Hey there, time traveller!
This article was published 31/3/2014 (2682 days ago), so information in it may no longer be current.
The unmarked building in the east end of Winnipeg off the beaten track with no obvious evidence of activity is an ideal setup for a commercial medical-marijuana production operation.
John Arbuthnot, a polite, clean-cut, articulate 24-year-old guides a visitor from about one half kilometre away into the newly operating marijuana-production facility he runs with his father, Bill Arbuthnot, in a patient, calm manner.
But once inside, the first order of business is to sign a legal non-disclosure agreement -- the location of the facility cannot be disclosed, nor the details of the $200,000 of security equipment that has been installed.
There is plenty of pride as Arbuthnot leads a tour through the initial 14,000 square feet of production space. It's capable of producing about $3 million worth of high-quality medical marijuana every year.
Notwithstanding it is a controlled narcotic being produced, this is a fully compliant and regulated production facility, as professional as any other in town operating in accordance with good manufacturing practices.
Called Delta 9 Bio-Tech, the Winnipeg medical-marijuana production facility is one of 12 licensed commercial producers Health Canada officially announced two weeks ago.
Arbuthnot and father Bill -- an information technology professional with a background in managing advanced manufacturing facilities -- raised about $1 million last fall and spent a good portion of it before it received its conditional licence on Dec. 24.
"It was a great Christmas present," said Bill.
"The challenge is not only having enough product for this month but also until the next crop is off. We can't sign up patients and deliver this month and not have product for next month. Having a guaranteed recurring supply is important" ‐ John Arbuthnot
There was plenty of risk involved after all. Delta 9 was one of a lucky few applicants compared to about 500 who applied and were unsuccessful.
There are likely many reasons for their success.
Arbuthnot had been working on a business plan since his first year of business school at the University of Manitoba. (He hasn't yet graduated and is still taking classes.)
Health Canada did extensive background checks to weed out any applicant who had even a whiff of criminal involvement or even indication of past recreational use of marijuana.
And Arbuthnot is dead serious about the company's ultimate end game, providing quality -- and a reliable quantity of -- medicine to as many of the 37,000 authorized medical-marijuana users in Canada as possible.
So one should not be mistaken about Delta 9's intentions when its newly launched website features graphic photos of lush marijuana buds the 31 varieties of which have names such as Super Lemon Haze, Chronic, White Rhino and AK-47.
"A number of strains we use (all sourced from cannabis genetics suppliers from the Netherlands) come from the recreational-cannabis industry and the names are a carryover," said John Arbuthnot.
He said there is nothing gained by changing the names other than lending an air of legitimacy.
"The stigma is something the industry is going to have to deal with," he said. "But in the meantime we have a nice old lady who swears by El Nino -- a small bushy indica-dominant plant with a mid-range cannabinoid profile." Delta 9 planted its first seeds Jan. 9. Some of those have now advanced past the vegetative phase -- about two- to three-foot tall plants that spend the first two months under lights 24 hours per day.
They are then transferred to the flowering room where their nutrient mix of nitrogen, phosphorous and potassium is slightly tweaked and they spend another seven to 12 weeks with lights off for 12 hours and on for 12.
"This induces plants to think that it is fall," he said.
And that is when the thick flowering buds emerge, the source of the medicinal components of the plant.
Arbuthnot said Delta 9 is working up a product portfolio of 31 different varieties that have characteristics that can benefit patients with a broad range of conditions from chronic pain and muscle spasms to glaucoma, cancer and HIV. Levels of tetrahydrocannabinol (THC) -- the psycho-active components from which users get high -- will vary from strain to strain as well as the levels of CBD or cannabidiol.
"Up to the year 2000 all research being done was on THC, but people are really interested in CBD these days and research has been expanded out to determine if CBD can be used for a number of different medical conditions," he said.
These include pain management without the psychoactive element characteristic of THC consumption.
Delta 9 -- which is the name of the most popular psychoactive compound or cannabinoid found in marijuana -- will not produce its first crop of commercial product until mid-May or June of this year.
The company did not officially receive its final licence until two weeks ago. New Health Canada regulations regarding the purchase of medical marijuana -- which come into effect on Tuesday, April 1 -- are the cause of a lot of uncertainty among the authorized users.
Delta 9 has an explosion of interest instantly and already has a patient list of 500, just about capacity for the young company.
"The tough part on our side is signing up a patient list that is manageable," Arbuthnot said. "The challenge is not only having enough product for this month but also until the next crop is off. We can't sign up patients and deliver this month and not have product for next month. Having a guaranteed recurring supply is important."
Even though the debut crop is not off yet, the company is already considering doubling in size with space available in the building they're in.
"That won't be as difficult as it would be if we had to call some of these patients to say we don't have their medicine," Arbuthnot said.
The authorized medical-marijuana-user community is skeptical about the new regulations.
Steven Stairs, a Winnipeg medical-marijuana advocate and an authorized user himself, is concerned about the shift to large-scale commercial producers who might be more interested in profit rather than the well-being of the patients.
"I think patients will be happy to know there is a local producer," Stairs said. "But the big thing with patients across Canada is that they want to be treated like patients and not like customers. They want it to be a health-care issue."
He said if the new companies come off too much about the bottom line and not about compassion and care, they are not going to succeed.
Stairs was impressed when he heard Delta 9 will be implementing a compassionate pricing program that will help subsidize the cost of medicine for eligible clients on disability and low incomes.
But that's not to say the company is also not interested in growing its business.
In addition to a likely doubling in size in the short term into space it already has under lease, the company is also hoping it will eventually take over an additional 50,000 square feet in the same building that would allow it to produce close to $15 million worth of medical marijuana every year.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.