Similar to the beer industry, the non-medical cannabis sector has developed the niche business area of craft cannabis, which allows smaller independently owned producers to develop small scale batch productions of various strains of cannabis.
Much like its beer counterpart, the intention behind craft cannabis is to develop and curate strains of cannabis with an emphasis on quality, by using techniques and resources to develop a more desirable product.
The attention to quality and detail for craft cannabis starts from its initial seedling stage, all the way to the point of sale where marketing and product packaging are developed with an intent to provide customers with a unique experience.
Currently, the licensing scheme established by the federal government sets out three sub-classes of licenses for growing cannabis and two subclasses for making cannabis products. With respect to growing cannabis, there are nursery, micro-cultivation and standard cultivation licenses available, while for producing and processing there is either a standard processing or micro-processing license. The existing licensing scheme somewhat restricts the ability for craft cannabis cultivators and producers to grow and develop within the market. The existing licensing scheme creates either facilities which are too small, such as in the case of micro processing and micro cultivation, or those that are too large, such as standard cultivation or processing licenses, which makes it difficult for craft cannabis business to develop in the market. Furthermore, the regulations and requirements which apply to large scale manufacturers also apply to smaller scale craft cultivators and processors. For example, certain facility, security and record keeping requirements are the same for both micro and standard licenses, which can mean high initial capital costs and maintenance costs, which can often be a barrier to small scale producers.
The marketing and development of craft cannabis also has additional hurdles in comparison to craft brewers. Unlike craft brewers, which have direct access to their customers, craft cannabis growers and processors must sell their product offerings in a licensed retail store. In some provinces, such as Saskatchewan, a retailer is allowed to be associated or connected with a federal producer, which would allow a producer to have direct access to customers through an associated retail store. However, in provinces such as British Columbia the licensing scheme prohibits retail store owners from having any association whether it be a monetary connection or a familial connection with a federal producer. As a result, in markets where this prohibition is in place, craft producers face a greater challenge, as they are required to compete head to head with larger producers for retail store space, which can be a hindrance that some craft producers cannot overcome.
Craft cannabis presents an opportunity for producers to become more experimental with different strains, and could potentially assist in the developing medical cannabis that proves to be even more effective for symptom relief. While there may be added costs to cultivating and producing craft cannabis, there continues to be a market that would welcome a more costly but quality product.
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