Pubdate: Fri, 08 Apr 2016
Source: Windsor Star (CN ON)
Copyright: 2016 The Windsor Star
Contact:  http://www.canada.com/windsorstar/
Details: http://www.mapinc.org/media/501
Author: Doug Schmidt
Page: A1

FROM BLOOMS TO POT PLANTS

Aphria gobbles up flower grower to boost production of marijuana

The head of local medical marijuana grower Aphria is convinced
Canadians will be legally consuming pot recreationally within two
years, and his company is preparing to meet the inevitable spike in
demand.

"Recreational - that's a definite," Aphria Inc. president and CEO Vic
Neufeld told the Star.

Selling its first Leamington-grown bud barely a year ago, Aphria on
Thursday announced it was gobbling up its host farm operation, CF
Greenhouses, in a multimillion-dollar deal ahead of its next major
production expansion.

"We bought the farm ... it's an exciting time for Aphria," said Carl
Merton, the company's chief financial officer.

The $6.5-million deal to purchase closes June 30 and gives Aphria
access to 360,000 square feet of additional greenhouses on 36 acres of
land. With the sale, CF Greenhouses ends its longtime farm operation
growing potted poinsettias, geraniums and other plants.

"The space is available to us as needed," said Merton. Fully built
out, the acquired property offers space for a million square feet in
potential greenhouses and would permit the company an eight-fold
production increase.

As the company continues to expand its customer base and "exceed our
revenue and profitability expectations," Neufeld said two potential
growth options are currently being considered, either 40,000 square
feet or 100,000 square feet of pot production space added.

Aphria began sales in January 2015, in a leased 22,000-square foot
greenhouse and after a $6-million start-up cost. A recent expansion
saw Aphria lease another 21,000 square feet from CF Greenhouses, but
now the pot company is buying out its landlord.

Aphria is the second largest of 27 licensed producers approved by
Health Canada since the Supreme Court of Canada ordered Ottawa to make
medical marijuana available to patients.

As of the end of February, Merton said Aphria had between 10 and 15
per cent of the market nationally and was making deliveries to 4,000
patients holding doctor-approved medical marijuana
prescriptions.

While the Canadian market is now in the $200-million-per-year range,
Merton said the number of patients with medical marijuana
prescriptions is rising nine per cent per month, and Health Canada
projects that market could reach $1.3 billion annually.

The real industry buzz, however, is on the Trudeau Liberals following
through on legalization and commercialization of the recreational use
of marijuana, a potential $5-billion market.

The biggest question, according to Neufeld, is the type of
distribution model Ottawa might adopt. If the public's access is
through specialized dispensaries required to purchase their pot from
licensed producers like Aphria, "then it's Hell's bells for us," he
said.

A town hall gathering to announce the sale was held Thursday with
employees at CF Greenhouses, which is owned by Aphria co-founder and
chief operating officer Cole Cacciavillani.

Neufeld said the flower operation will end but that many of those
employees are part time or seasonal and could be eligible for job
openings at Aphria.

Merton said Aphria has about 55 employees in Leamington. Neufeld said
his board meets later this month to decide whether to expand by 40,000
square feet, which would mean about 20 new employees, or by 100,000
square feet, which could mean 40 additional employees.

"It's been a great journey," said Neufeld, who left Windsor's
successful Jamieson's Laboratories to help start Aphria.

The company currently retails up to 150 kilograms a month of medical
marijuana of different strains of potency. It also has contracts to
supply three other licensed producers with between 30 kg and 80 kg a
month of pot.

Aphria, which projects growing its medical marijuana patient list to
4,500 by the end of May, has also teamed up with Canadians for Fair
Access to Medical Marijuana to push for health insurance coverage for
those who use the product.
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MAP posted-by: Matt