Leamington marijuana producer Aphria is boosting production and building a $55-million extraction centre that will enable the company to better serve a rapidly expanding market for marijuana edibles and alternative products like patches, dissolving strips, sprays and infused beverages.
Construction is expected to begin immediately on a “state-of-the-art” facility that will create jobs for about 50 new workers, most of them skilled. The facility will house two Class 1 extraction rooms capable of processing more than 200,000 kilograms of cannabis annually. The first concentrates are expected to be released by March of next year.
The centre will enable the company to conduct advanced research and a wide-range of cannabis extractions, including butane, ethanol and C02, to produce “world class cannabis concentrates” including fractionated distillates — a substance Aphria chief financial officer Carl Merton called “the foundation” of myriad products currently on the market, as well as products yet to be imagined.
“That fractionated distillate can be converted into hundreds of other products — powders, creams, patches, infused beverages, edibles. It represents the foundation and cornerstone of everything else that is to come,” said Merton. “This lets us get ready for the next wave of things and the wave after that no one even knows about yet.”
Aphria announced two other moves Wednesday that will increase its annual cannabis production by 30,000 kg to 255,000 kg.
Aphria is spending $20 million to support “alternative growing techniques” at its Diamond facility, which is expected to increase capacity by 20,000 kg, bringing the yearly haul there to 140,000 kg. As well, Aphria announced a $10-million expansion of greenhouses on property acquired in 2017 that is expected to boost cannabis production by an additional 10,000 kg.
This $85 million expansion plan is being funded through a $225 million agreement announced Wednesday with Clarus Securities Inc., which has agreed, on behalf of a group of underwriters, to purchase on a “bought deal basis” nearly 19 million common shares at $11.85 per share. Aphria shares finished trading Wednesday at $12.79, up 63 cents or 5.18 per cent.
The remaining money from the Clarus deal will be used to further Aphria’s global expansion plan and the domestic plan to expand the workforce in Essex County, said Merton.
Leamington Mayor John Paterson called it an “exciting” day for the town. He said Aphria was well on its way to becoming the town’s largest employer.
“The opportunities for those in the science fields and medical fields have been lit on fire right here in Leamington,” said Paterson. “We’re expanding our horizons in Leamington so that when our youth go away to school they’ve got something to come home to.”
Aphria currently has about 260 employees at its main campus and anticipates that number will grow to about 400 by Christmas. The company is expecting an additional 300 workers will be required for the expansion of the Aphria Diamond facility. With the 50 extraction centre workers coupled with employees in Toronto and B.C., Aphria expects it will employ more than 800 people by next year.
The new extraction centre will take Aphria to the next level and enable it produce the raw material required to make all manner of cannabis-infused products, from chocolate bars to rapid dissolve strips to tablets and eventually beverages, said company CEO Vic Neufeld.
“We need to move it to a higher level,” Neufeld said Wednesday from the Atlanta Airport before boarding a plane to Colombia, where Aphria is the supplier of medical marijuana.
“Let’s do everything on our beautiful campus in Leamington, Ontario.”