Kapuskasing aims to profit from medical marijuana business

The Kapuskasing Economic Development Corporation will today sign a memorandum of understanding with pharmaceutical grade cannabis producer, CannAssist Canada for a public-private partnership to construct a medical marijuana production facility near the airport.

Town's economic development corporation to get five percent in equity from CannAssist Canada

A medical marijuana production facility, similar to this one in eastern Ontario, will be built in Kapuskasing by CannAssist Canada. (CBC)

There's a different kind of drug deal going down in Kapuskasing.

The northern Ontario town's economic development corporation will sign a memorandum of understanding Thursday with CannAssist Canada, a producer of pharmaceutical grade cannabis.

The public-private partnership involves the creation of a marijuana production facility, to be built on municipal land near the airport. It's expected to create 60 full time jobs, initially.

Kapuskasing mayor Al Spacek says the town is supplying the serviced land, and in return will get a five per cent equity in the business.

Not only will the community see new jobs and profits from the production, but Spacek says there will also be economic spin-offs from sub-contractors interested in joining the market.

First products to market by late 2018

The cost to build the facility is estimated around $8.5 million, says CannAssist Canada CEO Janice Britton.

Before shovels hit the ground, Britton says they need to get all the necessary permits in place and choose a commercial developer.

Construction on the 45,000 square foot building should start in the spring, and take eight months to complete.

Britton expects the first medical marijuana products to be ready to distribute to customers by late 2018.

For now the Kapuskasing facility is meant for medical marijuana production, but that could change in the future.

"Certainly that's a discussion that we've had," Spacek says.

"I think that market is a little bit uncertain at this point from a production stand-point because of the economics and the business model, but certainly that's something that I'm sure everyone will be looking at closely as an opportunity down the road," he adds.

"Our primary focus is medical [marijuana]. Of course, right now that's all we can focus on. But once the recreational market opens up we would sell into both markets," Britton says.

"There is just huge opportunity to expand ... there just won't be enough producers to supply the demand, initially," she adds.

Britton also says CannAssist Canada has been in negotiations with several other communities to develop similar partnerships to the one they now have with Kapuskasing.

Logical step for Kapuskasing

There has been a lot of interest in the marijuana production facility from around Kapuskasing.

Spacek says the town provided an opportunity for residents to raise concerns or ask questions about the project. He says during two separate consultation sessions no negative comments were recorded.

"One of the things that makes northern Ontario attractive is the desire for people to have economic growth and development," Spacek says.

"At the same time a higher level of tolerance, not so much a NIMBY [not in my back yard] syndrome that you might see in the more highly-populated centres of southern Ontario."

According to Spacek, there are a lot of young people born and raised in Kapuskasing who want to return because of the lifestyle, the cost of living, and the quality of life.

"We have all of those dynamics working in our favour."

This agreement has been years in the making. The application was submitted to the federal government in January 2014, but Spacek says he started working on finding a cannabis production company to relocate to the town after an agriculture research facility was left vacant in 2011.

Spacek calls this a logical step for Kapuskasing.

"We like to think we have a reputation for being forward thinking when it comes to economic development and keeping our community vibrant and stable, economically and socially."

About the Author

Angela Gemmill

Journalist

Angela Gemmill is a CBC journalist who has covered news in Sudbury, Ont., for 13 years. Connect with her on Twitter @AngelaGemmill. Send story ideas to angela.gemmill@cbc.ca