In quite some Canadian greenhouses the growing of cannabis was recently stopped because of a surplus in the market. Due to the COVID-19 outbreak, people are worried about food and if there will be enough. Could the cannabis greenhouses be converted into vegetable ones? George Smitherman of the Cannabis Council of Canada explains. “An empty greenhouse is the most expensive of all.”
In order to understand the current situation in the cannabis market, George takes us back to the start of cannabis legislation. The model of cannabis legislation in Canada began with the focus on constitutional guaranteed access to medicinal cannabis. In 2018 Canada moved forward following Uruguay, with the fully integrated and legalised model for adult-use cannabis.
Free market
“The government gave out over 300 licences for growing, without any concern about how much capacity was needed for the current market. So it wasn’t a quota model, instead it was a free market one which encouraged to build whatever you could and wanted”, George explains.
It is estimated that the Canadian market for legal cannabis is worth about 3 billion CAD per year. “We believe that is 20 or 30 percent of the total recreational cannabis market. We’re growing the legal market share month by month, but here are points of overcapacity in the Canadian cannabis environment”, says George. Right now there are surplus greenhouses, resulting in empty farms. The three largest ones are one in Ontario and two in British Columbia.
Accommodate growing cycle
George says that it would not be a problem to accommodate the growing cycle to growing vegetables, for a year or even eighteen months. “I don’t know if it will happen, I can’t predict this, but it is not a problem to maintain a growing market and at the same time use some of the additional capacity to augment food supply. So the industry is well positioned to lend a hand if Canada begins to experience hardship around food supply. People are wondering whether COVID-19 will affect the supply, and there is now some planning around the protection of the food supply,” George says. “We would be a cooperative partner in identifying spaces if we would need to take on more food production.”
A lot of the cannabis is grown in traditional industrial warehouses or pharmaceutical environments, so without the benefit of sunlight. There were also ‘hybrid’ buildings developed, which let some sunlight in. “But there’s also a lot of cannabis grown in greenhouses. Ironically enough, some of these are former vegetable greenhouses that have been converted for several million dollars into greenhouses suited for the cannabis cultivation. The physical structure is the pre-existing, but lighting and technology have been added, making them really expensive, and growing vegetables in them would not be profitable. But an empty greenhouse costs more,” says George. “The buildings still need security et cetera.”
Start-ups with scale challenges
“What people have to realise, is that every cannabis growing company is a start-up. Even companies with a significant scale have problems, because they are just starting and are not necessarily profitable yet”, says George. “Are they positioned to subsidize the operating costs of growing vegetables? No.” They’re obligated to their shareholders to maximize profitability and the value of their assets, so they would be looking to other strategies. Perhaps people from traditional vegetable growing companies would be looking for surplus greenhouses, and could offer to purchase the surplus greenhouses.
“At the moment we’re all in a bigger war”, says George. “Everybody wants to lend a hand and do what they can for the community. Many companies made donations of personal protective wear, started to produce hand sanitizers, et cetera. Everyone is willing to focus on an important national topic: food safety and security.”
For more information:
Cannabis Council of Canada
cannabis-council.ca