Changes to Health Canada rules announced Wednesday will likely make it harder for West Kootenay cannabis growers to go legal, say people in the industry and analysts.
“It makes it a little scarier,” says Dan, a micro-grower who didn’t want his last name used. “It’s definitely a deterrent.”
Health Canada announced it was changing the licensing requirements in a bid to speed up the process. There have been ongoing complaints by B.C. growers that the licensing process is opaque, expensive, and weighted to big producers.
The federal health body said that growers wanting to get a licence to grow, produce or process cannabis have “to have a fully built site that meets all the requirements of the Cannabis Regulations at the time of their application, as well as satisfying other application criteria.”
Prior to this, cannabis licence applicants could submit an application with their plans and get approval before building.
The agency says a “significant” amount of resources has been used to review applications from entities that are not ready to begin operations, contributing to wait times for “more mature applications” and “an inefficient allocation of resources.”
But the practical reality in the Kootenays is most small producers are family-run, and can’t easily put up the money to build a site on speculation.
“It just means that much more of a gamble on borrowed money,” says Dan. He’s been working on getting a micro-grower’s licence, but has been trying to figure out the right path.
“Which is complicated,” he told Castlegar News. “Estimates keep going up. We thought we could build for $5-600,000. Then the price went up to a million, then a million-and-a-half dollars.
“‘It’s definitely a deterrent. Banks aren’t seeming too interested in loaning money for these endeavours yet, so you’re looking at venture capitalists, friends and family. Health Canada is changing the rules as you go, if you get that far invested into something and you can’t pull it off, you’re kinda screwed.
“It makes it kind of scarier.”
Fighting for way of life
A long-time cannabis promoter and entrepreneur in Nelson calls the new Health Canada rules “brutal for a lot of folks.”
David Robinson, a director for the Craft Cannabis Association of B.C., attended a call with Health Canada yesterday explaining the rules, and says he understands why they made the changes. He said the system was getting bogged down by speculators and people not ready for growing.
“It is going to allow people who are ready to enter more quickly, so it will expedite things for people who are ready,” says Robinson. “But my big fear in this is the little people getting left behind.
“We are just going more and more in that direction. We are literally fighting for our way of life here.”
He says the line has been drawn between people who have money and people who don’t.
“All the little guys can play,” says Robinson. “All the little guys with $2 million. That’s the reality.”
A Selkirk College instructor who’s been studying the transition process from the illegal cannabis market to the legal one in the West Kootenay isn’t impressed by the changes.
“I’m very disappointed,” says Tracey Harvey, who works at Selkirk but is studying the cannabis market for her PhD at the University of Guelph. “To me this represents a failure of the micro system, and it’s as if Health Canada has given up on small farmers and/or do not care.”
An industry consultant who’s been working to develop a co-op with small B.C. producers says he’s unimpressed by the way Health Canada announced the changes.
“My concern is for the lack of consultation,” says David Hurford. “Who did they talk to before making this decision?”
Hurford says Health Canada officials attended a recent symposium on the industry in Nelson, but the signals there to them weren’t picked up.
“I don’t think anyone in that meeting suggested this as a solution,” he says. “And I don’t see anything in the announcement that should make craft growers celebrate.”
While Ottawa has talked about creating a space for small producers to create craft product, he says this policy will not accomplish that.
“If you really wanted craft growers in, and the government says they do, this is not the way to go about it,” he says. “It’s just another one of those disincentives. When the government should be creating incentives for these growers to come in, they’re actually putting up more barriers.”
Hurford says public meetings Health Canada announced for next week in Kelowna on Tuesday would be one opportunity to provide the government with feedback on the new policy, and local growers should lobby with the province to provide feedback as well.
But Hurford’s not sure the policy will actually change much, as only a tiny fraction of small growers have managed to navigate the federal licensing system anyway.
“People were already feeling overwhelmed before this announcement, there were already enough barriers,” he says.
“Sometimes if you’re already down and hurting, and you get kicked again, you don’t really feel it as much.”