Outdoor Cannabis Cultivation Has Arrived in Canada

Article by Jay, The Deep Dive

Outdoor Cannabis Cultivation Has Arrived in Canada June 3, 2019 Jay 48North, Aleafia Health, Canntrust Holdings, WeedMD Inc

Outdoor grow is coming to Canada in a hurry. Health Canada, the regulating body for cannabis licensing in Canada, has now approved three known outdoor cultivation facilities. Meanwhile, several other licensed producers have already announced their intent to enter the nascent space ahead of regulatory changes expected this fall for next generation cannabis products.

To help keep investors in the know, The Deep Dive has compiled data on those public companies that are involved, or intend to be involved, in the outdoor grow segment. To keep things simple, we’ve limited our data to firms that are intending to enter the space for the 2019 and 2020 seasons, and that have secured or acquired land in relation to this business model.

48North Cannabis

The second firm in the industry to obtain an outdoor cultivation license, after private operator Good Buds Co of B.C., 48North holds the title of being the first publicly listed firm to obtain a license to grow cannabis outdoors. It’s a good thing too, as its business plan is heavily reliant on the success of its outdoor crop.

Licensed to grow on a 100 acre plot of land located in Brant County, Ontario, 48North is expecting to yield roughly 40,000 kilograms of cannabis in its first year of outdoor grow. They have one of the lowest estimates in the outdoor segment, with projections of only 400 KG per acre of production. Collectively, this puts 48North at a total capacity of 45,000 kgs per annum once its two indoor facilities are factored into the equation.

The firm, which is believed to be planting seed on its property, is expecting production costs to come in at roughly $0.25 per gram which would put it as one of the lowest cost producers across all categories should things go to plan. The organic-labelled crop is expected to be used for extraction purposes to produce next-generation cannabis products upon changing regulations this fall.

48North has already entered agreements to sell 9,660 KG of the expected yield to various entities, including the SQDC. The firm is expected to begin seeding at some point this month.

Aleafia Health

In stark contrast to 48North, Aleafia Health has submitted its evidence package for an outdoor grow amendment at its Port Perry facility. The strong difference between the two firms, is the anticipated yield of the planted crop.

Whereas 48North is expecting a small 400 KG of cannabis per acre, Aleafia is on the other end of the spectrum, anticipating 60,000 KG of dried cannabis bud on its 26 acres of outdoor cultivation. The per acre estimate works out to roughly 2,308 KG of cannabis.

Aleafia is anticipating a cost per gram basis of $0.25, similar to that of 48North. While the Port Perry location is ready for planting, the firm has yet to decide what to do with an additional 83 acres of land they currently hold in Paris, Ontario. The latest investor presentation suggests that it may be provisioned for outdoor growth at some point in the future as well.

Unlike its competitors, its not entirely clear whether Aleafia intends to utilize its outdoor cultivated cannabis for use in extraction or not. While a high likelihood exists in this area, the firm is quick to identify that it has an in house extraction capacity of 50,000 KG per annum, which is lower than the expected yield for the first years harvest.

WeedMD Inc

Canada’s newest licensed outdoor producer, WeedMD received its license to cultivate cannabis at its 27 acre outdoor plot on Friday. The plot is directly adjacent to its Strathroy facility, which will allow for operational efficiencies with respect to infrastructure and labour use.

In terms of expected yield, WeedMD has taken a bit more conservative view than that of Aleafia. While allotted outdoor plots are relatively the same in size, WeedMD is expecting to yield roughly 1,000 KG of cannabis per acre of production, placing its estimates for yield in the middle of the pack.

Read the full article here.

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