Inside the hermetically sealed, temperature-controlled, licensed greenhouse, the weed is frosted, purple and spongy; clumps of bud the size of a baby’s fist with trichomes practically dripping from the edge of the 8,000 plants.
Close your eyes and you can envision Woodstock, or at least a cannabis field in Kelowna; the smell hanging so thickly in the air you might think the odour alone could get you high (it can’t).
This cannabis, however, will never be sold on Canadian soil, and ZenKai’s export business is part of a new Canadian pipeline bolstering the value of legal Canadian weed companies. After bonanza market caps and equally steep stock-price fall-offs, Canadian marijuana has a new cash generator: exporting the pot to less mature legal markets where there’s more demand for our weed.
ZenKai, a Canadian medical cannabis company, doesn’t have a licence to grow weed, purchasing cannabis from licensed producers instead, then selling the product around the world. Canada now exports more marijuana across the globe than any other country and a product that sells in Canada for $1.50 per gram is worth as much as $4 abroad.
“Demand in Europe, especially Germany, is so high right now they’re looking to buy everything we produce,” says John Aird, managing director of ZenKai, as we tour the cultivation room the company leases in a licensed cannabis facility in Langton, Ont., about 200 kilometres from downtown Toronto.
ZenKai hires the grower but doesn’t own the building — the brokerage firm is a tenant in a shared workspace where highly regulated medical and recreational weed is grown for domestic and international sale.
Originally, the greenhouse was purchased in 2013 by Maricann, a cannabis company that invested upwards of $100 million into the facility. However, like a lot of licensed Canadian cannabis production companies, Maricann ran out of cash. In 2020, the company was purchased for $12.4 million by new Austrian owners, who kept the Maricann company name, and this team, led by CEO Daniel Ould-Slimane, lease ZenKai space in their licensed facility.
ZenKai’s business model — partnering with licensed greenhouses like Maricann and internationally distributing its product instead of building facilities of its own — uses its hard-won cannabis know-how to export something that we have too much of in Canada but is coveted around the globe.
“For companies that know how to manage international regulations,” Aird says, “there’s never been a better time to grow Canadian medical cannabis for export.”
Publicly traded Canadian cannabis companies have a nasty reputation after Canadian investors lost some $131 billion in the markets. Large Canadian cannabis companies such as Canopy and Aurora have lost up to 97 per cent of their value since hitting astronomical market highs in 2019.
Canopy sold its headquarters in Smiths Falls, Ont., in summer 2023, and Aurora, which once claimed a market cap of $15 billion, has been closing its Canadian facilities and laying off workers since 2020 while also expanding into the European medical cannabis market.
Tilray, which merged with Aphria in 2021 to make a Canadian cannabis super brand, reported a quarter of its 2025 first-quarter revenue from its alcohol line — which has nothing to do with CBD or THC. In Canada, its cannabis line declined by 12.9 per cent in Q1 2025 versus the same quarter last year.
“The bubble bursting will always hang over that first wave of Canadian cannabis super companies and their stock price will never recover to where it was,” says Lawrence Purkiss, senior analyst at Prohibition Partners, a data firm based in the U.K. that monitors the cannabis industry worldwide.
“Smaller Canadian cultivators, however, with less overhead and less capital-intensive businesses, are running profitable businesses and finding most of their success abroad.”
In 2024, Canada exported 20,000-plus kilograms of cannabis to Germany, according to Prohibition Partners. Portugal, our closest rival for worldwide cannabis export, sold Germany just 4,000 kilograms. In terms of scale, the German cannabis market is small. It’s worth $500 million (U.S.), a drop in the bucket compared with Ontario’s cannabis market, worth a billion Canadian dollars.
But there’s a lot of competition in the domestic legal market and a tax rate on licensed producers that can reach up to $1 per gram, so Aird says it’s cheaper to sell cannabis to Australia from Ontario than it is to sell it in the neighbourhood he lives in, Toronto’s Annex.
“In the Canadian market, cannabis brands sell product below production price because they want market share, but in Germany, there’s demand for premium, consistent, Canadian medical cannabis — and not enough supply for the spike in demand,” says Aird, also the co-founder and chairman of Olli Brands, which produces and distributes legal edibles in Canada.
Right now, ZenKai focuses on established or emerging medical cannabis markets in the EU. But Aird believes Poland, France, England and Portugal — all loosening their medical cannabis regulations and already importing Canadian weed — will bolster the Canadian cannabis industry for years.
Canadian medical cannabis exports surged to a record $218 million (Canadian) in the 2023-24 calendar year, according to Prohibition Partners. This is in the face of the plummeting domestic medical cannabis market, which decreased by 13 per cent in the 2023-24 fiscal year ended March 31, according to Health Canada, to $355 million from the previous year’s $409 million.
New tallies for domestic medical cannabis sales will be released this spring by Health Canada, but likely the domestic medical market is heading in the opposite direction of our medical cannabis exports, which Prohibition Partners predicts should increase by 33 per cent to $290 million Canadian dollars when the final 2024 numbers are tallied.
Meanwhile, the medical cannabis export business is not only growing, but it may be a less expensive arena to compete. According to Aird, the overhead on selling weed abroad is less capital-intensive than slugging it out in the crowded domestic market.
“With our international business, we don’t need a sales team, marketing team or graphic designers,” says Aird, who ran half a dozen other businesses in legal cannabis over the past decade. “All we do is manage the marketplace on production and sourcing opportunities.”
It’s not only the international cannabis business showing signs of life. Even at home there’s profitable weed brands that are possibly undervalued.
Cannabis executives, once bitten, are twice shy, but Organigram, based in Moncton, N.B., which sells cannabis domestically and abroad, saw its stock rise six per cent this past summer. In December, Organigram spent $90 million to purchase Motif Labs, a Canadian cannabis extraction company based in Aylmer, Ont., specializing in transforming cannabis flower into CBD and THC distillate, and, for the year ending 2024, its stock is up 34 per cent versus last calendar year.
In late November, Cannara Biotech, based in Saint-Laurent, Que., reported its 14th consecutive quarter of positive EBITDA (earnings before interest, taxes, depreciation and amortization).
Raj Grover, founder of High Tide, a dispensary chain based in Calgary, Alta., with 191 stores across the country, thinks there’s never going to be another Canadian cannabis company worth $22 billion, the heights Canopy ascended to in its prime. In January, High Tide entered the German market by spending $7 million to acquire 51 per cent of Purecan, a German pharmaceutical wholesaler with a licence for importing medical Canadian weed.
Grover remains bullish on Canadian weed stocks. He echoes Prohibition Partners’ sentiments, noting that today’s Canadian cannabis companies have learned from the past, rightsized, and survived long enough not to make the same mistakes as their earlier, money-hemorrhaging peers.
“After the mayhem, investors now have clarity on the business plans of many cannabis companies. Most have failed, but a select few continue to march ahead and execute their game plan,” says Grover, whose lean, no-frills approach to Canadian weed sales now generates better dollar-to-dollar returns per square foot, according to the company, than retail industry leaders like Canadian Tire and Walmart. Grover sees a path where High Tide annually — domestically — does more than $850 million in sales.
“Our industry should be valued significantly higher than its current levels, especially given its growth potential,” Grover says. “Six years into legalization, most of the old unicorns have disappeared.”
Four years ago, John Fowler, founder of cannabis unicorn 7ACRES, which was purchased by Canopy in 2021, became president of Muskoka Grown, a craft Canadian cannabis producer. Muskoka went bankrupt before he took it over, in 2020. Over the ensuing years, he says the company has grown, had its first profitable quarter, and now has just over 100 employees. In Ontario, Muskoka Grown is a top 50 licensed producer by dollar volume, but like ZenKai, Fowler is becoming less interested in domestic sales.
Fowler says he’s not surprised his industry tanked.
“7ACRES was never intended to be a billion-dollar public company with global reach. All we wanted to do was show we can produce tasty flower cheaper than everyone else,” he says. “It became almost irresponsible to be a Canadian weed brand and not have designs on taking over the world, even if we saw that premise was false.”
International sales, he believes, will eventually account for almost all of his business.
“The reality is there’s 4,500 cannabis SKUs in Ontario and I wouldn’t be surprised if 50 per cent aren’t sustainable for the companies that make them because domestic prices are too low across the supply chain,” Fowler says.
“International distribution presents a better opportunity over the next five years than we see in Canada, which is exciting,” he says, “and, frankly, a little sad.”
Back at the Maricann facility with ZenKai’s Aird, the mood is giddy, and it’s got nothing to do with the hours we’ve spent around the weed.
It’s October, three weeks before the grand harvest — the facility pumps out five tonnes of weed per year with the capacity to produce 100 tonnes, and the pace is matched by Austrian efficiency.
There’s teams of trimmers, dryers and packers, and an assembly line that recycles the leaves from the mother plants back into the soil so strains like Mango Haze and Lavender Clouds can be cloned and replenished, initiating the growth cycle for Germany again.
By knowing the cannabis they buy is pre-sold to German medical patients, ZenKai doesn’t have to create unsustainable margins to sell to an oversaturated Canadian consumer.
Josh Rutledge, one of the master growers producing for ZenKai, says he’s spent his career growing weed on both sides of the law.
Rutledge, bearded, grinning and tending as delicately to his plants as a father to his child, says that after years of trial and error, he’s happy to find a legal model for growing his weed that works — even if his Canadian friends can’t smoke his bud.
“Billions of dollars were sunk in this industry, but we’re still here, and if I can capture a piece of the market without looking over my shoulder, I’ll sell to Germany,” says Rutledge, a cannabis plant tattooed down his neck from his ear.
“I love cannabis and I’m sticking with it — we just had to find a new way to win.”
Ben Kaplan is the author of “Catch a Fire: The Blaze and Bust of the Canadian Cannabis Industry,” on Dundurn Press.
