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Cannabis represents growing business for carriers willing to move it

Posted: November 27, 2019

NIAGARA FALLS, Ont. – Matthew Sly remembers the day when his boss came through his door with a challenge: “I need you to figure out how to ship weed.”

It was no small task. Canada was on the brink of legalizing recreational marijuana, but the related supply chain had to be created from scratch. A regional distribution center was needed. Carriers had to be contracted to move the freight.

But Canopy Growth has emerged as one of the largest businesses to do it.

“There was nobody to follow. Nobody to learn from,” the company’s director of logistics recalled during CITT’s recent Canada logistics conference.

Moving marijuana is no typical shipment, either. While the drug is legalized, it represents some unique cargo security challenges. There’s still an active black market for marijuana, and the loads are especially valuable. A single shipment from the distribution center can be worth more than $5 million; the trailers that support grow ops can carry $20-30 million in cargo.

Many carriers wanted no part of the business. Cross-border fleets balked at the cargo because marijuana is still a Class 1 drug in the eyes of U.S. Customs and Border Protection. FedEx and UPS turned down the freight as well, he said.

The solution came in the form of a multi-year deal with Brink’s, a fleet traditionally known for moving cash and other valuables in armored cars. That agreement was signed just over a year ago, only weeks after legalization in Canada.

“The rapidly growing cannabis industry requires security solutions for its products as well as its cash, and Brink’s is uniquely positioned to provide these solutions,” Brink’s president and CEO Doug Pertz said at the time.

“On a global basis, I think cannabis is going to be a booming industry,” Pertz added during a related interview with Mad Money host Jim Camer, referring to a global US $160 billion market. “There’s probably only about 10% of that that’s legal, but that means there’s a huge opportunity and demand out there.”

Security represents just one of the unique challenges, especially when it comes to moving the living plants. “You have to get really, really creative,” Sly said, referring to the need to maintain temperatures and supply the plants with artificial light in transit. “It gets tricky.”

Every destination also has to be licensed by Health Canada, complete with secure storage, security cameras, and screened personnel. No blind spots in the facilities are allowed.

“If anything goes missing, you have to report to RCMP within 24 hours,” Sly added, referring to other unique guidelines and geofenced trailers to help spot any equipment that strays off course.

Recently legalized edible products will introduce another layer of challenges. But planning ahead for this category of products, Canopy Growth has already ensured that all the linehaul equipment in its network comes with temperature and humidity controls. It’s ready to move ahead.

“We account for every single gram, every single unit that gets shipped,” Sly said. “Everything has to be perfect.”

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