In a previous column I noted that the potential of medical marijuana as a new agricultural opportunity is literally growing by leaps and bounds. There are now 450,000 patients and its expanding every year, that is up from 100 patients just 13 years ago. Either the prescription rules were too restrictive back then, or doctors today are a lot more comfortable with writing marijuana prescriptions for a variety of ailments. Perhaps the medical establishment is also trying to send a message about their view on the legality of the product. It wouldn’t be the first time such a perspective was pursued by doctors.
During alcohol prohibition in the USA and in various places in Canada (Alberta had prohibition in the 1920’s), doctors wrote out literally millions of prescriptions for medicinal alcohol for their patients to relieve an assortment of ailments. That spawned a multi-million dollar business in mail order liquor from other jurisdictions. After prohibition ceased, and curiously to this day, you would find few doctors prescribing or even suggesting alcohol consumption for any reason. To be fair unlike alcohol, medical marijuana has actually been proven to be beneficial to relieve pain under certain conditions.
Health Canada also seems to have relaxed the rules against growing and distributing medical marijuana. This seems to be the compromise with the abolition of growing medical marijuana by patients themselves. That’s seen a number of start-up companies getting licensed to legally grow the product. The plant growing technology is certainly available from the greenhouse industry and from experience in other countries like the Netherlands. That country has become the major source of marijuana seed stock in the world and has a thriving multi-million dollar seed export business. A big chunk of the Canadian greenhouse business is run by Dutch immigrants or their descendants, I expect those business-savvy folks can see the potential in expanding their businesses should the opportunity arise.
New licensed marijuana growing companies are probably also looking down the road with what they see developing in the US states of Colorado and Washington, where the recreational use of marijuana has been legalized. Growers, distributors and retailers in those states have seen their business explode into a billion dollar industry. That development would not be lost on investors and grower companies in Canada, especially with the view from Liberal Party leader Justin Trudeau that he will legalize the recreational use of marijuana if he became Prime Minister. No doubt, any company in the growing business would want to be well established to take advantage of any new bonanza if and when that political change happens.
Interestingly growing marijuana is not a new concept in western Canada. Almost from the beginning of settlement industrial marijuana, more commonly known as hemp, has been grown on the prairies. It’s the same plant species but is the low THC variety used for fibre, seed and oil purposes. It had its cycles and almost disappeared in the 1950s, as growing and processing hemp moved to low cost production areas like India and the Middle East. It’s had a checkered history since then, some small scale growing and processing has occurred in the 80s and 90s but the industry was plagued with onerous government restrictions, processor bankruptcies and marketing problems. Somehow it survived and today there is a small and stable industrial hemp business in Canada. Nowadays hemp has expanded into multiple uses from nutrition to cosmetic products. For growers it’s also gotten a bit easier to produce hemp as some of the original growing restrictions have been relaxed somewhat – although probably to the dismay of suspicious lay enforcement officials.
What industrial hemp growing has done is create a pool of experienced growers who could probably grow medical marijuana. It’s not a great leap to suggest that when recreational use is approved, the massive new demand will only be able to be supplied by commercial large scale growers. That may not happen soon, but as political and society perspectives change over the next few years, that potential is not that far-fetched. Interestingly, perhaps some government officials share that future potential as a number of ag departments are quietly supporting research and development of new and better agronomic practices for growing hemp (aka marijuana). It would seem that when the day arrives when marijuana use is fully legalized, some provinces will have in place experienced growers, and established processors and marketers to take full advantage of the new weed bonanza. In the end governments will be reaping their own bonanza in new tax revenue.
AHEAD OF THE HEARD