As Canadians prepare to light up, pot-grower Aphria steams ahead with huge expansion
Doug Schmidt, Windsor Star Updated: October 14, 2018
LEAMINGTON, Ont. — With provinces and producers warning of likely supply shortfalls once marijuana becomes legal for Canadian adults on Wednesday, one of the country’s biggest licensed producers, Aphria Inc., is rapidly scaling up to meet demand.
The company’s current annual production rate of about 30,000 kilograms, only achieved last spring with a tripling of previous capacity, is set to nearly triple again by the end of this year. Aphria will then more than double that production level again by next spring, bringing its total annual cannabis output to 230,000 kg by May 2019.
Some perspective — Aphria sold only 2,700 kg of product in the first half of 2018.
Aphria is growing so fast that it can’t wait for public utility Hydro One to keep pace — the company is building its own on-site power plant capable of generating enough energy to power a small town.
“Every morning, I look at what we’re doing and I ask myself: ‘What happened?’” Cole Cacciavillani, Aphria’s co-founder and vice-president of infrastructure and technology, told the Windsor Star on a recent tour.
Cacciavillani, 62, spent a life growing holiday poinsettias and other potted greenhouse flowers on a large scale for the retail market and said he envisioned himself slowing down by this stage. But just six years after he began tinkering with new and more scientific ways of growing cannabis for the medical market, he’s one of several multimillionaire co-owners of a multibillion-dollar corporation with almost 500 employees and a plan for rapid expansion and global growth.
With its $140-million Phase 4 expansion at the original Aphria site underway since August 2017 — a massive 700,000-square-foot high-tech growing area and 230,000 square feet of additional infrastructure set to be completed by January — the company is also in the midst of constructing a separate $120-million cannabis greenhouse growing facility of more than a million square feet at another Leamington location. Also underway is Phase 5 — an $8.5-million, 200,000-square-foot greenhouse on five acres that will be completely dedicated to supplying stock, with new marijuana plants propagated from cuttings of older plants.
Once full production is underway next spring, and subject to Health Canada approval, Aphria’s Leamington operations, along with a smaller B.C. subsidiary named Broken Coast Cannabis, will be harvesting about 5,000 kg a week for Canada’s recreational and medical marijuana markets.
“We’ll never jeopardize our medical program — it’s in our DNA,” Cacciavillani said of Aphria’s now-humble beginnings in late 2014 in two greenhouses (22,000 square feet) converted from flower growing.
“We’ve never stopped building,” he said.
To feed its need for expansion space, Aphria began gobbling up neighbouring farmland and greenhouses, with sellers offered shares in the new company, then valued at about $2 or $3 a share. Farmers, who tend to be conservative, opted instead for cash. Based on current share values, Cacciavillani said one neighbour who sold for a little over $1 million, left behind another $7 million in profit.
“Oops!” said Cacciavillani, whose involvement in marijuana has already made him a multimillionaire many times over.
As of spring 2018, more than $150 million had been invested in the Leamington infrastructure expansion currently underway. At the peak of construction last winter, 800 workers were on-site, with pretty much every available HVAC, mechanical and electrical contractor pulled in from the local area.
Related
One indication of how fast Canada’s cannabis sector is growing and evolving is the 22,000-square-foot secure vault for finished product. The $22-million facility is as big as Aphria’s entire initial operation and wasn’t even completed when the Trudeau government last spring gave the green light to recreational marijuana and Health Canada — under big pressure to expand the number of legit pot growers — deemed such high-security no longer necessary. It’s now just a part of the production area, albeit a very expensive part.
Under Phase 4, sorting, sticking, stacker and table loader robots in a massive propagation room will help turn 225,000 cuttings a week into marijuana-producing plants, in multiple strains, ready to be harvested in eight weeks. Despite all the automation, Cacciavillani said the company will probably need another 200 workers — “but that’s instead of 800 people.”
Replacing the current tent-like structures used to foster development of the cuttings will be a giant five-layered rooting chamber — 216 feet long, 40 feet wide and 26 feet high — with plants fed from six large tanks with six different mixtures that include nutrients like calcium and magnesium bought by the tonne.
The 15-megawatt power plant (six megawatts produced through co-generation) will help provide electricity, both hot and cold water and to provide humidity control at Aphria One, while a separate 14-megawatt plant will provide the same at Aphria Diamond.
It’s a green operation. Giant catalytic converters will convert exhaust from the power plants into carbon-dioxide for the cannabis plants. Two five-million-gallon tanks will store the hot and cold water, and underneath the production space is a five-million-gallon storage tank to capture and recycle plant runoff. A 5,000-volt distribution system would allow Aphria to export any excess power to the public grid, and LED lighting throughout will cut energy consumption by a fifth.
As for consumer demand when marijuana is decriminalized in Canada after 95 years, Cacciavillani said: “We think it’ll be a little crazy too.”
