A year after warning Canadian politicians and investors about the risks of growing cannabis outdoors, Canopy Growth Corp. (WEED.TO) is getting set to plant its own legal pot at an outdoor site in northern Saskatchewan.

The company said on Monday it received a licence from Health Canada for outdoor cultivation and it has already started planting cannabis at the 160 acre-sized area. The move comes a year after Linton criticized plans to legalize commercial outdoor cultivation, where it will be challenging to ensure a high-quality product.

While there remain some challenges with odour mitigation and pesticide drift, the company is still moving forward with what it deems as a pilot project to test whether outdoor grow will be a viable way to produce cannabis, said Bruce Linton, chief executive officer of Canopy.

“We’ll take a licence for anything we can get,” said Linton in a phone interview with BNN Bloomberg. “But we’re cautious enough to call it a pilot because there’s a possibility these things don’t work out as much as some people would like.”

Canopy now joins several Canadian cannabis producers who have looked outdoors to grow thousands of pounds of legal pot much cheaper than it would be when growing indoors. WeedMD Inc., Aleafia Health Inc., and CannTrust Holdings Inc. have all previously announced they’ve received similar licence amendments to grow outdoor cannabis and have begun planting crops with plans to harvest the product this fall.

In May 2018, Linton relayed concerns on outdoor-grown cannabis to a Canadian Senate committee hearing which was held to suggest amendments to the federal government's upcoming Cannabis Act. He said the quality was "likely to be suspect," and that there was a "potential for diversion of cannabis to the illicit market."

“Although Canopy would succeed and benefit in the short term from operating outdoor cultivation sites, in the long term they would not be sustainable because of the conditions in which the product would be grown,” Linton said at the time.

Linton now reaffirms his quality concerns for outdoor-grown cannabis but maintains the business won’t be a main focus for Canopy.

“We’re not sure this is going to be a long-term business for us but we need to try everything,” he told BNN Bloomberg.

Jefferies cannabis analyst Ryan Tomkins said in a report Monday that Canopy’s entry into outdoor cultivation may raise some fears of a potential oversupply of product in the near term. However, Tomkins noted that by growing cannabis outside, Canopy can save its better indoor-grown dried flower product for the consumer market rather than “wasting” it in extractable products.

Linton said if Canopy does move forward with a large-scale outdoor operation, he expects any cannabis grown outdoors will be earmarked for extraction purposes.  

“Anything grown outdoors will not be of bud quality,” he said, noting the site will be fully secure and abide by Health Canada regulations. “I suspect a lot of people are going to find out in the next three to four months it’s not a straight forward process to grow quality cannabis in Canada in an outdoor environment.”

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