Major buzz: Argentia Gold rolling out 500,000 joints per week from old Newfoundland military base
ARGENTIA, NL – When the canteen for the US Navy base in Argentia was built in 1956, its extra-thick walls were designed to reduce the effects of bombing raids. Nowadays, the idea of being bombed takes on a whole different meaning when applied to what was once a military compound.
After a $12 million renovation, the historic building was transformed into a modern, licensed cannabis production facility for Argentia Gold. The company started its first crop in 2020 and entered the Newfoundland and Labrador market the following year. The building was the offices of the Argentia Management Authority, now Port of Argentia, prior to its purchase by Placentia Bay Holdings in 2017. Placentia Bay Holdings is the parent company of Argentia Gold.
Argentia Gold CEO Brian Keating acknowledges that there were many unknowns in the cannabis sector before and after the drug was legalized in Canada in 2018. Argentia Gold uses less than a third of the 80,000 square foot facility.
“Everyone knows the marijuana industry hasn’t been as lucrative as everyone expected,” Keating said. “I’m telling you, the fact of the matter is that Newfoundland right now has to be all about internal growth. There are no nights for an outdoor grow. It’s very expensive with lighting, heating, HVAC systems and everything.”
The Company currently processes two harvests of its own locally grown indoor crop annually. Outside of the growing season, there is still a lot of activity in their building thanks to the processing and packaging work that Argentia Gold does for products grown and manufactured elsewhere, including cannabis grown outdoors in Delhi, Ontario.
Depending on the season, the company employs between 20 and 40 people.
“It’s cheaper for us to do it in our outdoor grow, irradiate it, and bring it here to pack,” Keating said, adding that the company has invested in its own trucks and trailers to help cut shipping costs cut in half
New Markets
The cannabis market in Newfoundland and Labrador is small, so Argentia Gold has focused on offering its products to as many Canadian markets as possible.
“We sell to Ontario. We sell in Saskatchewan. We’re licensed in Manitoba and we’re now looking at other districts over the next few months,” Keating said, adding that relying solely on provincial distribution isn’t feasible.
“You’re looking at a population of 500,000 people. Take 50 percent from non-recreational smokers, then take half from the black market. They are looking for at least seven (licensed producers) on the island arguing 150,000 users. Do the math.”
Keating suggests that black market cannabis outperforms licensed producers by a 5 to 1 ratio (he includes consumers who legally grow their own plants in this black market definition). Price has been recognized as a key factor, with Statistics Canada finding in 2020 that a legal gram of cannabis (at $10.30 per gram) costs 55 percent more than black market cannabis ($5.73 per gram).
“It’s actually a big competitor, but that’s how it was legalized and that’s how the government came out with it,” Keating said.
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Lots of joints
Consumers can purchase buds and pre-rolled joints under the Argentia Gold brand. Each joint is individually weighed and hand folded at the tip. According to Keating, Argentia Gold currently ships 500,000 pre-rolled joints to Ontario each week.
There are also sister companies of Argentia Gold like Baked Babes and Level Up, the latter of which makes cannabis drinks and sleep aids.
“We pack it all here,” Keating said.
To fuel further growth, Keating said Argentia Gold is looking to partner with candy and other edibles companies. The company is also seeking a license to sell medicinal cannabis in various provinces.
Much of the unused space in the facility remains freshly renovated and ready for use. Keating said Placentia Bay Holdings is open to any company that wants to use it. He noted that there was a suggestion that part of the building be rented out to grow portobello mushrooms, but concerns about cross-contamination ultimately scrapped that idea.
