Ownership of mystery company in Canopy lease deal not of concern to N.L. government

Innovation Minister Christopher Mitchelmoredoesn't know who owns the numbered company that is leasing land to Canopy Growth, but says it doesn't really matter to the government.

"We do not dictate where a company is setting up," Mitchelmore told reporters at Confederation Building on Tuesday afternoon.

Mitchelmore was reacting to a CBC Investigates story published earlier Tuesday.

• Canopy Growth will spend $25M over 5 years to lease St. John's site, with option to buy

It revealed details of a lease agreement between Canopy and a mysterynumbered company that owns the site where a cannabis production facility is now being built in St. John's.

"They determined that it was best to go forward and obviously lease a property, as was reported by the CBC in a story earlier today, which outlined those details," Mitchelmore said.

"When it comes to matters of companies, and what they enter into in terms of agreements, they may decide to lease property (from) companies, they may go into various forms of financing. What is important to the government of Newfoundland and Labrador is that companies live up to their contracts."

Canopy and the province reached an agreement nearly a year ago.

It will see Canopy establish a $55-million production facility capable of producing 12,000 kilograms of dried cannabis product a year, creating 146 jobs, and ensuring at least 8,000 kilograms of cannabis is available for sale in the province.

In return, Canopy will be able to recoup $40 million of eligible costs through reduced sales remittances.

Mitchelmore stressed that lease costs are not included in eligible expenditures under the deal with the province.

"That's certainly something that's important," he told reporters.

Ownership of numbered company unknown

It's not clear who owns the numbered company, 80521 Newfoundland and Labrador.

Canopy says it is arm's length a distinct and separate business.

Christopher Mitchelmore on Canopy lease deal

6 years ago

Duration 1:53

He doesn't know who owns the numbered company that is leasing land to Canopy Growth, but says it doesn't really matter to the government.

Mitchelmore indicated it will be the responsibility of Health Canada to do background checks on those involved, as part of the process to get a licence for the St. John's facility.

"When it comes to a matter of concern, we want all companies that are doing business here in Newfoundland and Labrador to certainly follow the rules and the appropriate procedures, and I don't anticipate that any publicly traded company would be doing anything untoward in their business dealings," Mitchelmore said.

But during question period in the legislature, PC Opposition leader Ches Crosbie went on the attack, alleging that political ties played a role.

"There are an awful lot of strange coincidences here," Crosbie told reporters.

"Who gives the person that you're going to lease the land from a $10-million interest-free loan?"

When informed of Mitchelmore's comments that lease payments were not eligible expenses in Canopy's deal with the province, Crosbiesaid: "Technically, I'm not surewhat an eligible cost is supposed to be, although I suspect that if it's money going to Liberals, then it's eligible."

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