Delta 9 to expand cannabis production, open more stores to meet growing demand

Winnipeg cannabis producer and resaler Delta 9 plans to expand its production capacity and open more stores to keep up with a growing demand.

"All of our expectations have been blown away, the demand is far in excess of our projections," said CEO John Arbuthnot.

The company announced Friday it aims to grow 60,000 kilograms annually by 2022, compared to its current annual projected growth of 4,224.

Delta 9 also plans to open an additional three stores in Winnipeg, Brandon and Thompson, bringing its total store number from one to four. The company is also working with a First Nation to open another.

Arbuthnot said the market has been under pressure since Delta 9 opened its first store on legalization day last October.

"We've seen an incredible reception from the consumer side, we've seen some concerns industry-wide from a supply side," he said.

"I think what all of this means is it's an incredible opportunity for business to be ramping up on the production, the distribution side. There's an incredible opportunity to expand out into retail as well. I think we couldn't be happier with how things have gone in the wake of legalization."

The company plans to expand in two phases over the next three to four years. 

A big part of that first step comes in the form of adding more repurposed steel shipping containers, or growing pods, to its facility.

Right now the company has about 154 pods growing about 200 leafy green plants in each, but it hopes to boost that by adding another 456 pods this year.

That's expected to take its current 49,000-square-feet of production space to just under 200,000-square-feet, the company said. Production is estimated to increase by nearly 16,800 kilograms.

The first phase is projected to cost $24 million which Delta 9 plans to bankroll through its current revenue stream.

The next phase will take place between 2020 and 2022 and cost another $115 million.

During that period the company wants to beef up its growing pod network to about 2,000; 15 modular warehouse buildings totalling 480,000 square feet of production space will be rolled out; and a 30,000 square foot cannabis extraction facility will be built, the company says.

Arbuthnot hopes it will all help the company get to its 60,000-kg annual target by 2022.

Right now Delta 9 employs 200 staff but plans to bump that up to around 750 by the time the expansion projects are completed, he said.

"It means investment, it means jobs, it means economic development and diversification for the province. All these are great things."