A Canadian firm plans to raise $2.9M to purchase and equip a plot of land for cannabis production.
Mark Spear, a 34-year-old Ottawa native founded Burnstown Farms Cannabis Company, and now wants to further his success.
Spear, who has worked in the cannabis industry since 2014, wants to convert a 50-acre plot of farmland in Beckwith Township into a “canna-tourism” complex that will grow more than 100,000 cannabis plants by 2020, run workshops on how to grow and cook with marijuana, and allow visitors to relax at a weed-friendly spa.
It’s an ambitious plan for Spear, who last November founded Burnstown Farms Cannabis Company. Spear is eyeing 225 acres outside Burnstown in the Ottawa Valley for an outdoor grow-op, an activity that is not yet legal in Canada but which could have a substantial impact on the industry’s carbon footprint.
In April, he launched a plan to raise $2.88 million — through the sale of 24 million common shares at a price of 12 cents per share — to purchase the property and obtain licensing to create an operation that would extract oil from dried cannabis and sell it to manufacturers to produce edibles, beverages and vaporizer cartridges, all of which are expected to be legal for use in Canada by next year.
A further round of financing to raise $10 million to cover infrastructure and operating expenses will follow this fall. Spear has enlisted the help of George Routhier, a Burnstown Farms board member who runs the Mallorytown, Ont., cannabis consultancy Pipe Dreemz, to handle the licensing paperwork.
Spear hopes that Routhier’s success rate with obtaining a third of all Health Canada licences for medical marijuana production will help Burnstown navigate the government’s strict requirements, not the least of which involves security. (The farm will be outfitted with 24/7 video surveillance and surrounded by an 8-foot-tall, barbed-wire, chain-link fence, and anyone entering the oil-distillation production area will need to have authorized access.)
How does it work?
Burnstown Farms will be more environmentally friendly than standard greenhouses that grow marijuana, according to Spear, who was raised in Kinburn and now lives in the village of Ashton, southwest of Ottawa.
A greenhouse will typically grow about five crops a year; Burnstown will only grow one larger crop. Low production costs and high demand for cannabis oil have led Spear to make a bold prediction: “We’re going to be profitable in our first year,” he says. “Currently, a gram of concentrate in the medical market sells for $100, and it takes anywhere from five to 10 grams of cannabis to make a gram of oil, so the margins are astoundingly high.”
Spear thinks that as already happened with legal alcohol distribution in the distant past, he can take the first step with marijuana.