(This is the 10th installment in a series looking at the marijuana markets in each of Canada’s provinces. Other installments: Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland, Nova Scotia, Ontario, Quebec and Saskatchewan.)
Prince Edward Island (PEI) may be Canada’s smallest province, but it has already attracted some important investments in the cannabis industry.
Canada’s Island Garden found itself on the receiving end of a major deal with Alliance One International (NYSE: AOI) earlier this year. It was the first foray by a significant tobacco company into the cannabis industry.
Executives in the province are capitalizing on business opportunities in areas such as cannabis tourism, extraction and – to a lesser extent – cultivation.
Tourism is projected to be a big part of the accessible industry for entrepreneurs, and hotel proprietors will have the opportunity to designate guest rooms for cannabis consumption.
“Given the fact that we are Canada’s ‘food island,’ the opportunity for cannabis tourism and the cannabis consumer experience are just phenomenal,” said Shaman Ferraro, CEO and founder of Gocanna, a Charlottetown-based, MJ tourism guide.
PEI passed its key cannabis-related legislation June 12.
Prince Edward Island’s recreational market is expected to be the smallest in Canada.
Data from the Parliamentary Budget Office (PBO), when adjusted for the province’s working-age population, points to annual demand of about 3,300 kilograms (7,275 pounds) of cannabis.
That could rise to 3,700 annual kilograms by 2021, depending on how successful the provincial government is in corralling black-market sales.
Estimates place the number of consumers in the neighborhood of 20,000 of the province’s 120,000 adults.
According to Statistics Canada’s recent National Cannabis Survey, 14% of PEI adults have consumed some form of marijuana in the past three months.
PEI’s 800-plus registered medical cannabis patients per 100,000 people indicates that MMJ has an above-average uptake compared to the rest of Canada.
However, the market is small overall; as of December 2017, there were nearly 1,200 registered patients.
For comparison, neighboring New Brunswick has 6,500 registered MMJ patients.
Thirty-six people in the province had a license to cultivate their own MMJ as of December, according to publicly available data from Health Canada.
While small, PEI wasn’t dead last place when it comes to cultivation as of June. (That title goes to Newfoundland and its zero licensed producers.)
In addition to the one current LP, only one other license in the province is pending with Health Canada.
In the meantime, Canada’s Island Garden is executing an aggressive growth strategy, with plans to grow its workforce from 20 people to roughly 200 in the coming year.
When fully built out in 2019, the company will have roughly 250,000 square feet of cultivation space under canopy, making it one of the biggest facilities in Atlantic Canada.
“In terms of the population we have and a company our size, it’s a great place for us to be,” Jewell said.
In January PEI chose three licensed producers for its domestic supply of adult-use cannabis – Ontario-based Canopy Growth, New Brunswick-based Organigram and Canada’s Island Garden.
PEI is a magnet for tourists, and entrepreneurs hope to parlay that into cannabis gold.
Ferraro of Gocanna noted that PEI’s regulations will allow cannabis consumption to take place in personal residences, on private property and in hotel rooms if the guest has consent from the owner.
“Tourism is so big here,” he said. “There are tons of opportunities for operators to be able to offer the feature of designating an area on your property where people can legally and safely consume cannabis.”
Ray Gracewood, chief commercial officer of Organigram, said cannabis tourism will be one of the bright spots in PEI’s cannabis industry, and licensed producers like his are planning to target hot tourist markets to build brand awareness.
“When people are on vacation and having great experiences in PEI, our product can be part of that,” he said, noting his supply deal with the province. “Then, when people go back to their homes, whether that’s Ontario or New Brunswick, they’ll (leave with) a favorable impression of our brand.”
Businesses are also moving to fill the void in other areas such as extraction.
Dosecann, a licensed dealer applicant, plans to capitalize on extraction, formulation, filling and packaging.
The Charlottetown-based company says it is developing a suite of cannabis products for both the medical and adult-use markets.
Canada’s proposed licensing structure for recreational marijuana will create significant opportunities for additional players in every province.
Like most other Eastern Canadian provinces, Prince Edward Island plans to corner the market on recreational marijuana by limiting sales to government-owned retail locations, making it one of five provinces to bar entrepreneurs from investing in storefront opportunities.
Those retail stores will be located in Charlottetown, Summerside, Montague and West Prince.
Industry sources expressed concern with the province’s plan to set up just one cannabis retail store for the capital, but the provincial government said it will gauge sales and weigh any future expansion plans.
Matt Lamers can be reached at firstname.lastname@example.org
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