Canada’s cannabis market ‘comes down to execution’: Q&A with marijuana entrepreneur Chuck Rifici

chuck rifici, Canada’s cannabis market ‘comes down to execution’: Q&A with marijuana entrepreneur Chuck Rifici

As Canada’s marijuana market enters the next phase of its evolution, serial cannabis entrepreneur Chuck Rifici expects to see a stratification of businesses that have the products consumers demand – and those that lack such merchandise.

“We really started the beginning of the brand race, where the consumers are going to start seeing different types of products,” Rifici said.

The cannabis industry pioneer helped start Canopy Growth (previously called Tweed) in 2013.

Today, Rifici is CEO of Ottawa, Ontario-based Nesta Holding Co., a private equity firm whose portfolio of businesses includes Auxly, Dixie Elixirs, Feather and Wikileaf.

Rifici said Canada’s first year of legalized recreational cannabis took out 10% of the illicit market, which he said is “a great start, and it’s going to keep increasing.”

Edibles, extracts and topicals are going to start hitting store shelves in Canada later this year.

In an interview with Marijuana Business Daily, Rifici shared his insights into both Canada’s cannabis market and business opportunities, and he offered advice for entrepreneurs.

Reflecting on the first year of Canada’s adult-use cannabis market, what regulatory improvements would you like to see going forward?

One area where I expect to see change is the limits per package (for edibles).

I think 10 milligrams as a dose is reasonable in the rec market, but to have an entire package around a 10 milligram dose is the area I could see coming into play, mainly because of the packaging waste.

Who will have the upper hand when it comes to raising capital in this tighter funding market?

We are starting to move into an area where an investor, both retail and institutional, is looking for more executions versus ambition.

With the amount of capital put into building out capacity, people are looking to see how that can start turning into real, sustainable cash flow.

How will Canada’s advertising rules impact competitiveness, short and long term?

My concern on branding and advertising rules involves Canadian competitiveness and the long-term value of Canadian-based brands, compared to having to compete with U.S. brands on a global scale.

Future consumers around the world are going to be much more exposed to U.S. brands because of the rules around what we can do in Canada.

It’s not going to have an impact today or even tomorrow, but I think when you look at the long-term, 10-year values of companies, for me that’s the biggest long-term competitive issue.

At the same time, I think it’s very appropriate what we have now in Canada. It’s much easier to lessen the rules over time.

What advice do you have for cannabis entrepreneurs?

Download a copy of the Cannabis Act and read it. Not enough people read the Cannabis Act.

It’s a good litmus test: If you can’t get through the Cannabis Act, then you probably don’t want to be getting into the licensed cannabis business.

What are companies like tobacco firm Imperial Brands looking for in a partner?

It comes down to execution.

You have a lot of large companies in different sectors that could be affected by cannabis or could see disruption, whether it’s beauty, cosmetics, the packaged goods industry.

We’ll see more (outside investments from) beverage manufacturers. We’ll see more from the pharmaceutical industry.

Imperial scanned the globe to find the right partner for cannabis. And obviously we’re very happy Auxly was chosen.

Not only is it the capital, but also the experience they have running a large-scale, heavily regulated global business, but they also have depth in vape intellectual property.

I think we’ll continue to see these types of deals.

It’s a combination of the capital requirements of the industry, but also the speed at which everybody’s scaling.

Do you see any business opportunities ripe for the taking?

The area that I we’ve seen the least of, compared to what I thought we would see, are micro licenses.

They’re a much smaller entry point from a capital perspective – micro-cultivation and microprocessing. That could provide a really nice, robust craft industry and a lot of diversity of products.

I would say there’s opportunity in microprocessing because there’s more of a bottleneck today in processing and extraction than there is in cultivation.

The pendulum swinging from undersupply to oversupply on raw flower and inputs for extraction is going to come. We’ve already seen a bottleneck in extraction in the past six months.

This interview has been edited for length and clarity.

Matt Lamers can be reached at