Business booming for medical marijuana dealer

Tilray co-founder Christian Groh and Philippe Lucas, v-p of patient research. (Dave Abel/QMI AGENCY)

Tilray co-founder Christian Groh and Philippe Lucas, v-p of patient research. (Dave Abel/QMI AGENCY)

Jenny Yuen, QMI AGENCY

, Last Updated: 6:44 PM ET

TORONTO -- Christian Groh is all business.

Sharply dressed in a pressed navy suit and blue striped tie, he speaks boldly of his new investment venture - a $22-million, 60,000-square-foot manufacturing facility tucked away on Vancouver Island.

It's heavily guarded around-the-clock by 72 CCTV cameras and a full roster of security officers overseen by a former RCMP drug enforcement specialist. And rightfully so -- there is something very valuable within those concrete and steel walls.

Though he may not fit the typical Cheech and Chong image, Christian Groh is a medicinal marijuana dealer. And business is booming.

Groh and business partner Brendan Kennedy first met as co-workers at Silicon Valley Bank, famous for backing companies such as Facebook, Twitter and Tesla, and started an evaluation group there to follow trends. The pair, along with another business partner, have raised more than $22 million and are set to close on another $50 million to $75 million in private capital this summer through Privateer Holdings, a private Seattle, Wash., company that invests in the legal cannabis business.

Using that money, they began Tilray, one of only 13 Canadian companies that has authorized "licensed producer" status from Health Canada that allows them to grow, sell and distribute medical pot.

"The walls of prohibition are coming down," Groh said. "We started looking at this four years ago and it operates on so many different levels -- it's medical, it's legal, it's social, it's political and financial.

"Not many other industries can hit all those tenants, which is interesting to me. We have an opportunity to build a $1-billion company and a multibillion net new sector."

Since the fall, the federal government imposed new rules on medical marijuana to cut out what officials say are "abuses in the system" and shut down home-grown production.

Any new patients permitted to smoke weed for medical purposes now have to get their prescriptions filled at a designated licensed producer approved by Health Canada -- such as Tilray.

The plan, as of April 1, was that Health Canada would no longer license users or distribute marijuana. However, in March a federal court judge ruled the old program could continue, meaning those who were grandfathered in the old system were still allowed to grow their own plants unless the decision is overturned.

Health Canada is appealing the decision.

Meanwhile, the new system is running full-steam ahead.