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㽶ƵֱB.C. bud㽶Ƶֱ cannabis still underground, John Horgan hopes to rescue it

Legal marijuana mostly from out of province, not selling well
19619219_web1_cannabis-Hexo-Quebec-Oct11.19.CP
Large-scale cannabis grow room operated by Hexo Corp. in Quebec, Oct. 11, 2019. Hexo is marketing a licensed dry cannabis product for $4.99 a gram to compete with illegal sales. (The Canadian Press)

First of a series on the preservation of a 㽶Ƶֱcraft cannabis㽶Ƶֱ industry in B.C.

In the bad old days, B.C. used to supply half of Canada㽶Ƶֱs marijuana, export it to the United States by the hockey bag, and bring home a bong-full of blue ribbons for its exotic 㽶ƵֱB.C. bud㽶Ƶֱ strains from international Cannabis Cup competitions in Amsterdam.

Premier John Horgan argues that this history is the main reason why legal marijuana has fizzled so far in B.C., a year into Prime Minister Justin Trudeau㽶Ƶֱs bold legalization experiment. Horgan㽶Ƶֱs government is moving to take over the 㽶Ƶֱeconomic development㽶Ƶֱ part of legal cannabis from Ottawa, because its ponderous Health Canada licence system for growers is working great for mass-market producers in Ontario and Quebec. And it㽶Ƶֱs killing B.C. bud.

The Central Kootenay around Nelson B.C. is ground zero for Horgan㽶Ƶֱs experiment, economic development grants to subsidize and guide illegal growers from the dark side to the light. The $676,000 project is funded by the Ministry of Social Development and Poverty Reduction, and administered by Community Futures Central Kootenay.

Energy Minister Michelle Mungall, who holds the Nelson-Creston seat for the NDP, was quoted in a low-circulation , applauding the grant㽶Ƶֱs potential to help growers navigate the federal-provincial-municipal regulations. Kootenay West MLA Katrine Conroy, another NDP cabinet minister, has expressed her concern that Canada㽶Ƶֱs wave of stock-market-backed mega-producers is a grave threat to her local economy.

Social Development Minister Shane Simpson says this is his ministry㽶Ƶֱs first cannabis-related business venture, and it was a grassroots idea. If it works for the Kootenays, it could work for the Okanagan or the Sunshine Coast, Simpson says.

㽶ƵֱWe㽶Ƶֱve seen what㽶Ƶֱs happened with the craft beer industry in British Columbia,㽶Ƶֱ Simpson said in an interview with Black Press. 㽶ƵֱIt㽶Ƶֱs exploded and become an important part of the local economies in communities right across the province. It㽶Ƶֱs possible that there could be that same craft aspect to the production of cannabis. 㽶ƵֱEverybody talks about B.C. Bud and the reputation it has, so if we can build a craft industry that㽶Ƶֱs legal, that㽶Ƶֱs regulated appropriately, then that㽶Ƶֱs a good thing.㽶Ƶֱ

PART TWO:

PART THREE:

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B.C.㽶Ƶֱs main legal effort is a monopoly wholesaler run by the Liquor Distribution Branch, with a monopoly online store and a scattering of government-owned retail stores, a few licensed private retailers and a ragtag of unlicensed stores and private dealers. Some insiders estimate that the 㽶Ƶֱgrey market㽶Ƶֱ and 㽶Ƶֱblack market㽶Ƶֱ ragtag still holds 80 per cent of the B.C. market.

Large-scale licensed national producers, the Budweiser and Coors Light of cannabis, have been noted for missed targets, regulatory cheating, and a shortage followed by a glut of overpriced product, some of it getting mouldy sitting in the warehouse.

Horgan says he㽶Ƶֱs well aware that most of the product Health Canada has made legal for recreational sales is from other provinces. And he recalls telling the Trudeau government well before legalization that B.C. would make its own way on business development.

㽶ƵֱThe federal government said 㽶Ƶֱwe㽶Ƶֱll take care of economic development㽶Ƶֱ, and we just disagreed with them on that, and we continue to disagree with them on that,㽶Ƶֱ Horgan told reporters at the B.C. legislature Nov. 28. 㽶ƵֱWe have in B.C. a legendary quality product, and that㽶Ƶֱs not making its way to the legal market.㽶Ƶֱ

The jokes about the B.C. NDP somehow l are no longer funny. It㽶Ƶֱs a fact. In her second-quarter budget update, Finance Minister Carole James reported that forecast for B.C. Liquor Distribution Branch income has been lowered $18 million 㽶Ƶֱdue to the delayed rollout of private and public cannabis stores and lower-than-anticipated demand.㽶Ƶֱ

Federal excise tax from cannabis, the dollar-a-gram first take for recreational product, is split three quarters for the province and one quarter for Ottawa. The latest forecast downgraded B.C.㽶Ƶֱs share for the current fiscal year from $38 million to $8 million. Policing and other costs are coming in higher than budgeted.

Horgan acknowledges that the problem is the black market is still here, and the 㽶Ƶֱgrey market㽶Ƶֱ that worked through medical dispensaries and compassion clubs, is greatly endangered. One disadvantage is price, with Statistics Canada estimating that legal cannabis is running close to $10 a gram, while illegal product is selling for half that.

Quebec-based Hexo Corp. has a plan for that, and it㽶Ƶֱs more bad news for 㽶Ƶֱcraft cannabis㽶Ƶֱ in B.C. Hexo has launched a budget product for national sales called 㽶ƵֱOriginal Stash.㽶Ƶֱ It㽶Ƶֱs only sold in the old-school 28-gram or one-ounce bag, at $4.99 a gram.

Next part: A craft cannabis grower navigates the regulatory system.



tfletcher@blackpress.ca

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