When Miguel Martin first visited Bevo Agtech Inc.'s Langley, B.C., greenhouse, he saw potential bursting from every corner. Hundreds of trays of tomato seedlings stretched away under the glow of LED lights. Baskets of blossoming flowers hung from the rafters. And the company was convinced it already had its next big product line: orchids.
Martin is CEO of Aurora Cannabis Inc. and may have seemed like an unlikely buyer for Bevo, an agriculture stalwart still run by the Dutch family that founded it in 1986. But it was a good match: the Edmonton-based pot giant already had the hulking, temperature-controlled greenhouses Bevo needed to expand, while for Aurora, Bevo's stability would provide some reprieve from the volatile weed industry. "It's a company that makes money. It's a company that's growing," Martin said in a September interview, a year after Aurora bought a 50.1 percent stake in Bevo for $45 million.
"It's a company that's not broken. It doesn't need us to do everything for them." In the cannabis world, where facility closures, layoffs, and multimillion-dollar writedowns have become the norm, "growing" and "not broken" are crucial elements for survival. Over the five years since cannabis was legalized in Canada, pot companies have been constrained by the strength of the illicit market, packaging and tax rules they see as too restrictive, and U.S. regulators that have been slow to make national changes.
As the industry continues its slow crawl toward profitability, many are now heavily focusing on other parts of their companies to protect themselves from further upheaval. For example, Village Farms International Inc., the Vancouver-based owner of cannabis companies Pure Sunfarms, Leli Holland, and ROSE LifeScience has a subsidiary growing tomatoes, cucumbers, and peppers. SNDL Inc., the Calgary-based firm behind the pot shops Value Buds, Spiritleaf, and Superette, owns hundreds of liquor stores across Western Canada. "A lot of cannabis companies have evolved and are different than maybe what they were before," said Martin.
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