Cannabis has long been an “unofficial” underpinning of the Kootenay Economy.
Community Futures Central Kootenay is committed to ensuring that local entrepreneurs interested in competing in the legal cannabis industry have the supports they need to enter and compete in the new global marketplace.
What factors will influence success in the legal market?
Understanding government policies and their implications
Marijuana legislation is complicated at all levels of the government. Successful operators must be able to navigate the regulatory landscape at both the provincial and federal level. Inventory management, QA/QC compliance, accounting standards and managing tax remittances may be new ground for local growers.
Development of effective marijuana strains
Growers that can develop the most potent and effective strains can potentially attract greater demand for their products, if they can find ways to market the products within the advertising constraints within Canada, or internationally.
Marketing of differentiated products
Dispensaries and sellers must properly promote their products given the differentiated nature of dried flower and processed cannabis products. Note that 70% of the dollars spent in the marketplace is on extracts, neutraceuticals, and edibles, and only 30% of revenues comes from primary product. Not everyone is a smoker, but a great many people can benefit from this plant’s various properties, and this is reflected in the 2018 segment sales.
Fast adjustments to changing regulations
Regulation is constantly changing. Growers and processors must comply with the latest legislation or endure fines, business closure, or even arrest, and they must be able to adjust to changing regulation quickly and smoothly. This requires diligent attention to regulatory policy, and the funds and will to pivot to fit new regulations as they evolve.
Efficient production for long term margin gains
Cost of production must be managed effectively to compete in a market where the price is likely to drop as more production comes online to meet demand. Production methods that may have worked with black market prices and little regulation or competition, will be challenged by increasing economies of scale, production efficiency, and the higher cost regulatory compliance including security, QA/QC, sanitation, pathogen control, and creating safe work environments for staff. Firms that can produce quality product efficiently will make higher margin now, and weather commodity market fluctuations down the road, better than those that do not.
Helpful links for entrepreneurs in the cannabis cultivation or processing sector
- Kootenay United Cannabis Association
- RDCK local Zoning, permits
- Health Canada –Cannabis overview
- Health Canada –Cannabis licensing guide
- BC PST Bulletin on Cannabis
- Federal Excise Tax Collection: Obtaining and CRA Cannabis License, and collecting duty on Cannabis
- WorksafeBC for Cannabis Cultivation (Subsection of Agriculture)
- Guide to the BC Employment Standards Act
- “Employee or Contractor” Factsheet