A Smiths Falls company has cleared another hurdle to cashing in on Canada’s medicinal marijuana market after receiving permission from Health Canada to begin shipping the product when new federal rules go into effect on April 1.
By Jacob Serebrin
Tweed has had a temporary licence – which allowed it to grow marijuana but not sell – since mid-November.
Health Canada inspectors visited its facility at the end of December to ensure its security systems were up to code, said Bruce Linton, the company’s chair.
The company then received its licence earlier this week to begin operating out of the space, a former Hershey chocolate factory.
It’s not just about security. Mr. Linton said the company has had to implement rigorous procedures to ensure that only the right people get the right amount of the company’s product.
Health Canada also verified that Tweed’s testing procedures, which have to verify not only that the company is using the right amount of active ingredient but also for standard agricultural issues like mould, were up to code.
Canada’s new open market for medicinal marijuana will be big business for companies like his, said Mr. Linton.
“The big driver is that the Canadian market has been limited,” he said.
Right now, legal access to the drug requires both a doctor’s recommendation and a licence from Health Canada. But after April 1, any doctor will be able to issue a prescription for medicinal marijuana.
Those changes will also ban people who are legally allowed to take marijuana from growing their own. Instead, they will have to purchase it from a licensed private grower – like Tweed.
“The market will grow quite rapidly,” he said. “The supply chain doesn’t exist.”
According to Mr. Linton, the Smiths Falls location gives the company easy shipping access to big markets such as Toronto, Montreal and Ottawa.
He expects that Tweed will become “a fairly large business in a rather short period of time.”
Getting the company off the ground has been a “really fast march,” said Mr. Linton, since the new rules for medicinal marijuana were only announced on June 19.
The short time-frame is the main reason the company is going public on the TSX-Venture through a capital pool transaction.
“Time matters and a CPC is the most efficient,” he said.
But the company isn’t going on the stock market in an effort to raise money; It’s more about visibility and credibility. Federal rules prohibit marijuana growers like Tweed from advertising, so the company has had to find creative ways to get its name out.
“How does the consumer choose? They’ll choose the store they’ve heard of,” he said. “Being listed means we’re reliable and transparent.”
Drawing attention is also one of the reasons for the company’s clever name. Mr. Linton said he spent “many, many weeks” working on it with his business partners.
The company has begun growing marijuana and Mr. Linton said different strains – the company plans to have 25 – will be ready in several stages.
Tweed current has a licence to supply up to 15,000 kilogams of dried marijuana and the average price is between $5 and $7 a gram, fueling Mr. Linton’s hopes that it will be a $100 million business.
For Mr. Linton, Tweed is also a sign that Smith Falls’ economy is coming back, stronger and more diversified after the loss of the branch plant that for years drove the local economy.
“If Smiths Falls was a business, you’d buy stock in it,” he said.