A budding professional pot investment firm is ramping up its lobbying efforts in Ontario and will likely discuss possible provincial government subsidies as Ottawa marches toward legalizing recreational marijuana.
Privateer Holdings – a Seattle-based firm that runs a handful of marijuana companies, including Bob Marley’s “official” brand, Marley Natural, and Leafly, an app that tracks dispensaries and strains – has a lobbyist registered on its behalf with Ontario’s Integrity Commissioner. Privateer also runs medical pot producer Tilray, headquartered in British Columbia, which became the first legitimate Canadian firm to internationally export the substance when it shipped products to Croatia this summer. Tilray is also listed as an active lobbyist on the registry.
Privateer, which has scored significant investment from Peter Thiel, the billionaire venture capitalist and Donald Trump supporter (at one point, at least), is seeking a cash injection from Queen’s Park, such as a subsidy or grant, and says its goal is “to advocate for investment from the government into medical cannabis production expansion in Ontario and the resulting job creation."
Cameron Bishop, Privateer's director of government affairs, added in an email to QP Briefing that the company is also looking to ramp up its investments for both recreational and medical marijuana through "various opportunities," which includes expanding production capacity.
"As it relates to recreational, we are committed to all of the policy objectives outlined in the federal Task Force on Marijuana Legalization’s Discussion Paper [more on this below] and believe that the best way to achieve each objective is to develop a strict, clear, fair and flexible regulatory framework that will allow free market forces to eliminate the illicit market through competition," Bishop wrote.
"Ultimately, we believe that a successful regulatory framework (as defined by the government’s goals) must allow professional companies to compete with and eliminate the black market by allowing for brand differentiation, meaningful scale, reasonable taxation levels, product diversification and innovation, and access to capital and consolidation."
According to its website, Privateer is “building pioneering global brands to lead, legitimize and define the future of cannabis” and believes “brands will determine the future of the cannabis industry.” The firm first signed up in January in anticipation of the federal government's tabling of legislation that will legalize weed in the spring of 2017. Privateer amended its registration a week ago to include its intent to lobby the Ontario government for potential investment. It's original application lists MPPs from all parties, several other ministries and the LCBO.
(On Friday, the firm's CEO Brendan Kennedy will deliver a keynote speech at the International Cannabis Business Conference in Vancouver. Tommy Chong will also be in attendance, as will Ed Rosenthal, billed as an "overall cannabis guru" and Jamie Shaw, who has sat on the Canadian Association of Medical Cannabis Dispensaries board).
Privateer's efforts may be a harbinger of a wider professional pot lobby in Ontario. The province surpasses the rest of the country when it comes to medical retailers – of the 35 licences Health Canada has issued to medical marijuana producers, 20 have been issued in Ontario. British Columbia trails second with eight, and Saskatchewan follows with just two.
Moreover, the Ontario Chamber of Commerce, which has urged the premier to let the private sector in on the lucrative retailing, estimates recreational pot will be a $1 billion to $2 billion cash cow for the provincial economy by 2024. CIBC has priced the Canada-wide market at $10 billion annually, with a potential $5 billion up for grabs in tax revenue for governments.
The provincial lobby roster of registered marijuana-minded organizations also includes the Canada Cannabis Association, Cannabis Growers of Canada and the Canadian Association of Pharmacy Distribution Management, with ambitions that run the gamut from health and insurance to distribution and taxation. The Ontario Real Estate Association is also lobbying specifically for the creation of a marijuana grow-op registry.
Ontario's Liberal government has shown itself to be a willing investor in private-sector ventures. Three business-subsidy programs have awarded over $900 million in grants over the past three years, records show. To QP Briefing's knowledge, the provincial government has never partnered with a medical marijuana company.
The Minister of Economic Development's office said they regularly meet with hundreds of businesses and any legitimate firm that satisfies the criteria is free to submit an application for any one of the ministry's corporate subsidies. Spokesman Alex Mather added in an email that, "Privateer is not one of the many companies we have previously met with but we are likely to meet with them in the coming weeks."
Yet Bishop said Privateer has "previously engaged" with the provincial government on issues related specifically to medical cannabis.
Next month, the federal government's special task force, helmed by ex-justice minister Anne McLellan, is expected to report back with advice on a future regulatory framework for legal pot following public consultation.
Ontario Attorney General Yasir Naqvi, who leads the province's pot file, has met with his federal counterparts and set up a cross-ministerial team comprising Health, Finance, Transportation, Community Safety and Children and Youth ministries devoted specifically to writing pot policy.
Both the premier and Naqvi have kept any potential retail and distribution plans under lock and key until Ottawa's task force makes it final report public, saying little more than they are treading water in a "grey area." Last month, Naqvi said they were "nowhere close to making any specific decisions. What we're doing right now is identifying policy options, doing some extensive research and analysis around those policy options."
"Much of our work will depend on what the Federal Government chooses to regulate and what they choose to leave to the provinces. While the legalization of marijuana may seem a long way off, this is a highly complex issue that we are taking very seriously," he added Thursday in a statement to QP Briefing.
Naqvi was in Halifax Thursday to meet with his federal, provincial and territorial counterparts in justice and public safety, and pot is high on the docket. In a letter to federal Justice Minister Jody Wilson-Raybould this week, Naqvi added he is focused on a well-rounded policy that considers public health and safety, road safety, protection for youth and high-risk users and economic development.
"[This] is a highly complex and important initiative – one I intend to take very seriously," Naqvi writes in the letter. "[The] Ministry of the Attorney General will be establishing a dedicated team that will be exclusively focused on developing Ontario's regulatory framework for marijuana. My ministry will be co-ordinating the policy response across all impacted provincial government ministries to ensure a cohesive approach."
This story has been updated from its original version.
To contact the reporter on this story:
snanji@qpbriefing.com
416-212-5789
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