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This article was published 24/7/2019 (259 days ago), so information in it may no longer be current.
Winnipeg-based Delta 9 Cannabis is prepping for the next wave of legalization with a deal to buy at least $4 million worth of extract products from an Alberta supplier.
The one-year deal, announced Wednesday morning, will see Westleaf Labs supply Delta 9 with vape pens, gel capsules, ingestible oils and edibles starting Oct. 1. The products are made using concentrated cannabis oils, which Westleaf Labs will produce in Calgary.
Westleaf chief financial officer Taylor Ethans says a federal licence is expected in the fall. New regulations that legalize commercially produced concentrates will take effect Oct. 17, and Health Canada says products, including cannabis-infused food, could be on store shelves by mid-December.
Westleaf’s concentrates will be extracted from a variety of licensed dried marijuana cultivators, including Delta 9, Ethans said. Derivative products can be extracted from "trim," weed industry parlance for loose fragments of dried plant.
"Through the extraction equipment you can create a really high-quality product, assuming you’ve got high-quality trim," he said.
Ethans said Westleaf will focus on producing vape pens, devices that turn small amounts of concentrated cannabis oil into inhalable vapour without resorting to combustion. Delta 9 CEO John Arbuthnot expects they will be popular.
"It’s discreet, provides people a very similar uptake and experience to a smokable product, but in a platform that I think is much more streamlined and pleasurable from the consumer standpoint," he said.
Arbuthnot is also keen on leveraging the Westleaf white-label supply deal to sell Delta 9-branded cannabis oils and gel capsules, products that are already available on the legal market from other producers.
"What we’ve seen, in terms of trends, is that we really have a lot of people coming in that are not your traditional cannabis consumer, and they’re using these ingestible oils, these gel caps as more of a wellness product, they’re using it for aches and pains, and to sleep," he said.
"So I think having those options really gives us access to a whole demographic of consumers that I think is certainly building."
Delta 9 was originally a partner in Westleaf’s extraction facility, but traded its 50 per cent stake for company shares in January.
Arbuthnot said buying products from Westleaf, instead of producing them in-house, will help the company focus on its core businesses of cultivation, distribution and retail.
Under the terms of the deal, Delta 9 has the option to purchase as much as $16 million worth of Westleaf products in the first year.
Westleaf will also sell Delta 9-branded products through its subsidiary retailer Prairie Records, which currently operates three locations in Saskatchewan.
Solomon Israel is a full-time reporter for the Winnipeg Free Press and for two years, the lead writer for Free Press cannabis news site, The Leaf News. He continues to provide coverage of the cannabis beat while covering business in the city and province.
Updated on Wednesday, July 24, 2019 at 6:56 AM CDT: Adds photo