In just a year, Tilray’s massive medical marijuana facility in Nanaimo has become the sixth-largest private-sector employer in the region, creating hundreds of jobs and the prospect of hundreds more if a proposed expansion goes ahead.
Since setting up in the Duke Point industrial district in April 2014, Tilray has hired 140 people, putting it just behind forestry company Island Timberlands in terms of private-sector jobs, says an economic impact study released Wednesday.
A proposed second facility, four or five times the size of the existing 60,000-square-foot plant, could create another 275 jobs and 100 indirect jobs. That would make the medical-pot business the top private-sector employer in the Nanaimo area.
“They produce a significant economic investment for our region,” said Sasha Angus, CEO of Nanaimo Economic Development Corp., which commissioned the report.
In addition to the 140 people employed by Tilray, another 75 jobs were created through construction of the facility, the report found, which amounts to just over $3.2 million in direct wages and salaries.
Another 180 indirect jobs were created relating to construction, logistics and third-party services.
“A lot of their security is provided by local companies, all of their construction was done by a local construction firm and contractors, so that’s been a great thing for the construction sector in Nanaimo over the last year and a half,” Angus said. “Everything from catering to administration, you name it, they try to buy local, which is fantastic for other local companies.”
While Tilray has received zoning approval from the City of Nanaimo, the company is waiting for federal approval to build the second facility, expected to cost $75 million.
“I don’t see any hurdles with Health Canada on that expansion, but it will take time,” said Tilray CEO Greg Enge. The goal is to have it running in 2016.
Tilray is a licensed producer under Health Canada’s new medical-marijuana regime, which came into effect April 1, 2014. The company is the Canadian subsidiary of Privateer Holdings, a Seattle-based private equity firm.
Other Vancouver Island municipalities have been cautious about approving medical-marijuana facilities, with some, such as North Saanich, even passing bylaws to ban them. But Nanaimo has worked hard to entice Tilray.
The medical-pot industry is fraught with uncertainty as two cases wind through the legal system. One case involves patients fighting for the right to grow their own medical marijuana at home and the other involves a Victoria man arguing that criminalizing cannabis extract used in pot cookies and salves is unconstitutional.
After months of running well below capacity to abide by federal regulations, Tilray is operating at 90 per cent capacity, Engel said. “[Health Canada] has been cautious in terms of production capacity and has wanted to allow companies to expand as patient demand is increasing.”
The company serves 4,000 patients across Canada with an estimated production of 50 kilograms of medical marijuana monthly, Engel said. By the end of the year at full capacity, Tilray estimates it will serve 12,000 patients.
Engel would not disclose the company’s sales revenue or profits.
Tilray invested $26.9 million in B.C. to build and operate the facility, which generated $48.1 million in spinoff economic benefits in 2014, the report says. It paid $130,000 in local property taxes in 2014 and will pay $220,000 in property taxes this year.
The company did have a setback last month when Health Canada inspectors found bacteria in three blends, resulting in a voluntary recall. Chief science officer Josh Eades said at the time that there were no reports of adverse side effects. Tilray offered to reimburse clients.
Angus said there have not been any security concerns for the company. “Tilray has made a massive investment in security. I know their current facility has been described as a bank vault inside a castle wrapped in a prison.”
The Greater Nanaimo Chamber of Commerce named Tilray best startup company in its 2015 business achievement awards.
“I know from a community perspective we’re going to do everything we can to support them in their expansion,” Angus said. “We’re very proud to have them as part of our community. They’ve done incredible things for our economy and we look forward to bigger and better things.”
