Province under fire from budding local suppliers for marijuana deal with Ontario supplier

A budding local marijuana supplier says the provincial government overlooked Newfoundland and Labrador growers in their recent pot supply deal with a mainland company.

"It is kind of annoying when your own government is using your own taxpayers' dollars to compete against you," said Bond Rideout, CEO of NLMedicorp, who has been working on transforming a Placentia Bay fish plant into a medical marijuana production facility.

"We could have a really powerful industry here that's not only created by Newfoundlanders, but it's employing Newfoundlanders, and it's for Newfoundlanders and Labradorians."

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The province announced Friday that it had signed a deal with Ontario-based company Canopy Growth Corp.

As part of the deal, the company will invest $55 million to build a facility in the province and supply up to 8,000 kilograms of cannabis per year.

Rideout said the agreement effectively creates a monopoly for Canopy.

"They're totally putting the cuffs on industry here in Newfoundland by doing this," he said.

"They're allowing one player to have such a massive control over the marketplace. It's very hard to compete."

'A shock'

Rideout isn't licensed to produce pot just yet — he's been working on the application to Health Canada since 2013, he said — but he says he's poised to produce a lot of it once the licence comes through.

He has a 15,000-square-foot facility right now, he said, and land ready for another 45,000-square-foot facility.

Rideout said government representatives met with him a year ago to ask him how he saw the industry shaping up, but that they didn't give him a heads-up or even consult with him about their supply plans.

Friday's announcement was a "a shock, to say the least," he said, and he wishes the provincial government had consulted with him and with other local producers when they developed their supply plans.

NLC will give priority to NL pot producers

Minister of Tourism, Culture, Industry and Innovation Chris Mitchelmore says the government went with Canopy because there aren't any licensed producers in the province, and they wanted a guaranteed supply.

"Newfoundland and Labrador is the only province without a licensed producer," he said.

"In order to move forward with our retail model and with ensuring there is an adequate supply once cannabis becomes legal, we needed to enter into a supply agreement."

He emphasizes that the agreement with Canopy is not exclusive, and that it is just a supply agreement and not a purchase agreement; the NLC will be free to purchase from any supplier they choose.

He also said that in making those choices, the NLC will be giving priority to producers from the province.

As for the claim that government has given Canopy a monopoly, Mitchelmore said that simply isn't true.

He says there is plenty of room of providers from the province once they get licensed, and points to New Brunswick, where a number of supply deals have been struck.

Accelerated plans

Rideout agrees there is opportunity for his company, but said the window for that opportunity is now quite small, thanks to the Canopy deal and timeline.

Recreational pot will be legal in July 2018, but Canopy's facility won't be operational in the province until at least 2019.

The NLC  plans to issue a request for proposals for retail marijuana stores early next year, aiming to have those stores open by July 2018.  

Rideout would like to be up and running by then, he said, and he's accelerating all of his plans in order to make that happen.

"That'll really show government in this case that they probably should have looked within before they looked without."