Canopy Growth is worth more than Bombardier, a maker of planes and trains. Bruce Linton, the chief executive. (Dave Chan for The New York Times)
Smiths Falls, Ontario
Millions of dollars worth of marijuana plants sat under lamps brighter than the noonday sun as employees of Canada’s largest cannabis business bustled about the 47 giant growing rooms of its factory, which once made Hershey bars.
Now it is home to Tweed, whose parent company, Canopy Growth, was the first Canadian marijuana grower to debut on the New York Stock Exchange.
Valued at more than $10 billion, Canopy is worth even more than Bombardier, the Canadian manufacturer that is one of the world’s largest makers of planes and trains, offering a stark example of this nation’s new get-rich-quick hope — the marijuana industry.
Canopy Growth, one of Canada’s largest cannabis businesses, is valued at more than $10 billion. (Dave Chan for The New York Times)
On October 17, Canada became only the second country in the world and the first major economy to legalize marijuana for all uses (Uruguay legalized the drug in 2013). Companies are clamoring to join in what some are calling a green rush.
“It’s like Seagram’s back when Prohibition was in place and just about to end,” said Deborah Weinstein, a lawyer in Ottawa who handled Canopy’s move onto the Toronto Stock Exchange. “But it’s more than that. This has never been an industry.”
The law limits the products that can contain cannabis; edibles, for example, will not be legal until next year. The legislation also heavily restricts advertising and is laden with bureaucratic rules.
The top 12 Canadian marijuana companies are now worth nearly 55 billion Canadian dollars, or $42 billion, and investors are snapping up the stock. Profits, though, are a dream of the future. At Tweed, for example, sales last year from the medical marijuana business were just 77 million Canadian dollars. The company lost 70 million.
Not every marijuana producer will profit and survive, many experts believe.
There are 120 businesses licensed to grow medical marijuana, which has been legal in Canada since 2001. They are now poised to serve people who simply want to get high. Companies are scrambling for licenses to open stores.
Businesses have sprung up to create the software that allows growers to track their plants and final products, as the government requires. Marijuana growers are also voracious consumers of supplies like fertilizers, as well as energy.
And greenhouse makers now have a customer base beyond tomato and green pepper farmers.Abandoned factories, like the one Tweed operates in, have suddenly become hot properties.
Even Canadian news organizations have joined in. In Toronto, The Globe and Mail has hired reporters and editors to produce “Cannabis Professional,” a daily newsletter that will cost 2,000 Canadian dollars a year for a subscription.
David Campbell is one of those profiting from the boom. Mr. Campbell, 50, has a background in management at companies that make machines known as “supercritical fluid botanical carbon dioxide extraction systems.” Typically they decaffeinate coffee. But they are also ideal for squeezing the active ingredients out of marijuana plants to create oil.Mr. Campbell set up Advanced Extraction Systems in Charlottetown, Prince Edward Island, just to serve the cannabis industry.
The company has sold 12 systems this year, including one to a medical marijuana company in Germany. Advanced has gone from one employee, Mr. Campbell, to 14, most of them engineers.