The unlikely cannabis revolution powering Canada’s local economy

The arrival of a new cannabis factory rescued Smiths Falls from a post-industrial malaise. Might the same approach work in the UK?

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Smiths Falls, Ontario is a town whose 9,000 residents will always find something to complain about. Its diagonal parking situation, for example, has proved highly contentious. Though it seems a moot point to a British visitor given the unfathomable width of Canadian roads, protracted arguments among residents are yet to result in an agreement.

Residents were comparatively calm when a company repurposed a 470,000 square-foot factory to build a cannabis factory in Smiths Falls six years ago. The factory had been the site of Hershey’s chocolate production for nearly half a century, providing hundreds of jobs for local workers. Chocolate gave Smiths Falls a strong civic identity (the town’s other claim to notoriety was that the first Beatles record in North America was pressed over the road at the RCA plant). Now it’s Canopy Growth Corporation, a market leader in medical cannabis, which is putting Smiths Falls on the map.

Hershey announced in 2007 that it would be ceasing production in the town the following year as part of a global restructuring agreement. Its departure preceded a series of devastating closures. The Stanley Tools factory and the Rideau Regional Centre, a residential unit for disabled people, closed their doors in 2008 and 2009 respectively. So when Bruce Linton, Canopy’s CEO, proposed to take over the old chocolate factory in 2013, he brought renewed hope – and a lot of weed. (Linton stepped down from his position on 3 July).

Tracy, a cab driver in the town, tells me Linton’s proposal was initially met with some skepticism. When I put this to Wendy Alford, Acting Mayor of Smiths Falls, she says early opposition wasn’t directed at Canopy or medical cannabis per se, but to the idea of change in general. Smiths Falls belongs to an electoral district that has held a right-wing party seat in parliament for all but five federal elections since 1867. Somewhat surprisingly, there was no political opposition to prevent Canopy’s takeover of the factory.  

The reason for Smiths Falls’ ultimate acceptance of cannabis production was that the town desperately needed jobs. Incidentally, it was under the premiership of former Conservative Prime Minister Stephen Harper, who maintained an openly anti-cannabis stance, that Canada legalised marijuana for medical purposes in 2014. “They didn’t regulate cannabis because they wanted to,” says Linton. “They regulated it because the police were finding it impossible to govern it.”

In 2018, cannabis was fully legalised in Canada under Justin Trudeau’s government. In theory the change of law means existing users will substitute illicit providers for above-board cannabis. But the change has also been cultural, legitimising cannabis for people that might previously have frowned upon it. Linton jokes that older people, who are more commonly afflicted with cannabis-treatable conditions like arthritis and prostate cancer, are now advocating the use of weed to their grandchildren.

His own mother adds the gel capsules to her pill box to help with sleeping problems (best for this, apparently, is a balance of CBD and THC content). Martha Stewart, previously a pin-up for North American suburbia, has turned into a cannabis advocate and partnered with Snoop Dogg to promote the drug. A collaboration between Stewart and Canopy on a series of products for anxious pets is in the pipeline. Much to everyone’s delight (including, it seems, his own), Linton receives a call from Stewart as we’re about to start our tour of the factory. “Martha,” he says gleefully, “I’m gonna have to call you back. I’m with a bunch of journalists from England!”

Gel cannabis capsules at the Canopy factory

Linton has the enthusiasm of a schoolboy and the curiosity of an inventor. He speaks rapidly, telling us about the properties of cannabinoids (there are around 100; THC and CBD are the best-known and most commonly used) and how the firm is experimenting with new products including novelty-coloured cannabis. Though the factory’s experimentation zones are shrouded in Charlie and the Chocolate Factory levels of mystery (Linton repeatedly tells us not to take pictures of the experiments), Canopy’s main objective seems to destigmatising the drug. The company prizes consistency and accuracy and wants to convince more doctors and pharmacists of the drug’s health benefits; it’s currently running 60 trials monitoring the plants’ growth conditions and gene pools.

In turn, this allows manufacturers like Canopy to produce cannabis oil and capsules with precise dosages of THC and CBD. Measuring elements by the milligram is crucial to gain approval from the medical community. “When we want to make something, you don’t want to get a gram [of cannabis] and throw it in, because that one gram might have 40mg [of active ingredients], and that gram over there might only have 2mg,” Linton says. “The old school ‘hey man, how much for an ounce’ just means you’re buying something you’re going to combust. No doctor or pharmacist is ever going to feel good about it.” By cloaking cannabis in a lab coat, Canopy hopes to tap into a wider market – like Linton’s mother – to whom taking a pill is infinitely more appealing than smoking a joint.

That said, 50 per cent of Canopy’s sales are dried flower (the substance you can smoke) and 10 per cent are pre-rolled joints, boxes of which worth $250,000 are wheeled past us several times during the tour. Canopy supply recreational products via wholesalers and medicinal products through their own website. Medical cannabis has been available in some capacity in Canada since 2001 – so why wouldn’t pharmaceutical companies themselves want a part of the market?

The answer is that “medical” and “medicinal” are separate categories: for cannabis to become an integrated part of the medical system and be sold by pharmaceutical companies as drugs, further regulation would be needed. Jordan Sinclair, Canopy’s Vice President of Communications, calls this “stigmatised over-regulation”: it would not be such an issue, he thinks, if it wasn’t cannabis.

The medicinal label is undoubtedly Canopy’s unique selling point. Sinclair says the company is not creating new consumers but rather “converting from one supply chain to another”. People have been self-medicating for years, without the control that medicinal marijuana companies can offer.

Demand is clearly growing. When regulations around medicinal cannabis were relaxed in 2014, Health Canada predicted that there would be 400,000 patients by 2024; there were already 300,000 by 2018.

Workers pick from the plants at the Canopy factory

While dried flower – combustible and therefore widely associated with recreational use – makes up most of Canopy’s distribution, 70 per cent of all cannabis in Canada is still bought on the street. This figure might seem surprising – why bother doing something illegally when you can walk into a shop and obtain the same product of arguably better quality? Long-term recreational users aren’t perhaps as comfortable with the corporate status of Canopy and rival companies.

Indeed, stoner stereotypes aside, Canopy is as corporate as it comes. Some areas of the site feel more like a Shoreditch WeWork than a small-town factory or weed-smoking paradise. Safety signs are similar to Innocent Smoothie branding, each starting with a slightly nauseating “Hi.”.  Team bonding events are frequent. A pool table from Linton’s own house has been donated to the staff dining area. It’s confusing to see a product that has deep-rooted associations with an anti-establishment subculture celebrated in such a mainstream capitalist way. The Canopy site appears a mix of the two: the visitors’ shop sells more branded merchandise like hoodies than drug-related products; the wifi password would feel fitting in an Amsterdam coffeeshop: “It’sAlways420!”.

What actually happens when it is always 4/20, though? At Fire & Flower in Ottawa, one of 25 shops in Ontario selling Canopy products, 34-year-old Daniel Lacroix tells me that while he’s happy he can now easily walk into a shop and buy cannabis, which he’s been using since he was 17, he still thinks the drug’s health risks are underemphasised.

“They’re not doing enough to raise awareness of the side effects post-legalisation,” Lacroix tells me. “But it’s a process, so they’ll get there.” For Lacroix, the side-effects comprise diminished motivation. But there are more serious concerns about the link between long-term regular cannabis use and mental illnesses such as schizophrenia, an anti-legalisation argument that 63 per cent of adults in the UK found compelling in a 2019 poll.

Is Linton concerned about the lack of knowledge concerning the results of regulated long-term cannabis use? “I think people should be very cautious about everything. I don’t look for fast friends. We run trials. If we get any sort of adverse reaction to combinations of cannabinoids, we figure out where we bumped into the bad outcomes. We haven’t seen [a trigger], but if there is anything, we’ll find it,” he says.

The company says it is consciously trying to avoid unintended consequences when it comes to town life in Smiths Falls. And so far, the effects have been positive: employment in the town is now 75 per cent, up from just 55 per cent when Canopy took over. Of the factory’s 1,300 employees, 800 are Smiths Falls residents, a figure that represents nearly 10 per cent of the town’s population.

But Smiths Falls’ renewed desirability has also made it more expensive. House prices have risen by 22 per cent from five years ago – a boon to home owners, but a barrier to those looking to get on the ladder. The same café that made our lunch is allegedly selling cold-pressed juice for $6. Alford concedes that the town is being gentrified, but eschews the idea that there’s a new cultural fault line between “rich versus poor”.

Though there’s underlying concern that some people could be priced out of the area, the overall outcome is positive: Canopy has brought hundreds more employment opportunities. Perhaps the same is true of the cannabis market more generally. “You can hate big companies,” says Linton, “but if you actually want to prove this stuff does something and make evidence-based claims and educate doctors, you should start off with a few hundred million dollars.”

It’s this money that will enable cannabis to reach people who really need it in safer and more scientific forms. Smiths Falls has embraced the drug. The ripples are widespread. The UK is a decade or more behind Canada in its legislation, but a similar situation isn’t unimaginable, with a recent survey showing that 63 per cent of people in London are in favour of legalisation. It seems for both Smiths Falls and cannabis, as Alford puts it: “the future looks so bright, we’re gonna have to wear shades.”

This article was updated on 3 July to include the information that Bruce Linton had stepped down as CEO of Canopy. 

Emily Bootle is the New Statesman’s editorial assistant.