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.

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

An Island Health nurse prepares a dose of COVID-19 vaccine. (Photo courtesy Island Health)
Health authority opening 19 clinics to immunize Vancouver Island residents

Health authority anticipates more than 40,000 people will be immunized over the next month

Eliot Kinsey runs T3ch For the People at Ladysmith Secondary. (Jennifer Fink photo)
High school student joins program to improve access to technology

By George Brockhurst, LSS Student Writer As the world moves forward, people… Continue reading

Lymphedema is often treated with medical devices such as compression garments, pneumatic compression pumps, or specialized custom wraps and bandages. (Submitted photo)
March 6 marks World Lymphedema Day

Lymphedema is caused by damage to the lymphatic system, and afflictings millions worldwide

Work has begun on the Downtown Public Washroom on 1st Avenue. (Submitted photo)
Work has begun on the Ladysmith Downtown Public Washroom

The project is expected to be finished in the spring

An architectural rendering of the five storey condo building at 201/203 Dogwood Drive. (BJK Architecture photo)
Five storey condo building proposal at Dalby’s proceeds to public hearing stage

Frank and Mike Crucil of FMC Holdings are hoping to turn Dalby’s Automotive into a five storey condo

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
‘It’s been a good week’: Tam hopeful on vaccines as pandemic anniversary nears

Tam says the addition of two new vaccines will help Canadians get immunized faster

Const. Allan Young. Photo: Abbotsford Police Department
Manslaughter charge laid in Nelson death of Abbotsford police officer

Allan Young died after an incident in downtown Nelson last summer

(The Canadian Press)
‘Worse than Sept. 11, SARS and financial crisis combined’: Tourism industry in crisis

Travel services saw the biggest drop in active businesses with 31 per cent fewer firms operating

Pictures and notes in from friends and classmates make up a memorial in support and memory of Aubrey Berry, 4, and her sister Chloe, 6, during a vigil held at Willows Beach in Oak Bay, B.C., on December 30, 2017. THE CANADIAN PRESS/Chad Hipolito
Mother of slain daughters supports recent changes to Canada’s Divorce Act

Sarah Cotton-Elliott said she believed her children took a back seat to arranging equal parenting

The Port Alice pulp mill has been dormant since 2015. (North Island Gazette file photo)
Parts recycled, life returning to inlet as as old Port Alice mill decommissioned

Bankruptcy company oversees de-risking the site, water treatment and environmental monitoring

Victoria man Brett Andersen is asking for people’s help to secure him one of eight free tickets to the moon. (Screenshot/@brettandersen Instagram)
Victoria man wants your help securing a free ticket to the moon

Japanese billionaire offering eight people a trip to the moon

The Conservation Officers Service is warning aquarium users after invasive and potentially destructive mussels were found in moss balls from a pet store. (BC Conservation Officers Service/Facebook)
Aquarium users in B.C. warned after invasive mussels found at pet store

Conservation officers were told the mussels were found in a moss ball from a Terrace pet store.

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Most Read