From the Editor: Artists’ corner
February 15, 2021 By Mari-Len De Guzman
The increased number of micro cultivation licences in Canada signals the emergence of a significant segment in the Canadian cannabis marketplace.
As of this writing, Health Canada has issued 142 licences for micro cultivation – that’s nearly 25 per cent of all cannabis licences issued in Canada to date. Of this, 127 were issued just in the last year.
Industry observers view craft cannabis as a pathway for the legacy market to get into the legal environment, on the one hand, and as a response to growing calls for more diversified product offerings, on the other hand, particularly in the Cannabis 2.0 space.
Contrasted with the large, commercial scale, mass-produced products, small-batch craft cannabis production offers a unique appeal to a particular segment of the market. One of the things that make it appealing is the story behind the creation of a craft product.
“Artists growing cannabis.” That’s how Chad Hason, marketing director at Stigma Grow, put it during an episode of Grow Opportunity’s new podcast.
Market research has shown that consumers are increasingly interested in learning more about the products they consume. They want to know the story behind the products and the companies that make them, and they are more likely to buy from producers with a good track record on sustainability and the care that they put into making their products.
The announcement by the Ontario Cannabis Store (OCS) in early January to create a craft designation for small-batch cannabis products is a welcome development. The craft designation will apply to “artisan handcrafted processing methods.”
Craft producers selling in Ontario will benefit from the opportunity for differentiation in retail shelves. Competing with commercial scale producers is a challenge for the craft producers as their cost of production can be slightly higher than the bigger LPs’. This would normally put them at a disadvantage from a price-point perspective. But as we’ve already seen in the cannabis marketplace, things are not always black and white.
What would be perceived as a market disadvantage, could turn into a competitive advantage. The trend in consumer behaviour that prioritizes quality over price, the story over the sales pitch, will be craft cannabis’s greatest ally because they can provide that quality and the story. The craftsmanship and artistry that go into the cultivation and development of a cannabis product – that’s the story. And craft designation at retail stores will provide craft growers the platform to tell their stories.
On the other side of this equation is the consumer. There is an ongoing need to educate consumers about cannabis, and that responsibility should not be placed solely on the government’s shoulders. The industry has to play a bigger role in consumer education. Granted, this could be a challenge in a highly regulated environment and a restrictive marketing and branding regulation. But, as we’ve seen with the evolution that’s happening with regards to product packaging, sustainability and compliance can both be achieved with innovation and creativity.
I hope other provinces will follow suit and formalize a program that will provide opportunities for craft producers to effectively compete in the market. I also hope craft producers are ready to take on the challenge and demonstrate to the marketplace that size does not always matter.
Speaking of challenges, Grow Opportunity is always looking for ways to bring new and compelling content to our audience. Our latest feat is a new podcast series, launched this January. Each podcast episode will feature experts and thought-leaders discussing the latest trends and the hottest issues in the Canadian cannabis industry. To listen, visit growopportunity.ca/podcast.
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