Barry Gerding/Black Press Maurizio Terrigno, founder of the Cannabis Chamber of Commerce, speaks at the Okanagan Cannabis Business Symposium held at the Delta Grand Conference Centre in Kelowna on Tuesday.

Tempering the B.C. cannabis legalization ‘gold rush’

Retail selling of marijuana offers potential business opportunities and pitfalls

The legalization of recreational marijuana will not offer an easy road to riches, according to industry experts speaking at the Okanagan Cannabis Business Symposium held in Kelowna on Tuesday.

While many are optimistic about the potential for retail sales, it remains a new industrial ecosystem overshadowed by uncertainty about regulations, delivery of product to retailers and unknown consumer needs.

Maurizio Terrigno, founder of the Canadian Cannabis Chamber of Commerce headquartered in Alberta, was in Kelowna Tuesday and said many early investors got into the business by accident.

“When we started the chamber three years ago, a lot of us starting out in the business kind of fell into it,” Terrigno, who was retired living in Arizona after 45 years in the hospitality industry when a friend in Calgary called him to say the prime minister planned to legalize marijuana and the business opportunity that might present.

Terrigno went to Colorado to research what that state had learned thus far from legalizing marijuana, and found himself feeling out of place at first.

“I went there to introduce myself to people in the industry, a suit-and-tie guy meeting guys in hoodies. It didn’t go well at first, some of them wondered if I was an FBI agent,” he recalled.

He said the legalization experiences of California, Oregon, Washington and Colorado offer an early lesson in the pitfalls and opportunities a legalized cannabis industry will present.

“Our goal as a chamber is to help avoid some of those pitfalls,” he said.

Darcy Bomford, chief executive officer and founder of New Leaf Medicine International, said exaggerating the hype surrounding legalized cannabis in this province can happen given that “B.C. bud” is known worldwide.

RELATED: True Leaf announces Cannabis cultivation team

“I think in the end, the 80-20 rule will likely prevail. Eighty per cent of the new retailers will not make it and 20 per cent will be successful,” Bomford said.

But he feels strongly the cannabis industry footprint on the Okanagan, from retail to production, will be massive.

“They call the Okanagan the ‘green mile,’ which probably stretches from Penticton to Cherryville and probably can be extended into the Kootenays,” Bomford said.

Pet Leaf is awaiting its Licensed Producer status from the federal government, which he hopes will come this fall.

The company has already developed a line of pet health products using hemp seed, which is already legal and sold in 2,000 stores across North America and Europe. The company recorded $1.4 million in sales for the year ending March 2018, a 28 per cent increase over the past year.

New Leaf has purchased a 40-acre property in Lumby with the long-term plan to develop it into a cannabis supplier once its LP application process is approved.

The initial 18,000 sq.ft. lab and production facility will be operational this fall, but with the land available to them Bomford sees the long-term potential for up to one million feet of production space as the cannabis industry unfolds.

“For us, it’s been a long road over the last five years working on this, but our branding message is becoming more anymore focused and clear on a global level. With pets, we see a huge opportunity for cannabis-related products in that market. We want to be the Apple of that space in the market,” he said.

Lindsay Blackett, direction of public policy and government relations for the Cannabis Chamber, reiterated the ‘gold rush’ mentality behind the industry’s potential growth, but added some cautionary words for the more than 100 people attending the forum, sponsored by the Greater Vernon Chamber of Commerce.

He said projections of legal retail sales approaching $6.5 billion in 2020 across Canada is guess work at best, because polls and studies are inaccurate in getting a handle on how much marijuana people currently consume illegally.

“Nobody is going to give you a totally honest answer on that question, so these projections are really numbers being pulled out of the air. We think the market in B.C. alone is a $5.7 billion market, so you could add the rest of the country on to that,” Blackett said.

“While people are anxious to get in the industry and not miss the boat, the reality is the boat hasn’t even pulled up to the dock yet.”

He said some of the early headaches in the industry will include the current delays in the license approval process at the federal, provincial and municipal government levels; selling at a retail price that falls below the black market level; the ability in B.C. of the Liquor Distribution Branch to keep up with product delivery to the retailers; and the eventual impact of marijuana in edibles which has yet addressed by the federal government.

“The edibles factor is huge because people will be looking for a way other than smoking to consume cannabis because they don’t want to smoke,” Blankett said.

“There is lots of opportunity and exciting times ahead for this industry. With the potential for edible products being legalized and the global trade potential, a new workforce with high paying jobs being created. When the first day of legalization comes into place on Oct. 17, expect that to enter in a whimper rather than a bang. But over the next two years it will be a wonderful ride.”

Blankett said initial projections will see B.C. generating up to $150 million in tax revenue from cannabis sales.

“In Colorado, a state of 5.6 million people, legalized cannabis generated $950 million in tax revenue for the government and $2 billion in economic creation dollars.”

To report a typo, email: edit@kelownacapnews.com.


@BarryGerding
barry.gerding@blackpress.ca

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Ladysmith life coach wins international award two years in a row

Bestka K-Burr has been named among the Top 100 Management Consultants in the World

Businesses mixed on downtown temporary washroom

Ladysmith Health Food Stores launches petition against the temporary washroom

Three active COVID-19 cases on Vancouver Island

Since July 24, Central island has had five new cases, North one, South none

Cheri Mactier celebrates 20 years in Ladysmith real estate

After 20 years in town, Mactier’s daughter, Brianne Mactier is joining the family business

Exhibit showcases one side of artist’s wide-ranging personality

Skagfeld takes something from all of her life experiences

‘Don’t kill my mom’: Ryan Reynolds calls on young British Columbians to be COVID-smart

‘Deadpool’ celebrity responds to premier’s call for social influence support

Captain Horvat’s OT marker lifts Canucks to 4-3 win over Blues

Vancouver takes 2-0 lead in best-of-7 NHL playoff series with St. Louis

Garbage truck knocks down lamp post onto pickup in north Nanaimo

Emergency crews respond to Dickinson Crossing plaza mall Friday afternoon

Widow of slain Red Deer doctor thanks community for support ahead of vigil

Fellow doctors, members of the public will gather for a physically-distanced vigil in central Alberta

Protesters showcase massive old yellow cedar as Port Renfrew area forest blockade continues

9.5-foot-wide yellow cedar measured by Ancient Forest Alliance campaigners in Fairy Creek watershed

Taking dog feces and a jackhammer to neighbourhood dispute costs B.C. man $16,000

‘Pellegrin’s actions were motivated by malice …a vindictive, pointless, dangerous and unlawful act’

Racist stickers at Keremeos pub leaves group uneasy and angry

The ‘OK’ hand gesture is a known hate-symbol

VIDEO: World responds to B.C. girl after pandemic cancels birthday party

Dozens of cards and numerous packages were delivered to six-year-old Charlie Manning

Most Read