CANADA
Alliance One International Inc. (AOI) has entered the cannabis market with the acquisition of two Canadian companies.
AOI’s wholly-owned subsidiary Canadian Cultivated Products, Ltd. has purchased a 75% stake in Prince Edward Island-based Canada’s Island Garden Inc. and an 80% stake in Ontario-based Goldleaf Pharm Inc.
In a press release accompanying its Q2 earning released in February 2018, the company said, “We intend to broaden our business portfolio over the next three to four years by focusing on consumer-driven agricultural products, with increased operating margins when compared to our historical leaf processing business.”
AOI also said, “Our goal is to generate a significantly increasing portion of our profit from new, higher-margin businesses by 2020,” using its earnings to announce a new strategy of increased focus on cannabis, industrial hemp, and vaping liquids.
Canada’s Island Garden, PEI’s only licensed cannabis producer, is not large. According to c.e.o. Edwin Jewell, a recent 1,000 kilogram supply contract with the PEI government will take up most of the current crop. But, the company is planning to expand its 20,000-square- foot facility to 250,000 square feet over the next several years, costing US$25-40 million.
“With the full build-out, in a couple years’ time we would be 30 times the production we have today and I wouldn’t be surprised if there would be 150 to 200 people (employed) here,” explained Jewell.
According to Jewell, Canada’s Island Garden had been courted by multiple potential partners over the past year and a half, but none seemed to fit. AOI, felt different, and after the company reached out to Jewell in November, the deal closed in late January.
“If you look at the tobacco industry globally, it’s not on the incline, it’s on the decline. And you look at what we’re doing and it’s just the opposite, it’s a product that helps people. So I think we’re part of just a changing dynamic in their company,” he said.
Ontario’s Goldleaf, is still applying for a license under Canada’s Access to Cannabis for Medical Purposes Regulations. AOI says Goldleaf is currently building a 20,000-square-foot indoor facility.