Cannabis farmgate is an evolving business model in Canada that seeks to create an experience similar to what wineries, distilleries and breweries have been doing for a long time. Farmgate cannabis involves a standard or micro licensed producer who sells their products directly to consumers. The product is taken from seed to sale all at one location. This helps consumers receive fresher cannabis and connects them directly with the people who made it. Those looking to open a cannabis farmgate facility are hoping to give their customers a unique experience that would include facility tours, educational workshops and product sales. This would help solidify a company’s brand and educate customers on their products.
Right now, some provinces allow cannabis farmgate, while others have yet to develop guidelines for the concept. Ontario is currently the only province with operational farmgate stores in Canada. British Columbia is looking at a 2022 launch for their direct-to-consumer program. Alberta has not announced a program, but producers are itching at the opportunity to let customers in to their business. Each province is taking their own approach and will develop their own policies and practices within their legislative framework for farmgate cannabis sales if they haven’t already done so.
While farmgate cannabis presents a good first step towards further engagement with consumers, there are a number of changes to provincial regulations that still need to be worked out in order for it to be a reality in Canada. The current Product Recall insurance limits in Ontario and BC present obstacles for smaller producers who are interested in farmgate. Furthermore, wholesale distribution is still controlled by the province in BC and Ontario, making the process from seed to sale longer than it needs to be.
There are also a number of risks involved including food product liability, security, crop coverage, retail store trip and falls and more. Insuring Canadian cannabis businesses can be complex, which is why it is important to work with an insurance broker who specializes in the cannabis industry and can provide you with comprehensive coverage. If you are a cannabis producer considering opening a cannabis farmgate operation, speak with one of the expert brokers at Fuse Insurance.
If you’re interested in learning more about the insurance process for your cannabis business, contact us at 1-866-387-FUSE (3873), get started on your online quote now or read about our cannabis division at www.fuseinsurance.ca/cannabis.