team member spotlight / carte blanche may 26, 2017
By Jennifer Dianne Thomas
At Province we are pretty dialed in to pop culture. All of our products lines are given code names that we use internally – typically each product is named after a famous Canadian in pop culture right now. Likewise all of our investor portal passwords are popular song lyrics or titles. So this week a classic pop culture reference came to mind as I have been reading news about our industry. In a song Jay-Z croons “They say a midget standing on a giant's shoulders can see much further than the giant.”
Province right now is a smaller player industry and we are working to partner with a giant.
We are hearing that the giants of our industry are struggling with a two things: a glut in the market of new licensed producers and investor fatigue.
A GLUT IN THE MARKET
We are hearing that Health Canada will be giving out licenses to quite a few applicants over the next few weeks. Health Canada has granted seven licenses since January and (on average 1.5 per month and four more licenses in the past two months).
Now consider that Health Canada recently announced that it is introducing several improvements that aim to streamline the licensing of medical cannabis producers and enable increased production of cannabis. So it is easy to foresee that the number of licensed producers could easily double over the next year. But what does this mean for the larger market in Canada? A large part of the value of LP license is the scarcity of these licenses. If that number increases tremendously, it won’t seem so scarce.
Investor fatigue has taken hold in Canada’s hot marijuana sector amid an influx of look-alike producers getting licensed and going public, analysts said at an industry conference Friday. People can’t tell the difference between licensed producers anymore. Fundamentally, to some degree, these businesses, as prescribed by Health Canada and being in a highly-regulated industry are almost forced to be identical in many ways.
As the market evolves, the importance of licensed producers who grow the plants will diminish as packaging, and branding that transform the drug into novel consumer products such as beverages or edibles becomes more prominent
ON A GIANT'S SHOULDERS
All of the above, is generally good news for Province because the growing number of LPs gives us more opportunities to secure prospective partners with LP licenses. And while the focus in the Canadian market continues to be on licensed marijuana producers forward looking thinkers in the market say it’s time to switch to looking at ancillary businesses that support production and distribution. Province is just that kind of business and we are poised to step into this role before the “giants” catch up and realize the shift in the market.
So back to the Jay-Z quote – BY standing on the shoulders of a giant (i.e. creating a partnership with an LP) we truly can see further than the giants. Jay-Z’s lyrics are based on a use of this phrase by Isaac Newton in a letter to his rival Robert Hooke, in 1676:
"What Descartes did was a good step. You have added much several ways, and especially in taking the colours of thin plates into philosophical consideration. If I have seen a little further it is by standing on the shoulders of Giants."
To me this translates to be able to see market needs or trends that are on the horizon. Basically we are using the understanding gained by major thinkers who have gone before in order to make intellectual progress. While the giants are becoming indistinguishable -- we are working at Province to create a product that is branded that will fill space in the market that the giants are not prepared or capable to fulfill.