Pot producers in Pelham face pushback over bright lights and 'skunk smell'

David Ireland is frustrated by the "skunk smell"of pot that wafts down from two cannabis cultivation facilitiesroughly five kilometres away and lingers outside his home, even inthe winter.

"On hot humid days, it's worse because they have to vent moreoften ... You wouldn't be able to open your windows," he said.

The town of Pelham, Ont., where Ireland liveshas become a hotbed forlegal commercial pot growers who have snapped up greenhouses andconverted them from flowers and vegetables to the more lucrativecrop.

There are now six licensed marijuana production operations in thecommunity of 17,500 people, and one cannabis company that hasexpressed interest, according to Pelham Mayor Marvin Junkin.

And while the community is receptive to the jobs the companiesbring, mounting complaints about odour and light pollution at nighthave prompted residents such as Ireland toform a group aimed atkeeping the industry in check.

As a result, Pelham has banned any new cannabis cultivationfacilities and existing ones are prohibited from expanding for oneyear, under an interim control bylaw put in place on Oct. 15 lastyear.

"Unfortunately, the ones that are here haven't been the best ofcorporate citizens," Junkin said.

"It's a two-edge sword right now," the mayor said. "As a townwe definitely like the jobs...If they can just meet a little bitmore halfway on the emissions, light and odour."

Growing pains

This tension in Pelham highlights the growing pains of thecannabis industry as Canadian pot players ramp up production to meetdomestic and global demand while balancing the concerns of thecommunities where they operate.

The Green Organic Dutchman, based in Mississauga,has alsofaced resistance in Hamilton where it has a planned greenhouseexpansion. Meanwhile, more than 30 Ontario municipalities havedecided they do not want cannabis retail stores in their communitiesahead of a Jan. 22 deadline.

The domestic cannabis industry has exploded in recent years inpreparation for legalization of adult-use pot last fall.

The cannabis market in Canada, including medical, illegal andlegal recreational products is expected to generate up to $7.17billion in total sales in 2019, according to a recent Deloitte report. Of that amount, legal sales are expected to contribute morethan half, up to $4.34 billion, in the first year, Deloitte added.

Canada has emerged as the world leader in pot, with companiesexpanding their global reach as more countries around the worldlegalize the drug for medical use.

The result has been an economic bump in communities such as Leamington, Ont. and Smiths Falls, Ont., helping to fill a void leftbehind by factories that once produced Heinz Ketchup and Hersheychocolate, said Ryerson University business professor Brad Poulos.

"It's had a huge impact, basically brought these communitiesback to life," Poulos said.

There were 10,400 people employed in cannabis-related jobs inCanada in November, up 7,500 or 266 per cent from a year earlier,according Statistics Canada.

Demand vs. supply

Meanwhile, demand for legal recreational pot since Oct. 17 acrossCanada continues to outstrip supply, with widespread shortages thatprovinces and territorial suppliers have warned may last for months.

The pushback against the industry in Pelham is a constraint onlicensed producers such as CannTrust, hampering their ability toexpand and cash in on the current supply crunch.

"Overall, we consider this to be a potential negativedevelopment as a delay in CannTrust's ramp to full production wouldlimit its ability to capitalize on the near-term under-suppliedCanadian market," said Bank of Montreal analyst Tamy Chen in arecent note to clients.

CannTrust opened a hydroponic facility in Pelham last June, whichthe company has said is capable of producing up to 50,000 kilogramsof pot annually. The producer had also planned to expand thefacility, in two phases, which wouldeventually increase its outputto 100,000 kilograms.

The company has not yet received the needed permits for thelatter phase of its expansion. CannTrust chief executive Peter Aceto said those permit applications were submitted before the Oct. 15bylaw was passed.

However, Pelham's director of community planning Barbara Weins said a sale transaction related to CannTrust's planned expansion wasnot completed before Oct. 15 and therefore the permits could not beissued.

The company has taken "significant precautions" to controlodour at its Pelham facility and it hasn't received any smellcomplaints, Aceto said, but it has been contacted by the countyabout light pollution.

"It's always been really important to us to be a good member ofthat community," Aceto said. "So if there is something that ismaking people unhappy, we want to remedy it."

In any case, CannTrust is exploring other options to expand itsproduction capabilities, such as outdoor growing, acquiring alicensed producer or buying existing greenhouses in other parts ofthe country, he said.

CannTrust executives met with Pelham's mayor on Friday and had a "productive" visit, according to Junkin.

Leviathan Cannabis Group had announced plans for a greenhouse inPelham, and has made an exemption application to the town, said itschief executive Martin Doane.

The Toronto-based company, which is still awaiting its licensefrom Health Canada, intends to build a sealed greenhouse with fullshading to contain odour and light, he said.

"Our company empathizes... We don't want to be lumped in withthese earlier-generation facilities."

The light pollution, rather than the pungent aroma, is the mostpressing concern, said long-time area resident Josh Miner.

"At night, it's ridiculous... I can walk in my backyard and it'sbright as day," he said.

Still, Miner recognizes the economic boost the industry bringsand has positioned himself to benefit from it. His business Fenwick Pie Co. is near one of the cannabis cultivators in Pelham, and hasseen an influx of customers as a result.

"People do need to realize that heavy industry is dead, or it'son its way to dying. And if people need jobs -- that's a job," Minersaid.

A pungent aroma is a common by-product of any industry, he adds.

"The way I look at it, we've been an agricultural area foreverand I grew up near a chicken farm," Miner said.

"So there's a negative smell there as well, but nobody hasstopped raising chickens."