Cannabis popularity is on the rise, and with it, a growing interest in the craft market. Since the legalization of cannabis in Canada in 2018, the government has continued to take steps to grow the industry with the introduction of Micro-cultivation licenses.
Micro-cultivation, or craft cultivation as it is sometimes called, is a unique opportunity for smaller operations to become involved in the cannabis industry in a cost-effective way. These new licenses allow for a leaner operation, as smaller cultivators can grow and sell with different operational requirements than a Standard Cultivation license. These changes in regulations will help micro-cultivators diversify the industry alongside larger cannabis corporations, similar to what’s happening in the craft beer and wine industries.
Providing small-scale cultivators with the opportunity to contribute to this rapidly growing industry is expected to start a new revolution of cannabis companies by leveraging the demand for more specialized, innovative offerings.
What is micro-cultivation?
Micro-cultivation is the process of growing small batch cannabis in a limited space. It allows you to focus on achieving the best possible environment for your plants to better ensure a high-quality strain.
With the ability to grow in small batches, there are also lots of opportunities to differentiate yourself in the market, with unique genetics, limited or seasonal releases, community presence and brand personality.
For the most part, micro-cultivation licenses are very similar to the standard cultivation licenses, but with different square footage and security requirements.
Any company that meets the standards outlined in the Cannabis Act is eligible to apply for a micro-cultivation license that allows you to grow cannabis and sell to licensed third-parties. The license allows you to have a 200 m²/2153-sq-ft growing area, including multiple surfaces. Since a micro-cultivation company will generally have fewer employees, the security requirements for monitoring the cannabis storage areas are slightly reduced.
Under a micro-cultivation license, you would be able to sell cannabis to:
- Licensed third-party wholesalers
- Provincial distributors (fresh/live plant/seeds only)
- Licensed processors (dried flower, oil)
- Licensed retailers
- Medical patients
To acquire a micro-cultivation license, you must draft an application, and submit to Health Canada for review. Extensive details of your facility and operations must be provided, including a professional floor plan, site and physical security design (and risk management programs), standard operating procedures, security clearances, corporate structure summary, site survey, filed notices with local authorities, various quality assurance reports and administrative forms.
After receiving your initial license, Health Canada will inspect the facility on a regular basis to ensure compliance in all areas covered within the Cannabis Regulations.
For more information on the specific application requirements, you can visit the Government of Canada website.
At Cowan, our expert brokers understand the cannabis industry and offer one of the most comprehensive insurance packages in the market. Contact us today to learn more about how we can help protect your business.