Tourism, Culture, Industry and Innovation
November 2, 2018
New Cannabis Production Facility to Create Jobs in Western Newfoundland
To further position Newfoundland and Labrador as a leader in Canada’s cannabis industry and create new jobs, the Provincial Government has reached a production and supply agreement with Biome Grow Inc. and its local entity Back Home Medical Cannabis Corporation. This performance-based agreement will help create a minimum of 120 new production jobs, bring economic spin-offs to the Bay St. George area and more than $15 million in revenue to the province over five years.
A new production facility will be built in Barachois Brook in phases. Biome Grow is committed to produce local cannabis by the second half of 2019, and to operate its production facility for a minimum of 20 years. There is approximately $6.5 million in annual salaries related to the project.
A new supply agreement will guarantee up to 24,000 kg of cannabis for the province over a three year period with an option to renew. As a result of this and the original cannabis production and supply agreement with Canopy, the province will now have a guaranteed cannabis supply for a minimum of 40,000 kg over the next three years.
Biome Grow will receive access to five retail licenses The company expects to create an additional 80 jobs associated with its retail stores.
The company will also invest $500,000 over five years for research and development.
The Provincial Government is in discussion with other potential producers, including local firms, who are pursuing cannabis production and processing.Quotes
“Our government is working successfully to attract new investment and new industries to Newfoundland and Labrador. We have been able to create new jobs and new revenue through performance-based agreements. Our partnership with Biome Grow is a continuation of our plan to build a new industry in this province, including in rural Newfoundland and Labrador. As a result of our actions, the province is becoming a leader in Canada's cannabis industry, with at least 260 new production jobs and a further 220 plus retail jobs associated with the two cannabis agreements reached to date.”
Honourable Christopher Mitchelmore
Minister of Tourism, Culture, Industry and Innovation
“As a long-time local business owner, I am proud to enter into an agreement with our Provincial Government that will create sustainable jobs, boost our economy, and enable the potential for national and international export of Newfoundland and Labrador cannabis products. I congratulate the Government of Newfoundland and Labrador on working with local businesses and private partners, such as Back Home and Biome, to grow a new industry right here on the west coast of Newfoundland.”
Dave Callahan, President
Back Home Medical Cannabis Co.
“Biome Grow has focused its business investment strategy primarily on Atlantic Canada because we believe in creating local ecosystems, or biomes, that offer employment, business, and research and development opportunities. We believe this agreement with the Government of Newfoundland and Labrador is the largest agreement across the Atlantic region to date and it demonstrates our commitment to investing significantly in the provinces and communities where we operate.”
Khurram Malik, CEO
“This is welcomed news for the district of St. George's - Humber. This new agreement with Biome Grow Inc. will bring a minimum of 120 production positions, plus, and additional 80 retail positions to Barachois Brook and surrounding area. It not only means a rise in job creation for rural Newfoundlanders and Labradorians, but continued growth for Western Newfoundland, with a plan to operate the production facility for a minimum of 20 years.”
MHA St. George's – Humber
“I am thrilled to see that this new production facility will be built in Barachois Brook. With the creation of 200 new jobs between production and retail positions, this agreement with Biome Grow Inc. will bring approximately $6.5 million in annual salaries in relation to the project. This is yet another testament to our government’s commitment to work with industry and attract new investment and economic opportunity to the Bay St. George region.”
MHA Stephenville - Port au Port
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Tourism, Culture, Industry and Innovation
Government Members Office
Terms of Agreement with Biome Grow Inc.
- A minimum of 120 production positions will be created as a result of the agreement with Biome.
- The average salary for jobs related to the production facility is $54,000.
- A new production facility in Barachois Brook will be built in phases – an initial 18,000 square foot facility, followed by an expansion of 150,000 square feet.
- Biome Grow is committed to produce local cannabis by the second half of 2019, and to operate its production facility for a minimum of 20 years.
- For every gram of cannabis sold in Newfoundland and Labrador, the NLC collects a commission on the sale. Following the framework used with the original cannabis agreement with Canopy, in exchange for new jobs and the construction of a new production facility in the province, Biome Grow will be permitted to retain a minority portion of this commission on their sales in the province, for a period of five years up to a maximum of $52 million.
- No upfront grant, loan or upfront investment by the Provincial Government.
- Even with reduced remittances, the NLC will be the principal beneficiary of cannabis sales and will receive anywhere from twice as much to six times as much as Biome on cannabis sales.
- The company will pay corporate income tax and government will receive additional tax associated with labour, which is estimated to exceed $15 million over the five year term.
- Biome Grow will receive access to five retail licenses as well as the same premium percentages as provided in original cannabis agreement by government (a 10 per cent reduction in remittances paid to the NLC on the product sold in its retail stores, a five per cent reduction for online sales and a three per cent reduction for product sold in other retail stores) for a period of five years, after which time the reduction in remittances will end.
- The company expects to create 80 jobs associated with its retail stores.
- No obligation for the Provincial Government to purchase cannabis; however, guaranteed supply available.
- Biome Grow will guarantee a supply of up to 4,000 kg in the first year of a three year contract, with 10,000 kg annually in the next two years.
- An option to renew.
2018 11 02 10:20 a.m.