On October 17th, 2020, Canada’s legal cannabis industry turned two.
Little did we know, back in 2018, that Covid-19 was waiting in the wings, and would effectively shut down our lives of parties and dinner theatres and swanky nights out (er, if that was your life, that is!).
That said, with pandemic came stress. And with stress comes…legal self-medication. New Brunswick recently reported that retailers in the province sold the equivalent of 1.5 million packs of cigarettes, four million cans of beer and 10,000 litres of hard liquor MORE than they did last summer. Most of it likely consumed in the kitchen! (<<< come on, it was crying out for a kitchen party joke! )
And the legal cannabis industry? It likewise boomed. Global News reported that “In July, licensed marijuana stores sold more than $231 million in product — a 15-per cent increase from June’s sales — marking the biggest monthly jump since the country legalized cannabis.” [emphasis mine]
Despite initial bumps in the road back in 2018 – quality questionable, price too high – one gift that Covid-19 gave to Canada’s marijuana retailers was the drying up of the black market.
As the industry matured, the people selling product became more knowledgeable, and the product itself improved. Of course, as with most anything, avoiding the black market and purchasing legally ensures that what you’re buying is highly regulated, and approved by Health Canada. A definite plus/plus if you’re a consumer.
An Entrepreneur’s Entry into the World of Weed
And that’s where Tyler LeBlanc comes in. A recent guest on “I’m a Millionaire. So Now What?” back in 2013, in true “keep your eyes peeled for trends!” entrepreneurial style, he saw the shifts in social mores around cannabis and got started.
As the Director, Co-Founder, and visionary behind the B2B cannabis provider, apollogreen, Tyler led the rigorous application process, steering the company toward a focus on genetics, innovation and the development of proprietary high-yield cultivation methodology.
The only legal way to grow, sell and export cannabis in Canada is to become a Health Canada licensed producer, a multi-year, multi-step application and approval process. apollogreen was among the first wave of Canadian businesses to submit an application to Health Canada, and over the years Tyler has built relationships with an extensive network of cannabis experts from around the world.
Today, apollogreen has a genetic bank of more than 600+ world-class cannabis strains, all graded AAAA (quad or quadruple A), and like the finest wines all over the world, each strain has its own unique flavour profile, terpene blend, flowering time, colour, height, yield, degree of disease resistance, and medicinal properties. He’s built a state-of-the-art facility east of downtown Ottawa and has a great story about his foray into the world of weed.
Here's a bit of what we talked about!
The Wild West of the Weed Market and the Genesis of apollogreen
“apollogreen actually started because of my belief in it as like a medicinal plant, and also the recreational benefits and the culture of it. And I was sitting in one of my dad's buddy's backyards, and he's a bit of a hippie, right? He was one of the older ‘cultivators.’ From the medical marijuana program - he was a medical patient and grew his own medicine, and was having trouble with his landlord [because it wasn't legal at the time]. And he said, ‘You know, I'm having trouble with my landlord and I would really appreciate if you would buy me a house and lease it to me.’ I said, ‘Well, you know, I’ll consider that, but I’ve got to talk to my lawyer - I don't know about this whole cannabis thing.’ - because again, it wasn't legal at the time. I happened to Google that night about a license, it was in October of 2013, and that was the nucleus of how apollogreen came together. I started researching the licenses, and the personal licenses at that time were set to expire in April 2014. And there was a message that said the only way to commercially produce marijuana legally in Canada is to become a federally licensed cannabis producer. So, I was online, and there was a Google ad that said, ‘how to become a federally licensed cannabis producer.’ And it was an academy in Toronto called the Green Line Academy, and I got on the phone with the guy that ran it, and he just sold me this dream, basically! That anyone's going to be able to get one of these cannabis licenses - federally legal - it's the largest industry in the world. This is seven years ago, like everyone else was growing in people's garages and their basements or outside in the wilderness. Covert, essentially. And there was no real structure to it or anything. So, I called a friend of mine and said, ‘You know, I think we should look at this. Do you want to come down to the seminar with me?’ We went down, and it was a three-day seminar about how to put all the components together to become a federally licensed cannabis producer.”
The Science Behind Growing Cannabis
“We went basically from thinking we're going to put some lights into a warehouse, to being a genetics and micro propagation and clone company! Meaning, we have two, sort of, ‘initiatives’ right now: one, we're building a large genetic bank and library - we have over 600 varieties of cannabis. We're growing those out and storing them for getting all the cannabinoid profiling and the data so that we will have a large genome bank of cannabis. And then on the other side of it, we have a basically a nursery function where we make large and small-scale licensed producers more efficient. We've already done all of the work upfront on the genetic side, to let them know what it's going to perform like, what it looks like, how it grows, what to feed it, so we can take a lot of the risk of cultivation away from them by giving them this data on the genetics in advance. We act as their propagators. Every time that they grow a cannabis plant to full maturity and flower, they don't actually have to start and maintain the mothers, we are able to deliver them the new baby plants, every time one of their cultivation facilities turns over. It makes them more efficient. And it's much more like traditional agriculture, where you have a supply chain, you have the nursery and the seed companies, the large scale cultivators, and then there's normally the secondary packagers, and then there's the marketers. We're starting to see that sort of diversification and we're at the very, very beginning. And we're also at the very, very end. We also do live rosin extraction, which is basically the extraction of the cannabinoids from the plant, not using any sort of solvent, no co2, no ethanol, no alcohol, it's all done with ice and water and heat, which is a very natural, pure way of doing things. We've gone from thinking we're going to be a cultivator into a company that's doing tissue culture. We've got a partnership with Loyalist College in their research lab they built as a tissue culture laboratory. We've got three student scientists on staff, we've got a chief science officer, and we've got a great cultivation team. We're planning to hit at least a million dollars in phone sales this year alone, and pretty much provide a stabilized cash flow position for our company. And we'll be going into exponential growth throughout the next four to five years.”
Biggest Challenge?
“Absolutely the licensing process. They actually don't give you a license until you're fully built out. Like the cart before the horse. So, we couldn't raise money until they gave us a letter stating that if we built out, we would be able to get a license. No one would finance us really, because they're just like, ‘Hey, all you have is a warehouse application in and that's it.’ That was almost three years of holding a building. Then when we got closer and actually got into construction, the construction itself took about a year. And there was also a lot of regulatory like work as well. On the back end of that. It was just slow. Then last year, in February or March, we were very close to getting licensed and fully ramped up. You had to have a certain number of staff in order to actually get licensed and get things operationalized. We had a staff of about six people, and consultants, and our burn rate with the financing and everything was about $100,000 a month. We had gotten to the point you know, no sales, no sales, no sales, there was zero sales. We were going to our friends, family, business associates, accredited investors, you know, knocking on angels’ doors. Times where I was down to $40,000 in the bank, hundred thousand dollar a month burn rate, and four-month ramp up - even when we got the license - to start to be revenue producing. And then an investor would come in with $200,000, you know, $150,000, good for another 45 days. My advice? Never, ever, ever take no, for an answer. Don't give up because of a no is what I'm saying. Because you could knock on 30 doors and get no, and then on the 31st try, you knock on that door, and it'll change your life.”
Sound advice indeed!
If you’re an entrepreneur looking to exit, or you’re at the helm of a thriving business or startup, I would love to talk with you about your stories! You can drop me a line here.
Plus, if you are craving like-minded conversation with growth-oriented business owners, consider joining me and eight other business owners, investors and entrepreneurs for our next two editions of Elevated Conversations - watch this space for more details!