Strong Roots

Organigram
Written by Jessica Ferlaino

In 2014, the Marijuana for Medical Purposes Regulations (MMPR) was launched and with it, Organigram was one of approximately twenty companies that were licensed and approved at that time for medical cannabis production and sales.
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In August of 2016, that program was replaced by the Access to Cannabis for Medical Purposes Regulations, or ACMPR. Under the ACMPR rules authorized by Health Canada, companies like Organigram are in a position to cultivate, process and sell dried cannabis and oil-based products.

There are no legal cannabis dispensary facilities in Canada; one hundred percent of the authorized providers in Canada sell through mail order. Companies like Organigram receive a medical document that is basically a prescription filled out by a physician, and the patient is then able to order online or by telephone. Currently, the only other legal access to medical marijuana in Canada is for patients to apply for permission to grow their own product, and a limited number of people choose this option.

Organigram was one of the first licensed companies and it started out on English Dr. in Moncton, New Brunswick. The original facility – at approximately 31,000 square feet – Is in the midst of a fully funded expansion plan to bring the facility to an overall footprint of over 250,000 square feet. The company launched under private ownership, but two years ago it became one of the first publicly traded companies in the space. In the last couple years, as the company has grown rapidly since going public, it put itself in a position to raise additional capital through the Toronto Stock Exchange Venture (TSX-V), which is where Organigram is listed. The business raised enough capital to expand dramatically and add another 102 000 square foot building to its location.

“To give you a sense of production levels,” explains Greg Engel, the CEO of Organigram, “Today we can produce about five thousand kilos, which is equal to five million grams, and by this point next year we’ll be in the position to produce sixteen thousand kilos a year and by the end of next year we’ll be able to produce twenty six thousand kilos – so it’s pretty dramatic growth.” The new facility was an investment of over thirty-five million dollars. It is growing to meet the medical needs today of the population as the medical market grows by ten percent each month; the company is also expanding production in anticipation of the adult recreational market in the future. “The adult recreational market is predicted to be anywhere between a five and ten billion dollar market in the next five to eight years, depending on which forecast you look at,” says Greg.

At this point, the federal government in Canada continues to move toward the launch of a regulated and controlled adult recreational program by the end of June 2018. Adults who are eighteen or older will be able to legally buy and cultivate small amounts of marijuana for personal use. At the same time, selling it to a minor will become a new criminal offence. What is still uncertain is the distribution process; there will be a direct mail option where adult recreational users will be able to purchase online with an age verification and proof of identification to receive the product in the mail. Each province is responsible for setting up the distribution and management within its province. “The only provinces we have certainty on so far are New Brunswick and Ontario,” explains Greg. “New Brunswick is in a real leadership position; it sees this as a growth industry from a job creation perspective. Today we employ over one hundred and twenty staff here but we also have another sixty to eighty tradespeople on site daily because of the construction we are doing, which will be the case for the next twelve to eighteen months.”

As a company, Organigram appreciates the support it has received from the city of Moncton and the province of New Brunswick. It has access to approximately $990,000 of employment assistance funding through Opportunities New Brunswick and it continues to receive local support from other elements of the provincial government, a key part of Organigram’s successful journey.

On account of all the local support the company receives, it is very focused on supporting local businesses in return as much as possible. When it comes to engineering, construction and production, the company works with New Brunswick-based companies often and especially likes to support the other Maritime communities in Atlantic Canada. When the company made the decision to purchase large-scale supercritical carbon dioxide equipment, which is used to produce extraction products, it purchased the equipment from a company based in Prince Edward Island instead of the other options it was considering. “They had the best equipment and we certainly made the decision based on that, but supporting a company in Atlantic Canada was also a big plus for us,” says Greg.

Indoor production and greenhouse production are the only two ways to grow marijuana authorized by Health Canada. Organigram stands out in Atlantic Canada because of its indoor production. There is a high cost to being an indoor producer due to the power usage involved in lighting and environmental controls; depending on the time of year, it can comprise up to fifteen percent of the company’s operating cost. But New Brunswick has some of the lowest power costs in the country at 5.2 cents per kilowatt-hour (kWh) versus Ontario for example, which can be as high as 18 cents per kWh, which puts the company in a great position to produce an indoor grown product at a lower cost than in other jurisdictions.

One of the key advantages of indoor production is that the indoor grown product has consistently been perceived as being of higher quality compared to lower cost, greenhouse production. According to Greg, “Quality is going to a big differentiator, especially in the adult recreational market. In the medical market, people are looking for an effect that meets the needs of their treatment, but I think as we move toward the adult recreational market that people will look for a perceived quality.”

As Canada moves forward with the legal market, other countries have been doing the same. Israel has been at the forefront of legal cannabis use for medical purposes and now Australia and several European countries have joined the adventure as well. One benefit of this is that there is now more definitive scientific research happening, which has improved the potency and also enabled growers to produce strains for specific, desired effects. Compared to twenty years ago, there are much higher levels of cannabinoids today and that has been achieved through selective breeding and improved growing techniques in production facilities.

From a treatment perspective, it is useful to know what effects to anticipate from medicinal marijuana. CBD or cannabidiol is a non-psychoactive cannabinoid that is primarily used to treat chronic pain, seizures and other serious ailments. THC or Tetrahydrocannabinol is the psychoactive component in cannabis that people are more familiar with, and it is used medically to treat depression, anxiety and appetite issues. Typically Indica strains are more sedating and Sativa strains more activating, and there are hybrids in between that provide a combination of different cannabis effects.

Many medical cannabis users and patients experience comorbidity, and the different strains of cannabis allow users to treat those different issues depending on the time of day and other factors. Chronic pain is often associated with mental health and sleep issues, for example; patients may want to use a Sativa strain during the day to keep a positive attitude and switch to Indica at night to relax and sleep without pain. This process is similar to prescribing anti-depressants that have different activating and sedating effects. Terpenes such as limonene and pinene provide the aromatics of cannabis, and typically with high quality product there are increased levels of terpene production.

Organigram is still restricted in terms of what it can sell. It is limited to producing dried cannabis, either as a whole flower or as a blend, and producing cannabis oil for oral ingestion. There is a substantial difference between the oil products and dried cannabis. The main difference between the two is that the oil has a much slower onset time for the drug to take effect, and the effects can last much longer. “If you’re vaporizing or smoking a product it can have an effect within the first five minutes,” explains Greg. “If you are using oil through oral ingestion, it can take up to sixty to ninety minutes to have an effect, so people have to be more cognizant of when they’re looking for the effect and what the duration is.” The general rule for oils and all cannabis use is to start low and go slow.

The number one preferred way of ingesting cannabis is through vaporization. Vaporization is a non-smoking delivery; the cannabis is heated at a low temperature that doesn’t release anything but the cannabinoids in water vapour, and it leaves behind a green material that has not been burned. According to Greg, “We support vaporizing as an alternative to smoking and we have a number of vaporizers that we make available to our patients online for purchase. We’ve seen from survey data we’ve done that vaporization is the preferred route of ingestion over smoking.” The company also finds the oral oil products to be popular, and that many people are moving away from smoking for health reasons.

As the federal government is developing a regulated and controlled adult recreational program for marijuana we know today that the system will have appropriate controls on production so that companies like Organigram focus on following good production practices and continue to perform rigorous testing on all product they produce. Along with that, the government will want to ensure that the drug is distributed in a restricted manner. “It’s interesting, I have heard consistently that if you were to ask a teen today whether it is easier for them to get alcohol or cannabis, it is much easier for them to get cannabis because alcohol is regulated in terms of how it is sold,” explains Greg. One of the main goals for the government is to have a restricted distribution system in place that will prevent access to cannabis by the youth of Canada. There will also be more education surrounding the topic to eliminate some of the stigma associated with cannabis use but also to highlight the risks associated with chronic cannabis use for adolescents.

Organigram is well prepared for the anticipated growth in the market and its focus on quality combined with the low indoor power costs in New Brunswick is positioning the company to be a leader in the industry. A flyer in the Organigram offices reads, “As we celebrate the 150th anniversary of our nation’s confederacy, we wonder – what is Canada? Two official languages? Ten provinces and three territories? A rich cultural mosaic 36 million strong? Just like the most vibrant plants in our garden, the answer is in our roots.”

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