The upcoming Council meeting on Monday (January 21) is certainly to be an interesting one, although the Biodigester is on the agenda, front and centre will be the debate and vote on whether Grimsby should “opt-out” or “opt-in” of retail cannabis sales.

The agenda in fact is permeated with the question, studies, comment and letters falling on either side of the matter.  But what caught this author’s eye was the delegation of “Province Brands” and an interview form included with the agenda package that are urging Council to allow retail cannabis sales.

The agenda is viewable here:  January 21, 2019 Council Agenda

Who is “Province Brands of Canada”?

Province Brands in a press release has described itself as “the Canadian company developing the world’s first beers brewed from the cannabis plant”.

While it is expected that the major breweries such as Molson Coors Canada who have entered into joint-ventures (no pun intended) will produce cannabis-infused beverages, Province Brands is aiming at brewing purely from the cannabis plant.

Other than a slickly produced video, there is little information available at their site:

What Is The Relationship To Grimsby?

The company has already signed or optioned to sign a lease agreement for a “123,000 square foot facility in Grimsby, Ontario (currently under construction).”

Well, the building is definitely not under construction as it already exists at 270 Hunter Road, formerly the Westbrook wholesale floral warehouse (122,615 sq. ft).

Here is the original commercial property listing:

From their various press releases it appears that Province Brands is interested in converting this property to act as a “white-label” production facility for smaller craft breweries (at least 4 according to research) who want to market a cannabis beer.  Essentially companies would have their product  produced and labeled there.

The point of their delegation and the body of this article is not the debate on whether such a facility should be allowed, but rather if Grimsby should opt-out or not of retail cannabis sales, thus allowing or disallowing them to have a retail store at their proposed production facility. 

Efficacy of Province Brands’ Delegation “Arguments” For Opting-In

Having read their delegation material and comment form, it would seem the company is grasping at straws to justify why Grimsby should not opt-out of retail cannabis sales.

Using the old “it’s in the best interest for the community” argument never fails (to amuse the masses), when really at the heart of this is a commercial self-interest.  An interest that this author argues would be a negligible retail operation (more on this later) at possibly a greater expense to the community at large.

The “will set Grimsby up as a destination” might be the proverbial slap-in-the-face of many local residents and businesses who already know Grimsby IS a destination.  While this author can not speak for those at the Gateway Welcome Centre, I am sure they have a laundry list of reasons why Grimsby is already a destination.

Moving on…

Grimsby can position itself to reap the benefits of retail cannabis at a later date if it wants to… no need to make a hurried decision based on optimistic projections and the financial notion of FOMO (“Fear Of Missing Out”).  Beyond that, Grimsby is already benefitting from the medical cannabis industry and adding retail would be a “diminishing return”.

Well you can not argue that retail cannabis will not create jobs, but given the small number of licenses handed out by the Province, likely the only retail cannabis in Grimsby for the foreseeable future would be a Province Brands retail shop.  Self-interest knocking again.

Given that the focus of the proposed facility is production and manufacture of cannabis beverages, the amount of retail space would be very limited and thus so  would be the number of potential jobs.

This author estimates such a factory retail cannabis outlet would create a handful (< 10) of jobs at best.   The more considerable job numbers are in the production, packaging and distribution process and thus would be unaffected by the Town’s decision to opt-out or not.

Here we have the old “public safety” angle and re-appearance of FOMO (no say in future cannabis laws).  Invoking the “Government of Canada” as the big-brother who will protect us all from the “black market” is trivial at best.  It strikes odd that no mention is made of the Province of Ontario and the Alcohol and Gaming Commission of Ontario (AGCO) who are the ones actually overseeing retail cannabis implementation and the licensing of retail outlets.

In fact as a result of the chaos following AGCO’s “cannabis license lottery”, there has been remarks from the AGCO that the current allotment of 25 stores will do little to curb the “black market” and legal supply issues.  So that argument goes out the window for now as well.

Efficacy of Province Brands’ “Stakeholder Interview”

Town Staff “conducted one-on-one stakeholder interviews with four groups” including Province Brands, whose comments were included in the Town Report (also in the agenda).  Much like the online survey engagement, this author questions the objectivity of these interviews and concluding statements.

Digging in…

Province Brands indicated they are (“proud”ly) based out of Grimsby… is this correct?  Not based on what this author has seen.  Their proposed commercial facility might open here, but research shows them all over the map.

Their website shows the following:

Nunvaut is a long way from Grimsby.  Unfortunately Nunavut does not have an online corporate search system, so this author was unable to confirm if they are actually headquartered there or if this is just a novel marketing angle.

In tracing all the takeovers, reverse-takeovers and series of financial funding rounds, the company seems to bounce around Canada.  There is ties to Calgary through an entity known as “Colson Capital Corporation”, which was taken over/merged into “Honest Inc.” which seems to be the legal body doing business as (d/b/a) “Province Brands”.

From the Alberta Securities Commission website at the following information is found:

Toronto it is.  We debunked the based in Grimsby statement, so let’s look at their proposed facility and process as an aside.  They stated it was 200,000 sq. ft. but as was noted in the real estate listing it is actually just under 123,000… where the other 77,000 square feet are coming from I am not sure.  Somebody is inflating the numbers here.

And unless Province Brand’s “patent pending” method significantly differs from US Patent 8,778,418 (Note To Investors:  Possible Prior Art)  the process of going from plant to beverage sounds like there is a lot of processing involved.

This has been discussed… please draw your own conclusions.

Here is where things get desperate in a “lets hold the sword over the head of Council” play.

Based on the information contained in this interview form, it appears the company is willing to go full-stop on their facility if the Town does not allow them to have a small retail shop.  Given that any possible retail shop would be a mere sliver of revenue, these appear to be idle threats.  Province Brands would not want to throw the baby out with the bath water despite what they say, especially if they are already “under construction”.

Why?  The proposed location fits a logistics model perfectly… located right on the QEW, at the “Toronto” end of Niagara region and close to cannabis production facilities.  As Province Brands is not producing their own cannabis, the cannabis production operations in Niagara are a nearby repository of “source material” that can be used to brew.

Further, it would be remiss to imply that Health Canada would judge Province Brands on the account of not getting a retail shop based on a municipality opting-out.  Health Canada has a mandate to ensure laws are complied with, regardless of whether a municipality opts-out or not of retail cannabis sales.  Province Brands are trying to tie one small aspect (a retail cannabis shop) of their business plan to the much different and separate production aspect.

In that, opting-out would not be akin to “getting cut off at the knees” for this company.  Sure if the whole operation is disallowed (again not the matter Council is deciding) then yes, it would be bad for Province Brands’ business plan… but to say their industry success depends on a having a small retail operation is beyond reason.

While this author is a criminologist, I can not state with agreement if Grimsby has “low crime” as the term is rather subjective.  What can be stated however, much to the disagreement of the above view is that retail cannabis outlets are routinely targeted for robberies at a rate that exceeds robberies of traditional retail activities, except perhaps banking.

Submit “cannabis robbery ontario” into any popular Internet search engine and you will find incident upon incident of retail cannabis shops being robbed, sometimes violently.  Nobody knows how the industry will have to respond if this trend continues… will retail outlets need paid-duty police or will they operate behind security glass.  As unreasonable as they may sound, shops may have to go to extremes to protect themselves, their clients and product.

Conclusion:  “Up In Smoke”

Based on the submitted materials, business records and arguments put forth by Province Brands, their argument in trying to push Council to allow retail cannabis sales goes “up in smoke”.

It probably was not really a great idea for the company’s rep to give the impression that they would break a lease and cancel a whole project solely hinging on whether this company can have a retail outlet in Grimsby or not.  Such a contingency makes zero sense, especially for a startup and quite frankly, the newly-minted Councillors will easily see past this poor attempt at brinkmanship.

It should be interesting to see how this all plays out in the Council Chambers on Monday.  As always, Council meetings are at Town Hall @ 7PM and the public is encouraged to attend.