Joint venture: Manitoba cannabis producers team up to package, distribute their own products

JesseLavoiewanted to sell Manitoba-grown cannabis in his home province, but first he had to ship it away.

Working with seven local companies to produce not-for-profit joints to help fund a legal challenge to the province's pot laws, he soon found the process to be needlessly complex and expensive, taking a big bite out of the funds he was trying to raise.

Lavoie said the price of shipping two kilograms offlower to Ontarioto get it processed and sending it back toindividual cannabis shops in Manitoba was roughly $1,000 and that didn't include the cost of processing.

"That's when we all decided,instead of us all doing this separately through other means, let's come together. Let's form a syndicate," said the Winnipeg entrepreneur.

Starting next week, five independently owned Manitobacannabis companies will handlethepackaging and delivering themselves, and they'll do it locally.

The TobaRolling Syndicate will pack the cannabis into pre-rolled joints and jars, for examplein one facility anddeliver itto the province's cannabis shops together.

Small-batch growers teaming up

It will save each companymoney, create new jobs and reduce their environmental footprint, they say.

"We all have similar issues where we're paying big money for shipping or we're paying a big corporationto do our processing and maybe it gets deprioritized, maybe it doesn't," Lavoie said.

"There's a bunch of different issues that we're trying to get rid of by doing it ourselves, and I couldn't think of better partners to do it with."

His venture,TobaGrown, isjoined by fourindependently owned cannabis producers:Alicanto Gardens, Cypress Craft, Kief Cannabis and Natural Earth Craft Cannabis.

Prior to this arrangement,"when youship to a dispensary, you need to ship to each individual dispensary," Lavoie said. "There's over 150 in this province. If you think about 150 packages leaving Ontario to come here, that's crazy money."

Lavoie anticipates the shops will appreciate making one order and getting product from five companies.

Alicanto Gardens,based in the Morris area, considered becoming a licensing processor to save time and money.

But it wouldn't have been cheap, said co-ownerWaldemar Heidebrecht.

"Just to make this processing room and all the licensing we're talking about $10,000, $20,000, $30,000 right there, without even blinking an eye."

In fact, he once quipped to his familyLavoieshould create some kind of a processing and distributing co-operative with other small-scale producers.

"It was kind of a in-house joke and never thought about it again, but then Jesse called me up and said, 'Hey, we have this idea,'"rememberedHeidebrecht, whojumpedon board right away.

Lavoie is well-known in Manitoba's cannabis industry. Under the TobaGrown banner, he tookthe province to court for banning the production of homegrown recreational cannabis, even though the federal government allows it. He is awaiting a rulingfrom the Court of Queen's Bench.

Lavoie said this latest collaborativeeffortis a vote of confidence in Manitoba's cannabis industry.

"It symbolizes our commitment to this province, the cannabis consumers in this province, the dispensaries in this province and the brands in this province," he said.

Focusing first on Manitoba

"Of course,our partners have aspirations to go beyond here. Manitoba will be our focus, but we will go there eventually."

The local market is drivingNatural Earth Craft Cannabis, a Winnipeg-based processor which was initially producing cannabis for other companies to sell elsewhere, before getting a sales licence to sellunder its own branding.

"Wewanted to be a part of the local cannabis community, which means having our products on local cannabis store shelves," director Tim Doerksen said.

He said the TobaRolling opportunity was "almost impossible to say no to." By aligning with other producers and minimizing or sharing costs, he expects a 20 per cent savings on that portionof his business.

The extra revenue will help businesses like his expand, and support the hiring of eight new workers to handle the weighing of flower, the rolling of joints and the labelling of containers, among other duties.Lavoie said the syndicate could hire more people if more businesses sign on.

Cypress Craft Cannabis, run out ofthemunicipality of North Cypress-Langford, is hopeful the new relationship will bring their products to more Manitobans.

As a smallbusiness run out of the family farm, master grower Bryce Oliver said there's sometimes little time to focus on the distribution part of owning a company when you're busy producing it.

"One of our problems is we don't get off the farm too often. So if [TobaRolling is]making a lot of relationships across the province, that's going to help us out."

This arrangement ispossible with the involvement of a licensed producer likeKief Cannabis, which has the authority to be a processor.The Selkirk-based producer has one room set aside for packaging, and another room in case of expansion.

But Jesse Denton, Kief's founder,said TobaRolling couldn't have come together without the five parties.

"From my understanding, we're the first of its kind," Denton said.

"I think it speaks volumes into how well-connected we are as a province and how well-connected we want to be as an industry, especially locally."

Five local companies join forces to package and deliver cannabis

2 years ago

Duration 2:10

Before you can buy cannabis at a shop near you, it has to be packaged and distributed. The process can be very expensive, especially for small-scale cannabis producers without the license to do it themselves. Some local entrepreneurs are trying to change that.