Canada’s Legal Cannabis Has a Quality Problem (in Cannabis Industry Journal)

The (Arrested) Rise of Craft Cannabis in Canada

Icicle creator and CEO Steven Burton wrote an op-ed for Cannabis Industry Journal based on his presentation at the Cannabis Quality Conference and Expo 2020. The topic: why is Canada’s legal cannabis industry piling up tons of degrading product, and how could this be avoided? The article looks at the possibilities presented by the burgeoning craft cannabis market in British Columbia, Canada.

The Problems with the Legal Cannabis Market in Canada

Burton begins by laying out the state of legal cannabis in Canada today. While the picture is not a terrible one (the market was worth $7 billion last year), there are number of shortfalls in how legalization has rolled out. Headlines have followed major production facilities shutting down and a thriving illicit market that accounts for over 80% of cannabis sales nationally. But a problem that is growing exponentially tells another side of the same story, namely, the accumulation of dried flower inventory since legalization in 2018. Here is a chart from the Government of Canada showing this trend:

Source: Government of Canada

Government data shows that inventory is accumulating at a significant rate, with a flood of supply but presumably, not enough demand. Burton argues that this is a clue to a core problem with the corporate cannabis rollout: a lack of quality coupled with higher prices than the illicit market. This points to a clear rejection of the legal market, as Burton continues:

“The majority of existing cannabis consumers across the country prefer the fresher, higher quality and generally lower priced product they can easily find on the illicit market. That preference couldn’t be clearer when you look at the growth of inventory [in the chart above], which is far outpacing sales.”

A Future in Craft Cannabis?

It seems like the mega producers that were privileged in the beginning of legalization have failed to live up to expectations, but smaller companies are now showing us how it should be done. Burton explains,

“Consumers have consistently shown a strong preference for craft cultivators and other small-scale producers who produce higher quality, more varied products that are more responsive to consumer needs. It also hasn’t hurt that prices are also coming down: Pure Sun Farms in Delta, BC is consistently selling out of their $100/ounce special, which is highly competitive even with the illicit market.”

While this may seem like a ready-made solution, there are four major barriers that Burton identifies in the way cannabis is being regulated in Canada:

  • License distribution is uneven and chaotic;
  • Basic regulatory compliance is complex and time-consuming;
  • A literal long-distance road to compliance and safety means higher costs, and government requirements for cannabis irradiation could be exacerbating quality deficiencies;
  • It is virtually impossible to market improved products due to Canada’s severe marketing restrictions.

These problems are well known in the industry and the smaller producers are mobilizing to change the cannabis landscape. Burton points out that organizations like BC Craft Farmers Co-Op are advocating to the government for sensible regulatory changes. “As a result of their advocacy,” Burton notes, “in October, the federal government initiated an accelerated review of the Cannabis Act’s restrictive regulations related to micro-class and nursery licenses.” Indigenous growers, like Williams Lake First Nation, are also providing alternative models for the cannabis industry to learn from. Finally, the farm-gate model is also a point on the horizon as COVID-19 travel restrictions are gradually eased.

Burton concludes with the following thought:

While the cannabis legalization story in Canada has had its bumps, the clear path forward for greater legal market success lies in increased support for micro-cultivators. By increasing support for these small-scale producers to navigate regulatory requirements, more will be able to enter the legal market and actually compete against their illicit counterparts. The result will be higher quality and more diverse products for consumers across the country.

Read the whole op-ed at Cannabis Industry Journal here.

Icicle’s Cannabis ERP System Secures Safety, Quality, and Compliance

As Burton notes in his article, the regulatory burden for cannabis producers in Canada is significant. The federal government, for example, requires cannabis producers to submit a monthly report with 477 compliance fields, and that is just one part of the complexities. Managing the entire process manually is a nearly impossible administrative task, and automation technology is here to make it much easier experts agree.

But Icicle isn’t a tool for filling out forms; it goes far beyond that. At it’s core, Icicle works on a digital model of your business, helping you manage the entire production process from seed to (whole)sale. All the information you feed into Icicle will do multiple jobs in return, ensuring compliance, preparing for audits, managing traceability seamlessly, improving operational efficiency, generating reports and forecasts, and more.

We’ve already made the argument that cannabis should be regulated more like food than pharmaceuticals or nutriceuticals. After all, it is a plant and most cannabis processing involves other food products. Food safety and quality are at Icicle’s core, the beginning of our vision and ERP system. Cannabis companies are using Icicle to leverage the knowledge of the food industry and the HACCP program to produce superior, compliant product. Reap the benefits of a robust food production management ERP system, specially adapted for the cannabis industry right here in BC.

We are providing complimentary HACCP plans to cannabis facilities that are committed to creating and implementing a quality food safety program. Learn more and request a free HACCP plan here. Or, get in touch to schedule a demo.

Steven Burton is a technology expert who, in addition to being the CEO and President of Icicle Technologies Inc., developed and continues to build Icicle, a comprehensive food production management platform offering the food industry creative and dynamic solutions for better production, better business, and better public health. Follow him on LinkedIn to hear more about the future of tech, or check out his other articles in leading industry publications.

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