New Brunswick invests in cannabis industry, which could be worth billions once legalised, with hopes to revive its declining economy and aging population

The thick scent of marijuana hangs heavy in the small room where rows of green plants are neatly arranged on shelves.

For the medical marijuana company OrganiGram, this is simply the latest round of production. But for New Brunswick, the small east coast Canadian province where this facility is based, the plants are part of a bigger gamble – one that aims to transform Canada’s looming plans to fully legalise marijuana by July 2018 into an economic boon capable of solving the problems of chronic unemployment and a rapidly ageing population.

“We see here an industry that we think has extreme growth potential,” Brian Gallant, the Liberal premier of New Brunswick, told the Guardian.

His province has embraced the country’s nascent marijuana industry like no other, betting heavily on its potential to shake up an economy long dominated by fishing and forestry. “We’re very optimistic that we’ll see significant investments and significant jobs created in the province because of it.”

Some 100,000 Canadians currently use medical marijuana – and the number is growing by 10% each month, according to the Canadian National Medical Marijuana Association.

This growth, along with promises from the federal Liberal government, led by Justin Trudeau, to make Canada the first G7 country to fully legalise marijuana, have led analysts to estimate Canada’s cannabis industry could eventually be worth somewhere between C$5bn and C$7bn annually.

The industry’s potential growth spurt comes just as New Brunswick stares down a fast-approaching perfect storm of an ageing demographic and economic decline. “We’re desperate for growth,” said Moncton-based economist Richard Saillant.

In some ways New Brunswick has more in common with countries, such as Greece or Portugal, than with other regions of Canada, said Saillant. “We share the same characteristics as those countries to the extent that they’re slow-growing peripheral economies that are fast aging and that are facing major financial stress.”

Home to some 750,000 people, the province is the only one in Canada with a shrinking population, as deaths outnumber births and younger residents head west for jobs. In their wake they leave an unemployment rate that hovers around 10% – one of the highest in Canada.

One in five residents in New Brunswick is currently aged 65 years or over, said Saillant, compared to about one in eight in western Canada. Within two decades, the number is expected to balloon to one in three, posing a significant challenge for the province’s healthcare system.

The demographics may help explain why a province with conservative tendencies has become so open to the marijuana industry. “I think it’s just the attitude that we have to have – as a smaller province with some challenges – that we have to look at these economic opportunities and be aggressive about them,” said Gallant, the province’s premier.

His government has invested C$4m in a loan to one medical marijuana startup, Zenabis, in order to help build a facility in northern New Brunswick that aims to create more than 200 jobs. In August, a senior government official suggested that these jobs may just be the tip of the iceberg; telling reporters that the sector could become a major economic driver in the province and create thousands of jobs.

The expectation saw New Brunswick become among the first jurisdictions in Canada to establish a working group to explore the issues around legalisation, ranging from how it will be sold to where products could be used. “There’s going to be production and distribution and sales of this across the country,” said Gallant. “So it’s a question of whether we as New Brunswickers can make sure we act quickly to benefit as much as possible from that.”

The provincial government has also invested in OrganiGram – currently the province’s only licensed marijuana producer – providing up to C$990,000 in payroll rebates for the creation of dozens of jobs over the next three years.

Facebook Twitter Pinterest Ray Gracewood, OrganiGram’s COO. Photograph: Sean McGrath

The government’s investment came just as OrganiGram acquired another 136,000 sq ft of industrial space in order to ramp up production, said Ray Gracewood, the company’s chief commercial officer.

“It’s fair to say that there really isn’t a model that we can look to to provide a turnkey solution,” said Gracewood. “So in a sense, I think Canadian industry is blazing a trail internationally from a legitimate sort of regulated industry. We’re already starting to get calls from representatives from other countries, asking what we’re doing.”

It hasn’t all been smooth sailing: OrganiGram and two other licensed producers in Canada recently issued a voluntary recall of much of its products sold in 2016 after five lots tested positive for low levels of two unapproved pesticides. The company has since put in place new growing and harvesting protocols.

The fast-growing industry has also been in a holding pattern as of late. Some worry that the federal government’s timeline of July 2018 is too ambitious, given the scope of work likely to be left to the provinces. A date of 2019 has been floated as more likely.

And while eight US states and the District of Columbia have voted to legalise recreational marijuana, the White House has hinted that the Department of Justice will do more to enforce federal laws prohibiting recreational marijuana, raising concerns over how Canada’s approach will coexist with a potential crackdown south of the border.

Nearly 400,000 people a day cross the shared border between Canada and the US, and any clampdown on the border could have economic repercussions for Canada, which last year sent three-quarters of its exports to the US.

Still, many in this province continue to push forward. In October, a New Brunswick college announced it would launch a specialised program on marijuana cultivation aimed at prepping potential workers for everything from quality control to harvesting. The program, which could be on offer as early as autumn of this year, will compensate for the fact that “most of the experience that exists within the cultivation of marijuana happens in the black market”, said Gracewood.

It’s a necessary development as the industry moves out of the shadows and into legalisation – and another building block that could help the province reap the benefits. “This industry is going to exist whether New Brunswick likes it or not. And the thing that’s most encouraging to me, is that as a province, they’ve truly embraced the opportunity,” said Gracewood. “My sense is that New Brunswick will be one of the most prepared provinces in Canada when the opportunity arises.”