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 Canopy Growth Corp's Tweed Farms Inc subsidiary expects to spend at
least C$25 million ($21 million) to upgrade the property, a flower
farm it purchased for about C$9 million in cash and equity, with
work including the installation of security cameras and fences due
to start in October.
With Canada less than a year away from the planned legalization of
marijuana for recreational use, licensed producers are rushing to
try to fill an expected shortfall in supply.
"This is a very big leap, in terms of our output, our capacity, our
footprint," Bruce Linton, Canopy Growth's CEO, said in an interview.
Canopy Growth is currently licensed to produce 31,000 kilograms of
marijuana and related products, and aims to triple that by July next
year, the deadline the federal government has given provinces to
make pot legal for all.
The deal gives Canopy 450,000 square feet of greenhouses that can be
immediately added to its existing 350,000 square foot facility in
Niagara-on-the-Lake, Ontario. It is also building an additional
200,000 square feet of greenhouse capacity on its existing property.
Linton said that a 250,000 square foot greenhouse should be able to
produce around 10,000 kilograms of marijuana annually, which at an
average sale price of C$8 a gram could bring in C$80 million.
Beyond Niagara, the company is expanding its headquarters in a
former Hershey's chocolate factory in Smiths Falls, Ontario, and
developing other indoor properties in New Brunswick, Saskatchewan,
and Alberta.
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The company has signed up about a third of the roughly 200,000
medical marijuana customers in Canada, and Linton said he expected
some 3 million Canadians to use legal non-medical pot next year.
Within three years he expected more than half the company's revenues
to come from business outside Canada, as countries from Australia to
Germany take Canada's lead in creating rules to regulate the
industry.
Canopy Growth has been exporting cannabis for sale in German
pharmacies for more than a year, has a majority stake in a medical
marijuana company seeking final licensing in Chile and a 10 percent
stake in Australian company AusCann <AC8.AX>. It has also partnered
with two emerging medical marijuana companies in Brazil.
The company has so far steered clear of the U.S. market, citing the
legal uncertainty of federal prohibition that overhangs legality in
several states.
($1 = 1.2140 Canadian dollars)
(Reporting by Alastair Sharp; Editing by Andrew Hay)
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