With supply consistently remaining low in legal outlets in Canada, the race is on for companies on the recreational and medical sides of the industry to produce more product for a cannabis-hungry market.

For companies like Alberta-based SugarBud Craft Growers Corp. (TSXV: SUGR), that means constructing additional grow space while waiting on an often slow-moving licensing process.

The project is currently half a million over budget at this point, running slightly under $8 million.

SugarBud just completed a major milestone in the first phase of constructing a new grow facility in Stavely, with walls, plumbing, and electrical systems now in place.

The project is currently half a million over budget at this point, running slightly under $8 million as phase 1 of the project nears the halfway point.

While two flowering rooms of that facility are nearly ready to begin growing cannabis, SugarBud is one of hundreds of companies awaiting new cultivation licenses from Health Canada in the wake of country-wide legalization through the Cannabis Act.

After filming an attestation video for Health Canada next week, the company is currently expecting to receive licensing by the end of the quarter, at which point two partially finished grow rooms will begin cannabis cultivation.

In a construction update issued today, SugarBud stated its intention to move employees into the building by Feb. 28, 2019.

With the completion of this first phase of construction and licensing, an additional six vertical grow rooms are projected to be operational by the end of 2019.

Those 28-foot-tall rooms will utilize a four-tiered canopy system, with the company issuing this statement about that design choice:

SugarBud’s vertical grow method with four layers of flowering canopy is anticipated to result in a 211% flowering canopy to flowering floor plate ratio. This high utilization of square footage maximizes revenue per square foot of floor plate and minimizes capital costs per square foot of flowering canopy.

Previously operating as Relentless Resources Ltd., SugarBud began trading on the TSX Venture Exchange at the end of October after acquiring Grunewahl Organics Inc.

That acquisition included a subsidiary in the late stages of applying for licensing under the Access to Cannabis for Medical Purposes Regulations that spurred on this two-phase construction project.

The second phase of construction is due to kick off next year, with plans for an additional 12 grow rooms to be added to the facility. When both phases are finished, SugarBud estimates a total of 92,500 sq. ft. of grow space will be licensed and operating.

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