The markets are bullish on cannabis thanks to Bill C-45, Canada’s legislation legalizing recreational adult-use of marijuana, which is slated to pass its final Senate hurdles and come into effect this August. When it does it will create an industry that is bigger than booze and a new frontier of opportunity for the meetings industry.
According to Statistics Canada data, in 2017 about 4.9 million Canadians aged 15 to 64 spent an estimated $5.7 billion on cannabis for medical and non-medical purposes. This is equivalent to around $1,200 per cannabis consumer. Using that figure, the legal and pre-legal cannabis consumption is $100 million more than Canadians spend on hard alcohol (rum, gin, whiskey, vodka, etc.), though beer and wine sales are, for now, greater.
But, Conrad Barber-Dueck, chief, SNA Analysis and Data Development at Statistics Canada, points out that as the majority of cannabis consumption is not yet legal in Canada, estimates of consumption and production are provisional. No-one knows how big the marijuana market really is—or will become.
What is well-known is the fact that, like alcohol and tobacco, cannabis producers face strict prohibitions on how they can market and sell their products and services. As a result, the rapidly increasing number of companies in the Canadian cannabis sector have to rely on networking, public awareness opportunities and face-to-face events to interact with investors, suppliers, prescribers and consumers.
There is already a full calendar of national, regional and city events running nationwide. In addition, there is potential for cannabis producers to broaden their reach and awareness campaigns by becoming exhibitors and sponsors at non-cannabis sector events.
Canada’s in a leadership position
Two of the largest events in Canada are the Lift Expo Toronto and Lift Vancouver, both owned and produced by Lift & Co. Ltd.
Nicholas Pateras, vice-president of growth for the Toronto based company, says that the cannabis market grows 10 percent month-over-month, in contrast to pharma, where categories grow one-to-two percent every year.
He reports that the Lift Expos see an equal level of high growth. For example, the first Vancouver expo, held in September 2016, drew 7,000 attendees to the Vancouver Convention Centre (VCC). The second edition, which ran January 13-14, 2018 at the VCC, attracted 14,000 attendees and 130 exhibitors.
This month, the third edition of the Lift Cannabis Expo Toronto will be held May 25-29, 2018 at the Metro Toronto Convention Centre (MTCC). “It’s going to be huge,” says Pateras. “Our first year we had 8,000 attendees. In 2017, we grew that to 15,000 attendees—almost double. We benefited from the fact that we had much more promotion and a bigger team. We also are growing the size of the event in terms of the number of exhibitors, sponsors and the size of the show floor. This year the show floor is 50 percent bigger. We’re taking over the entire North Building.”
The show’s exhibitor numbers have grown by 55 percent, climbing from 160 in 2017 to 250 for 2018. While the bulk of exhibitors are Canadian, 10 percent come from the United States, Europe and Israel. “Canada is going to be the first G20 nation to legalize cannabis at the federal level,” says Pateras. “We are in a leadership position. Every other country, every other market, is looking at us as being the best-in-class example. The capital markets and investors are excited about that.”
He explains that Canada is the second country in the world to legalize the medical use of cannabis, behind Israel. “Thankfully, where they focused more on research, we focused on patients and commercializing product for export. Forget recreational [use], medical use has fantastic growth and that’s not even accounting for the fact that in the last 12 months a dozen European jurisdictions either launch or announce they are going to launch medical programs. Canada has the opportunity to export or move into these markets. The medical cannabis phenomenon is a global one. It’s fantastic. On the recreational side, it’s the same thing. We are the leaders in that too because we have such an established medical framework.”
One of the newer players in the market is London, ON-based Indiva Limited. Koby Smutylo, its chief operating officer and general counsel, says he attends two to five cannabis events a month, including the Lift Expos, where they are exhibitors. According to Smutylo, attendance at the expos is mandatory because “there are a lot of companies that have raised a lot of money and it’s so competitive.” However, he adds, that like the alcohol market, the cannabis market is “massive” and there’s room for lots of companies.
“The strategy for awareness is attending everything from job fairs to industry events. We’re attending a lot of health and wellness events to make a positive impression on medical professionals, pharmacists and others in the wellness industry,” says Smutylo. “In Toronto, we sponsored a wine and cheese event to engage the medical community and learn about their concerns, what they want to see and to let them know we’re a responsible provider of cannabis products.”
He adds that they are also “doing lots of smaller events.” For example, he says that there’s an orchestra evening the company might attend in some capacity, and they are looking at sponsorship opportunities related to arts events since research shows that “people who are a little bit artsy are more likely to engage in using cannabis.”
In addition to the Lift Expos, there are Hempfests in Saskatoon, Calgary, Edmonton and Winnipeg; cannabis meetings in Halifax and Vancouver; and soon to be a CannabisFest in Montreal. While tight regulations in Quebec
have kept other organizers out of the market, Montreal-based Philippe Telio, who produces the highly successful StartUpFest, as well as the World Elevator Tour and ResolveTO, is barreling into the cannabis expo sector.
“We’re StartUpFest, so we like to do things that are new, and obviously anything to do with alternative business is in our wheelhouse. Cannabis is supposed to be legal this summer, so the time is right,” he explains. “Two years ago, the winner of our $50,000 Best of the Fest prize was a company called Hello MD out of San Francisco. Since everybody is wondering what they should be investing in, what they should be building and what the opportunities are in the [cannabis] industry, Hello MD came to us and said, ‘It looks like Canada is primed to develop a lot of great things this summer, can we do something in a partnership?”
Telio sees CannabisFest as a natural tie-in for his company’s mission to be on the leading edge of new economy opportunities. “This is a burgeoning sector. StartUpFest is about entrepreneurship, so this is really an opportunity for tech entrepreneurs to figure out where the opportunities are [in the cannabis market].” He also sees opportunities existing beyond the growing and selling of cannabis. “We’re in talks with companies that are doing
some very interesting grow technologies, like new lights to help improve the growth and potency of products. I assume this is going to have a positive impact on agriculture as a whole. You have people trying to grow this highly lucrative product more efficiently, so why not use that same technology down the road to grow tomatoes? We’re going to create a bunch of new technologies that will help us grow all sorts of produce more efficiently.”
Just an event like any other event
This January The Fairmont Waterfront Hotel Vancouver hosted the Canaccord Genuity Wealth Management Second Annual Cannabis Investor Day. Canaccord is a boutique wealth management company with offices across Canada, Australia and United Kingdom. According to Hadley Sullivan, a senior communications manager with Fairmont, the event had 500 attendees ranging from investors to representatives from 28 presenting companies. “The event used all of our 24,000 square feet of function space and additionally used parlour guestrooms for one-on-one meetings.
Food and beverage consumption was heavy, but there were no unusual requests,” she reports.
While a number of Canadian properties have expressed a willingness to work with “any group operating within the law,” there has been resistance in other places were cannabis is legal. Colorado legalized cannabis for recreational adult-use in 2012 and created a billion-dollar industry employing 18,000 people. Still the sales director for an iconic resort in the state, which refuses to be named, quite emphatically says that they haven’t hosted any cannabis events “and we don’t want to go there.”
Craig Lehto, general manager of the Vancouver Convention Centre, says the VCC’s key takeaway from hosting the Lift Expo is the normalcy of the event. “Initially we had some concerns, but this trade show runs very much like other trade shows hosted at our venue. The Lift Expo is really about business and the cannabis part is almost irrelevant. The show targets industry professionals and not recreational users. There is nothing unusual to point out with event requirements. Security was similar to other trade shows held here. It had limited f&b, but what it did have [a bistro, lunch and dinner for the seminar attendees] were typical fare we offer.”
Christine Tse, director of marketing at the Metro Toronto Convention Centre, the venue for the Lift Expo Toronto, says that it sells out its exhibitor space and has all the signs of a successful, growing show.
Pateras, who was a brand manager at Johnson & Johnson before joining Lift & Co. 13 months ago, points out that Lift is a media and tech company. “We don’t grow, sell or distribute cannabis in any way. Our mission statement is: ‘To empower informed cannabis decisions.’,” he says. “Given the regulations and advertising restrictions in place on the producers, our role in the industry is to bridge the information gap between buyers and sellers.” The latter being handcuffed by very tight regulatory practices, and the former facing a vast choice of suppliers and products.
Cannabis [expo] exhibitors, he explains, include cultivators, who actually grow the plant; testing companies; air processing and extraction companies; and packaging suppliers. “Then you have the services, so everything from financial and legal services to creative and branding. Essentially it mimics everything you would see in alcohol or tobacco, where you have something that is created in a production-grade environment that has to go through all these steps and hurtles in the quality assurance processes to make its way into the hands of consumers. And then there are all the ancillary services that help and support it every step along that path.”
As for cannabis expos and conventions devolving into pot parties, Pateras explains that exhibitors are not permitted to sell or sample on the show floor, nor are attendees allowed to consume cannabis on site. However, since you can’t follow people into washrooms, the Lift expos do have a large contingent of emergency responders and security. None have been needed.
What they have permitted is the medical use of cannabis. “We had a Vape lounge on-site at the MTCC for the last two years,” he says. “That is a lounge where only legal medical patients can consume their cannabis in vapourizable form, and it comes with a whole slew of restrictions. We obviously have to validate that the person is a medical consumer or patient, and they have to sign a liability waiver.”
This raises the question of whether medical use of cannabis will receive the same level of legal recognition as regulations stipulating accessibility for the handicapped and accommodations for service dogs. The answer may come down to provincial regulations versus a national policy or standard.
As for recreational adult users, Pateras says that their expo attendees span the spectrum. “We have people who fulfill the cannabis stereotype of stoner potheads with tie-dye shirts and ponytails, but they are a minority. Really, you’re looking at the everyday consumer. We have young professionals, who are established in their careers in law or banking. We’ve got parents showing up. We’ve got people in their 70s and 80s who may have had a relationship with pot many years ago and are now curious about cannabis either as a medicine or looking to learn more about the recreational effects. Think how many people consume alcohol for different reasons. That’s analogous to this industry.”
This article was originally published in Meetings + Incentive Travel Magazine