Counting on cannabis
Exchange Magazine last caught up with John Bell in 2007-08, when Bell got involved with ATS during his Polymer Years. Polymer had done very well: “We were profitable, but were coming into a cash crisis,” says Bell. “We went from $9 million to over $100 million, and that put a real stress on us. I sold it to two private equity firms with deep pockets.” And just like that, Bell became both unemployed and a major investor.
Bell, now 71, admits that he misses the operations side of running a business. “I guess I’m a professional board member now, with a half a dozen [companies] on the go. But boy, you get itchy for operations, when you’re on the ground doing stuff and things are happening. Now, I get to go into meetings, give my two bits and then get thrown out, that’s until the next quarter.”
In 2009, Bell bought into a small micro-cap Toronto public company called BSM, which “stood for Bay Street Moose.” He turned over the board, put in new management, and in Bell’s words, it “did really well for four to five years”. At any time, Bell states that he might have a “bunch of early-stage growth companies on the go, which is kinda’ what I like doing”.
In 2014, Bell was introduced to what is now known as Canopy Growth. Then, the company was known as Tweed; it grew cannabis, and was just going public, “so I took this really high risk investment… A lot of people wouldn’t touch it, certainly the banks wouldn’t. The banks told us to go home”. But John Bell really saw something in Tweed’s CEO, Bruce Linton. Bell believes Linton will go down in history as one of Canada’s great entrepreneurs. “So, it’s a pure joy to be working with him, with his confidence. He’s absolutely brilliant.”
Bell says that Canopy Growth is now the largest cannabis company in the world, worth $14 billion, “and when I got on board the stock was $1.02.” At time of writing, the stock sat at $37.00.
Bell is the lead director of Canopy and a “pretty good sized shareholder, but it’s been so much fun – I would have done it without all the financial rewards. They are significant, but I would do it anyway, ‘cause I’m having so much fun.”
He likens his time to what RIM’s Mike Lazaridis and Jim Balsillie went through. “When you grow a company from nothing to several thousand employees, in a very short time, you‘re going to make some mistakes and that puts monstrous stress on everybody in the organization, but it’s exciting stress for me. I like it”.
The future of this industry, indicates Bell, is not about smoking cannabis, certainly not medicinally. “It will be unusual to smoke it,” he says. “It will provided usually as an oil or a gel cap.” It’s expected that next year businesses will be allowed to make and sell both edible and cannabis based beverages.
“I would have done it without all the financial rewards... ‘cause I’m having so much fun.”
Bell says one of the more interesting things to watch for is how will this take, on the social scene. “Will I or my friends be offering, instead a glass of wine on Friday night, another kind of drink?”
Pets and pot
There is a huge amount of research to be done. “We’re investing heavily. They say pain management is one of the big ones. [Another] of the big ones will be pets – calming your pet down, [if it] barks all the time or is getting uncomfortable. So the pet market is going to be a big one.”
Canopy has purchased approximately 26 companies, and most likely more will be added by the time this article is published. Besides Canada, they are in Germany, Czech Republic, Denmark, Spain, Columbia, Chile, Brazil, Lesotho, Australia, and “Jamaica of course – we partnered with Michael Lee Chin in Jamaica”. Their head office is in Smith Falls Ontario, located in the old Hershey Chocolate Factory, “so we now have a visitors’ centre,” says Bell. “It’s a real destination.”
Bell estimates that Canopy has 7 million sq. feet of growing area across the country. “We’re growing in most provinces, and selling in all provinces.”
But that’s not all John Bell has been involved in. One investment and board role involves DelMar Pharmaceuticals Inc., which is producing a drug in clinical trial for glioblastoma, an aggressive form of brain cancer. He’s also on the board of Strongco.
Bell is approached by about 100 opportunities a month. “People just show up at my office,” which is located in Cambridge’s Galt district. “Most of the stuff I am doing is out of town, so I’ve lost most of my local connections. I miss my connections to the community. “
Bell is concerned about maintaining free trade, and he encourages people to be vocal about it. “I know how important that is … the amount of risk, today… We’re starting to feel it here.”
He is also worried about social issues, especially the plight of the poor, telling Exchange, “I am really concerned about the disconnect between the 1% and the people that can’t afford housing.” With Bell’s track record of energetic involvement, don’t be surprised if he finds a way to tackle that, as well.
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