Creative Edge Nutrition Inc (FITX)

[Dr. Johnny Fever]

This zoning thing is a point that keeps coming up, unfortunately. I am a shareholder, for the record, and I believe in the potential of what FITX is doing. I consider myself very 'pro' FITX.

Regardless, the Canadian government does not allow for the commercial-scale growing of recreational marijuana, which, in Canada, remains illegal. Furthermore, the Canadian government has not announced any plans to decriminalize recreational marijuana. Marijuana grown in Canada must be for medical purposes in order to be legal. As such, unless I am much mistake (which could be the case), Health Canada treats medical marijuana as a pharmaceutical, and requires that medical marijuana production facilities be considered industrial sites like other pharmaceutical facilities. This is partially the reason for the change in the law, for marijuana production to be regulated in sterile environments so as to reduce or eliminate the risk of drug (buds!) contamination by bacteria, molds, fungi, and other contaminants that could cause harm to patients who use mmj and who are immuno-compromised, such as HIV patients and patients on chemotherapy regimens.

Mr. Chaaban and co. have stressed this aspect of the operation and its place in the development of the facility. For FITX to receive a growing license, the utmost care and attention to detail must be given to create a proper, sterile pharmaceutical production facility. It is not unrealistic to assume that the strict standards and conditions in which medical marijuana may be legally produced in Canada require an industrial zoning categorization. Aside from Tweed's former-Hershey-factory facility (which, as I believe I read on their website, or a related article, is situated next to cattle pastures), has anyone investigated where the other 11 licensed companies are growing, and what kind of zoning they have? I admit I have not.

I also admit that I have not read the MMPR law or HC guidelines in their entirety, and therefore, I admit that my line of reasoning here is speculative. However, as I did in a previous post this afternoon, I will refer to a document that Investanator posted in reply to one of my posts a few days ago:

http://www.citywindsor.ca/cityhall/committeesofcouncil/Standing-Committees/Planning-and-Economic-Development-Standing-Committee/Documents/feb%2010%20item%202_20140130153939.pdf

My relevant follow-up in that post is quoted here:

"Granted, the document is from the Corporation of Windsor, and thus does not represent the municipal conditions of Lakeshore. However, the summary on the law as established by Health Canada is very relevant, because, although it represents Windsor's interpretation of the HC law (or maybe they've been told by relevant authorities to interpret it as such) that medical marihuana facilities must be zoned as industrial, and does not necesarily represent the Lakeshore Municipal authority's views, it is very likely that Lakeshore has adopted the same stance. Furthermore, the minutes from the April 8th Lakeshore Council meeting state the the Director of Community and Development Services (I believe that's Mr. Steve Salmons) has told CEN that they will need to seek "rezoning and site plan approval" from the Town. Therefore, though I hate to do so, [I will admit] that Rolphtonair has been correct all along, and that, technically, CEN Biotech does not have the appropriate zoning requirements to operate a medical marijuana facility in Lakeshore."

As I went on to say in that post, I do not believe that this means FITX will be unsuccessful. I believe that it will be, or, rather, I believe that it can be and hope that it will be. (If anyone cares to read my reasoning as to why I think things will work out for FITX and the zoning, please refer [oddly enough] to post #110420.) However, if I'm even sort of right in my speculation on the zoning issue, then the facility will have to meet HC pharmaceutical specs, which will require an industrial zoning OR some kind of exception added onto the zoning classification of "Agricultural Use - Value Added" under which the facility is currently registered and taxed. This will, of course, mean that at some point, company representatives will need to meet with Lakeshore Municipal officials to discuss the best way to proceed, with regards to rezoning applications, etc. (as Mr. Salmons states in the April 8th document linked above). One very real potential problem (which may have been part of any previous, pre-CEN Biotech, attempts to have the land rezoned) is the relative closeness of residential homes and structures to the site. For that reason, it may be that the zoning issue is resolved by adding an exception onto the current Agriculural zoning status, or rezoning to a different Ag classification. I feel, though, that if the town and county want to do it, and if the site meets the other requirements of the HC law, and if CEN pushes hard enough in the right direction, this issue can be resolved satisfactorily for all relevant parties.

What bothers me most is that, given this line of reasoning, Mr. Chaaban's message posted on Facebook at 11:38 am on April 6th, is rather disconcerting:

[begin quote]
"...you do Not require a permit to grow, harvest and package on agriculturally zoned land. There will be no processing involved. The final product will be picked up by brinks and shipped from canada post."[stop quote]

I mean, surely he realizes that the zoning issue is not merely a construct of ihub message board speculation and dialogue.

However, I am not a lawyer, and I sure as hell am not familiar with Canadian law or the political machinations that drive these and other commercial dealings. It is for certain that Mr. Chaaban understands much better than I the inner workings of the politics involved in making this thing happen (that's his job, after all, and he has accomplished or set in motion much of what he has set out to do with the CEN Biotech subsidiary project, which in my mind has earned him some due respect and some room to continue onward without warranting too much undo bashing or unnecessary questioning of character).

As a side note, there has been some discussion of the cost of the construction, which Mr. Chaaban has estimated at $12,000,000, to the delight of many naysayers who have attempted to cry 'foul' after claiming to have seen or found Lakeshore municipal documents pricing the construction of the new building at $900,000 (I have not seen these documents, but I trust that they exist). However, what said parties have failed to address is the cost of outfitting a sterile lab-like growing environment, or the equipmemt to grow with (which, on a commercial scale, will get pricey with a quickness), or the starter seeds and/or clones, or safety features that any of the buildings being used to grow or process the medicine will require, including extensive fire safety systems, computer networks and equipment, negative pressure seals, etc. (not to mention the cost of skilled labor for these things). Nor have they mentioned the cost of licensing for the tracking software, insurance, nor the price of legal representation, etc. I could spin this point into yarn. The point is that, while there is certainly room for speculative lines of reasoning regarding all of the issues raised, a reduction in fantastical negativity would be a welcome change to a board where genuine, constructive dialogue should encourage investors and interested parties to engage the issues from all sides objectively. This last was not intended as a rebuke to any specific individual, it was merely intended to address a certain tone that occasionally sets in, and which could have very real negative consequences regarding the investors who are here to do well for themselves and their families, many of whom are new and inexperienced, as has been the case during much of the "green rush". Regardless, I very much enjoy the many views I've read here, which have given me new and vital perspectives with which to consider my own investment in FITX. Thanks to all. I'm out for the night.