Cannabis Micro License … Is It For You?
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Cannabis Micro License … Is It For You?

November 20, 2019

Definition of “Micro” Under the Cannabis Act

Health Canada issues four types of licences for cultivation (Standard, Micro, Nursery, and Hemp) and two types for processing (Standard and Micro).

For cultivation, “Micro” is defined as any operation up to 200 square metres in cultivation area. On a hockey rink, that would be about the area from the benches to the centre dot wide, and between the two blue lines long producing a maximum of 600kg of dried cannabis annually. The act includes a table that lists equivalents. For example, 1kg of dried cannabis is equivalent to 5kg of fresh plants.

Source: Health Canada

 

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For small producers this still amounts to approximately $1.5 million in startup costs. Although it’s no small investment, micro-breweries can easily reach startup costs of $1 million or more which is not out of line with the start up costs for a craft cannabis operation.

Difference Between Craft Cannabis Growers and Craft Brewers

The major difference between craft cannabis growers and craft brewers is direct access to their customers. Craft cannabis growers under a Micro-cultivation or Micro-processing licence can not sell directly to customers for adult use, unlike their craft brewery counterparts. The hope is that direct-to-consumer sales will happen in the future, but for the moment it isn’t.

Another drawback to craft cannabis is that they will require plain packaging and limited marketing, unlike craft breweries who can create labels, giveaways, and merchandise. This will have an impact on the craft cannabis grower’s ability to make consumers aware of their product(s) and promote brand loyalty.

The financial barriers to entering the cannabis market at any level are significant, but not that much more than starting a micro-brewery. Craft cannabis growers operating with micro-cultivation and micro-processing licences will be more likely to experiment with different strains producing a better quality product. Not only will this benefit adult users, it could potentially benefit medical cannabis users by encouraging development of targeted and/or more effective symptom relief with edibles and lotions. Have no doubt though, prices will likely be higher for the consumer, just as they are with craft breweries.

Despite the limitations in terms of marketing and direct-to-consumer sales, craft cannabis operators do have an opportunity to produce a quality product at a price point consumers will accept.

The question remains … is it for you?

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