The Provincial Government has entered into a production and supply agreement with Newfoundland and Labrador’s Oceanic Releaf Inc. and its strategic partner, Delta 9 Cannabis Inc. By 2024, this production and supply agreement will contribute an estimated $24.6 million annually to provincial GDP, resulting in 76 jobs through direct, indirect and induced employment, while providing nearly $3.2 million in wages and salaries.
Oceanic Releaf will establish a 60,000 square foot cannabis production facility in Burin, at the site of a former fish plant in the community. The facility will be retrofitted to produce at least 4,000 kilograms (or equivalent) of cannabis annually when in full production. The two-phase construction process will cost approximately $8.4 million, and will be completed by the summer of 2023. Oceanic Releaf has committed to maintaining a minimum of 23 person years of employment annually for 20 years.
This production and supply agreement will allow Oceanic Releaf access to up to two retail licenses; permit Oceanic, in partnership with Delta 9 Cannabis, to supply Oceanic’s retail store(s), as well as other Newfoundland and Labrador Liquor Corporation licensed retailers; and make product available online through CannabisNL. Oceanic Releaf has committed to contributing $150,000 over five years to support cannabis research and development in Newfoundland and Labrador when their cannabis production facility is completed.
Delta 9 Cannabis is a publicly traded company based in Manitoba. Its focus is on craft-grown, hand-trimmed, high-quality cannabis strains at a large scale, with over 20 genetically unique strains in its current offering. As part of its strategic collaboration with Oceanic Releaf, Delta 9 Cannabis will provide consulting services and allow access to their proprietary Grow Pod Platform.
The Provincial Government now has three agreements in place for local cannabis production, totaling at least 32,000 kilograms per year by 2025. Direct employment associated with the three agreements is 285 person years of employment. Discussions continue with other potential producers, including local firms, who are pursuing cannabis production and processing.
Quotes
“Diversifying the economy, creating wealth and contributing to sustainable employment is important to the Government of Newfoundland and Labrador. This performance-based supply and production agreement with Oceanic Releaf will generate positive results for the Burin Peninsula, as we continue to build and develop this brand new industry in the province.”
Honourable Bernard Davis
Minister of Tourism, Culture, Industry and Innovation
“Oceanic Releaf is a proud Newfoundland and Labrador company that will play a key role in the growth of the province’s cannabis industry. Oceanic is near completion of Phase 1 retrofit (15,000 square feet) within an existing 63,000 square-foot facility in the heart of the Burin Peninsula and is dedicated to supporting local employment, infrastructure, and innovation. Strategic partnership with Delta 9 will elevate Oceanic’s expertise and expedite products to market. We are thrilled to move forward with the province of Newfoundland and Labrador and Delta 9. Together, we will cultivate amazing cannabis, create a memorable retail experience and revitalize the community of Burin.”
Taylor Giovannini
CEO, Oceanic Releaf Inc.
“We are looking forward to working with Oceanic to further assist start-up cannabis companies grow and flourish. We also look forward to bringing our portfolio of high quality Delta 9 products into the province of Newfoundland and Labrador. This marks Delta 9’s first direct investment in a cannabis company in Newfoundland and Labrador, and when looking for opportunities to do so in that province, Oceanic stood out as a clear choice.”
John Arbuthnot
Founder and CEO, Delta 9 Cannabis
“Since becoming MHA for the District of Burin-Grand Bank, my main focus has been on rebuilding the economy of the Burin Peninsula, and as part of that, I have advocated for a diversified economy. Today’s announcement of an agreement between the Provincial Government and Oceanic Releaf is great news for the Town of Burin, and indeed the whole of the Burin Peninsula. It is another indication that entrepreneurs are taking that message of diversification to heart. I look forward to the start of operations upon completion of the Burin facility, as undoubtedly do those who will gain direct and indirect employment due to this infusion into the local economy.”
Honourable Carol Anne Haley
Minister for the Status of Women and MHA for Grand Bank-Burin
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Media contacts
Eric Humber
Tourism, Culture, Industry and Innovation
709-725-9655
erichumber@gov.nl.ca
Taylor Giovannini
Oceanic Releaf
709-873-8000
taylor@oceanicreleaf.com
Ian Chadsey
Delta 9 Cannabis Inc.
204-898-7722
ian.chadsey@delta9.ca
George Murphy
Government Members Office
709-729-4777
GeorgeMurphy@gov.nl.ca
BACKGROUNDER
Terms of Agreement with Oceanic Releaf Inc. and Delta 9 Cannabis
Production Agreement
- Once full production is reached, Oceanic Releaf is committed to maintaining 23 person years of employment annually and producing approximately 4,000 kg of cannabis annually. This will result in over 76 jobs through direct, indirect and induced employment; and nearly $3.2 million in wages and salaries.
- A cannabis production facility to be established at 1-7 Seaview Drive in Burin, totaling 60,000 square feet.
- Oceanic Releaf is committed to produce local cannabis by spring 2022 and to operate its production facility for a minimum of 20 years.
- Oceanic Releaf will receive access to two retail licenses as well as the same premium percentages as provided in the original cannabis framework by government. For 10 years, from the effective date of the agreement, Oceanic Releaf will be eligible to reduce its monthly remittances to the NLC for sales of its cannabis sold in the province, up to the confirmed eligible expenditures.
- A 10 per cent reduction in remittances paid to the NLC on the product sold in its retail stores; a five per cent reduction for online sales and a three per cent reduction for product sold in other retail stores. This exists for a 10 year period, after which time the reduction in remittances will end.
- There is no grant or loan by the Provincial Government.
- Oceanic Releaf will pay corporate income tax and government will receive additional tax associated with labour, which is estimated to exceed $55 million over 10 years.
Supply Agreement
- No obligation for the Provincial Government to purchase cannabis; however, guaranteed supply is available.
06 15 2020 10:30 a.m.