BCBusiness

SOURCES: IPSOS/MNP LLP; PWC CANADA; BORDEN LADNER GERVAIS LLP 16 BCBUSINESS JUNE 2017 all applicants to the ACMPR pro- gram, explicitly sell, or intend to sell, medicinal cannabis. Some, like Vancouver-based Aurora Cannabis Inc., a listed licensed producer with a $1.1-billion market capitaliza- tion when it was trading at about $2.60 in late April, have embraced opportunities in the recreational market. "This is something that we planned on, and that's why we started construction on this enormous facility," Aurora's executive vice-president, Cam Battley, told CBC News in March about the company's 800,000-square-foot plant near Edmonton, which it bills as the world's largest. Others, such as Tantalus Labs, a privately held applicant that is nearing com- pletion of its 115,000-square- foot greenhouse in Maple Ridge, are more reticent. "We're focused on a quality product," says Tantalus founder Dan Sutton. "We want to be consis- tent in our production no mat- ter what the marketplace is." Then there are players like True Leaf, which wants to stick with the medical market—and even target speci•c ailments. "Our focus is on the medicinal strains for people with hip and joint problems, for example," Bomford says. Harcourt, his adviser, is pithier: "We're about 'Get well,' not 'Get high.'" The Canadian marijuana industry doesn't consist only of those looking to operate legal grow-ops. On the margins, a host of small-cap companies aim to serve the market in other ways. Burnaby-based Cannabix Tech- nologies Ltd., trading at 80 cents in late April, is developing a marijuana breathalyzer to meet U.S. and Canadian regulatory standards. Wildœower Marijuana of Vancouver, an early applicant in the Stephen Harper govern- ment's Marihuana for Medical Purposes Regulations program (replaced last August by the federal Liberals' ACMPR) turned to the recreational market in Washington State to sell its can- nabis-oil disposable vaporizers. Another, Delta-headquartered Vodis Pharmaceuticals Inc., repositioned itself as an adviser to Washington pot producers on their operations. All of this has kept investors interested—if over-optimistic. "The future is bright, but if one were to take the calculation of the market cap and then look at how much pot will be bought, you'll see that [the licensed producers] are overvalued," says Brayden Sutton, a Chilliwack-based inde- pendent analyst who has covered the medical marijuana sector since 2009. "We're in bubble territory, and people are buying what they think is the future." In January 2016, CIBC World Markets estimated that the Canadian cannabis market could be worth $10 billion a year once the recreational system is up and running. Deloitte, in a report issued last spring, calcu- lated that pot sales alone could range from $4.9 billion to $8.7 billion, while the total market size—including testing labs, security services, paraphernalia and tourism revenue—could reach $22.6 billion. Deloitte based its results on an in-house survey that found one in •ve adult Canadians is a potential consumer of regulated recreational cannabis. But with the federal government still to table legislation—and B.C. yet to indicate what policy it might develop around supply chain, distribution and the retail market—nobody knows what the system will look like. In the meantime, Bomford and Harcourt's company has found a novel way to stay aœoat: hemp-based dog treats. (Bomford's previous busi- ness was Darford Oven Baked Treats.) With quarterly sales of about $150,000, it's much smaller than other medical marijuana ou•ts—but at least it's generating revenue. Bomford draws a parallel between the two sets of customers, dogs and their owners. "They're looking at what they eat themselves as they get old," he says of the lat- ter, "at the aches and pains they get, and they look at their pets the same way." MEDICINAL HERB That's how many B.C. businesses in a recent Ipsos/MNP LLP survey said that hackers accessed or may have accessed their con•dential information in the past year. As the June 12¬15 Ignite conference brings 4,000 cybersecurity professionals to the Vancouver Convention Centre to talk the latest in high-tech prevention, businesses of every size and sector are grappling with the human side of data theft. Konstantin Beznosov, founder of UBC's Laboratory for Education and Research in Secure Systems Engineering, says that despite advances in security technolo¯y, "the last three feet, where the users are" is often where vulnerabilities lie. The challenge is adapting security to the ways that di¥erent generations and social groups use technolo¯y. "That's a focus of usable security research right now," Beznosov says. "We need to make it very easy for both consum- ers and people who manage systems to improve their security hygiene." by Melissa Edwards Crime of the Century NUMEROLOGY SOURCES: HEALTH CANADA, CANACCORD GENUITY 52% Licensed medi- cal marijuana producers in B.C. as of April 10 Patients enrolled in the federal medical mari- juana program 130,000 Potential medi- cal marijuana patients 700,000

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