Pot industry not of one mind over outdoor growing

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The federal government’s move to greenlight the growing of commercial cannabis outdoors will allow Canadian producers to compete globally, but it also carries risks, those in the industry say.

At least one medical marijuana grower in Southwestern Ontario – one of the country’s richest farm belts, where seven indoor pot producers now operate – says his company is cautiously exploring the new outdoor option, while another was quick to rule it out.

The mixed reaction comes as the federal Liberals prepare to lift the outdoor cultivation ban on medicinal and recreational cannabis – the drug could previously only be grown in greenhouses or indoors – in a bid to create a competitive industry and battle the black market ahead of legalization on Oct. 17.

The head of an American biotechnology firm that specializes in cannabis plant breeding says marijuana companies looking to survive in the increasingly competitive global market will adopt outdoor growing.

“There’s going to be a lot of competition and I think you’re going to see commoditization of this crop, just like every other crop that came before,” Jon Vaught, chief executive of Front Range Biosciences, said of marijuana.

Outdoor growing makes sense for cannabis crops used to make extracts like CBD oil – a cannabinoid that doesn’t have the psychoactive effects – while growing inside will always yield the highest-potency marijuana, he said.

“Every outdoor environment has its challenges,” Vaught said. “With a greenhouse, you get to control the environment.”

WeedMD, an Aylmer-based producer, is mulling outdoor cultivation, but has concerns about security and biosecurity, said chief financial officer Keith Merker.

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“We will have the option to grow outside. We have the land already within our scope,” said Merker, whose publicly traded company recently expanded into Strathroy, where it’s building a massive greenhouse on a 40-hectare property.

“I still have a lot of concerns and reservations,” Merker said of outdoor cultivation, noting a decision can’t be made until the new rules become clearer.

Weed MD chief financial officer Keith Merker stands in a field that could one day be used to grow marijuana outdoors near the company’s facility just north of Mt. Brydges, west of London. Mike Hensen/The London Free Press/Postmedia Network

MedRelief, a Toronto-area producer that recently bought a 304,000-square-metre greenhouse and 66 hectares of land west of Exeter, has no plans to grow outdoors, a spokesperson said.

The new cannabis regulations, including the rules on outdoor cultivation, come into effect Wednesday.

“The regulations impose the same strict physical security requirements for indoor and outdoor cultivation, such as physical barriers, intrusion detection systems and video surveillance,” a spokesperson for Minister of Health Ginette Petitpas Taylor said in an email. “For all cultivators, cannabis will always need to be processed and stored indoors once harvested.”

Some of the country’s largest licensed producers have pushed back against allowing outdoor growing, raising concerns about such issues as product security and cross-contamination from other crops.

But the head of a cannabis business association says the big growers are just trying to protect the indoor-based system they’ve spent millions on.

“The reason you’re hearing from these guys is they’re all heavily invested in dinosaur facilities,” said Ian Dawkins, president of the Cannabis Commerce Association of Canada, a national trade association that represents marijuana-related “craft” businesses.

“They all have these big indoor bunkers with 18-inch concrete walls with reinforced metal beams – it’s just insane.”

Introducing outdoor cultivation in states like Oregon and Washington State led companies to undercut each others’ prices, Dawkins said.

“You’re going to see the market begin to realign itself into what we call a bipolar market,” he said.

Cross contamination is a legitimate concern for growers, Dawkins said, but it’s one that many farmers already deal with.

“If you talk to people who grow wheat, they have the same challenges,” he said.

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