Pasha Brands aims to open Canada's legal cannabis market to small craft producers

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This week, various media outlets have reported that B.C.'s legal cannabis sales are lagging far behind many other provinces on a per capita basis.

B.C.'s $19.5 million in legal cannabis revenue through June 2019 is just 15.4 percent of what was generated legally over the same period in Alberta, which has a smaller population.

This has exasperated highly capitalized, federally licensed producers. They were hoping that a more rapid rollout of legal retail outlets would make their weed more available to B.C. cannabis users.

But a long-time Vancouver cannabis-industry advocate, Jamie Shaw, says B.C.'s refusal to rush into retail licensing offers opportunities for local craft producers.

That's because they already face an uphill battle gaining the federal stamp of approval, so a little more time might help them gain a stronger foothold.

"It's an interesting dynamic where if provinces were given control over more than just distribution, we might see a better approach and a more local approach, province by province, than we're seeing now," Shaw told the Straight in a coffee-shop interview on Vancouver's West Side.

Shaw is chief communications and culture officer of Pasha Brands, which bought Medcann Health Products Ltd., a federally licensed producer on Vancouver Island.

She's a long-time advocate for compassion clubs and regulatory reform. Also a cannabis historian, Shaw will interview California's top cannabis regulator at the upcoming International Cannabis Business Conference in Vancouver in September. 

Pasha Brands is processing craft cannabis at the Medcann facility, but it hopes micro producers can be licensed more quickly so more product can be made available.

"Underneath Pasha, there are multiple brands and wholly owned subsidiaries, such as B.C. Craft," she explained.

Shaw described Pasha Brands as a "Trojan horse", created to open up the opportunity for hundreds of small producers to participate in the legal cannabis sphere.

"It’s a way of kind of aggregating micro producers—letting them still operate on their own terms, getting them to market with the same sort of power and voice that Canopy or Tilray, for example, have.”

But an obstacle has been the reluctance of provincial governments to embrace farm-gate marketing, in which producers can sell directly to consumers and retailers.

Instead, all jurisdictions except Saskatchewan have created provincial wholesaling monopolies.

B.C., however, has indicated that it will revisit the farm-gate issue when there are federally licensed micro producers.

"If they had just handed out farm-gate now, you're talking about [benefitting] the existing large producers, not all of the little players," Shaw noted. "It would give them a big step up."

That's why she likes certain aspects of B.C.'s more deliberate approach.

Part of the problem, she explained, is that Health Canada has required applicants for production licences to have existing buildings before they apply.

"It streamlines how many applications they get," Shaw said.

However, these same prospective applicants can't always do that because they face delays from municipal and regional governments in obtaining permits.

Then the federal government wonders why it's not getting applications from smaller producers.

It means that the big, publicly traded licensed producers face less competition.

And the pioneers in the industry, many with a great deal of expertise in different cultivars, are left selling their product on the black market.

The end result is there's less revenue flowing into the B.C. treasury, due in significant part to the actions of other levels of government.

"I think the NDP and Greens sharing power, maybe, means the NDP feels like it has to be a little bit more conservative than what it seemed like they were going to be," Shaw said. "For the Greens, they've been surprisingly silent on this."

Pasha Brands has filed a submission to Ontario Cannabis Stores, which controls distribution in that province. And the company plans to file a submission to B.C.'s provincially owned distributor regarding edible cannabis products, which will be legalized in October.

But Shaw is most excited about the prospects in Saskatchewan, which allows licensed producers to partner directly with retailers rather than going through a provincial middle man.

"We're trying to bring up those local farms, and put them on the same level," she said.

Jamie Shaw will interview Lori Ajax, chief of the California Bureau of Cannabis Control, at the International Cannabis Business Conference at the Westin Bayshore in Vancouver. The conference takes place on September 15 and 16.

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