Sneak Peak - Farm Gate in BC

Can you tell us about what you’re doing now with Farm Gate?

We’re currently looking at the notion of Farm Gate stores having the ability for on-site consumption. We're doing engagement to start the conversation of what a Farm Gate business could look like - what does it need to succeed?  We have to keep in mind public health and safety issues, and some things will have to work within the existing framework - no indoor smoking and vaping, no minors, measures to reduce the illegal cannabis market, measures to address safe driving, and measures to address the co-use of cannabis and alcohol. We’re also looking at the role of local governments, who play a significant role in cannabis retail licensing, just as they have a say in spaces for alcohol consumption. So, with all these factors to consider, we’re asking what this could look like… Is it events? Is it outdoor spaces? Is it different products, or different experiences?  

We really want to hear from businesses about their vision and what's critically important for them to have in order to make the Farm Gate business model viable. Of course, we're here also as regulators, and while we want businesses to succeed, we're thinking about how to make it safe and something that British Columbians are going to have trust in. We want to make sure it’s a good experience, for the industry and businesses, but also for neighbours and communities.

What is your role as a public servant? How does it compare to the elected officials?

We play the role of implementers and advisors. We help government understand the different issues, what matters to different stakeholders, to understand the business and the industry, and then how regulatory systems might intersect with it. We were tasked with talking to people in the industry to have some in-depth conversations and look at the industry at a macro level. We then provide a lot of options and choices and give our advice. We don’t just say “this is how you should do it”, but rather we give a range of options for the elected officials and decision-makers to make an informed decision. 

How did this program come to be?

It’s important to note how fast this all happened and how much time pressure there was. After Trudeau announced how the federal legal framework would work, we basically had a year to build out the entire system, build up all the rules, consult with British Columbians, build out all the logistics for LDB, figure out how the licensing would work, and how enforcement would work. It was a massive project with huge effort put into it. We looked to the structures created around liquor and those agencies to get their expertise to apply as much as we could to cannabis to help us get through the tight timeline to roll out the system. 

One of the big decisions made in that time about the structure resulted in what we still have now of two supply chains. If you're a producer, you can sell into the medical system, or you can sell into the provincial distribution wholesale system. In 2018, we started hearing from small producers that they were facing barriers - the big barrier at the time being lack of licenses. We realized the business model was going to need to change for small businesses to succeed – going to need more sales channels, more access to market, and sales channels that are a better fit for small businesses. 

We could then look at the cannabis economy and what British Columbians wanted to achieve with it, instead of operating in a sort of ‘emergency build out’ mode. People wanted to hear from our elected leadership that there was a vision of cannabis having an important role in the economy – that it can be something like wine or beer, that we should be thinking about building a future that accommodates things like Agri-tourism and the cannabis sector. We’ve been thinking about how we reconcile the regulatory system we built out with these visions, and with the need for small businesses to be able to succeed in this market.

Do you communicate these visions with the elected officials?

We’re now at the next round of sorting out what the models look like and what it’s going to take for them to meet all the different objectives we have. We may have to take back some choices based on what we hear in meetings like this and make tweaks. Some things we may need to rethink. We'll take those back to the elected officials and update them on what we've heard, give them those choices and see where we go next. I think the path that we're going down is the one where we’ve had endorsement.

Do you keep informing elected officials after programs get implemented?

Our role is to keep on listening and they're talking to their constituents. It's dynamic, it's a flow from us to them and them to us. I think we have a lot of elected leaders who are very engaged. We're getting questions from that, we're getting “Well, what about this?”, “What about that?” We're able to bring up issues and say, “you know, we think that there's an issue here, we want to consider this. We want to consider making a change here.” There's lots of space for dialogue to happen between us.

There’s interest in outdoor consumption lounges to have a vibrant agritourism business. Can you tell us about the direction you see this moving?

I'm really interested to hear what ideas people have around having a Farm Gate store and how they might imagine it. In the engagements that have happened so far, there were a lot of really cool ideas that were thrown out there. To me, it's about an experience, and I think that’s the challenge. It was important for government to look at consumption at the same time as Farm Gate because we didn't want Farm Gate to just be a retail store in an inconvenient location. 

There's some recognition that we have to allow there to be some experience around it, while keeping it safe. There's an issue of feasibility - the right order of operations, and that we don't need to build everything all at once. What's the right place to start? It needs to instill confidence, and that local communities are going to feel comfortable with. We need to use some creativity to think about how people can have a good experience, while still keeping it something that's safe and meets the regulatory goals.

Some growers get frustrated by the federal government regulations. How does this interact with those regulations?

We can make provincial rules for particular things, but we can't override something that the federal government has required. That's just going to be something to consider as you design your Farm Gate store. How are people going to interact with this federally regulated production facility and how are they going to interface with each other? Talking to the feds, there's a lot of space for that interaction and interface to happen. We've already had some Farm Gate stores in Ontario where they've been figuring this out, but it’s tricky. One of the big ones is packaging requirements. And that's going to be something that you're going to have to consider how you fit the packaging regulations in. What can you have out of a package on the production site versus in the retail store?

Does the BC government have any sway on Health Canada? Can you push to allow packaging of dried cannabis as a cultivator without needing the processor to be a middleman, to make it more accessible for small scale producers?

I think there’s interest there… They've indicated that anyone can put forward an application and they’re open to talk about an application that's for packaging only, and maybe it has another step that's done by a processor and then sold back to do this other packaging activity. I think it will be helpful for the feds if a producer who wants to take that on can step forward with an idea and start talking out exactly how it would work. I think they have the authority to grant it based on the way their mission is written, it's just about what practically makes sense.

It’s been reported that, on average, government stores sell twice as much THC as private stores. To what do you attribute that?

I think they looked at THC as the key measurement in the report. They were looking at how much THC was being sold, rather than how much cannabis was being sold. Also, with government retail stores, there's less of them, but they're located in high traffic locations to get good bang for buck for the taxpayers. So I wouldn't be surprised if it’s just that the average government store is located in a way to sell more product.

Why not allow processors, at least microprocessors, to sell Farm Gate? What about small batch edibles, producers, self-extractors, etc.?

I think it's really just about the starting place. Wineries are the model starting point. I think we're going to see interest from small processors, and it's going to be interesting to have that conversation in the future. But I think the starting point is cultivation, and having it more in a kind of Agri-tourism context.

Is there a push to have cannabis moved into the Agro sector?

This idea has come up… There is increasingly more involvement from the Ministry of Agriculture. What we do is a bit different than what the Ministry of Agriculture does, but there’s a lot of thinking around business success, and how they can help businesses. There's some work ongoing around helping producers with standard operating procedures. I think we're going to see a lot more of cannabis fitting into the space of other agricultural businesses, and, as the rules are established, you'll probably start hearing less from us and more from the business development side of the Ministry of Agriculture, who want to help cannabis businesses succeed.

Any final thoughts you want to share?

One question asked is if industry leaders should be connected with administrators or politicians… I don't think it's ‘or’ but rather ‘and’… it's different conversations, and we're really happy to have them. I think, especially early on, there weren't enough dialogues like this. As we move into a more mature relationship between folks in the sector and regulators, we can start having more open dialogue. Contact us. Let us know where things aren't working - we need to know.

Watch the full episode of The State of Craft featuring the BC LDB, LCRB, & the Cannabis Secretariat’s Office on YouTube!

This article was written in tandem with Mike F.