First comes legal cannabis. Then, say industry insiders, will come the artisan stuff
Craft cannabis will be desired by consumers, but it won't be easy for mom-and-pop pot shops to compete
When Albertans walk into a retail cannabis store on Oct. 17, they'll be able to choose from a selection of about 300 products from 13 different licensed producers.
But for the more experienced cannabis user, the experience might be a bit like walking into a liquor store and choosing between Molson Canadian and Labatt Blue.
The Alberta Liquor, Gaming and Cannabis Commission has signed deals with 13 cannabis producers to provide the province's pot. One — Aurora — is an Alberta company; all of them are federally approved large-scale producers.
Products available will include dried flower, milled flower, pre-rolls, oil, capsules and seeds, at a variety of price points.
But Lana Syms, a self-employed retail consultant in the medical cannabis industry, said consumers won't yet have access to the really good stuff.
"On the level of the street, so to speak, licensed producer weed is still mocked. From the 420 culture as a whole, nobody thinks LPs are growing good weed," Syms said.
"The people that will buy that weed are people that are naive and don't know any better, but they'll become educated as time goes and then they'll begin to look for better sources of material than what the legal system will provide."
Craft cannabis producers face cost hurdles
For now, so-called "craft cannabis" from small producers — known as micro-cultivators and micro-processors — will not be sold in Alberta's retail cannabis stores.
Micro-cultivators produce cannabis under a 2,000-square-foot canopy space. Many micro-cultivators have been growing under the black market or the Access to Cannabis for Medical Purposes regulations for years, Syms said.
These small producers will be able to apply for federal licences on Oct. 17, said Deepak Anand, vice-president of government relations and development at the consulting firm Cannabis Compliance Inc.
Initially, Anand said, it will be tough for the little guy to compete with the more well-established, larger licensed producers.
If they do become licensed and get access to sell to the AGLC, it will increase the diversity of cannabis strains available to the public, he said.
"Most people that are currently growing craft [cannabis] have been doing so illegally, and the requirements of the AGLC … are quite significant," he said.
For some current micro-craft cannabis producers with unsophisticated business skills, "it's going to be quite challenging for them to supply to these sort of government monopolies, if you will."
The cost of setting up a large licensed cannabis production facility can run up to $5 million, Anand said. Micro-cultivators can expect startup costs to average $500,000, he added.
'True artisans of the industry'
The AGLC has no timeline on when it will be looking to sign with craft growers, spokesperson Kaleigh Miller said. But once it gets a sense of what the market will be like, it will be looking to sign more contracts with licensed providers, she said.
"We already know that we likely will want to enter in more contracts with people, and specifically Albertan companies. We anticipate that will grow over time," Miller said.
Syms recognizes the AGLC is doing its best to provide good product, but is looking forward to seeing craft cannabis reaching the consumer market.
While licensed producers may be preoccupied with mass production and stock prices, she said. For the micro-cultivators, it's a passion.
"The craft growers are the ones who know and love and respect the plant itself. Yes, they hope to make money and make a living off of it, but more importantly it's about the plant itself," Syms said. "They're the ones that want it to be done right with the best products possible.
"The craft producers are going to be the true artisans of the industry."