Second of a series on the development of B.C.91Ƶs craft cannabis production.
When Canada was approaching cannabis legalization in the fall of 2017, Travis Lane made a prediction: if underground producers were shut out, the country would be running out of legal marijuana within a month.
In the year since legalization actually took effect, in the fall of 2018 after a four-month delay, that initial shortage has led to a glut as large-scale greenhouse growers ramped up production. With its tax-heavy price and variable quality, legal cannabis has barely dented the market in British Columbia, one of the strongest and most famous in the world.
At that time, Lane was director of the fledgling B.C. Independent Cannabis Association, representing licensed medical marijuana dispensaries. As a long-time grower for compassion clubs and dispensaries, Lane was in the 91Ƶgrey market91Ƶ that Premier John Horgan wants welcomed into the age of legalization.
91ƵThe last study I saw where the numbers looked realistic put it at about 12 per cent of sales in Canada were legal and 88 per cent were illegal,91Ƶ Lane said in an interview with Black Press. 91ƵAnd I think that91Ƶs not a bad number for the first year, but it could be a hell of a lot better with regulations that are more business-favourable.91Ƶ
Will BC break even on sales this year? Still soon to say, says
91Ƶ Tom Fletcher (@tomfletcherbc)
Now Lane has three producer licence applications in to Health Canada, for facilities he wants to build in Greater Victoria. He says he can soon be in production as Whippletree Organics, Captured Light and Nuvem Nurseries, to provide more B.C. craft options for retail stores that are largely supplied by big producers.
The association has changed its focus to cannabis education, working on industry training with Camosun College and Kwantlen Polytechnic University. But Lane says they still do some government lobbying, speaking to Health Canada and B.C. Public Safety Minister Mike Farnworth91Ƶs ministry.
91ƵIt91Ƶs getting better,91Ƶ Lane says of the licensing system. 91ƵThe regulators are bureaucrats so it takes time to get through to them, but we have found that it is easier for small businesses to get into the space and operate.91Ƶ
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Lane says he has financing for his three brands, but many small producers can91Ƶt afford to build their facility, get it federally inspected, and then wait even longer for a licence before they generate their first dollar.
91ƵIt might be easier to fill out the forms and figure out what you want to do and what licence to apply for, but people are still waiting nine months, a year for their licences to be approve, which leaves businesses in the lurch,91Ƶ Lane said.
Farnworth agrees that Ottawa is making progress. He recently visited growers in the Kootenay region, which now has a $676,000 grant to help with the layers of federal, provincial and municipal licensing and zoning regulations. And he has been working with Health Canada on the financing issue.
91ƵOne of the things we have been saying is that they need to have a licensing and production regime that allows for small-scale production to take place, that is not too onerous,91Ƶ Farnworth said in an interview. 91ƵRight now there are challenges with that, because you in essence have to have your facility built before they91Ƶll give you a licence. How are you going to get financing if you can91Ƶt get a licence?91Ƶ
By mid-November, B.C. had nearly 200 retail store licences issued, and was second to Ontario in the crucial federal production licences. Farnworth said the B.C. Cannabis Stores, the province91Ƶs monopoly wholesale and online seller of recreational marijuana, is still getting much of its product from large producers, some out of province.
Lane says Farnworth should reconsider 91Ƶfarmgate91Ƶ sales for cannabis, as B.C. has done successfully with wine and beer. But Health Canada has kept its medical model strictly in place, with tobacco-style excise tax stamps and graphics restrictions, along with elaborate security packaging.
91ƵI91Ƶm a craft beer guy,91Ƶ Lane said, and one way B.C. craft beer producers have made inroads into a market dominated by multi-national beer companies is through edgy, innovative branding, and brewery tours.
91ƵThose big public companies, they91Ƶre not necessarily interested in producing high-quality product,91Ƶ Lane said. 91ƵThey91Ƶre producing as much as they can. And there91Ƶs a place in the market for that, just like Budweiser, just like Coca-Cola.91Ƶ
Farmgate sales is the key to craft producers getting traction, he says.
91ƵThere hasn91Ƶt been a whole lot of movement on it, but there aren91Ƶt a whole lot of local B.C. licensees yet,91Ƶ Lane said. 91ƵAnd so it91Ƶs kind of a chicken or egg situation. Who are they going to give the farmgate licence to if we don91Ƶt have a half-dozen micros somewhere in Victoria and Vancouver? They91Ƶre going to end up giving it to Tweed or something like that, and that91Ƶs exactly what they don91Ƶt want.91Ƶ
Next part: The Community Safety Unit cracks down, as edibles arrive.
tfletcher@blackpress.ca
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