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Cannabis Small pot growers find roadblocks on path to microcultivation licences

Part of cannabis and small business and retail

Yan Boissonneault’s daughter was turning blue.

Without warning, his baby had stopped breathing, and he frantically performed CPR while his friend James Gallagher called 911.

Years later, the men still become emotional remembering that day. Mr. Boissonneault learned that his daughter had a rare disorder that caused epilepsy, and when pharmaceutical medications failed to cure her seizures, he turned to CBD oil, a non-psychoactive substance in marijuana.

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Yan Boissonneault, left, and James Gallagher, licensed medical marijuana growers, at a legal medical grow-op they oversee in Mission, B.C.

DARRYL DYCK/The Canadian Press

“It’s been two years now and she hasn’t had a seizure,” Mr. Boissonneault said, standing next to rows of pungent marijuana plants under glowing white lights. “That’s what got me involved in this. It’s quite personal. ... The only profit it gives me is the joy of seeing my daughter smile.”

Mr. Boissonneault and Mr. Gallagher now run a handful of small legal medical grow-ops in British Columbia and are among the “craft” producers who hope to use their skills in the fledgling recreational market by getting a new licence for microcultivation.

But would-be applicants are discovering a major hurdle in their way: obtaining municipal approval and zoning, a key requirement of the licences. Many cities have not established zoning and either aren’t ready or are reluctant to allow microcultivation, growers say.

Small growers say the federal government failed to educate municipalities about the new licences and the need to create zoning to support them. As a result, they say, applications are delayed, the legal supply chain is beset with shortages and the illegal market continues to flourish.

“The spirit [of microcultivation licences] was to get the small growers involved and to get the black market to convert over to the new market,” said James Walsh, president of the BC Micro Licence Association. “In reality we’re just not seeing it.”

Ottawa began accepting applications from microgrowers on Oct. 17, the same day it legalized recreational weed. The licences cover 200 square metres of plant canopy, allowing a premium cannabis producer to make up to $3-million in gross revenue a year, Mr. Walsh said.

But many small growers have not been able to apply to the federal government because they are still waiting for local zoning, he said.

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Health Canada said it has received 23 applications for the licences so far, including five in B.C., five in Alberta, seven in Ontario and six in Quebec.

Cannabis legalization was the result of more than two years of consultation with all levels of government, and Health Canada has answered many questions from municipalities and remains available to do so, said spokeswoman Tammy Jarbeau.

“Health Canada has encouraged and supported municipalities to put in place standards and local bylaws as necessary,” she said in a statement.

The Federation of Canadian Municipalities published a guide to cannabis legalization in August, 2017, providing advice on bylaws, zoning and business practices. The federation stressed the need to respect local authority during legalization consultations, it says on its website.

Still, small growers say they’re encountering municipal red tape and it’s especially bad in B.C., despite its reputation as a marijuana mecca.

Part of the issue is B.C.’s Agricultural Land Reserve, legislation protecting farmland from being taken over by industry and residential development. In July, the province introduced a law allowing cities to prohibit concrete-based pot facilities on the land reserve.

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There’s good reason to ban pouring concrete on precious agricultural land, said Malcolm Brodie, the mayor of Richmond, B.C.

“Very simply, you put that kind of construction on the farmland, you’ll never have it for soil-based farming again,” he said.

The city only wants one cannabis facility and it already has one, a licensed producer in an industrial area, said Mr. Brodie. He said applications in industrial areas will be considered on a case-by-case basis, though he wouldn’t guarantee any would be approved.

There are already “hundreds and hundreds” of black-market grow-ops on the land reserve, said one small grower who asked not to be identified due to legal concerns. Within a 10-minute drive from his property, over a million dollars in cannabis is likely being produced monthly, he said.

“Do they want us to keep growing the weed and selling it out the back door or do they want the tax money?” he asked. “We’re going to do it on ALR land regardless.”

Growers use concrete facilities because soil is more likely to breed mould, yeast and bacteria, and open-air farming is impossible due to weather, he added.

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In Ontario, some municipalities created zoning before Oct. 17 while others have waited until microcultivator applicants approach them, said Mathew Columbro, president and founder of consultancy firm Vindica Cannabis Corp.

“I think Ontario is doing a little bit better than B.C., but it’s not perfect,” Mr. Columbro said.

The application portal should have been opened prior to legalization day, instead large licensed producers got the first shot at the market, said Ian Dawkins, president of the Cannabis Commerce Association of Canada.

“The big story is fairness,” he said. “If big business is afforded an opportunity to bid on something and small business is iced out, then that is considered an egregious policy failure.

“Yet on this enormous multibillion-dollar national project, where is that same leadership?”

Small medical producers have put a lot of time and passion into growing quality marijuana, said Mr. Gallagher, looking out over the thriving grow-op he shares with Mr. Boissonneault.

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“We do have a lot of knowledge and we want to see how that transitions,” he said. “Can we turn this into a business now that it’s legal? That’s something that’s always been on our minds.”

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