Nfld. & Labrador

Who is behind the numbered company leasing St. John's land to Canopy Growth?

A Tory MHA says the land was acquired, and then immediately leased to Canopy.

Finance Minister Tom Osborne says he will look into it

Jeff Ryan, left, a vice-president with Canopy Growth and minister Christopher Mitchelmore break ground on the site of the company's future production facility. Opposition MHAs want to know who owns the land that Canopy is leasing. (Terry Roberts/CBC)

Canopy Growth is leasing a piece of land in St. John's for its future cannabis production facility, and a Tory MHA is determined to find out who is behind a numbered company that bought the land shortly before leasing it to Canopy. 

Opposition House Leader Keith Hutchings pressed Finance Minister Tom Osborne about the matter during question period in the House of Assembly on Thursday.

"The company acquired the land immediately prior to leasing it to Canopy. I ask the minister, is he aware who owns this numbered company?" said Hutchings. 

Osborne responded he isn't aware of who owns the company, before noting the millions of dollars in property taxes and income taxes that Canopy Growth will be paying to the various levels of government. 

The Canopy Growth plant being built in the White Hills area of the city is expected to cost $55 million. When it opens in 2019, it will have created 145 jobs and will start producing up to 12,000 kilograms of product annually.

But Hutchings pressed on.  

"This is a publicly traded company of about $11 billion — would the minister look in and see who exactly owns that property of the company ... and who is leasing that property to Canopy?" he said.

Keith Hutchings is the MHA for the Ferryland district. (Paula Gale/CBC)

Osborne said he isn't involved in the company and he isn't a shareholder in the Canopy Growth, which is based in Smiths Falls, Ont. 

"I don't know who owns the numbered company ... but certainly we will endeavour to find out," Osborne said.

The province hasn't required registered companies to list their owners for decades.

The sole director listed in the Registry of Companies is a lawyer in St. John's.

Outside the legislature, reporters later pressed Industry Minister Christopher Mitchelmore on who owns the land that Canopy is leasing. Mitchelmore was also asked about unconfirmed reports that the land is owned by a Liberal insider. 

Mitchelmore said he doesn't know who owns the land, and stressed that Canopy would determine where it would set up. He added it is not government's place to dictate that.

Tax breaks come under scrutiny

Hutchings has repeatedly questioned the deal the government signed with Canopy Growth, a topic that earlier this week led to Osborne accusing, and apologizing, for comments suggesting that Hutchings had some sort of involvement in the illicit drug trade. 

The company has committed to providing 8,000 kilograms of cannabis annually in a two-year agreement, with an optional one-year extension. 

The government didn't provide cash up front, but Canopy Growth does get a break on the sales remittances it makes to the Crown-owned Newfoundland and Labrador Liquor Corp. (NLC), which will regulate the distribution and sale of cannabis.

That break will continue until the company recovers its investment, up to a maximum of $40 million. 

Canopy Growth has operations in seven countries. (Sean Kilpatrick/The Canadian Press)

"Why does [Canopy] have to lease a piece a piece of land upon which to construct a $50-million facility and we are putting in $40 million in actual tax credits?" asked Hutchings.

"Why would they not finance and be part of that deal? Why is it necessary for the province to be involved?"

Mitchelmore, who was at the sod-turning event for the Canopy Growth facility last December, responded that the company wanted to build a site within the Northeast Avalon. 

"It would be up to them to determine which site, and which area, whether they buy land or lease land ... they could have looked at other properties," he said. 

'Deals certainly would be imminent'

"When you deal with publicly traded companies, there is procedure and protocol that you would have to undertake," Mitchelmore said. "The companies determine their location."

Hutchings asked about other companies that would be in line to get a similar deal.

"Deals certainly would be imminent and stay tuned ... we are building an industry here in Newfoundland and Labrador," Mitchelmore said. 

Speaking to reporters, Mitchelmore said details are coming on Friday morning. 

"We put out a media advisory. Stay tuned tomorrow at 10 o'clock," MItchelmore said.

Earlier Thursday, a government media release said Mitchelmore would make an announcement on an unspecified issue in the western Newfoundland community of St. George's on Friday morning.

With files from Katie Breen and Terry Roberts 

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