Bloomberg Businessweek - USA (2019-06-24)

Bloomberg Businessweek June24, 2019

55

month,Canopyannouncedit’s

workingwithMarthaStewart

tocreatecannabisproducts—

forpetsinitially—thatnoone

could talkabout yet. Snoop

Dogg,wholicensedhisLeafs

by Snoop brand to Canopy

in 2016 andco-hostsa cook-

ingshowwithStewart,intro-

ducedhertoLinton.SethRogen

foundLintononhisown.In

March,Rogensaid he’llcol-

laboratewithCanopyto sell

hismarijuana (brand name:

Houseplant)inCanadaaswell.

InApril,Lintonofferedtopay

some$3billionfortheU.S.com-

panyAcreageHoldings—when

marijuanais federallypermissi-

ble.Acreageis amongthelargest

U.S.potcompanies,witha mar-

ketvalueofabout$2billion.It

hascultivation,processing,anddispensinglicensesoragree-

mentsin 20 statesandmanagesa chainofstorescalledthe

Botanist.It alsohasformerHouseSpeakerJohnBoehnerand

formerCanadianPrimeMinisterBrianMulroneyonitsboard.

Lintonsayshewantstobuilda companysobigthatthere’s

“noquestionwho’sNo.1. It’sdifficulttoseewho’sbehindus

becausethey’resofarbehind.”Lintonseemstohavepicked

upa thingortwofromSiliconValley.Sohavehisrivals.They

havecatchynamesfortheircompanies:Aurora,

Tilray,Cronos,Organigram.Theywanttotakeon

establishedmultibillion-dollarindustries.Theycall

themselvesdisrupters.“We’redisruptingevery-

thingfromveterinariancare,vetmedicines,vegan

proteins,OxyContin,opioids,sleepaids,geriatric

care,alcohol,sportsdrinks,”Lintonsays.Thisis

whatexplainsthecompany’s$15billionvalueonthe

stockmarket,wherepromisesandpotentialcount.Canopy’s

actualrevenuein 2018 was$120million.Thisyearit couldbe

around$170million.“Forsure,theopportunityis overstated,

butwhatelseis excitingrightnow?”Lintonasks.

“OK,let’sgoona tour.”

W

e’ve come to Smiths Falls, an hour’s drive

southwestofOttawaacrossquietplainsofsnow,

ona lateFebruarydaytoseea cannabisharvest.

SmithsFallswasa hard-upcityofabout9,000residentswhen

Linton first visited in 2013. “They madethefirstBeatlesrecord

ever pressed in North America,inanRCArecordfactory.

Gone,” he says. “They used to makeallthesilverfilmforcig-

arettes and vitamin packaging. Gone.Theyusedtomakeall

the chocolate bars for all of CanadaforHershey.Gone.”Linton

saw derelict buildings he could buyonthecheap,highunem-

ployment, and plentiful power, gas,andwater.Donedeal.

We walk down bright

whitehalls. Weswipeour

security badges. We view

the plants—“moms” and

“teens,”asthey’recalled— in

analmost2,000-square-foot

growroom.“Allmarijuana

plants are female. Every

one,”Lintonsays.Thisgave

himanideafora workplace

slogan: “Don’t stress out

womenif youwanta super-

productiveenvironment.”

Wemeetpeople.Canopy

has3,400employees,more

than1,000of whomwork

atSmithsFalls.Therestare

initsdozenorsofacilities

inCanadaandoutsidethe

country.BilalRazackmon-

itorsthesystemsthatkeep

the growing, drying, and

trimmingroomsattherighttemperature,humidity,and

brightness.“Wedon’twanta singleextinctionevent,”Linton

says.Growingcannabisona commercialscaleis hard.Mold,

fungus,pests:Anyofthosecouldcausea croptofail.Canopy

saysit’sneverhada cropfailure.

Razackusedtogrowpotonhisown.“Iwouldn’tsaythat

wehiredyoubecauseyouknewabouttheplant,”Lintonsays.

“Butwedidn’tnothireyoubecauseofthat.”Therearemany

grayareasinthecannabisbusiness.Linton’semployment

philosophyis simple:“Wedon’tcareif youhavehadcrim-

inalexperience,”hesays.“Wecareif youdon’tdiscloseit.”

“Exactly,”Razacksays.

“OK.Thisperson,he’sgotthingstodo.We’lljustrandomly

stopandsayhitopeople.”

Asthetourproceeds,Lintondescribeshowhemanages

thosepeople.“Youhavetohavegoalsanda culture,”hesays.

“Everybody’shustlingaround,buteverybodyisina good

mood.”Couldthatbethemarijuana?weask.“Whoknows?

Theyjoke:‘Wehavereallyhighemployeemorale.’”

We see a room with eight people wearing hairnets and

orange gloves who are working with joint-rolling machines.

Canopy’s engineering team developed the machines over

two years and filed patents for them. The machines can roll

1,000 joints an hour; Canopy produces almost 200,000 joints

every week.

The company grows marijuana in more than a dozen facilities

around the world.

“For sure, the opportunity

is overstated, but what else

is exciting right now?”

Just don’t call

it
Pot
Weed

Grass

420

Ganja

Dope

Herb

Joint

Blunt

Reefer

Mary Jane

Buds

Stinkweed

Nuggets

Chronic

Tobacco

Doobage

Jazz cigarette

Wacky tobacky

Smoke

The 11th special herb in KFC’s recipe

Green

Sticky-icky-icky

Holy herb