With the legalization of recreational cannabis in Canada, cannabis companies are in an unprecedented position to develop an entirely new sector – and see extraordinary success and growth.
In today’s business landscape, however, having a stronghold in a burgeoning industry comes with an obligation to do things right.
Corporate social responsibility (CSR) itself is nothing new. First introduced decades ago, the business model that demands companies operate in a way that benefits society and the environment started to gain traction in the 1980s and 90s. Fast-forward to today with more and more consumers paying attention to how companies treat their workers and the wider world around them, and corporate citizenship has never been more important.
As in any field, some organizations walk the walk, while others fall short on promises. HEXO Corp is definitely in the former camp. The Gatineau-based adult-use cannabis brand is committed to upholding its social and environmental commitments on a local, provincial and national level. To that end, it has developed a CSR Charter and established a senior executive role dedicated solely and specifically to CSR.
“For us, CSR involves what we call 4 Ps: the planet, people in our company, the public and our product,” says Terry Lake, vice president of corporate social responsibility at HEXO. “We look at how we can have a positive impact in those four areas.
“Our attitude is that it’s a great privilege to be creating a business through the legalization of adult use cannabis. We feel a deep obligation to make sure we’re creating value and reducing any potential negative impacts, whether on the environment or the lives of our customers and our people,” he adds.
One of the company’s priorities is minimizing greenhouse gas emissions. HEXO grows more than 99 percent of its cannabis in state-of-the-art greenhouses located in Gatineau, Quebec and Brantford, Ontario.
“This reduces the amount of electricity, heating and cooling we require,” says Lake, a veterinarian who’s also the former British Columbia Minister of the Environment and Minister of Health and a past mayor of Kamloops. He is currently also running in the autumn federal election.
“We also have water-conservation mechanisms capturing rainwater,” he adds. “We’re reusing that water to irrigate our plants to minimize our water use as much as possible. We’re also experimenting different kinds of lighting to reduce our consumption in the lights we use to supplement sunlight.”
HEXO is currently in the process of completing its first greenhouse gas inventory, which examines aspects such as how much natural gas, electricity and diesel fuel it’s using. It’s working with a company called Smart Cert that provides baselines so that HEXO can identify areas for continuous improvement.
Packaging among cannabis products generally is an area that HEXO wants to finetune on its end. It’s in the process of reducing the volume while simultaneously meeting regulators’ demands for childproof packaging, as well as packaging that’s large enough to bear excise-tax labels and requisite warnings. “We’re already working at packaging 2.0,” Lake says.
The importance of operating in a way that enhances society can’t be emphasized enough. Having launched under the name Hydropothecary in 2013, HEXO initially focused solely on the medical cannabis market. With the advent of a legalized market for recreational cannabis, the company later became HEXO Corp, serving both medical and recreational markets.
One of the lowest-cost producers in Canada, HEXO Corp recognizes that, on the recreational side, it’s operating in what is called the temptation goods industry—a realm that demands diligence.
“While our products benefit medical patients greatly, we also know that the recreational use of our product can potentially have harmful effects if not used properly or if used by young people,” Lake says. “We want to ensure the responsible use of our products. They’re high quality products free of harmful substances and heavy metals. We have an obligation to the public at large.”
In terms of how it cares for its people, HEXO employees can hold stock options in the company for profit-sharing programs and have access to extended health-care benefits. There are also regular employee recognition events.
Lake says that the industry seems to be taking CSR seriously, and there’s a business case for it. Investors are looking for strong corporate citizens: companies that are not only top performers but that are also accountable, transparent and conscientious.
For his part, Lake became interested in cannabis after learning about the science of the plant and its potential medical effects many years ago. With his background in government, he was also intrigued by the public policy shift that accompanied with the end of prohibition and the challenge of implementing this new usage in a responsible way.
“Already we’re seeing our industry step up and support initiatives like the potential for cannabis to help with opioid use disorder and to reduce the number of opioids people are using,” Lake says. “I’m really proud we’re taking that step.”
Among the many community initiatives and organizations HEXO has supported across Canada are Hope Air, the only national charity that provides Canadians in need with free travel to medical care far from home, and Tree Canada, which plants trees and bolsters urban forests.
HEXO prides itself on relationships with various food banks as well as “Grow a Row” programs, where people plant an extra row of vegetables or fruit in their gardens to share with people in need.
“It’s important for us to help people who have vulnerabilities and to find ways and means of supporting them,” Lake says.
Even staff members have taken on the CSR mantle, participating in an event as part of the organization’s ongoing relationship with Tree Canada.
“We’re looking at the potential to expand that initiative in the future to offset our greenhouse gases by planting trees or preventing deforestation around the world,” Lake says. “As we look at the issue of climate change, tree planting is one tool we can use.
“Putting so much emphasis on CSR is a stake in the ground for our company,” he adds. “It’s more than a business practice. It’s the right thing to do.”
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