The marijuana industry’s first $1 billion ‘unicorn’ is a Canadian company you’ve probably never heard of

Bruce Linton, founder and CEO of Canopy
Growth.
Canopy Growth
Corp.

In a once-abandoned Hershey chocolate factory in the small town
of Smiths Falls, Ontario, the largest legal marijuana producer in
the world grows, trims, processes, packages, and ships weed
across the Great White North.

Canopy Growth is a cannabis holding company that
supplies the drug to nearly half of Canada’s current medical
marijuana patient base, following its acquisition of rival
producer Mettrum in January. Unless you’re one
of those 40,000 users who lights up with Canopy’s bud, you’ve
probably never heard of the company.

In the fall of 2016, Canopy, which trades on the Toronto Stock
Exchange under the ticker “WEED,” became the first company in the
marijuana industry to achieve elusive “unicorn”
status. The manufacturing giant blew past
a $2 billion valuation on November 16, one week after eight
US states passed ballot initiatives legalizing marijuana in some
form. 

(Its valuation, along with other publicly traded marijuana
companies that saw their market cap grow after the US
election, has since settled to $943
million, as of February 1.)

The manufacturer’s colossal growth stems from a belief
that as more countries legalize marijuana on a federal level,
companies like Canopy will be able to branch out into
international markets. Canopy already exports marijuana products
to Germany and Brazil.

Canopy wants to become the Proctor & Gamble of pot. Several
brands fall under its umbrella and cater to different user
preferences. There’s Tweed,
a medical marijuana producer with slick and youthful
branding that could be mistaken for a designer jean company.
The Quebec-based Vert
Medical allows Canopy to tap into the French-speaking market,
while Bedrocan Canada has
a distinct clinical feel that is likely to gain favor among
strictly medicinal users.

Canopy Growth operates out of an abandoned factory at 1
Hersey Drive.
Canopy Growth
Corp.

Every day, Bruce Linton, founder and CEO of Canopy, passes
a police station as he pulls into the parking lot of the
472,000-square-foot former chocolate factory where his company
grows pot. It’s a stark reminder that his success
couldn’t happen were he based in the US.

Since 2000, Canadians have enjoyed the ability to possess and
grow small amounts of weed for medical use. In 2014, the
government began licensing companies like Canopy to produce mass
amounts of marijuana for patients suffering from serious
diseases.

The industry raked in $869 million in legal sales in
2016, and
is expected to reach $22.6 billion when Prime Minister
Justin Trudeau opens up the recreational market this
spring.

Tweed is a top Canadian producer of medical
marijuana.
Canopy Growth
Corp.

The legal framework around marijuana in Canada makes
Canopy’s growth possible, Linton tells Business
Insider.

“It’s really about the public policy. That doesn’t sound
sexy or exciting. But if you don’t have the right public policy,
you don’t have the right business opportunity,” Linton
says.

Linton is a renaissance man, with over 10 years executive
experience working in software, telecommunications, water
sanitation, and concrete manufacturing. When I asked why he made
the leap into the volatile cannabis industry, I half-expected him
to wax poetic on the magical healing powers of the plant.

He had a more pragmatic answer.

Linton wanted to create a vertically integrated company —
one that grows marijuana in addition to processing it for oils,
gel capsules, and other products, and packaging it for
shipment — because it would give him better control over
quality and bring down costs.

A Canopy Growth employee stands in the halo of the
marijuana grow room.
Canopy Growth
Corp.

Plus, the industry has no organized competition yet, Linton said.
With marijuana regulation in the US trailing Canada’s more mature
program, he saw an opportunity to get a head start in the
increasingly global industry. He eyes the recreational market
with optimism.

The company’s fiscal year ends in March, and Linton expects it to
post $12 million in revenue, up from $2 million between 2015 and
2016. Canopy’s recent acquisition of Mettrum for $430 million

brings its
production capacity up to six licensed facilities and 665,000
square feet.

Patients shouldn’t expect to find stoner iconography on
Canopy’s website and in its facilities. The
company aims to elevate the drug to higher standards.

“We didn’t try to pursue the lowest common denominator
concept of, ”Let’s assume everybody’s stoned and not paying
attention.’ We took the approach of, ‘Let’s assume everybody’s
paying attention and maybe marijuana is something they’re
interested in,'” Linton says.