Man the gates!

October 17 says Trudeau. If cannabis packaging has to be “blah”, watch for non-blah “swag” as a main branding/marketing tool. Medical prescriptions will decrease as many prescription holders will opt for the simplicity of the recreational market – no more going to the doctor every 3 months to have your prescription renewed. This said, medical patients who already grow will continue to grow as they have much higher legal grow allowances (5 plants for each gram-per-day prescription – i.e. 4gr/day=20 plants allowed vs. the 4 plant limit for recreational growers). Many of these growers are already registered with Health Canada. Both medical and recreational growers are allowed to make extracts for their own use (possibly also for “sharing” but that is unclear at the moment).

The new “micro-cultivation” and “micro-processing” licences will give rise to an analog of the craft beer/distillery model – but it will happen a lot faster than it did with the beer/distillery market. The bottleneck will be Health Canada as it deals with an onslaught of applications. Those micros who are in at the beginning will be ahead of the game once the edibles/vape markets open in 2019. That’s only a year away and it will pass quickly so if you want to be in this market, start your preparation now. Here is a contact email at Health Canada –  [email protected]

Expect specialized micro-cultivation “spaces” to start appearing to accommodate the new “micros”. These will consist largely of specially-outfitted shipping containers and/or repurposed real estate – think vacant office buildings and warehouses divided into 200, 500, 1000, 2000 square foot spaces equipped with lights, HVAC, nutrients, etc… Sitting alongside the micro-cultivators are the “micro-processors”, who may also be micro-cultivators. The micro-processor will extract and process cannabis oils for sale via licensed sellers. Medical “micros” will have a distribution advantage in that medical cannabis/oils can be sold via the Internet to prescription holders anywhere in Canada – but that doesn’t mean it will be easy as the channels will likely be “stuffed” by the big guys. Watch for craft CBD micros and marketing co-ops.

The demand for cannabis oil extractors will increase generally and I expect that small-scale CO2-based extractors will become an extractor of choice for the flourishing “micro” scene.

Man the gates, the hordes are coming!

Disclaimer: The above is the opinion of James Durward and applies only to the legal Canadian cannabis market.