An aspiring marijuana grower an hour west of Ottawa says it expects to receive Health Canada approval to plant its inaugural crop within the next two weeks.
Carleton Place-based RockGarden would become the latest eastern Ontario firm to join the race to ramp up marijuana production ahead of the expected legalization of cannabis for recreational use in July 2018.
The company says it has already raised $3 million from investors and constructed an 8,000-square-foot indoor facility that includes a 960-square-foot growing area.
It’s now looking for an additional $8.2-million investment, which would value the company at $25.9 million. Once it’s secured the funding, the company plans to start construction of a 20,000-square-foot production facility that would allow RockGarden to produce 2,080 kilograms of dried flowers annually.
“We don’t have the intention of staying small,” says RockGarden chief financial officer Wynand Stassen. “All we need to execute now is the capital.”
Former Tweed grower cofounded firm
RockGarden was co-founded by president and CEO Deborah Hanscom, an Ottawa lawyer, and chief operating officer Andrew Rock, the former production manager of Canada’s largest legal marijuana grower, Canopy Growth Corp.
Mr. Stassen, who is also the chief financial officer and vice-president of operations at Ottawa tech firm Embotics, said they chose Carleton Place because it’s one of the fastest-growing municipalities in eastern Ontario that also features attractively priced development land.
He adds that the proximity to Smiths Falls-based Canopy Growth was also a factor.
“There’s somewhat of a concentration (of cannabis producers) that’s developing in the area,” he says, adding that it helps the region attract skilled workers.
“There’s a bigger scarcity in human capital than financial capital or licences. Growing the stuff is difficult. It’s not just a matter of putting a seed in the ground.”
RockGarden started the Health Canada application process in 2014 and cleared a “huge” milestone late last year when the government department approved its security clearance and protocols, Mr. Stassen says.
This week, it sent a report to regulators that attests its facility meets Canada’s medical marijuana production requirements. Mr. Stassen says the company expects to receive a licence that would allow it to start growing cannabis within the next five to 10 business days.
While it may not be allowed to grow marijuana, RockGarden has already outfitted its growing room with lights, ventilation systems and IT equipment that will allow it to start in earnest once its licence is approved.
Mr. Stassen says the company will have to harvest several crops before it will be ready to send samples to Health Canada for testing, the final requirement for obtaining a licence to legally sell cannabis.
He expects the company to start selling cannabis for medicinal purposes and generating revenues in the spring of 2018, just before marijuana is expected to be legalized for recreational use.
RockGarden is projecting $10.2 million in revenues in its fiscal 2019 year, according to an overview prepared for potential investors.
“We’re ready for the recreational market to open up,” Mr. Stassen says.
He argues RockGarden’s business model is far less risky than those for the industry’s early pioneers that faced far more uncertainty as they progressed through the regulatory requirements. Additionally, the company will be better positioned to capture market share and expand than the firms that launch after marijuana is legalized.
“We’ve hit the timing absolutely perfectly.”