‘Hype, hope and dreams’: B.C.’s craft cannabis industry stalled

British Columbia has been a mecca for cannabis enthusiasts and growers long before the product was legalized in Canada in 2018.

Industry advocates say the underground pillar of the province’s economy has not flourished, despite a tough fight for legitimacy.

Marshall Anselmo of Grass Roots, a Vancouver Island company that markets particular strains of cannabis plants, said policy constraints are strangling life from the dreams of small craft growers and ruining the legacy of B.C. bud.

“There was a lot of hype, hopes and dreams,” said Anselmo, who helped growers cultivate cannabis with pre-legalization and a medical license.

“But that kind of took a very sharp turn,” he said.

“There are still a lot of growers out there in the weeds, waiting to see how things turn out.”

David Herford, secretary of the BC Craft Farmers Co-op, said that although BC has competitive advantages, the West Coast cadre of small-batch producers may not have access to the market.

There are 6,500 medically licensed producers in the province, said Hurford, a former policy analyst for the federal liberals, but only a fraction have transitioned due to an over-the-top regulatory and licensing regime that favors large corporations.

“We have the best farmers in the world, and they are being laid off,” he said.

“Everyone wants a B.C. craft cannabis product, but the federal government only approved 60 licenses in the first three years of legalization.”

The Federal Micro Farming License was conceived to encourage smallholder farmers to access the market and allow the production of 200 square meters of cannabis.

But the risks and price tags associated with applying for a license are enormous, and producers may not make a comeback with such a small footprint, Hurford said.

Anselmo agreed, noting that it could cost $500,000 to $1 million with no guarantee of approval.

“It’s a risk from long ago,” he said.

Municipalities in charge of zoning regulations have veto power, and a micro-grow facility must be fully built and production-ready before it can receive final approval from Ottawa.

Anselmo said that with declining marijuana prices and the skyrocketing cost of property in B.C., there’s a steep hill for more small growers.

He said craft producers don’t have direct access to consumers who typically want to buy local quality hemp from producers they know — like they did before legalization.

Hurford said craft producers should use the B.C. liquor distribution arm as an intermediary to get their products to retailers at prices that aren’t necessarily true.

If craft farmers want a direct line to customers, they will have to separately apply for a separate federal license to process and/or sell their products – a costly and difficult route as well.

“It’s so heavily regulated, it feels like it’s made to fail,” Hurford said.

“This craft was not made with farmers in mind, and there seems to be some bias against them in the system.”

The BC Chamber of Commerce recently released a report calling for changes to “unlock” the potential of BC’s cannabis sector to boost consumer access, lower regulatory costs, and taxation and design markets.

Suggestions include allowing marijuana retailers (now able to take orders online) to opt for delivery services like Uber Eats or Skip the Dish.

The chamber called on the province to intensify a long-promised farm-gate program to promote agri-tourism to rural areas, and allow small producers to bring customers directly to market as they succeed. Make wine or craft brewery markets.

The report said the province should work with Ottawa to reduce the high taxes associated with cannabis, and base them on the percentage of sales rather than the price per gram.

“The higher rates are because of the money that even the government thought was going to be there,” Anselmo said.

“But although the prices have come down, the taxes have remained the same,” he said, adding that like any agricultural enterprise, the producer gets the least amount of profit from his produce in the supply chain.

He said Ottawa should also consider imposing a massive tax.

“Small micro producers are being taxed in the same way as multimillion-dollar corporations.”

Herford said some of the things that province and federal governments can do are help with financing because banks are still reluctant to provide loans to the cannabis sector.

“Farmers don’t have access to capital and banks wouldn’t touch them normally, and it’s very difficult to get insurance,” he said.

He said governments need to provide economic development funding and invest in capacity, training, environmental technology and underrepresented groups such as First Nations or women entrepreneurs, as they would in any other emerging sector.

Hurford said the province has promised it will launch the farm-gate program in 2022, but it was a long time coming.

“It is a good policy, but it should be started very soon,” he said.

“How many opportunities have we missed, especially in rural BC where it has been such a difficult year?”

Despite the growing pains, Anselmo still has high hopes for BC’s craft producers, who have the advantage of having a respected, tight-lipped collaborative group dedicated to developing the very best products.

“The market has yet to figure itself out, it is only three years old,” he said.

“But the bottom line is we have producers, products, and we have names.

“Stick BC on the label, and people are going to check it.”

Rochelle Baker / Local Journalism Initiative / National Observer of Canada


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