Craft cannabis growers have a lot to offer rural communities, but new Health Canada regulations may be a mixed blessing, experts say.
In May, Health Canada announced that those applying for licenses to grow cannabis must have a fully built site meeting all cannabis regulations. In the announcement, Health Canada cited the changes would address the wait time for licensing.
Why it matters: Developing an industry of small cannabis growers has the potential to create new economic opportunities for rural communities.
It said this requirement would weed out the 70 per cent of applicants who successfully passed the initial paper-based review of their application, but have never submitted their evidence package to show they’ve met building requirements.
At the end of April, there were no licensed craft, or micro, growers of cannabis in Manitoba and only one in Canada, according to Health Canada numbers, though 14 applicants for a micro-class license have received a ‘confirmation of readiness’ letter, which means that the department is satisfied that the application would meet the regulatory requirements based on an in-depth paper review.
David Hurford said the new rules show the government is “not really aware” of what it’s like to be a craft grower.
Hurford, the former national policy secretary for the Liberal Party of Canada, speaks on behalf of the B.C. Small Cannabis Producers and Processors.
“We were already starting at a low point,” Hurford said. Potential producers had many hoops to jump through, and capital was hard to come by. Now, he said, it will be worse.
“We think the government needs to go in the opposite direction,” said Hurford.
It’s been widely reported that Canada has a shortage of legal cannabis. Hurford said there are about 25,000 small farmers growing medical marijuana, and he would like to see 15 per cent of these transitioned to growing recreational cannabis.
“I think it’s all in our interest,” he said.
Hurford said each micro-grower could employ three or three-and-a-half employees per year. If 15 per cent of medical growers began growing recreational cannabis, this would create 2,000 direct jobs, mostly in rural areas.
He estimated that another thousand jobs would be created in processing, as well as increased demand for hardware and services like accounting.
Hurford said “no effort” has been made to transition medical growers to recreational cannabis.
On the other hand, Rob McIntyre said the new regulations don’t require growers to have their facilities fully built out. McIntyre, CEO of Salvation Botanicals, said while a micro-cultivation licence allows up to 200 square metres of total canopy space, growers can start much smaller and expand once they’ve been licensed.
The new regulations are a “step forward” for Health Canada, said McIntyre, adding this would eliminate applicants with no skin in the game and streamline the process for serious growers.
McIntyre suggested people step back, examine the regulations and plan how they can get into business with the smallest capital outlay. Then they can use their income to expand.
“Start small and grow tall,” said McIntyre.
He added that growers might consider cultivating their first crops outdoors and use that income to build facilities.
McIntyre said there’s already a thriving community of illegal cannabis growers. Done correctly, he says there’s a great opportunity for small operators to stake out a space in the cannabis industry.
“I definitely see a day when the Prairies are the largest producers of cannabis,” said McIntyre.
He suggested potential growers start with a small footprint, leave room to grow, get a good testing partner, find a place to get good advice, and ensure they’re compliant with Good Production Practices (GPP).