May 27, 2022

Nova Scotia’s cannabis business has had its ups and downs since legalisation

Nova Scotia's cannabis business has had its ups and downs since legalisation

Nova Scotia's cannabis business has had its ups and downs since legalisation

Producers say they’re worried about changing regulations and slow approvals from Health Canada.

Since cannabis legalisation in Canada in 2018, it’s been a wild ride for some cannabis businesses in Nova Scotia.

While some have expanded their businesses, others have closed down.

“In many ways things exceeded our expectations, but there were also things we didn’t expect from the industry,”

said Aqualitas CEO Myrna Gillis.

Aqualitas built its plant on the south shore of Nova Scotia at the former Bowater-Mersey pulp mill in Brooklyn, Queens County.

Gillis said business was going well, but price fluctuations and supply problems were causing cannabis companies to take a hit.

“The rate at which price compression and oversupply occurred, although somewhat expected, was in escalation,” Gillis said. “These were things that even the regulator was not expecting.”

Aqualitas, which has 75 employees, does not operate like other producers.

It uses waste from locally grown koi fish to fertilise cannabis plants. It’s a big expense that the business doesn’t have to worry about.

While this is a far cry from the 1,100 people who worked at Bowater at its peak, it is causing economic activity in a part of the province where jobs are hard to find.

While Aqualitas is taking up the challenge, other companies have left the province.

After an overhaul of the old production facility in Stellarton, cannabis has been grown for several years. But some 60 workers reported their last shift in February as parent company Hexo decommissioned the facility, deciding to centralise production at some other cannabis processing facilities.

A similar fate befell some 30 workers in the Annapolis Valley in March. Robinsons Cannabis, owned by Oxley of Ontario, closed its doors at the Kentville Business Park.

“We continue to focus our efforts on streamlining and simplifying our growing platform,” senior vice president Carla Navrocki told CBC News in an email.

A short drive down the highway from the Kentville site, two large warehouses with CCTV cameras and fencing have already been built on the open Robinsons growing site in Hortonville. No plants have ever been grown there, despite the large investment.

“We intend to sell these assets and use the proceeds of any such sale to support Auxly’s ongoing operations,”

said Navrocki.

Despite these setbacks, hundreds of people are still working in the cannabis industry in Nova Scotia.

Breathing Green Solutions, based in the Wentworth Valley, was the first Nova Scotian company to receive approval to sell cannabis from Health Canada.

The company upgraded the old NORAD site. Some security measures had already been put in place there.

BGS is almost entirely owned by shareholders and investors from Seaside.

“Our aim is to maintain a high level of employment in a beautiful rural location like Wentworth,”

said company president Savior Joseph.

The company employs 45 people at the plant, plus another 10 sales jobs.

The company has kept its business model simple, mass-producing only three varieties of cannabis. But that is about to change.

“We are starting to produce therapeutic products in a joint venture with a recognised leader in natural health products,” Joseph said. “We will also start producing capsules and other products here, so we have made some investments there.”

While the industry has been good for some and disastrous for others, all manufacturers say they are suffering from ever-changing regulations, in part because of COVID-19.

“We have a very complex retail/commercial environment with oversupply, a large unregulated market and significant regulations and taxes,” Joseph said. “All these things are hindering or causing problems for the industry.”

Despite the problems, the amount of cannabis sold in NSLC outlets is on the rise.

Figures for the last financial year will be released next month. They are expected to be up on last year, when sales were up 21.1% on the previous year.

The sharp drop in cannabis prices and the many other NSLC shops that have been refurbished to make way for cannabis sales are among the reasons for the increase.

Only 12 NSLC shops were selling cannabis when it was legalised in October 2018, but it is now readily available in 37 shops.

They are sourced locally from 16 Nova Scotia suppliers and three local micro-cultivators. That number will soon grow to 17 as Annapolis County-based Zuri Canada was licensed to sell Health Canada last week.

“It took three years and it’s been a long and difficult process,” said Carl Hollett, Zuri Canada’s chief operating officer. The company operates out of the old Convergys call centre, which closed in 2011.

Hollett said the company has 21 employees. Its product is expected to be in shops in four to six weeks.