Last week, Vancouver-based medical marijuana producer Sun Pharm Investments Ltd announced that they had entered into an agreement to merge with a subsidiary of publicly traded agricultural plants supplier Bevo Agro Inc.
This transaction will result in the amalgamated Bevo changing its name to Zenabis, one of Sun Pharm’s previously established cannabis brands, and the combined entities will have more than 320,000 square metres of indoor and greenhouse space across three Canadian provinces.
Zenabis CEO Rick Brar spoke to Civilized about the merger and his plans for ushering in this new chapter for the brand.
"We’re really excited," he said. "This is a landmark deal. We’re coming to this industry as a real business—well equipped, well capitalized, and ready to execute on our business plan."
It’s the perfect time. The cannabis industry is in its infancy, we’re in the middle of a historic landmark event in Canada with legalization, and we’re going to feel the reverberations throughout the world.
The timing was important to us, because it accelerates the global demand for the business we’ve already built. By being private, we’ve invested $70 million of our own money before bringing this business forward to the public market. We’ve also gone and raised approximately $58 million, which is the largest ever financing round for a Canadian cannabis company going into an RTO (reverse takeover). We’ve brought this company forward, and we believe it is the perfect time right now because of this paradigm shift in the cannabis industry.
When we first started, there were only ten or eleven countries in which medical marijuana was legal. Today, there are over 35 countries, and we have global demand for our products.
Being a previously established name within the industry, what expectations do you think this step will bring about?
We’ve been very calculating and thoughtful about the use of Zenabis. We’ve built a brand and have invested over $70 million of our own money into the communities in which we operate.
This is the largest propagation greenhouse in North America, and it is North America’s most technologically advanced greenhouse, so we’ll be able to organize our retrofit faster than anyone else in the space.
How will pooling this talent and these resources position the company as a cannabis leader?
That’s one of the things we’re really excited about. Jack Benne, the founder of Bevo, and my dad started working together 30 years ago when my father would buy plants from Jack’s propagation service. Over the years, his son Leo and I have built a business relationship, and we’re extremely proud of the talent and the pedigree of people on both the Sun Pharm and Bevo sides, and collectively as Zenabis.
This is a growth story, and we made that quite clear to our employees. We’re adding more jobs in what might be the biggest job search in Canada for cannabis. Leo Benne’s amazing ability to grow some of the hardest to grow plants have made him North America’s leading propagator of plants, and as for Sun Pharm, we're brining our past growing experience.
My partners and I have done herb production and pharmaceutical distribution and sales, and so we complement each other quite well, and it positions us quite nicely to be a leader in the industry.
Since this is a move towards considerable growth for the company, what are the benefits of running a large company in the sector over a small one?
I think each has its own benefits. For us, the demand for our products was so significant that we needed to add volume and in short order. So, in order for us to fulfill our domestic demands with the liquor boards, we added on a fourth liquor distribution jurisdiction in the Yukon. The demand mandates that we make this move.
How do you ensure quality on a plant-by-plant basis when dealing with a company on such a large scale?
We’ve had controlled growth. Our past experience from our management team is exactly in that. We’ve grown several crops annually over the past 15 years on a commercial scale in greenhouses, in both indoor and outdoor pharmaceutical growing conditions.
So, for us, this is controlled expansion, using the talents of our management team combined with the talents of Leo Benne and his team - as well as the right tools. A greenhouse just isn’t a greenhouse. This is North America’s most technologically advanced greenhouse, and that’s why Zenabis has done this deal.
What do you hope the Zenabis brand will stand for going forward?
I hope the brand has an attachment for our customers. It’s going to mean different things for different people, but it stands for quality. There’s a passion for the cannabis business with our senior management team, as well as a passion for the communities we are involved in.
So when you see that Zenabis brand, you know that you are going to get that quality and that passion. We’re going to try to make a difference in your life, whether you’re using it medically, recreationally, for enjoyment or relief.