Nova Scotia

Nova Scotia's cannabis biz has had highs and lows since legalization

It's been a wild ride for some cannabis companies in Nova Scotia since the legalization of cannabis in Canada more than 3½ years ago. While some companies have expanded their business, other facilities have closed down.

Producers say they've been plagued by changing regulations, slow Health Canada approvals

Aqualitas employees are shown cutting cannabis plants during a recent harvest. (Paul Palmeter/CBC)

It's been a wild ride for some cannabis companies in Nova Scotia since the legalization of cannabis in Canada in 2018.

While some have expanded their business, other facilities have closed.

"In many ways things have exceeded our expectations, but there were also things we weren't expecting with the industry," said Aqualitas CEO Myrna Gillis.

Aqualitas built its facility on Nova Scotia's South Shore at the old Bowater-Mersey pulp plant in Brooklyn, Queens County.

Gillis said business is going well, but fluctuating prices and supply issues have cannabis companies rolling with the punches.

"The speed [at] which the price compression and oversupply happened, while it was expected to some extent, it did happen at an escalated pace," said Gillis. "Those were things even the regulator wasn't expecting."

Aqualitas, with 75 employees, operates differently from other producers.

It uses waste from koi fish raised on site to fertilize cannabis plants. It is a big expense the business doesn't have to worry about.

Hundreds of cannabis plants are shown inside one of the grow rooms at Aqualitas. This crop was about a week away from being harvested. (Paul Palmeter/CBC)

While it's a far cry from the 1,100 people who worked at Bowater at its peak, it's sparking economic activity in a part of the province where jobs can be hard to find.

While Aqualitas is rising to the challenge, other companies have pulled out of the province.

Aqualitas uses waste from koi fish raised on site to fertilize their cannabis plants. (Paul Palmeter/CBC)

After a major renovation of an old manufacturing plant in Stellarton, cannabis was being grown for a couple of years. But about 60 workers reported for their last shift in February as parent company Hexo decommissioned the site, opting to centralize production at some other cannabis processing facilities.

A similar fate happened to close to 30 workers in the Annapolis Valley in March. Robinsons Cannabis, owned by Auxly out of Ontario, closed its doors in the Kentville Business Park.

"We continue to focus our efforts on streamlining and simplifying our cultivation platform," said senior vice-president Carla Nawrocki in an email to CBC News.

A short trip down the highway from the Kentville facility, two large storage sheds with security cameras and fencing had already been built at Robinsons' outdoor grow location in Hortonville. No plants were ever grown there despite heavy investment.

Robinsons Cannabis in Kentville closed in March. (Paul Palmeter/CBC)

"We intend to divest these assets and apply the proceeds from any such sale to support Auxly's ongoing operations," said Nawrocki.

Despite those setbacks, there are still hundreds of people working in the cannabis industry in Nova Scotia.

Breathing Green Solutions, located in the Wentworth Valley, was the first company from Nova Scotia to receive a cannabis sales permit from Health Canada.

No plants were grown at the Robinsons Cannabis outdoor grow and drying facility in Hortonville. (Paul Palmeter/CBC)

The company retrofitted the old NORAD site. It already had some security measures in place.

BGS is owned by shareholders and investors almost entirely from the Maritimes.

"Maintaining high quality employment in a rural, beautiful place like Wentworth is our focus," said company president Savior Joseph.

The company has 45 employees at the plant, plus another 10 sales jobs.

One of the grow rooms at Breathing Green Solutions in the Wentworth Valley. (Paul Palmeter/CBC)

The company has kept its business model simple with only three strains of cannabis being mass-produced. But that will soon change.

"We're moving into therapeutic products in a joint venture we have with a recognized leader in natural health products," said Joseph. "We'll be starting to make capsules and other products here too, so we have made some investments there."

While the industry has been good for some, and disastrous for others, all producers say they've been plagued by ever-evolving regulations due in part to COVID-19.

A Breathing Green Solutions employee holds a full tray of freshly cut buds inside the company's harvest room. (Paul Palmeter/CBC)

"We have an intensely challenging retail/commercial environment with excess supply, a large unregulated market and significant regulations and taxes," said Joseph. "All those things are hampering or putting challenges on the industry."

Despite the challenges, the amount of cannabis being sold at NSLC outlets is rising.

Numbers for the latest fiscal year will be released next month. They are expected to rise from last year when sales increased 21.1 per cent from the year before.

A sharp decline in the price of cannabis, and many more NSLC stores that have been renovated to make way for cannabis sales, are among the reasons for the increases.

Only 12 NSLC stores sold cannabis when it was legalized in October 2018, but it's now readily available in 37 stores.

A cannabis plant in the final stage of growth under specialized grow lights. (Paul Palmeter/CBC)

They are being supplied locally by 16 Nova Scotia suppliers and three local micro-cultivators. That number will soon grow to 17 as Zuri Canada, based in Annapolis County, received its Health Canada sales licence last week.

"It took three years and it was a long arduous process," said Karl Hollett, COO of Zuri Canada. The company operates out of the old Convergys call centre that closed in 2011.

Hollett said the company has 21 employees. It expects to have its product in stores in four to six weeks.

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