“We wanted to do something not done often in the Senate, which was to answer the question, ‘What problem are we trying to fix?’” says Dean. The answer, of course, was “How do we legally sell marijuana?” The file had been a judiciary exercise for Dean, until it became something different. At the start of 2018, he received a diagnosis of cancer. Medicinal marijuana became personal. Dean began using cannabis medically to help him sleep, stimulate his appetite, and relieve post-surgery pain.
He was sick. But he was also reinvigorated to fight for the cause. “Some people thought it might have been wise for me to take the year off, but this was the biggest, best distraction,” says Dean, who would travel to Ottawa from Princess Margaret Cancer Centre in Toronto between bouts of chemotherapy and radiation, lugging his big bag of cannabis research to his Senate colleagues.
On June 1, 2018, the Senate approved an amendment to Bill C-45 with a vote of 34 to 28. (One Conservative MP, Scott Reid, voted in favour of the bill in the House of Commons. He said that, for this action, he was “sacked” from his role as critic of democratic institutions by his leader, Andrew Scheer, and demoted to the backbenches.) The recreational cannabis market was coming. But, as ever with Canadian marijuana, a trouble-free period wouldn’t even last long enough to give Dean time to enjoy a celebratory joint.
On September 27, 2018, less than a month away from the end of prohibition, the first Canadian pot producer to have its licence suspended was Ascent Industries — not CannTrust, Aphria, or Bonify. Ascent Industries had been started by two weed guys in their twenties who learned the trade on Vancouver Island, growing medical pot legally under the MMAR laws. James Poelzer, head of business development at Ascent, was twenty-six years old when he began working with Philip Campbell, Ascent’s CEO, and he says Health Canada kept them in the queue for a licence to cultivate recreational cannabis for nearly three years, from March 1, 2015, to January 1, 2018. In the interim, and in possession of their medical cannabis licence, the company had four additional Health Canada licences and eight hundred plants.
Poelzer, who told me he sold weed sparingly in high school and has a business degree, wrote standard operating procedures for his company and maintained, he says, vigorous record-keeping. Like most cannabis producers, the company was bleeding money as it waited for Health Canada approval on their recreational licence, spending $1 million on a vault, among other things, and pioneering unique product offerings for their patients. They set up an ethanol extraction lab in Maple Ridge, BC and began selling their patients concentrates.
On a research trip to Colorado, they discovered an early cannabis vape pen and produced their own, which they believed was legal for medical patients under the MMAR laws. They assumed that their medical business, like Canopy’s or Aurora’s, would have no bearing on the verdict of their recreational licence. Ascent also had an effective medical e-commerce site, Poelzer’s baby, and business began booming. They consulted with Bruce at Canopy and Vic at Aphria and hobnobbed with the biggest cannabis companies.
Poelzer says his favourite cannabis executive was Terry Booth. “We used to have big parties at the Aurora head office in Vancouver and every year, take their big yacht out. We smoked the whole harbour out, it was a lot of fun.”
Poelzer, however, didn’t like any of the legal weed. “The legal medical pot was garbage. It was a disgrace,” Poelzer says, adding that the medical side of cannabis was shortchanged by the big licensed producers as they turned their attention to the bigger market of recreational marijuana.
Poelzer kept stringent records of all of his medical weed sales and says, even when revenue topped $10 million in 2016, everything he did was legal. “There was too much at stake for us to ever cut corners, and we didn’t want to risk everything that we built,” Poelzer tells me, then adds that the success of Aurora and Canopy impacted the thinking at Ascent Industries. Poelzer says he wouldn’t have taken Ascent public in 2018 if it wasn’t what the market seemed to demand every cannabis company do. In August 2018, Ascent was valued at $60 million and had 120 employees. They grew recreational marijuana on one side of their building, which wasn’t yet licensed, and medicinal marijuana on the other side, which was.
Marijuana for medical or for recreational use is the same stuff. There aren’t particular strains that do one thing that others don’t do, and there aren’t different ways to medically or recreationally grow weed. It’s all personal choice, and the plant affects people differently. However, for licensing reasons, the two halves of the company — medical and recreational — needed to be separated. Before they received their recreational licence, Poelzer says, the company had Health Canada approval to arrange their facility as they did. Again, he stresses that his record-keeping was so good because he wanted to use the data gleaned from their medical brand to help them gain insight into the recreational market.
In August 2018, Ascent sent out a press release: they were expanding their production facility from fifty thousand to seven hundred thousand square feet. “We weren’t picked on by bikers. We were picked on by bankers,” Poelzer says. “All we wanted to do was be legit.”
Poelzer says both Aurora and Canopy looked into acquiring his company, but he and Philip Campbell held out. They were in Las Vegas at the MJ Biz conference in 2017 when staff back home informed the two friends that they had received a letter from Health Canada. Expecting it was their recreational licence at last, they received a notice of inspection instead. They were having their medical licence reviewed. “They came in obviously looking for something,” Poelzer says.
Poelzer describes the Health Canada visit almost as if it were a raid: a team of uniformed agents asked the Ascent group to exit the building and proceeded to inspect every plant, seed, and document pertaining to both their medical and budding recreational business. Health Canada later determined that Ascent was performing “unauthorized activities,” based on the very documents Poelzer insisted on keeping for the regulators. “They didn’t go through security footage. There was no interview process. They just flatly turned our recreational licence down and revoked our licence to sell medicinal weed to our patients,” says Poelzer, still sounding dumbstruck by what occurred. He thinks his small company disconnected from Ottawa was made an example of to illustrate the Health Canada commitment to law and order. Terry Booth says Ascent “got royally fucked.” In knee-capping his company, insists Poelzer, the agency missed who the real law breakers were: connected billion-dollar Canadian companies like Canopy, Aphria, and CannTrust that played by their own sets of rules.
“Phil had never been a CEO, never been in the public markets,” Poelzer told me. “He’s a weed guy. All of us are weed guys.”
The weed guys, the short sellers, the executives parachuting in — everyone, Bill Blair, Anne McLellan, the one hundred pot agents at Health Canada, Tony Dean, Hilary Black, Terry Booth, Terry Parker, Alan Young, Brent Zettl, Lorne Gertner, and scores of retail investors around the world still bullish on Canadian weed stocks — held their nose and cupped their lighters against the negative tailwinds. Prohibition was ending. Legalization was just weeks away.
Chapter 10.17
“Downtown St. John’s kinda smells like weed.”
The CBC
On October 16, 2018, Bruce Linton flies through a storm in a Tweed-branded T-shirt to sell Canada’s first legal gram of recreational weed. Travelling from Ottawa to St. John’s, Newfoundland, on a private plane, Linton looks out the window and sees the rain thrashing down. As the wind blows his small aircraft through the sky, he thinks, Typical marijuana — can’t we ever simply have blue skies?
After he lands in St. John’s, alongside the media embedded in his entourage, he winds his way to the Tweed store on Water Street, where he is greeted by an adoring throng. Willy Wonka opening another chocolate factory for his stoned fans. This is intoxicating for Linton: fame. It energizes him and makes him feel powerful, almost self-righteous. Cult leader, god. It’s freezing outside, but it doesn’t matter. It’s a carnival. There are three hundred people in the street, and Bruce is about to legally sell weed. The countdown is on: at the stroke of midnight, prohibition will end. Seen from the right vantage point, the drug war is over. The good guys have won, and this propels Linton forward, shaking hands, signing shirts. Selling pot, making money — Linton can’t help, at the moment of legalization, feeling like the king of the world.
“I’m just the tip of the spear,” says Linton, whose team has worked with the city council to allow him to open his shop at midnight, which in itself is remarkable. Even in June, the law was still hazy regarding packaging and distribution, limits, and how the cannabis would be sold in each province. Executives didn’t even know what date legalization would take effect until the middle of summer. On October 17, 2018, Justin Trudeau doesn’t visit any stores, and he doesn’t take a victory lap for achieving his campaign promise. (Neither he nor his staff — even Gerry Butts, a friend of John Aird’s — would speak to me for this book.) Still, Mike Farnworth, British Columbia’s minister of public safety, tells the New York Times on October 17, “Legalization of cannabis is the largest public policy shift this country has experienced in the past five decades.”
In Canada, it’s the day’s top news, and for a segment of the population, it’s a dream come true. For the people in line in the cold who greet Linton like a hero, it’s Mardi Gras. The jubilation spreads out across the country, from Halifax to Toronto, Montreal, and Edmonton — where Terry Booth has rented out a nightclub for his Aurora staff and collected $10,000 onstage after winning a bet from 2013 that, within ten years, this day would come. People wait in line outside stores in Saskatoon and Alberta, many sleeping overnight to buy the morning’s first grams on “10.17” — October 17, 2018 — and the police aren’t arresting people for smoking weed out in the open. The line snakes around the Tweed store in downtown St. John’s, pot smoke floating in the air like the Newfoundland fog. For the people celebrating the end of prohibition, the problem hasn’t been finding Canadian weed. The problem, or the solution that they’re lighting up for, has been the laws, which are over — right now.
“To think that the first legal gram of pot sold in this country was grown in little Smiths Falls,” says Linton, who autographs the first Tweed bags filled with containers of Canopy pot.
“We won!” shouts Ian Power, the giddy first Canadian to legally buy a gram of weed. Linton himself makes the sale before the cameras. Power is wearing a Tweed hat and buying a Tweed product in a Tweed store, declaring that he won’t smoke history’s first legal gram, but will preserve it on a commemorative plaque. For Linton, it’s sentimental free publicity — gold.
John Fowler is smoking a joint on 10.17. He’s at the Supreme Cannabis headquarters in Toronto, off Ossington Avenue, just south of Dundas Street, right by my home. Fowler, who started his company in 2013, has assembled a collection of investors and activist friends to get stoned. It’s a cold evening, a Wednesday night, and there are more than one hundred people amassed outdoors, just blocks from where Fowler grew up (and sold and grew his first pot plants). Obviously, there’s marijuana being consumed. The moment is euphoric, and the former Bay Street lawyer feels justified now that his country is one of two in the entire world where it will be legal to buy pot. He knows all is not hunky dory. Even though pot is about to become legal, there are no stores — at least legal ones — in Toronto where an adult can buy weed. After Doug Ford replaced Kathleen Wynne as Ontario’s premier, he moved the retail business from public to private and set back the opening of provincial stores in Ontario for months. This lack of retail options in Canada’s most populous province adds to the general confusion about the status of legal weed, further hamstrung by the Canadian Medical Association.
Plant Man: John Fowler, founder of Supreme Cannabis Company, lawyer, entrepreneur, pothead. His company was valued at over $1 billion.
Two days before cannabis legalization, the Canadian Medical Association released an editorial describing legalization as “a national, uncontrolled experiment in which the profits of cannabis producers and tax revenue are squarely pitched against the health of Canadians.” This doesn’t help Canada’s 330,000 medical marijuana patients in their quest to remove the excise tax on their medicine. Cannabis can be prescribed as medicine, yet without the Canadian Medical Association’s endorsement, it remains taxed like booze.
For a weed smoker, says Fowler, these are problems for another day. Because tonight the weed activist CEO can’t stop smiling. He’s proud of his company, his bud, his industry, his country, and his prime minister. Fowler’s grandmother is his moral compass, and she isn’t always happy about her grandson’s choices. Active in her church, she doesn’t share Fowler’s enthusiasm for the plant, but she’s slowly come around. She has invested in Aurora.
“For someone who smoked cannabis all his life, and made a pretty heavy bet on a life in the business, investing everything I have into the industry and my company, today is a dream come true,” says Fowler, who first campaigned in Ottawa for legalization in 2010, at 4:20 p.m. on April 20, and has remained close to every facet of his industry: the growers, the investors, but also activists like Alan Young and Kelly Coulter.
Outside on the Supreme patio, the group counts down to midnight.
Unlike Linton, Fowler can’t hold his festivities at a store he owns, because the city isn’t licensed yet to open brick-and-mortar shops, and Ontario and Alberta, unlike Newfoundland, have rules against vertical integration (a licensed producer owning a store and selling their own product). As a block, at 12:01, the group takes out their cellphones, illuminating the night, to log on to the Ontario Cannabis Store (OCS) website to buy legal weed.
Except not a soul can get through. Not a person can shop. Not a gram of Supreme Cannabis, soon valued at over $1 billion, is sold.
“Fucking weed,” Fowler says as the guests continue smoking their own bud and then drift away with mixed emotions. He goes back inside the Supreme building and turns on the 10.17 coverage of Bruce Linton on the CBC. “Downtown St. John’s,” says the reporter, “kinda smells like weed.”
By 10.17, Trevor Fencott and Michael Haines have sold Mettrum to Linton and now own five Fire & Flower cannabis retail locations in western Canada and Saskatoon. They are mining their data as legalization unfolds. Demand exceeds supply, as Fowler and his friends have discovered, but Fencott knows that won’t last. Funded capacity suggests that there will be five times more weed in Canada than needed within the next few years. Trevor is calling that now. And while the product on his shelves can be inconsistent in terms of quality and it’s hard to consistently stock cannabis with THC over 22 percent, everything he has is sold.
“The black market can thrive even in the legal industry because the [legal] retailers are product strapped,” he says, estimating that his average price ranges from eleven dollars per gram to forty-five dollars for 3.5 grams, what are commonly known as dime and quarter bags. Fencott has his team conduct interviews with his customers. On 10.17, he learns something important. “Less than 1 percent of our customers have awareness of the brands,” he says. This means that cannabis consumers may have heard of Canopy and Aurora, Aphria and Supreme, but when they buy Jack Haze, Grandaddy Purple, or Pink Kush containers, they have no clue who produces the actual weed. At the onset of legalization, there’s no Kellogg’s of cannabis, no Prada, no Chevrolet. Weed is weed is weed. In general, the people who line up at Fencott’s stores — men and women, white- and blue-collar workers, all races and ages — want weed with high THC and low prices. Since you can’t see or smell or sample the legal product, customers say they want the cheapest, strongest thing Trevor Fencott has.
Alison Gordon is up at midnight on 10.17 and logging on to her computer. She is the CEO of the weed company 48North, and the only female CEO of a publicly traded weed brand. Her cannabis journey began with her mother-in-law’s breast cancer, which led her to discover her country’s legal medical marijuana regime. Gordon, a cannabis smoker with fabulous fashion, big hats, and furs, has one of her own 48North joints burning in her hand as she logs on to the OCS website and it ruins her high.
Her company is valued at $40 million. And she knows her stuff. She opened the dispensary in Los Angeles that eventually became the first MedMen location. MedMen, on 10.17, is valued at over $1 billion and is the first American cannabis company to reach that valuation on the Canadian exchange. On the OCS website, she drops her jaw. There are dozens of companies no one has heard of — ones even she doesn’t know — all selling the same thing at the same prices. Her dream is to launch multiple lines but, seeing what’s on the OCS website, with the same packaging and labels, it’s clear what the legal market doesn’t need: more versions of the same stuff. It’s 10.17, and Gordon, blowing out smoke, says, “I have to rethink — everything.”
On 10.16, the day before legalization, Hilary Black is in Ottawa giving the speech of her life. It’s a buzzy Walrus Talks event at the National Gallery of Canada, and she holds nothing back. She’s seen the opioid epidemic first-hand, and although she hears what the Canadian Medical Association is saying, she feels passionately that the group is behind the times, and absurd. If legalization is about stock prices to some, it’s not about that to her, and never has been. “I have spent pretty much every day of my life since I was eighteen working to break down barriers for patients to access cannabis and working to free cannabis from the chains that bind her,” she tells the audience. “Tomorrow that all changes.”