Outdoor Cannabis Cultivation Has Arrived in Canada

Outdoor grow is coming to Canada in a hurry. Health Canada, the regulating body for cannabis licensing in Canada, has now approved three known outdoor cultivation facilities. Meanwhile, several other licensed producers have already announced their intent to enter the nascent space ahead of regulatory changes expected this fall for next generation cannabis products.

To help keep investors in the know, The Deep Dive has compiled data on those public companies that are involved, or intend to be involved, in the outdoor grow segment. To keep things simple, we’ve limited our data to firms that are intending to enter the space for the 2019 and 2020 seasons, and that have secured or acquired land in relation to this business model.

48North Cannabis

The second firm in the industry to obtain an outdoor cultivation license, after private operator Good Buds Co of B.C., 48North holds the title of being the first publicly listed firm to obtain a license to grow cannabis outdoors. It’s a good thing too, as its business plan is heavily reliant on the success of its outdoor crop.

Licensed to grow on a 100 acre plot of land located in Brant County, Ontario, 48North is expecting to yield roughly 40,000 kilograms of cannabis in its first year of outdoor grow. They have one of the lowest estimates in the outdoor segment, with projections of only 400 KG per acre of production. Collectively, this puts 48North at a total capacity of 45,000 kgs per annum once its two indoor facilities are factored into the equation.

The firm, which is believed to be planting seed on its property, is expecting production costs to come in at roughly $0.25 per gram which would put it as one of the lowest cost producers across all categories should things go to plan. The organic-labelled crop is expected to be used for extraction purposes to produce next-generation cannabis products upon changing regulations this fall.

48North has already entered agreements to sell 9,660 KG of the expected yield to various entities, including the SQDC. The firm is expected to begin seeding at some point this month.

Aleafia Health

In stark contrast to 48North, Aleafia Health has submitted its evidence package for an outdoor grow amendment at its Port Perry facility. The strong difference between the two firms, is the anticipated yield of the planted crop.

Whereas 48North is expecting a small 400 KG of cannabis per acre, Aleafia is on the other end of the spectrum, anticipating 60,000 KG of dried cannabis bud on its 26 acres of outdoor cultivation. The per acre estimate works out to roughly 2,308 KG of cannabis.

Aleafia is anticipating a cost per gram basis of $0.25, similar to that of 48North. While the Port Perry location is ready for planting, the firm has yet to decide what to do with an additional 83 acres of land they currently hold in Paris, Ontario. The latest investor presentation suggests that it may be provisioned for outdoor growth at some point in the future as well.

Unlike its competitors, its not entirely clear whether Aleafia intends to utilize its outdoor cultivated cannabis for use in extraction or not. While a high likelihood exists in this area, the firm is quick to identify that it has an in house extraction capacity of 50,000 KG per annum, which is lower than the expected yield for the first years harvest.

WeedMD Inc

Canada’s newest licensed outdoor producer, WeedMD received its license to cultivate cannabis at its 27 acre outdoor plot on Friday. The plot is directly adjacent to its Strathroy facility, which will allow for operational efficiencies with respect to infrastructure and labour use.

In terms of expected yield, WeedMD has taken a bit more conservative view than that of Aleafia. While allotted outdoor plots are relatively the same in size, WeedMD is expecting to yield roughly 1,000 KG of cannabis per acre of production, placing its estimates for yield in the middle of the pack.

The WeedMD team has significant local outdoor cultivation experience which is anticipated to lend well to the firms success within the outdoor segment. The selected strains for outdoor cultivation have been proven to perform well outdoors in Southwestern Ontario. Collectively, WeedMD is now on track for annual cannabis production of roughly 150,000 KG per annum by 2020.

The way in which WeedMD sets itself apart from its current outdoor competitors, is that its outdoor grow operation will be fully irrigated and feature transplanted clones. This eliminates time to harvest for the plants, in addition to reducing the chance of a male plant popping up. The required infrastructure for this has already been put into place as per WeedMD’s most recent news release.

Additionally, the land is also organic certified which should be to the delight of many cannabis consumers. WeedMD has taken steps to maintain this organic certification, including rooting its clones in a coco coir medium. The clones were rooted prior to The Deep Dive’s facility tour two weeks ago, wherein we saw first hand the 25,000 plus clones that had been taken for the purpose of outdoor cultivation.

Given the recent license amendment granted by Health Canada, it is anticipated that WeedMD will be transplanting clones in the near term to guarantee a fall harvest for the 2019 season. It is believed that this falls harvest will be utilized for extraction at its recently announced dedicated extraction and processing facility in Aylmer, Ontario.

WeedMD intends to enter Phase II of outdoor production in 2020, which will result in bringing an additional 73 acres online for a total production space of 100 acres of outdoor cultivation.

Canntrust Holdings

Canntrust announced in April that it had purchased the first 81 of an anticipated 200 acres in British Columbia for the purpose of outdoor cannabis cultivation. The firm is expecting that it will harvest its first outdoor crop in 2019 subject to Health Canada approvals, which is to occur on this initial plot of land.

In terms of yield, the company has stated that it expects to yield roughly 100,000 to 200,000 KG of dried bud from its outdoor cultivation upon operating at full capacity with 200 acres of production. On a per acre scale, it places the firm in a range of 500 to 1,000 KG of yield per acre. Overall, the company has stated that it expects 1,000 KG per acre of outdoor production.

Canntrust intends to fully utilize its outdoor production for extraction purpose to create oils and next generation cannabis productions upon anticipated regulatory changes. The firm intends to supply the market with dried flower only from its indoor Pelham, Ontario facility so as to ensure a higher quality product for consumers while allowing for a premium concentrates product line.

Canntrust expects its outdoor operation to be in full swing come the 2020 outdoor season. Until then, it anticipates on having an outdoor crop consisting of 81 acres for the current year. The firm is currently underway with making the required security changes to the outdoor site.

FULL DISCLOSURE: WeedMD is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover WeedMD on The Deep Dive, with The Deep Dive having full editorial control. 48North, Aleafia Health, and Canntrust Holdings are not clients of Canacom Group nor The Deep Dive. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.