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This article was published 30/10/2017 (1058 days ago), so information in it may no longer be current.

Delta 9 Bio-Tech, one of only two Manitoba firms licensed by the federal government to produce cannabis for medical users, could make its debut on the TSX Venture Exchange as soon as today. The listing has received conditional approval from the exchange, said Delta 9 co-founder John Arbuthnot, who is confident his firm will be listed by the end of the week.

Twenty-seven-year-old Arbuthnot, who co-founded Delta 9 Bio-Tech with his father Bill Arbuthnot, will become CEO of the publicly-traded company, which will be renamed Delta 9 Cannabis. Bill Arbuthnot will be president and chairman of the board.

Delta 9 will issue eight million new shares at $0.65 per share to raise as much as $5.2 million, and is seeking more capital to finance future expansion plans.

"Ultimately our goal is to raise between 25 and 30 million dollars in additional capital, through a mix of debt and equity, over the next number of months," John Arbuthnot said on Monday.

"And all of that will be deployed over the next few years in our Winnipeg-based production, distribution, and hopefully ultimately retail operation."

Arbuthnot said he and his father will be the controlling shareholders of the publicly-traded firm, holding between 55 and 60 per cent of the shares. The deal is being underwritten by investment bank Canaccord Genuity.

Currently, 68 companies are licensed by Health Canada to produce cannabis for medical users. Delta 9 was among the first crop of companies to receive a production licence from Health Canada, in 2014.

The company employs about 55 people, primarily at its production facility in Winnipeg.

More than 2,000 clients are registered to purchase mail-order cannabis from Delta 9, Arbuthnot said.

As of June 30, there were 201,398 medical cannabis clients registered with Health Canada, including 3,598 in Manitoba. Some clients are registered to purchase from more than one licensed producer, and registered clients may sign up with any licensed producer in any province.

Registering with Health Canada and signing up to purchase cannabis from licensed producers requires a recipient to get a medical document from a physician.

In cities across Canada, a number of specialized medical clinics have sprouted up to connect potential medical cannabis users with physicians who may be willing to recommend cannabis. Delta 9 has launched its own such clinic in Winnipeg, the Delta 9 Lifestyle Cannabis Clinic at 478 River Ave.

Delta 9’s production licence from Health Canada allows it to devote up to 80,000 square feet of space to growing cannabis, said Arbuthnot. Right now, the company is using roughly 14,000 square feet, leaving plenty of room to grow before additional licensing is required.

Delta 9 cultivates its pungent crop in 28 specially-modified shipping containers inside its Winnipeg facility. The expected influx of capital from the public offering will allow Delta 9 to add between 40 and 60 new shipping container grow rooms, Arbuthnot said.

"What comes with that expansion is more jobs being created in the community here in Manitoba, increased production capacity allowing us to continue to bring on more and more registered patients both here in Manitoba and outside, and hopefully also the first steps in really positioning ourselves towards taking a hard look at the recreational market for next year."

Federal legalization of cannabis for recreational use is expected by July 1, 2018. Under the federal government’s proposed Cannabis Act, which is not yet law, only licensed producers such as Delta 9 will be able to supply cannabis to the legal market.

By 2020, Arbuthnot said, Delta 9 plans to use its new capital to increase production drastically — from about 1,000 kilograms a year to 17,000 kilos a year.

Like other players in Canada’s legal cannabis industry, Delta 9 is not yet profitable.

"I think most investors who are looking in the space right now are looking past the short-term financial performance towards some other metrics that are very important for the space," Arbuthnot said, citing his company’s as-yet-unused licensed production capacity as a potential selling point.

"We would encourage investors to look forward at things like capacity, as well as to look at some of the other points of our operations, including that we are one of Health Canada’s oldest licensed producers," he said. "And with that comes several years, now, of actual cultivation, processing, distribution, and sale experience."

After being listed on the TSX Venture Exchange, Delta 9 Cannabis will trade under the stock symbol "NINE".

solomon.israel@freepress.mb.ca @sol_israel