Pubdate: Fri, 09 Sep 2016
Source: Globe and Mail (Canada)
Copyright: 2016 The Globe and Mail Company
Author: Darren Campbell
Page: B6


In a 'virtually unprecedented' move, New Brunswick government invests
$4-million in medical-pot startup Zenabis

Kevin Coft and his medical marijuana startup are benefiting in a big
way as the New Brunswick government embraces the job opportunities
this budding industry could bring to the province.

On Aug. 23, the government invested $4-million in Zenabis, a company
Mr. Coft launched to build a proposed medical marijuana facility in
Atholville, N.B. The money comes in the form of a repayable loan, and
Mr. Coft says it signals that Premier Brian Gallant's Liberal
government is serious about supporting the sector.

"It's virtually unprecedented for a provincial government to make this
kind of investment in this business," said Mr. Coft, who hails from
Vancouver and is the company's CEO. "The New Brunswick government has
done an excellent job in trying to understand this market, be
proactive and look at the future."

That future could be bright. The Canadian National Medical Marijuana
Association reports there are now 70,000 patients registered to use
cannabis for medicinal purposes and that number is growing by 10 per
cent a month. Couple that with the federal government's promise to
legalize recreational marijuana, and the market could be worth
$5-billion to $7-billion annually in Canada.

New Brunswick has been the most aggressive province in Atlantic Canada
in trying to capitalize on the medical pot gold rush. Susan Holt, an
economic policy adviser to the New Brunswick government, claims the
industry could create "thousands of jobs."

That would be welcome news in a province in which the unemployment
rate was 9.6 per cent in July - only Newfoundland and Labrador had a
higher rate, at 11.1 per cent. In Atholville, which lies on the New
Brunswick-Quebec border, Mr. Coft estimates the Zenabis production
facility will cost about $14-million to build. He said it will be
operational in 2017, employ 50 people initially and up to 200 when it
reaches full production. If the federal government legalizes
recreational marijuana use, that number could reach 600 employees.

The province's only licensed marijuana producer is already in
expansion mode. OrganiGram in Moncton closed a deal in August to
acquire a 136,000-square-foot building to increase production and
capitalize on the recreational marijuana market. The company currently
sells medical marijuana to clients all over Canada and has 65
employees. But Organigram CEO Denis Arsenault says he expects the
company will be employing more than 100 people a year from now.

"We estimate the recreational marijuana market in Atlantic Canada to
be over $350-million annually," Mr. Arsenault says. "This deal allows
us to be a significant player in that market."

Health Canada lists 35 licensed marijuana producers in the country.
Most of them are in Ontario (20) and British Columbia (eight). Besides
OrganiGram, Atlantic Canada's only other licensed producer is Canada's
Island Garden Inc. in Prince Edward Island, which opened its doors in

The Truro Herbal Company is looking to get a piece of the action and
become Nova Scotia's first licensed marijuana producer. Based in the
Truro, a small agricultural town of 12,000 that bills itself as the
"hub" of Nova Scotia, the company has been working to build a 16,500
square-foot production facility to produce three million to four
million grams of medical marijuana. Company president Evan Price hopes
to employ 50 people and start production in 2017. He says 13 million
to 15 million grams of cannabis are consumed each year in Nova Scotia.

The stigma surrounding marijuana may explain why governments in Nova
Scotia, PEI and Newfoundland and Labrador have been mostly silent in
touting the potential economic benefits of the marijuana industry,
even as New Brunswick and Ontario governments embrace it. However,
social attitudes are changing.

Mr. Price says Truro is traditionally conservative in its political
views and he expected his business idea would raise concerns among
residents and political leaders. "But in the 21⁄2 years we've
been pursuing this, that never came to fruition," he said.
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