s, Gorenstein is proud of the trail he’s on.

“I’m at an age where I can set this up for the future … I’m not looking to sell shares in a year and exit. This is what I’ve decided to dedicate my life to.”

Neufeld goes from peaches to nutritional vitamins to marijuana 

Vic Neufeld is the self-described ‘money man’ at the helm of Aphria, a Leamington, Ont.-based medical marijuana business. Neufeld, who grew up not far from Aphria’s massive greenhouses, rose to prominence as the CEO of Canadian vitamin giant Jamieson. (Evan Mitsui/CBC)

Vic Neufeld is the self-described ‘money man’ on the helm of Aphria, a Leamington, Ont.-based medical marijuana enterprise. Neufeld, who grew up not removed from Aphria’s huge greenhouses, rose to prominence because the CEO of Canadian vitamin large Jamieson. 

Vic Neufeld
Firm: Aphria
Age: 63
Hometown: Leamington, Ont.

Rising up on a peach farm close to Leamington, Ont., taught Vic Neufeld an vital lesson: He didn’t wish to be a farmer.

As an alternative, he selected a profession in accounting, adopted by a 21-year stint as CEO of Jamieson Nutritional vitamins.

Relatively than retire, he took on yet one more profession transfer: farming.

However as a substitute of peaches, Neufeld’s crop is hashish.

The transfer was as stunning for Neufeld because it was for these round him. Over twenty years, he had taken Jamieson from a small vitamin maker to a number one model commanding 27 per cent of the Canadian market, with gross sales in additional than 40 nations. When that enterprise was offered in 2014, the longtime boss thought he’d take a while to chill and revel in life.

Then his cellphone rang.

It was outdated highschool chum Cole Cacciavillani, who was operating his household’s greenhouse, rising flowers and potted crops. He defined to Neufeld that rising marijuana couldn’t be a lot tougher and the alternatives have been far larger.

The not too long ago unemployed CEO was intrigued.

“It was just something that excited me. It was again reaching out to patients, and in this case, not human nutrition, but still a lifestyle and an alternate treatment for certain medical conditions. So to me, it was a natural fit.”

Cacciavillani and his greenhouse accomplice, John Cervini, knew so much about rising crops, however the huge enterprise world of medical merchandise was a thriller. But it surely was a discipline Neufeld knew properly from his days at Jamieson.

“There’s a lot of similarity,” he says of the parallels between medical marijuana and nutritional vitamins. “If you don’t start off with quality ingredients, you’re never going to get a quality end product that you can sell. And if it’s not a quality end product, you’re not going to garner the trust and confidence of consumers.”

A look inside the Aphria greenhouse in Leamington, Ont. (Evan Mitsui/CBC)

A glance contained in the Aphria greenhouse in Leamington, Ont. 

They started with a sack of seeds and began rising. It took greater than a yr of trial and error to search out one of the best strains. Neufeld’s imaginative and prescient from the outset was to develop pharmaceutical-grade medical marijuana, and do it at a decrease price than different licensed producers. 

Their firm, Aphria, needs to go a step additional and show marijuana’s well being advantages to docs and sufferers.

“We had tons of patient anecdotal evidence that one could find on the internet … but no true pharma clinicals.”

Neufeld can also be staking a part of Aphria’s future on the manufacturing of hashish oil. The corporate is increasing its manufacturing facility and acquiring a seller’s licence to export the oil. It has signed a take care of Australian biotech Medlab Scientific Ltd. to offer hashish oil for scientific trials utilizing a vaporizing spray for the administration of ache in most cancers sufferers.

An Aphria worker strips leaves off cannabis stems in a clipping room at the company’s facility in Leamington, Ont. (Evan Mitsui/CBC)

An Aphria employee strips leaves off hashish stems in a clipping room on the firm’s facility in Leamington, Ont. 

Neufeld additionally made a transfer into the U.S., taking a 37 per cent stake in Liberty Well being Sciences, which invests in and operates medical marijuana companies in states that enable it, in addition to buying partial possession of a grower in Arizona. With the U.S. investments, Aphria discovered itself afoul of the TMX, which operates the Toronto Inventory Alternate, the place its shares are listed. 

As a result of marijuana continues to be unlawful below federal legal guidelines within the U.S., publicly traded Aphria was threatened with having its inventory delisted due to these investments, a probably devastating punishment.

“We were very clear with complete disclosure on what we were doing. Constantly getting approved by the TSX,” he says of the U.S. strikes, noting there have been no purple flags till he acquired a harsh warning letter from the regulator. “How it surfaced now, why it surfaced now, many of us have our own suspicions of conspiracy theories.”

In early February, Aphria was compelled to divest most of its U.S. property as a way to adjust to Canadian securities laws.

The episode is a stark warning of the risks of making an attempt to construct billion-dollar companies in a discipline the place attitudes and legal guidelines are in flux. However Neufeld, along with his lengthy expertise within the worldwide health-care enterprise, shrugs it off. He’s assured the alternatives within the marijuana enterprise are price it.

Geriatric residents of an Israeli kibbutz made Closner a believer

Neil Closner, CEO of Markham, Ont.-based MedReleaf, grew his marijuana business in partnership with an established Israeli medical research firm. (Evan Mitsui/CBC)

Neil Closner, CEO of Markham, Ont.-based MedReleaf, grew his marijuana enterprise in partnership with a longtime Israeli medical analysis agency.

Neil Closner
Firm: MedReleaf
Age 42
Hometown: Toronto

Whereas many individuals make a pilgrimage to Israel for spiritual or religious causes, Neil Closner discovered himself within the nursing dwelling at a kibbutz north of Tel Aviv 4 years in the past to discover the medicinal qualities of marijuana.

The previous government at Mount Sinai Hospital in Toronto had travelled to Israel on the invitation of Tikun Olam, a company that has been testing medical marijuana on geriatric residents of Kibbutz Na’an since 2010.

Closner, who admits he knew little or no about marijuana earlier than setting out, was shocked by what he noticed there. Sufferers who acquired a hashish extract noticed their weights and appetites stabilize, and lots of have been sleeping higher and taking fewer drugs for power ache, he says.

Closner grew to become a believer.

When he returned to Toronto, Closner signed on to construct a enterprise in partnership with Tikun Olam and funded by Israeli-born Toronto financier Stephen Arbib. They constructed a 54,000-square-foot greenhouse in Markham, simply north of the town, and began MedReleaf, with the objective of making a world model of pharmaceutical-grade hashish merchandise.

The power in Markham and one other in close by Bradford have a mixed manufacturing capability of 35,000 kilograms a yr.

Closner believes Canada’s medical marijuana laws, together with the genetic strains and medical analysis developed in Israel, will show to be a successful mixture.

With marijuana, he sees a uncommon alternative for Canada to dominate in a world business.

“As a patriotic Canadian, I’d like to see us become known as the dominant player in this industry that will become a multi-multibillion-dollar business globally.”

At Mount Sinai, it was Closner’s job to show modern concepts into viable companies. One among his key achievements was the event of VitalHub, an digital well being software that permits docs and nurses to entry essential affected person data on a cell machine, akin to an iPhone. It’s simply considered one of a half dozen high-tech well being companies launched by the self-described serial entrepreneur.

“I really feel that if you can achieve your business aspirations, which for me were growing a business and enjoying that process and doing so by helping people, it makes it all that much more worthwhile.”

What units the marijuana business aside, he says, is the velocity of progress. When MedReleaf was granted its Well being Canada licence in 2014, there have been solely seven different licensed producers. At the moment, there are 89, with a minimum of a dozen vying for a spot on the world stage.

He believes the way forward for marijuana lies in pharmaceutical merchandise. MedReleaf and its Israeli accomplice are working to create strains of marijuana geared toward treating particular situations akin to PTSD, neuropathic ache, Crohn’s illness and cerebral palsy.

He expects folks will finally take marijuana within the type of capsules and sprays, fairly than smoking it. And Canada’s position, he says, might be as a expertise innovator, fairly than agricultural producer.