At least 77 Canadian millionaires thanks to the cannabis

Annabelle Blais and
Jean-François Cloutier

Saturday, 3 march, 2018 01:00

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Saturday, 3 march, 2018 01:00

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The cannabis recreation is not yet legalized, but many Canadians take the opportunity to make a fortune. At least 77 of them have accumulated millions of dollars in just a few months thanks to their investment in the industry, show data compiled by our Office of investigation.

“I knew that the pot was a good investment, but no one in the middle was never thought that it would bring in so much so quickly “, said Chuck Rifici, boss of the investment fund Cannabis Wheaton and former chief financial officer of the liberal Party of Canada (LPC).

43 year old, who is described as the “godfather of pot” in Canada is sitting on a personal fortune that he considers himself “more than 100 million,” including$ 47.7 Million in shares of producers of pot, according to public financial documents.

He has a Ferrari 458 red and a Tesla S.

It all started with an initial investment of $ 70 in shares in the company Tweed, a pot grower (now Canopy Growth). “I thought I was rich when I made my first $ 500,000 in it,” laughs the businessman of Ottawa.

Mr. Rifici said today to continue to work just ” for fun “. “It is a lot less stressful “.

Big risks

On the other side of the Ottawa river, in Gatineau, Sebastien St-Louis, 34 years old, has a fortune of $ 15.4 million. His company, founded in 2013, Hydropothecary, is estimated at 660 million $ $ $ in the Stock market.

The path to get there was not easy. “I passed two fingers of bankruptcy at least four times. My credit card was used at a maximum of $ 30,000 “.

Stories like that of Rifici and St. Louis, become millionaires before even a single gram of pot as a recreational is sold legally, can be counted by dozens in the industry.

List of Canadian millionaires of the pot allows making the following observations :

• The vast majority, or 58% of them (45 of 77), is from Ontario.

• Only 4 come in Quebec (5 %).

• Out of the 77 millionaires, there are only three women.

• The wealth is extremely concentrated

Speculative bubble ?

The stock market value of companies for pot has exploded in the last year at the option of the announcements of the Trudeau government on the legalization to come in 2018.

The new Brunswickers Denis Arsenault has acquired in 2014, a producer of medical cannabis for $ 1.7 million. Its acquisition, the company Organigram, is now worth half a billion $. “It was like going to the casino when I invested in it, at the beginning,” he laughs.

Even if the Canadians are still divided on the question of the legalisation of cannabis and that the banks are very reluctant to invest in this industry, the investors, themselves, are knocking now at the doors to the point that there is a fear of a speculative bubble.

According to several experts, the current frenzy is akin to the bubble in technology stocks in the late 1990s, because they are extremely volatile.

“There are companies that are not in the cannabis, who only say that they are interested in the industry and boom, their shares tripled “, stresses the analyst portfolio management Ken Lester, president of Lester Asset Management.

– With the collaboration of Marie-Christine Trottier and Andrea Valeria

They roll around on the gold thanks to their investment in the pot

The godfather of pot

Photo By Annabelle Blais

Chuck Rifici has inherited the nickname of the “godfather” of the industry of the pot. And for good reason, this Franco-Ontarian 43-year-old estimates his fortune at more than $ 100 million (of which at least$ 47.7 Million in shares of producers of pot, according to public financial documents).

It has two characteristics that are common to many millionaires in this industry : he is a contractor and he has political connections, particularly with the liberal Party of Canada (LPC).

Mr. Rifici has co-founded in 2013 Tweed, and now Canopy Growth, the largest company of pot in canada.

Since 2017, it is the CEO of Cannabis Wheaton, an investment firm in the business of pot, which the producers or manufacturers of accessories. Wheaton has a dozen partnerships, a huge spider’s web.

Two ex PLC

In parallel, the business man has also been chief financial officer of PLC from 2011 to 2016.

“To be treasurer of the PLC, it gives you credibility when you meet the investors for the pot,” he says. The vice-president of external affairs of Wheaton, Sarah Bain, has also been vice-president of communications of the PLC from 2010 to 2013.

Mr. Rifici is believed that the controversy aroused by this situation helped him to talk about his business. “All press is good press,” he said.

But this has contributed to exacerbate tensions between him and his partner Bruce Linton and Mr. Rifici has left Tweed in 2014 (see another text).

It is now investing mainly on the accessories such as vapoteuses. “I believe that the future of this industry will be in these value-added products,” he said. It is important to have a network of distribution and production, but in a Starbucks, this is not the coffee bean which pays the most, ” he said.

The socialist-jaguar

Photo Pierre-Paul Poulin

Wearing a three-piece suit and cell phone in hand, Bruce Linton, CEO of Canopy Growth, is the very image of the man of affairs to success.

“Because I sell cannabis, people still expect to see a guy in faded T-shirt “, he joked.

Mr. Linton is now at the head of one of the largest producers of cannabis in Canada. It was first founded Tweed in 2013 (integrated then to Canopy Growth) with Chuck Rifici, former chief financial officer of the liberal Party of Canada.

When asked why there are so many of the liberals in the industry, he replies : “I don’t know why there are a lot of liberals in the industry. Me, I’m not. You know what I am ? I am a socialist who likes to ride in a Jaguar. “

And he has the means to pay for luxury cars. On paper, the fortune of Mr. Linton is valued at more than$67 Million.

Drink the pot

In five years, Canopy Growth has acquired 13 sites of production of cannabis in eight canadian provinces, two of which are in Quebec. The company has also developed partnerships to export or grow with Australia, Brazil, Germany, Jamaica, Denmark and Chile.

Bruce Linton does not want to stop there. He has a vision well-defined for the future : sell a beverage in the cannabis. Canopy has concluded this autumn an agreement with the company’s Constellation, which markets the beer Corona.

Linton is already to follow in the footsteps of distiller Seagram, the Bronfman family, who made a fortune with the alcohol at the end of the prohibition.

“I want to provide a format that is similar to a bottle of wine, with rates of 12-13 %, which produces effects after 7 minutes, he explains. It is socially accepted to be under the influence. “

Not yet millionaires, but almost

Photo Martin Alarie

The Quebec Philippe Depault is not yet a millionaire in the pot, but it is on the point of achieving it.

The contractor of 26 years (left) and his partner, Alexandre Lalancette, 23 years old (right) come to sell their company accessories of cannabis, Maïtri, for 550 000 $ in addition to a amount of up to$ 1.2 Million which will be paid to the performance.

Rather surprising when it is known that Maïtri made its first sale in July 2017 only.

M. Depault was a cyclist with the canadian team, who dreamt of the olympic Games until the fibromyalgia disrupts his life, in 2013.

No medicine could relieve, except the cannabis. It is then given as a mission to fight the stigma of consumers.

Soon most of Quebec ?

The student in chemical engineering started by blog in the summer of 2016. And then march 2017, he associated himself with Mr. Lalancette to create accessories of cannabis use in the neat design with materials of quebec.

“Marijuana is still associated to the stoners,” he says. But in my circle, almost everyone uses cannabis, either once per day or once per year. These are engineers, doctors, lawyers. “It is to this customer that he wanted to speak to. An investor has injected $ 30,000 to $ 100,000, says Mr. Depault. And in July, the company was about to open a round of funding when Hiku, who has the pot grower DOJA, has made an offer to purchase. The agreement was reached in February.

M. Depault hope to see more Quebecers in the industry. “You start to feel the wave. “

A quebecer who sees big

Photo By Annabelle Blais

When Sébastien St-Louis was younger, his idol was not a hockey player, but Alain Bouchard, the founder of Couche-Tard.

“It is the largest company in terms of sales in Canada and he [Bouchard] has started with one store in Quebec. I recognize myself a lot in this story, ” he says.

The young father of family 34-year-old describes himself as an entrepreneur who has succeeded in grasping the business opportunity represented by the medical cannabis, in 2013.

His firm, Hydropothecary, located in Gatineau, is the first producer of pot authorized in Quebec. Recently, the company has won a agreement to supply 22 000 kg to the quebec Society of cannabis, the subsidiary of the SAQ, who will commercialize the substance.

With a market capitalization of 660 000 million, respectively, for Hydropothecary, Sebastien St-Louis is sitting on a fortune of more than $15.4 million.

But this son of parents teachers has not so much changed his style of life, if it is not that he has to travel more.

“I rode in a Grand Am for 12 years. I changed to Acura 2012, he said. A Ferrari, that’s not my style. “

Thanks to the family

It must be said that the journey of the producer has been fraught with difficulty and that bankruptcy has been avoided more than once.

At age 16, he already had his own company, 3D simulation, and he was investing in real estate. With his master’s degree in finance from the University of Quebec in Montreal, he later worked at the business development Bank of Canada.

In June 2013, at the age of 29, his friend Maxime Cyr, who worked for Health Canada, has announced that the federal government would allow private producers to sell medical cannabis. Sebastien St-Louis had never seen a plant pot, but it’s ability to see the potential.

He embarked on the project to his brother-in-law Adam Miron, a passion for policy, who was involved in the liberal Party of Canada until 2009.

Unable to get financing from banks, the two men have appealed to friends and family for a first round of private financing, in 2013. “Shots of 10 000 $, we were able to put $ 1.5 million,” he said. His parents have even mortgaged their home to invest $100,000.

“If it doesn’t work, I was bankrupt and I was losing my house, but there was a couch of friends on which I would have been able to go to sleep because I would have lost money on all of those that I knew “, ” he says.

The light appeared at the end of the tunnel when Health Canada has authorized the company to sell medical pot in 2015.

Big names in the CA

In 2016, he approached the large quebec families in search of partners. Vincent Chiara, a montreal businessman close to the family Saputo, has agreed to invest several million into the adventure. He currently sits on the board and his fortune in the company is valued at $25.5 million.

Sebastien St-Louis is also very proud to say that Nathalie Bourque, who sits on the board of Couche-Tard, has joined the board of Hydropothecary since the fall. The convenience store chain has already announced that it wanted to be able to sell the marijuana.

The boss of Hydropothecary believes that in the near future, there will be only two or three companies that will be the multinationals of cannabis. “I intend to be a leader from our platform in Quebec,” he says.

Music and pot for The Tragically Hip

Photo courtesy David Bastedo

Music and marijuana have always been closely linked. Newstrike has understood. Since soon a year, the company which markets the brand Up Cannabis, a pot grower in Ontario, has developed a partnership with The Tragically Hip.

The canadian rock group is a shareholder of the company and is involved in the important decisions concerning marketing.

Their managers, Bernie Breen, Patrick Sambrook, are also sitting on the advisory board of the company. Up Cannabis, for example, may use the songs in the group to make the promotion of its products or to name its varieties of pot.

He is worth$20.9 Million

“We approached them because they can help us to create a brand image and they represent Canada well,” says Jay Wilgar, the CEO of Newstrike.

The latter has made a fortune with a start-up of wind energy, which he founded in the early 2000s and that it has sold to the French multinational GDF Suez in 2010.

In 2013, he launched the cannabis investing 1.5 million, with a partner. Mr. Wilgar is worth today approximately$ 20.9 Million. The fortune of the Hips in the company of at least$2.2 Million

“We do not expect to see a growth if rapid and significant over the past year, it’s unbelievable,” he said.

The policy Up in Cannabis is to apply to mr. madame Tout-le-Monde, the image of the Hips. The company will focus on the recreational and has no patient medical.

More cost-effective than cucumbers

Photo courtesy Aphria

John Cervini, the cultivation of cannabis was a natural extension to his career as a vegetable farmer, Ontario.

“I am the fourth generation of growers. For 23 years, I have managed the family business with my brother, ” he said. The company was experiencing good growth, but John has preferred to leave, because the two brothers had different visions.

His friend Cole Cacciavillani, an industrial engineer in agriculture, he then spoke of cannabis, in August 2013. The company, Aphria, is part of the six producers who have signed an agreement to supply the Quebec cannabis through the subsidiary of the SAQ.

“As a farmer, we knew we had a good basis for the marijuana, said Mr. Cervini. It is our specialty to grow plants, one has the experience in logistics and supply on a large scale “, he says.

He seems to have won his bet. The title of the most powerful on the Toronto stock Exchange in 2017, has been one of Aphria, which has increased by 271 %. The fortune of the two founders today amounts to more than $200 million.