MediPharm to close Canna Farms facility, move medical sales to Ontario

| David Brown

Long-time BC cannabis producer Canna Farms is closing shop as its parent company shifts its medical platform to its Ontario facility. 

MediPharm Labs, which took over ownership of Canna Farms as part of its 2023 acquisition of Vivo Cannabis, says the move will allow the company to source lower-cost products from other producers. Vivo had acquired Canna Farms in 2018

The Canna Farms facility was one of a handful of companies to receive a commercial production licence in January 2014. It was also one of the first of these companies to post a profit while large pubcos continued to spend more than they brought in. 

Keith Strachan​​​​, president of MediPharm Labs, tells StratCann that the decision to ramp down production at Canna Farms’ 47,000 sq ft. facility in Hope, BC, was made earlier this year. This decision reflects the declining price of cannabis and the small facility’s inability to compete with larger-scale growers, especially greenhouse growers. 

“We slowly stopped cultivating there due to existing inventory and market conditions and just the ability to buy bulk flower at a better price than what we can grow it for,” explains Strachan.

Canna Farms’ primary business is direct-to-patient medical sales, he continues, which is why MediPharm has maintained Canna Farm’s licence, but says the final crop was planted in the facility earlier this year. In addition, in the company’s Management Discussion and Analysis (MD&A) for the three months ending March 31, 2024, posted in May of this year, it says that MediPharm had made the decision to begin to relocate Canna Farms’ direct-to-patient medical sales logistics to MediPharm’s Barrie facility. 

In that same MDA, the company listed a cost of $323,000 related to “employee compensation for terminated employees and write-downs of the carrying value of inventory at the Hope Facility.”

Strachan says one of the challenges is the facility’s size, which was not small enough to keep its costs down and not big enough to compete at scale. 

“There’s lots of great small, craft indoor growers who can fetch a premium price in Canada. And then there’s some great greenhouse and even outdoor growers that could sell a good product at a good price. And you can’t really be in the middle and that’s really where this facility ended up lying. It’s big enough that it wasn’t craft but not big enough that it had the ability to scale.”

Canna Farms’ Health Canada Cultivation and Medical Sales licences expire on December 14, 2027.

MediPharm’s “Barrie facility” is 70,000 sq. ft., and its Health Canada Standard Processing Licence expires September 28, 2026.

MediPharm Labs also operates out of its 29,000 sq. ft. EU GMP Napanee-Ontario facility. 

As of September 30, 2023, MediPharm’s management was committed to selling the Vanluven Road facility in Nappanee, Ontario, and the Yale Road facility in Hope, British Columbia. 

Featured image via Google Maps