Northern Grow Op(portunities) ?
June 26, 2017 - On March 24, the government of New Brunswick announced that they would not only embrace marijuana as a potential creator of revenue and jobs in the country, but went so far as to label weed as a pillar of their economic strategy.
Following the Federal government’s announcement that recreational marijuana use will be legalized nationally by Canada Day 2018, the government of New Brunswick appears to be taking hold of this opportunity and doing what they can to prepare for the future. The hope is that by embracing and supporting the industry, the province can benefit from expected revenues from marijuana sales, grow their GDP, and provide a new source of employment for residents.
The question I propose here is if it can work for New Brunswick, could it work for Northern Ontario? Could the legalization of marijuana be the golden (green) ticket that the north has been waiting for?
Before we can answer this question, let’s take a step back and consider the complex industry that is recreational marijuana. The marijuana industry is divided into the medical and soon to be legal recreational sectors. Unlike other parts of Ontario, few storefront dispensaries have opened up in Northern Ontario as of yet (although one has opened its doors in Sault Ste Marie). However, there are medical clinics across the north that help facilitate the delivery of medical marijuana to patients from licensed producers located outside of the north.
At the same time, there is a differentiation between marijuana sales and marijuana production. Right now for example, a facility has been approved near Kirkland Lake as a licensed marijuana producer. Interestingly enough, this facility was born out of a partnership between Wahgoshing First Nation and the company DelShen Therapeutics, as a way to provide economic benefit to the First Nation and provide jobs for community members.
There are other facilities awaiting final approvals from Health Canada – one in Kapuskasing and one outside of Sudbury. In total, there are 43 authorized licensed producers of marijuana in Canada, with 25 located in Ontario.
Getting back the question at hand, many have argued that the economic benefits of legalized marijuana will be significant. A report released by Deliotte in 2016 suggested that legalized recreational marijuana could be worth about $22.6 billion to the Canadian economy, when taking into account sales of recreational marijuana plus the “ancillaries such as security, transportation etc.”
Indeed, many leaders and advocates for this industry in Northern Ontario argue that expanding the marijuana industry could be beneficial to the economy. Alan Spacek, Mayor of Kapuskasing, says that if the proposed facility in his community is approved, it could result in a ‘excess of 40 jobs,” while Dr. Barry Kurtzer, President and Chief Executive of DelShan Therapuetics Medical Marijuana in Kirkland Lake, anticipates anywhere “from 30 to 50 jobs” as they move forward with production of marijuana. Bob Bateman, from a firm called 6-82 R-X in Sudbury, plans to hire six full time staff and predicts “a lot of economic spin-offs for medical researchers and biologists in the city” once his facility receives approval from Health Canada.
In a CBC Morning North segment released on April 18th, Bob Batemen presented an interesting analogy. He suggested that listeners compare the marijuana industry to the ‘spectacular’ wine industry that has emerged in Ontario, with thousands of vineyards popping up across the province, producing high quality, dare I say – boutique - wines. Similarly, we have seen the increase in local breweries popping up across the north. Since 2010, twelve new breweries opening up in communities across Northern Ontario including Kenora, Timmins, Sault Ste. Marie and Nobel. Bob sees the marijuana industry as representing a similar opportunity – a chance for operations to open up across Ontario to produce different, and high quality marijuana and marijuana derivatives and other associated technologies.
He argues that Northern Ontario has some distinct advantages – for one thing the Northern Ontario School of Medicine at Laurentian and Lakehead offer opportunities for innovation and research, especially with regards to medical marijuana. And, as Mayor Spacek said in the interview, marijuana production is simply a version of farming and “agriculture is becoming big in our area” (as it is in other areas across the North). Furthermore Northern Ontario boasts physical space, at a lower cost, that could result in more marijuana entrepreneurs considering the area to set up shop.
When recreational marijuana becomes legalized, it is expected that the demand will increase, meaning even more opportunities for potential producers to cash in. Indeed, it will likely speed up the process to approve production facilities that haven’t yet been approved by Health Canada.
Of course, Northern Ontario as a region rather than a province, does not have the same powers and tools that New Brunswick has to embrace and support the marijuana industry. Thus, it will be up to leaders in the north to foster an open environment to this type of business and take opportunities to communicate their requests to the provincial government who will inevitably be heavily involved in determining the specific rules surrounding marijuana, including how marijuana will be sold.
That said, not all leaders in Northern Ontario support marijuana legalization, or the process by which this change has come about. For example, the President of the Northwestern Ontario Municipal Association, Dave Canfield, has called on the federal government to ‘put the brakes on’ the plan and take the time to consider how tax revenues from sales of marijuana will be shared among the various levels of government- arguing that municipalities should receive a share of revenues as they will be responsible for the majority of associated costs. Regardless, the time for conversations between community leaders, those in the health and law enforcement sectors and citizens is now if the north wants to become a leader in the marijuana industry.
To take advantage of the potential that marijuana will bring, communities must consider what they can do to support the marijuana industry. Indeed, community champions, like Mayor Spacek, will be critical for supporting and advancing the cause. If Northern Ontario wants to get serious about the role it can play in this budding market, the time to act is now.
Emma Helfand-Green is a senior policy analyst at Northern Policy Institute.
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