Last week, the Ministry of Social Development and Poverty Reduction announced a new initiative to help micro growers of pot in the Kootenays.
It provided $675,000 to the Cannabis Business Transition Initiative, which will be delivered by Community Futures Central Kootenay. It’s a nonprofit community economic development organization.
According to a B.C. government news release, Community Futures has hired a team of cannabis business advisers to help small producers transition into the legal cannabis economy.
There are an estimated 2,500 growers of illegal weed in the Kootenays.
Depending on the circumstances, some may be eligible for loans of up to $500,000. The business advice comes for free.
“We are currently working with 5 businesses through this fall (2019) to develop the business plan templates and groundwork for successful licensing, and will be opening intake for 4 clients per month beginning in January 2020,” Community Futures states on its website.
Public Safety Minister and Solicitor General Mike Farnworth said that the government’s goal is to help producers who are not connected to organized crime.
“A failure to transition these producers would not only jeopardize our goal to reduce the illegal market, it would also be a lost opportunity to create stable jobs that support families and communities,” he said.
Because of the way legalization has rolled out, large, federally licensed and often publicly traded producers have dominated the legal cannabis sphere.
That’s because the feds have been restricting production licences to those who have secured buildings, according to Pasha Brands spokesperson Jamie Shaw.
In an interview with the Straight last summer, Shaw said that small operators have faced bureaucratic obstacles at the local and regional level in obtaining approvals. That, in turn, has eliminated their chance of entering the legal market.
In addition, those with criminal records for growing cannabis are not receiving security clearances to work in the legal industry.
Because the little guys are being shut out, many have resorted to supplying the black market. Illegal weed is significantly cheaper than legal cannabis, according to Statistics Canada.
That, in turn, has undermined provincial governments’ ability to generate revenue as the illegal market continues to thrive.
B.C. has so many small growers and was slower in licensing legal private stores, so it’s taken a bigger financial hit.
The province generated just $19.5 million in legal cannabis revenue through June 2019. That was only 15.4 percent of what was generated next door in Alberta, which has a smaller population.
The B.C. government has maintained a monopoly over wholesale cannabis sales, unlike Saskatchewan. And it has refused to allow craft growers to sell directly to legal private retailers.
To try to shut down the illegal market, a “Community Safety Unit” in Farnworth’s ministry is shutting down unlicensed retail stores.
There are five categories of cannabis licences: cultivation, processing, sale for medical purposes, analytical testing, and research.
Abbotsford lawyer John Conroy recently told the Straight in August that the feds are actually reinforcing the black market even as they claim to be wanting to stamp it out.
As an example, he cited the decision to delay legal edibles by a year and impose a maximum of 10 milligrams of tetrahydrocannabinol per package.
“Take the existing industry and roll it in so it’s not competing with you,” Conroy said by way of advice. “They keep saying they’re trying to get rid of the black market but they keep doing things to maintain it—the edibles being the classic example.”