Craft cannabis is one of the sector’s biggest question-marks.
Across the country, hundreds of growers or aspiring growers have indicated their desire to enter the legal REC industry through micro-cultivation licenses. Cannabis fanciers, as well, would like legal access to craft REC, which many feel is higher quality than LP flower. Yet as of mid-January, fewer than 30 micros had submitted applications to Health Canada. Going legal as a craft grower is more difficult than many expected it would be.
Craft Depot, headquartered in Victoria BC, helps growers clear the regulatory process, and operates as a marketplace for small growers to sell to larger buyers. As craft growers across the country are working hard to make the jump to the legal REC retail market, I asked Craft Depot’s Chief Compliance Officer George Anstey and CFO Oz Hanna what aspects were complicating that process.
The first subject to come up was a dire one: systemic contamination. There are certain contaminants that can not just harm a single plant or crop, but the entire range of plant-tissue propagated from that genetic source.
Anstey explained the best example of this is myclobutinal, an antifungal agent that produces hydrogen cyanide when heated.
“The problem is, most of the genetics in the gray market have had it applied at a certain point,” Anstey said. “Certainly not all growers, certainly not even most growers. It's just that once it's been introduced to the strain, it'll be detectable there for effectively as long as you're going to be able to grow it for. So it kind of disqualifies strains from being included into the white market. And that's going to create an unfortunate pinch point for genetics being transferred in in a few months.”
This is especially difficult because cannabis consumers buying legally hope to see high-quality flower on par with what’s available in underground markets. LPs, likewise, want to buck the stereotype that they produce bland “bankers’ weed” and are eager to invest in developing huge fragrant buds.
“There's a lot of supply chains that are looking very hungrily towards these exquisite [grey-market] genetics that do produce beautiful flowers,” Anstey says. “But because of the residual presence of antifungals, they can't transition into the Canadian market.”
Growers should definitely take advantage of Health Canada’s allowance for them to bring unlicensed genetics into the market, says Anstey, who encourages them to begin their applications early. But they need to make systemics-screening a priority, so they’ll know as early as possible whether their genetics are tainted and need to be discarded.
“You need, need, need to get it screened for systemics,” Anstey said. “It’s an absolute must. You have to. Because you could really shoot yourself in the foot if you don't.” The sooner a grower knows they’re going to need to develop new uncorrupted genetics, the better—the last time you want to find out your genetics are useless is as you’re about to bring them to market.
For CFO Oz Hanna, another concern is moving systems of classification from the mysteries of the illicit market into a standardized grading system by which all cannabis could be universally rated.
Both illicit shoppers buying product online and pre-legalization MED dispensaries have gotten used to “trips” and “quads” ratings (triple-A and quadruple-A grade flower), so Hanna noted those two rating systems at least were recognized. But the challenge remains, he lamented, that these ratings have zero objective merit.
“Right now there's really nothing, other than consumer opinion and the grower's opinion,” he said. “You look at bud, you smell it, you taste it, but those are all subjective ways of grading the product. There's a lot of subjective opinion.”
In coming years, Hanna stressed, the majority of legally-produced sub-premium flower will simply be processed into bulk extracts, which will serve the majority of the consumers enjoying cannabis in vape pens, edibles, and pill form.
“The only people smoking flower will be smoking the best flower,” he said. “The ultra premium market will always be there.”
For that reason, having the means to determine what constitutes top-tier “quads” will be very valuable to all those doing business within the craft space.
To begin with, Hanna said, Craft Depot is trying to decide on an internal standard, and sending samples of what they consider their “true quads” to labs to test them and standardize based on their results. They’re not alone in the industry, either. Other organizations have developed databases of samples and are trying to develop in-house standards based on the best and worst examples they can find of each cultivar.
“But I don't think one company is going to be able to create a standardized grading system,” Hanna said. “I think it's going to be a collaborative effort between various stakeholders, from the ground floor all the way up to all the labs. We need enough input and enough sample size to really come up with useful data. Hopefully over the next two, three years, maybe something will happen, but we definitely want to be a part of that conversation because we know how important it is.”