The modern face of farming in this region is changing. This is the final instalment of a four-part series examining the evolution underway in agriculture and how it’s changing our rural and urban communities.
Before the last federal election, the idea of openly growing pot in a field would have been dismissed as reefer madness — and illegal, too. But the Liberals won that contest, formed government, and their campaign promise to legalize recreational marijuana came to fruition this month.
The legislation has also spawned the first proposed (and legal) outdoor cannabis farm in the Ottawa Valley.
Mark Spear, a 34-year-old Ottawa native who has worked in the cannabis industry since 2014, wants to convert a 50-acre plot of farmland in Beckwith Township, into a “canna-tourism” complex that will grow more than 100,000 cannabis plants by 2020, run workshops on how to grow and cook with marijuana, and allow visitors to relax at a pot-friendly spa.
It’s an ambitious plan for Spear, who last November founded Burnstown Farms Cannabis Company.
In April, he launched a private round of investment to raise $2.88 million — through the sale of 24 million common shares at a price of 12 cents per share — to purchase the property and obtain licensing to create an operation that would extract oil from dried cannabis and sell it to manufacturers to produce edibles, beverages and vaporizer cartridges, all of which are expected to be legal for use in Canada by next year.
A further round of financing to raise $10 million to cover infrastructure and operating expenses will follow this fall.
He’s enlisted the help of George Routhier, a Burnstown Farms board member who runs the Mallorytown, Ont., cannabis consultancy Pipe Dreemz to handle the licensing paperwork.
Spear hopes that Routhier’s success rate with obtaining a third of all Health Canada licences for medical marijuana production will help Burnstown navigate the government’s strict requirements, not the least of which involves security. (The farm will be outfitted with 24/7 video surveillance and surrounded by an eight-foot-tall, barbed-wire-covered chain-link fence, and anyone entering the oil-distillation production area will need to have authorized access.)
Yet Spear says he cannot imagine the federal government denying him a licence for a farm that will run a green, cost-efficient and, he insists, profitable organic cannabis-oil-producing operation within its first year.
Burnstown Farms will be more environmentally friendly than greenhouses that grow marijuana, according to Spear, who was raised in Kinburn and now lives in the village of Ashton, southwest of Ottawa.
“We calculate that we’re going to use 99 per cent less electricity than an indoor facility, which is the equivalent of providing 11,000 Canadian homes with power over a year,” he explains. “Our operating expenses will be 10 per cent of a greenhouse operation, which uses dehumidification exhaust fans and, in some cases, air conditioning, while we will benefit from the sun at no cost.”
Burnstown Farms’ capital costs to build will be significantly lower, too, Spear adds.
“It costs a greenhouse about $100 per square foot to construct and $300 for an indoor operation, whereas for us the cost will be under $1 per square foot,” he says, adding that the cannabis plants Burnstown Farms plans to grow will be three times bigger at 300 grams than what greenhouses produce, due to the longer growing time on the farm.
A greenhouse will typically grow about five crops a year; Burnstown will only grow one larger crop.
Low production costs and high demand for cannabis oil lead Spear to make a bold prediction: “We’re going to be profitable in our first year,” he says. “Currently, a gram of concentrate in the medical market sells for $100, and it takes anywhere from five to 10 grams of cannabis to make a gram of oil, so the margins are astoundingly high.”
His optimism is based on recreational marijuana trends in mature markets, such as in Colorado, where consuming cannabis through derivative products rather than smoking has been increasing since pot was legalized there in early 2014.
Canadians will literally get a taste of that as a different kind of beer-buzz will soon be available.
In August, Molson Coors Brewing Co. of Denver announced that its Canadian unit — Molson Coors Canada — will partner with Hydropothecary Corp. of Gatineau to develop non-alcoholic “cannabis-infused beverages” for the Canadian market.
Spear believes there will be more liquid-herb variations, along with cannabis you can eat (think cannabis cookies or hash brownies) or inhale through pre-loaded, cannabis-oil vape cartridges as startups producing these consumables begin popping up across Canada over the next 12 to 18 months.
“We aim to be a wholesale producer for derivative manufacturers that will need to get their oil-extract supply from somewhere,” he says.
On that score, Burnstown Farms will face strong competition, most notably from Canopy Growth Corp. of Smiths Falls, which, as of May, became the first cannabis-producing company to be listed on the New York Stock Exchange. Through its Tweed Inc. subsidiary and Tweed brand that targets the medical-marijuana market, Canopy is now positioning its product line (which includes cannabis oil) for recreational users.
Spear, who previously served as a gunner with the Royal Regiment of Canadian Artillery and received an advanced diploma in computer security from Fleming College in Peterborough, Ont., worked for Tweed in various roles from 2014 to 2016, where he was involved in selecting plants, research-and-development experiments, and monitoring and maintaining grow and drying rooms.
He says that he knew back then that Canopy was eager to have its indoor and greenhouse operations produce cannabis products for the recreational market, but he believes Burnstown Farms’ outdoor-grow approach will allow the company to carve out its own cost-affordable niche in a cannabis market set to expand significantly.
And while Tweed opened a visitor centre in Smiths Falls in August to highlight the town’s transformation to a cannabis hub from Ontario’s chocolate capital, as it boasted before Hershey closed its plant nine years ago, Burnstown will also welcome guests to the farm.
There are plans to sell products made by manufacturers using Burnstown cannabis oil as well as the dried flower from plants grown in an on-site greenhouse. Visitors will be able to tour the farm, attend seminars on growing and cooking with cannabis, and stay there overnight and indulge in what would be Canada’s first cannabis spa that will offer massages using cannabis-infused oil and ganja yoga where participants draw vaporizer tokes before or during sessions.
Spear, who is licensed to grow medical marijuana for personal pain management following a 2004 motorcycle accident, plans to hire 80 employees and commence cannabis-oil production as early as next year.
Initially, the goal is to grow 17,000 marijuana plants on 10 of the 60 tillable acres on the farm. But by the summer of 2020, Burnstown Farms plans to use all 60 acres to generate a crop of more than 100,000 plants.
Other marijuana grow-ops
Besides Canopy Growth, other companies are growing cannabis indoors or in greenhouses in the Ottawa Valley, among them:
• LiveWell Foods Canada Inc. received Ottawa City Council approval in February to convert 540,000 square feet of greenhouses and other buildings on a 100-acre vegetable farm on Ramsayville Road near Greely into a marijuana production facility.
• In August, Fleurish Cannabis Inc. received a Health Canada license to produce medical cannabis products for women at its 20,000 sq-ft. facility in Kemptville.
• CannabisCo, formed as a subsidiary of IDP Group earlier this year, plans to produce cannabis at the former Nestlé coffee plant in Chesterville, located 60 kilometres southeast of Ottawa.
• Carleton Place-based Kolab Project, which is producing and selling marijuana for medical purposes.