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article imageCannabis co-operatives may help small producers go legal

By Ken Hanly     Feb 11, 2019 in Business
Many small producers who were already producing marijuana before it was legalized claim that the new marijuana legislation framework excludes many small producers with much experience.
Marijuana co-ops to the rescue
A recent CBC article notes: " British Columbia may be famous for its bud but some say Canada's new marijuana legalization framework is excluding the small producers with established know-how. A movement is growing in the province to address that problem with a common idea: cannabis co-operatives."
Barinder Rasode, the founder and CEO of Grow Tech Labs said: "Some may argue we've lost our place to either Ontario or Alberta based on the number of licensed producers based out of those provinces. We're very focused on making sure that B.C. remains a world leader in the area." Rasode, who also formed the National Institute for Cannabis Health and Education, says that she has traveled throughout BC talking to small producers who had been growing marijuana well before legalization.
Rasode reports that small producers complained that entering the legal market is too costly for them and the regulations too complex — including such restrictions as having a 195 square meter production limit. The security clearance criteria are also non-specific.
Grow Tech Labs and Victory Square Technologies have launched a cannabis co-op this month that is to begin with a consultation province with small producers and processors Rasode claimed. Grow Tech will provide startup funds, but it will be up to the members to choose an executive and set bylaws and a governance model.
Rasode notes: "To have a co-op based model where there is a collaboration on not only success but risk mitigation and learning outcomes from each other is a model that has worked in Canada and definitely in B.C. with other commodities like wheat and cranberries."
Other Cannabis Co-ops
The Cascadia Agricultural Co-operative Association is trying to create a medical marijuana co-op that would include not just producers and processors, but also consumers and retailers. The co-op would provide shared access to resources such as accounting and legal support.
A CBC article reports that,
"Current regulations prevent such a marketplace from operating independently. All distribution has to go through the B.C. Liquor Distribution Branch." This is true of recreational marijuana, but unless things have changed, medical marijuana goes through licensed producers: "There are over 40 Licensed Producers (LP’s) that operate under the Access to Cannabis for Medical Purposes Regulations (ACMPR). These LP’s offer a wide range of cannabis products that are currently being sold in dried cannabis and cannabis oil form. Prices vary from LP to LP and most offer patients a compassionate pricing discount if the annual household income is less than $30K. Patients can choose between products that contain tetrahydrocannabinol (THC), Cannabidiol (CBD) or a combination of both cannabinoids."
No doubt the co-op does not fit into current regulations. That is a problem that will need to be dealt with before the Co-op can begin operating.
Kootenay Outdoor Producers Co-op
In Kaslo, BC, Todd Veri said he was inspired to start the Kootenay Outdoor Producers Co-op after he read a federal government task force report on cannabis which claimed there would be space for small growers.
The co-op has 35 local outdoor properties lined up to join. It is reducing costs by using a "community garden" approach in which several growers will cultivate the same piece of land. The co-op also has a 460 square meter nursery in Salmo ready to begin operation but Health Canada has yet to process the application he had submitted last December.
Licences are expensive and take time to get
Veri said: "Our biggest concern now is we've been going on the hope that the licence application will take 60 to 90 days. If they take 120 or even 150, that's going to really impact whether our farms get licensed this year."
Each property requires its own licence, a fact that makes the community garden approach for small producers sensible. Each licence involves a $23,000 regulatory fee, a $3,000 application fee, a $1,700 security fee, plus other costs. At the end of January this year, Health Canada had received 83 micro-cultivation licence applications. This included 54 for cultivation only, 7 for processing only, and 22 for both. Only one company so far has received a micro-cultivation license.
There are no special rules for co-ops
Uruguay and the state of Massachusetts have special regulations for co-ops. Rielle Capier, a researcher at the BC Centre on Substance use notes: "The regulations here don't have a separate category for co-operatives like they do in those other jurisdictions, but our regulations also don't necessarily preclude that from happening."
The system of having many small local producers worked while marijuana was illegal. The small growers simply want to preserve that arranged within a legal structure Capier claims.
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