The buzz around micro cultivation is continuing to build both for those interested in starting their own business and for larger Licensed Producers (LPs) looking to partner with craft cannabis growers across Canada. Under the Cannabis Act, small-batch growers can apply for a micro-cultivation license. Under the regulations in the Act, a micro-cultivation license permits a company to have 200 square metres of total canopy space, which can be indoors or outdoors. A micro-cultivation license also permits the holder to process cannabis and produce cannabis derived products. If a business only wants to operate as a micro-processor (and not actually grow the cannabis themselves), a micro-processing license is also available, permitting the holder to process up to 600 kilograms of dried cannabis in their facility per year. All of the information needed to apply for a micro-cultivation or micro-processing license can be found in the Cannabis Licensing Application Guide from the Government of Canada.
Micro-cultivation may appeal to small business entrepreneurs and provides an opportunity for them to differentiate from large-scale producers by improving the quality of cannabis product. Craft producers can distinguish their product by using different strains, growing in specific soil conditions and using other methods to differentiate their cannabis. It is also an option allowing those with spare industrial space or farmland to enter into the cannabis business without having to comply with the myriad of requirements that standard cultivation (LP) license holders face. From a warehouse in Calgary, to a farm in Ontario, to a winery in BC, there are many locations where a micro-cultivation facility could be built.
There is an appetite for high-quality cannabis, just as there is for craft beer among beer lovers, and micro-cultivators are looking to duplicate the success of the craft beer industry with their premium cannabis products.
Although obtaining a license doesn’t come without challenges: obtaining municipal approval and local zoning have proven to cause roadblocks for many wannabe micro-cultivators and processors. While some municipalities established zoning before legalization, others have chosen to wait until micro-cultivator applicants approach them, leading to a number of cities that have yet to establish zoning laws for the industry. Health Canada has encouraged municipalities to put local bylaws and standards into place as necessary, which has also affected the number of craft cannabis producers across the country.
Beyond zoning concerns, many prospective micro-cultivators are often surprised by the depth of the requirements under the Cannabis Act in order for them to obtain their license. Part of these requirements includes a strong focus on risk management, so applicants will likely benefit from outside experts. For insurance and property or liability related risk, the cannabis team at Fuse Insurance is here to help applicants understand the numerous steps in properly insuring the construction, testing and eventual operation of a micro-cultivation or micro-processing facility.
Coverage includes property insurance, liability insurance, product recall insurance, crop failure coverage and other insurance products designed to protect the investment and growth of this new industry. Insurance for micro-cultivators and micro-processors is generally only available from the same few insurers that serve the rest of the Canadian cannabis industry. Fuse Insurance is a cannabis leader in Alberta, British Columbia and Saskatchewan and works with all Canadian insurers providing insurance coverage, so we are able to broker the best insurance program for your micro-cultivation business. You can learn more about our micro-cultivation division at www.fuseinsurance.ca/micro-cultivation.
Read more: Insurance Brokers Weigh In On Micro-Cultivation Boom
Fuse Insurance Ltd. is the evolution of the commercial insurance brokerage, and the first of its kind in Western Canada. Backed by policies from a selection of A-rated insurers, Fuse Insurance can provide coverage for businesses large and small from almost any industry. For further information or to get an online quote now, click here or call us at 1-866-387-FUSE (3873) for more details.