Five questions with Aurora Cannabis vice-president Cam Battley

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There's a lot going on in pot. Ottawa's federal task force released recommendations this month on how to move forward with legalizing marijuana. Aurora Cannabis Inc. is building a second massive growing facility at Edmonton International Airport. Aurora vice-president Cam Battley discusses plans for the new 74,000-square-metre facility, slated to open in October, 2017, and the future of Canada's cannabis industry.

What makes Edmonton's airport a good locale for a marijuana-growing facility?

To our knowledge, this is the first cannabis facility anywhere to be located at an international airport and it's going to be of immense benefit to us, both today and in the future. We've got access to everything we need in terms of gas, water and power. We've got access to courier services, warehousing and excellent security.

Aurora was the first licensed producer of medical cannabis to offer same-day delivery, and we started that in Calgary in the summer. Now, we offer same-day delivery in two metropolitan centres, Edmonton and Calgary.

This has been a benefit to our patients but also to us and it is entirely in line with our business strategy, which is e-commerce. We feel we can offer the same level and quality of service that a giant such as Amazon.com can. We've doubled down on that by producing the first mobile smartphone application for the purchase of legal cannabis.

The new facility will be larger than 16 football fields. Why so big?

Health Canada data shows that the number of patients registered with prescriptions has tripled in the last year. There are now more than 130,000 patients in Canada's national medical cannabis system, and that number is growing at 10 per cent a month. The demand is there, and in order to meet that demand, we have to expand our capacity.

The longer-term reason is the federal government's commitment to legalizing consumer use starting with the tabling of legislation in the spring of 2017. That would suggest implementation of consumer legalization some time in the first half of 2018. Therefore, the demand for cannabis, both medical and consumer, is set to expand very quickly.

What's the potential size of the market?

There are various estimates, but the most recent analyst estimates I've seen suggest that the medical cannabis system alone, within a couple of years, will exceed $1.5-billion in Canada, and that the consumer cannabis system will be somewhere between $10-billion and $15-billion a year. This is unlike any business scenario I've seen and here's why: We don't have to create a market. Some people compare the sector to the dot-coms, but there's a very big difference in that those companies had to create a market. We don't. The market exists and it's mature. There's already a multibillion-dollar-a-year market for cannabis. The difference is, it's an illegal market and it's unregulated. So what we're doing here is building the capacity to be able to achieve the federal government's stated policy objectives of keeping cannabis out of the hands of kids and keeping the profit out of the hands of criminals.

What are the most important aspects to come out of the federal task force report?

The task force did a remarkably good job. They took a very mature and comprehensive approach to this, to learn from the experience of our American cousins. They recommended that the medical system be maintained separately from the consumer system, and that's important because patients' needs must come first. Beyond that, there should be differentiated taxation for medical cannabis compared to consumer cannabis. It should be less expensive.

… My belief is that when the federal government moves on legalization, they are going to do that in a cautious and intelligent way. One of the task force's recommendations is something I've been advocating. That is that the existing, proven, successful mail-order system for medical cannabis be extended to consumer cannabis. It would allow for equality of access from coast to coast. It would also have zero impact on local communities while municipalities and provinces decide how to handle legalization and how they want retail distribution to look.

Does Aurora envision storefront retail?

We would envision supplying cannabis stores, and potentially being involved on the retail side ourselves. The task force recommended cannabis not be sold in the same physical location as alcohol. That's a discussion that needs to take place among the federal and provincial governments. But one thing the task force made quite clear is that there should be multiple distribution channels for cannabis. Regulated, all of them. I think that is a wise approach.

This interview has been edited and condensed.