Industry-Research Alignment and Nimble Regulation to Maximize Canada’s Cannabis Advantage

---

What is the potential for cannabis and hemp in Canada’s future economy?

Cannabis is a new legitimate industry with many attractive opportunities for Canada. Both indoor and outdoor growing segments of the industry will have a significant impact on our future economy. Hemp is one of the most versatile materials that we can cultivate on an industrial scale for a multitude of markets. We can derive economic opportunities from processing every part of the plant, including the flower, the fiber, the grain and the seed oil.

The hemp seed oil industry is established in Canada and North America. But the focus today is to go beyond the seed oil property of the plant and harvest the hemp flower for Cannabidiol (CBD), which is found in different varieties of the cannabis plant, including hemp. The cannabis plant has hundreds of chemical substances. Over 100 of these are known as cannabinoids, and CBD is one of them.

“Hemp is one of the most versatile materials that we can cultivate on an industrial scale for a multitude of markets. We can derive economic opportunities from processing every part of the plant, including the flower, the fiber, the grain and the seed oil.”

With a rise in demand for CBD, there will be an increase in hemp production across the continent. That’s only the start. A rise in demand for hemp could create value in many ways. It’s fiber, for instance, can be used in construction materials, carbon materials, and even in lightweight clothing used by aerospace and defense organizations.

By law, Canadian grown hemp cannot contain tetrahydrocannabinol (THC), which means it does not have the same issues crossing borders and can be exported, starting with Europe, as CBD is legal in the European Union (EU). With the EU-Canada Comprehensive Economic and Trade Agreement (CETA), Canadian cannabis and hemp companies should look to expand beyond their home markets and into European countries.

Lastly, hemp crops also provide major environmental benefits. Compared to trees that take 30 to 40 years to grow, hemp can be grown in 4 months, which makes it one of the fastest CO₂-to-biomass conversion tools available, more efficient than agro-forestry. It’s a very robust, competitive plant that will often out-compete weeds and, in most cases, this makes production possible without the use of herbicides and pesticides.

---

What must Canadian governments, industry, academia and other key players do to ensure Canada is a global leader in cannabis research and world-class product development?

Cannabis has already been designated a national priority, we simply need the federal government to accelerate its support and help industry find and implement innovation opportunities, synthesize ideas into concepts and product designs, and select what to focus on.Line departments must look to support agile regulation and government policy that improves the business environment for cannabis players while continuing to protect Canadians.

Investors and market demand propelled the cannabis industry to where it is today. However, its future lies in research and development (R&D) in areas such as agriculture, horticulture, genomics, artificial intelligence (AI) and possibly even with blockchain.This is where things get exciting and where key players in academia, provincial and private research institutes should start getting involved.

“Cannabis has already been designated a national priority, we simply need the federal government to accelerate its support and help industry find and implement innovation opportunities, synthesize ideas into concepts and product designs, and select what to focus on.”

For example, blockchain technology could provide some interesting benefits. Blockchain makes the most sense for an industry like cannabis that is ‘Net’ new where traceability—from the seed to a product sale—is paramount for public safety, for compliance and recall requirements. Should blockchain provide the capabilities needed to streamline traceability, the cannabis industry will be one of the fastest adopters.

Key players in academia and research institutes—both provincial and federal—should think through what complementary assets, capabilities, products, or services can be derived from cross-collaboration with the cannabis industry. Meaning that it’s not just up to Health Canada to take the lead on aligning policies across line departments. The National Research Council (NRC), Agriculture and Agri-Food Canada, Fisheries and Oceans Canada, NRCan and many more research institutes across the country can provide support in building a robust sector.

“Investors and market demand propelled the cannabis industry to where it is today. However, its future lies in research and development (R&D) in areas such as agriculture, horticulture, genomics, artificial intelligence (AI) and possibly even with blockchain.”

To move forward, I would urge Canada’s governments, both provincial and federal, to promote alignment among diverse groups within the cannabis economy, to clarify objectives and priorities, and to help focus efforts around them by supporting agile regulations and government policy.

---

The federal government, and many provincial governments, are focusing on the benefits of growing the bioeconomy. How can the cannabis industry contribute to this growth and help shape policy that could accelerate our investment into the bioeconomy?

The global economy is already moving towards a bio-based economy—one where the term bioeconomy will not simply be a sub-sector of the economy. Early in 2019, Canada’s first Bioeconomy Strategy was launched. It illustrated the need for building strong companies and value-chains in Canada’s resource-based sectors and the resulting opportunities should the recommendations be implemented. Cannabis is Canada’s newest resource-based sector and positioned to play a significant role in Canada’s bioeconomy. This sector —both cannabis and hemp—has the potential to support the development of a multitude of renewable bio-product applications, including fiber, natural health products, and bio-based materials used in composite construction, energy, electronics, even sensors and imaging.

The government could accelerate a flourishing bioeconomy by specifying how the different types of cannabis and hemp products can fit into it, and the resources that could be allotted to each.

---

How would you rank Canada’s regulatory environment as it pertains to cannabis? What is this environment’s effect on innovation and commercialization—and how would you improve it?

The Canadian cannabis industry is heavily regulated. Although I used to believe Canadian cannabis regulations were putting us at a disadvantage, I have since seen that they instead set us apart from other jurisdictions in terms of enabling more complex breakthroughs. At 1812 Hemp, our team has been very fortunate to travel globally to review other regulatory environments.  In comparison, the environment that Canada has established is phenomenal and as much as I used to think we were falling behind, we’re not—we are leading the pack and setting global standards for quality, safety and research and development.

Cannabis and hemp could become an international industry in the near future, boosting opportunities for Canadian firms, and we need to take advantage of our leading position now. With fast growth comes a new set of hurdles. If provincial and federal governments do nothing to commit to a set of coherent, reinforceable policies or behaviours aimed at achieving a sustainable first-mover and competitive advantage in the cannabis industry, it’s ours to lose.

“If provincial and federal governments do nothing to commit to a set of coherent, reinforceable policies or behaviours aimed at achieving a sustainable first-mover and competitive advantage in the cannabis industry, it’s ours to lose.”

So, with public safety being paramount, let’s use that to our advantage. The day cannabis is considered a safe commodity, educating foreign jurisdictions will follow suit. Canada has a chance to set the global regulatory environment for other countries weighing cannabis legalization and relaxing hemp laws. Already, efforts are underway in a handful of other countries—in Europe and in South America—to legalize cannabis and hemp, and they are looking at Canada for guidance on how to approach this.

---

What are the most significant opportunities in New Brunswick’s cannabis space?

New Brunswick is the only province in Canada with both a hemp and a cannabis strategy that supports its line departments and spurs economic development around the whole-plant opportunity, not just certain aspects of it.It has significant expertise in genomics, equipped with world-class researchers and institutes who focus on developing some of the fastest growing trees, fish and potatoes. If the province can apply its expertise to the cannabis and hemp sectors, it makes New Brunswick a phenomenal sandbox for industry and research to play and  drive innovation forward.

“New Brunswick is the only province in Canada with both a hemp and a cannabis strategy that supports its line departments and spurs economic development around the whole-plant opportunity, not just certain aspects of it.”

New Brunswick also hosts the largest number of engineers per capita, along with some of the country’s largest water technology companies. In addition, New Brunswick provides the lowest cost land base, lowest cost of energy, and is home to 13 research institutes focused on resource-based sectors. These strengths make an attractive sandbox from a research and development perspective, and Canadian producers looking to carve out a niche related to genetics or the lowest cost of production should look to take advantage of this. Entrepreneurs looking to create disruptive new business should look at cannabis as a nexus for every industry; from food and beverages, to aerospace and defense, to pharmaceuticals and natural health; cannabis as a sector is currently under-leveraged.