Dont invest,Tilray lays off,no demand for more product.
C&P Vancouver Sun:
Nanaimo medical marijuana growing company Tilray has laid off a third of its workforce — 61 employees — to “more efficiently serve patients,” according to a statement from chief executive officer Greg Engel.
The surprising announcement Friday comes less than three months after Nanaimo city officials touted Tilray’s plan to quadruple the size of its growing facility and create at least 200 new jobs.
Engel said the medical marijuana market is not growing at the pace Health Canada and many analysts had projected, partly because of the proliferation of marijuana dispensaries.
“Dispensaries continue to operate and compete outside of the same type of rigorous regulations (medical marijuana) licensed producers are required to abide by,” he said.
About 100 dispensaries now operate in Vancouver and city council recently voted to regulate and license them, a move that drew the ire of federal Health Minister Rona Ambrose.
Vancouver will charge retail dealers a $30,000 licence fee and prevent dispensaries from operating within 300 metres of community centres, schools and other pot shops.
Tilray opened its $25-million, 60,000-square-foot marijuana growing facility in Nanaimo in April, 2014, and was planning to expand the operation to 265,000 square feet over the next two years.
Engel said the company still wants to expand when market conditions warrant it but stressed it has “ample inventory” now to serve the Canadian market on a consistent basis.
Tilray announced in April it had a record harvest of more than 140 kg of marijuana and planned to consistently deliver 50 kg a week to its patients across Canada, with Ontario patients being its largest market.
Nanaimo Mayor Bill McKay blamed the federal government for allowing market conditions to become difficult for licensed medical marijuana growing companies.
“(The licensed companies) have invested all this time, energy and money in a new market that is not growing as fast as people expected,” he said. “The federal health minister slaps Vancouver on the hands, saying you shouldn’t be licensing these (dispensaries) because they’re illegal. Well, do something about it then.”
A Nanaimo Economic Development Commission report this year estimated an expanded Tilray operation would generate $112.8 million in total economic output and contribute $19 million in annual taxes to all three levels of government.
Canna Farms part-owner Dan Laflamme isn’t sure if his licensed marijuana growing operation in Hope has been affected by marijuana dispensaries in Vancouver. He said there’s no data available on how many dispensary users would be able to get a medical prescription from a doctor, which would allow them to buy his firm’s product.
“The dispensaries might have a lot of patients but are they mostly just recreational users?” he said. “I just don’t know.”
Don Briere, who operates 10 Vancouver dispensaries, feels licensed growers have been hurt by many doctors’ reluctance to write prescriptions for medical cannabis.
“Our oldest patient, who is 97, went to his doctor and couldn’t get a medical marijuana prescription, which is just crazy,” he said. “That has to be hurting (the licensed growers) big time.”
bconstantineau@vancouversun.com
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