Ottawa Needs to Stop Ignoring Cannabis Entrepreneurs

Article by Jameson Berkow, Globe and Mail

Ottawa needs to stop ignoring cannabis entrepreneurs JAMESON BERKOW

Less than half of 1 per cent.
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In a country where 98 per cent of all businesses are small businesses, that is how much of Canada’s total licensed pot cultivation space is controlled by small businesses. The figure also represents a generous estimate for the level of attention federal policy makers gave to aspiring entrepreneurs when they designed our legal cannabis regime.
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Just 25 licences for micro-cultivation or processing of cannabis have been issued, according to the latest Health Canada data. Assuming every one of them is using the maximum 200 square metres of canopy space their licence allows for cultivation (many are opting in fact to become micro-processors, which involves turning the dried flower into extracts or distillates), you arrive at a total of 5,000 square metres.
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As a proportion of the 1,211,615 square metres of indoor cultivation space approved by Health Canada as of Jan. 31, micro-cultivation accounted for a whopping 0.41 per cent. Add the 180 hectares of licensed outdoor cultivation space to the total and the micro-market share falls to a barely noticeable 0.17 per cent.
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Seventeen months after recreational cannabis legalization took effect, the shockingly low rate of small-business participation feels like more than just a policy oversight. Willful disregard feels more accurate.
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The clear ambivalence in Ottawa toward cannabis entrepreneurs is arguably already having implications for displacing the illicit cannabis market. How can the federal government possibly hope to rival the century-old illicit market – itself comprising mostly small, local entities – when they refuse to fight fire with fire?
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Moreover, where is the public-safety benefit from denying countless Canadians the right to earn an honest living, create jobs and contribute to an exciting new part of the economy?
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Health Canada didn’t even start accepting micro applications until recreational legalization took effect in October, 2018. That was despite announcing plans to offer those licences in November, 2017, with the goal being to “enable a diverse, competitive legal industry comprised of both large and small players,” according to a news release at the time.
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The unexplained delay handed existing large-scale medical cultivators a head start in the race for recreational legal market share. Then, less than seven months after Health Canada started accepting micro applications, the regulator set aspiring small cannabis businesses even further back.
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As of May 8, 2019, those seeking any sort of licence to grow cannabis could not even submit an application until they had a fully built facility ready.
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Entrepreneurs now had to spend several hundred-thousand dollars and wait for months or even years before they could expect to start earning revenue. And yet, as the barriers to entry rose, the strict 200-square-metre canopy limit for micros kept the potential returns low.
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Many have argued that limit makes it impossible for micro-cultivators to maintain a consistent supply chain and as a result, some have struggled securing wholesale deals.

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