Two days ago, FV Pharma, the Cannabis company who bought the Kraft plant, announced that they had closed their financing agreement with Cannabis Wheaton Income Corp. They had previously announced a letter of intent to do this (see link below). They are saying that the deal has “the potential to build out the largest indoor cannabis cultivation facility in the world” and that they will produce 400 million grams of Cannabis a year of which half will be “paid” to Cannabis Wheaton. Chuck Rifici, Chairman and Chief Executive Officer of Cannabis Wheaton commented that “it has the potential to create hundreds of jobs for the City of Cobourg.” What they don’t say is that there are a whole lot of competitors in this business. In fact, Cannabis Wheaton is financing many of them – basically spreading their bets.
But Thomas Fairfull, President and CEO of FV Pharma is happy: “We couldn’t have asked for a better joint venture partner for the development of our world class facility and the execution of our business plan that we expect will create hundreds of quality skilled jobs for the City of Cobourg. We are excited at the opportunity to build and operate something special with Cannabis Wheaton and to set the gold standard for cannabis cultivation and for cannabis-derived consumer products.”
They both call Cobourg a City – we love our Town but it’s not a city.
Note that at $10 a gram, 400 million grams per year translates to a business producing $4B a year in revenue – not bad for a few hundred employees.
Legislation has not yet been passed to legalize recreational use and in the meantime the only licences to grow are for medicinal purposes – and there are currently 91 producers licenced for that in Canada. Of these, 48 are in Ontario – see link below for details.
Although growth in the world-wide Cannabis market is expected to be exponential, and although Canada is leading the pack in legal businesses growing the weed, it seems extremely unlikely that there will be a market worldwide for all the Cannabis that Canadian growers plan to produce. That means that even though Canadian companies are planning to export much of their production, many of these companies will either fail or merge with others. No doubt all the owners of these ventures have optimistic faith that they will be one of the winners but it will be interesting to see what happens to FV Pharma and whether Cobourg will in fact get the hundreds of “quality skilled jobs” that have been promised.
- Update on Cobourg’s Marijuana Facility
- Health Canada List of licenced producers
- Press Release by Cannabis Wheaton Income Corp.