(This is the first in a series on government funding that is available to Canadian cannabis businesses.)
The growing number of cannabis companies in Canada is using government funding sources to fund research and other projects as private capital is becoming more difficult.
Mjbizdaily has found that over $3 million in federal funds worth Canadian dollars ($2.2 million) have been provided to almost 20 companies over the past year, according to the government grant and contribution portal .
Since 2018, when Canada legalized recreational marijuana, the business support program has provided approximately $32.8 million worth of funding to dozens of cannabis businesses.
In this analysis, MjBizdaily only included funds sent to commercial companies.
The funds do not include government money allocated to pandemic-related programs.
Over the past five years, federal donations range from CA $7,380 to Ricci Cannabis, commercializing “wine-style” non-alcoholic cannabis drinks. Through the government's local economic growth and through innovation programs.
Most of the funding was for research-related activities, but some were used to expand business in general.
For example, in 2020, the federal economic development agency, Western economy diversification Canada, awarded $2.9 million by now-decommissioned Tantalus Labs to expand its greenhouses to expand its production of cannabis. did.
That funding was secured through regional economic growth through innovation programs.
Executives told Mjbizdaily that government funding is essential to implement targeted research and development projects, but should not be expected to fund daily business costs in general.
“If we didn't have grants, we wouldn't be as long as we were there now… we're struggling,” Usukuma Ekuere, co-founder and CEO of Canna Stream Solutions, phone interview I spoke to Mjbizdaily.
Canna Stream Solutions has received a total of nearly $500,000 subsidies since 2021.
Alberta businesses, formed in the middle of the Covid-19 pandemic in 2020, are seeking “upcycled” marijuana waste. That is, it converts cannabis that are planned to be destroyed into something more useful.
Ekuere said youth employment subsidies helped build the company's research capabilities.
The Industrial Research Assistance Program (IRAP), a federal innovation support program for small and medium-sized businesses, supported employment researchers at Kannastream.
“As a young company, we couldn't afford to just hire people,” Equere said.
Funded by the National Research Council
The nation's leading research institute, the National Research Council (NRC), helps small and medium-sized enterprises to enhance innovation capabilities and bring concepts to the market.
An NRC spokesperson told Mjbizdaily in an email that if the cannabis company has an appropriate Canadian issued license, it could be eligible for IRAP funding.
The number of cannabis-related projects and approved IRAP funds has steadily increased in recent years.
In the fiscal year ended March 2023, 42 cannabis-related projects received a total of $4.3 million in donations, up from 17 projects the previous year to $1.5 million.
Since 2018, 107 projects have received approximately $11.1 million in donations from the NRC.
One of the companies that contributed is Aqualitas, a licensed cannabis producer based in Nova Scotia.
So far, Aqualitas has been approved for two NRC programs, a youth employment contribution of CA $30,000, and R&D contributions by IRAP at CA $173,000.
Co-founder and CEO Myrna Gillis said Aqualitas also benefited from the state's incubator known as Invest Nova Scotia, previously known as Innova Corp.
Gillis said with a grant of about $5,000 from Novacorp at the time, Aquaritas produced professional pitch videos and helped them acquire them in front of Arcview Capital, which promotes capital for small businesses. Ta.
“That small investment made us differentiate ourselves from our competitors and took us to the audience we would otherwise not have,” she said.
“The amount was very modest, but it proved to be useful for us.”
Gillis said Aquaritas wants to commercialize the production of aquaponic, cannabis-specific phytonutrition, which the company already uses in its production.
Her advice to other small businesses is to keep state and federal programs up to date.
“Whatever you do, make sure you have an innovative idea,” Gillis said.
Gillis recommends that companies “before” themselves “before” themselves, so they “have a lot to attach square pegs to round holes if they don't meet the criteria.” You don't spend time, you should have good success.
“It helps a little,” she said.
Other programs
Tanner Stewart, co-founder and CEO of licensed producer Stewart Farm in New Brunswick, said one of the most useful programs for cannabis companies is scientific research and experimental development (SR&ED) tax incentives .
SR&ED is a federal program aimed at encouraging businesses to carry out research and development.
“The thing about SR&ED is that we will not regain that from the end of the fiscal year when funds were spent on research in the previous fiscal year,” Stewart said.
“It all comes down to the strength of your paper and ensures you're studying something new – something that's not there yet.”
He said his company has received about $700,000 over the last three fiscal years.
Useful local programs are secondary education, training, labor programs, or PETL.
For cannabis companies seeking government funding, Stewart said:
“And he continued,” he continued. I understand that these government programs are there and that they are designed to support businesses. Those who manage these programs are paid to give that money to the right companies.
“So, chase it down. It's all about supporting a promising company.”
You can access Matt Lamers at Matt.lamers@mjbizdaily.com.
