There are two available licenses available to entrepreneurs in Canada's recreational cannabis market. One can now be considered the more traditional route—a standard cultivation license—and a second avenue is a micro cultivation license.
The standard license has become prohibitively expensive and overly competitive for most new entrants. Most major producers who hold a standard license are intently focused on pumping out high-volume, low-quality flower, which is why newcomers have begun adopting the micro cultivator angle to carve out a corner of the market for themselves.
With lower startup costs, a shorter runway to production, and a focus on quality, this small-scale model allows craft cultivators to excel at what they do best: grow good flower.
Let's look at the practicalities of micro-cultivation in Canada, including the best tactic for new entrants.
Micro Cultivation in Canada: The Regulations
Per the regulations outlined by the Canadian Government, micro cultivators are licensed to produce cannabis plants, seeds, and fresh and dried cannabis on a grow surface area of up to 200 m² (2153 sq ft).
This includes all horizontally and vertically arranged surfaces used for growing, propagating, and harvesting cannabis plants. But it doesn't include areas used for non-cultivation activities and storage. Like all licensees, micro-cultivation licensees must comply with Health Canada regulations.
The specifics of this license stand in stark contrast to a standard license, where there are effectively no limits on cultivation area. However, micro license holders can scale up to a standard cultivation license if and when it makes sense.
Current Market Perfect for Micro Cultivators
It's no secret that the world's first national recreational cannabis market is floundering as the sector's largest producers struggle with debt, oversupply, and race-to-the-bottom pricing. Until the market works itself out through this period of self-regulation, there isn't much space for new large-scale producers.
This dilemma is why there has been a noticeable shift in the types of licenses Canada has issued in the last three years. Instead of handing out standard licenses, Canada is increasingly seeing more micro-cultivators come online.
As Matt Lamers reported for MJBiz," Cannabis entrepreneurs are increasingly turning to smaller micro-cultivation facilities to manage costs and produce higher-quality marijuana at a time when the industry is facing a glut of ‘standard’ products and falling prices."
Unlike Canada's major producers, micro cultivators face substantially lower startup costs and (provided they know what they are doing) can produce high-quality craft products. Craft products target an entirely different subsect of the Canadian consumer—one willing to shell out more of their hard-earned dollars for a premium product.
As one cannabis consultant told Lamers, "Some operators have figured out that getting a micro license, focusing on cultivation and using a large LP for distribution/retail activation or genetics is a more efficient and low-cost way of getting their weed to the market."
A Solution for Micro Cultivation in Canada: Introducing TSRgrow's HarvestPRO
As Canada's recreational market continues to move through these early years of legalization, navigating difficult market conditions, micro-cultivation licenses have become one of the only viable routes for new entrants.
For those pursuing this path towards small-scale production of premium craft flower, the fastest most efficient solution is TSRgrow's HarvestPro Cannabis Cultivation Container.
Speedy Startup
Instead of getting approval before the facility is completed, as of 2019, applicants must complete the build before they can apply for licensing. So, imagine how much simpler your startup and licensing could be if your cultivation space were a turnkey facility delivered to your door.
The HarvestPRO Cultivation Container is compact and easy to move, which means it can be deployed much faster than any legal facility could ever get built out.
Scalable
Given that Canada allows micro-cultivators to scale up into a standard cultivation license at any point, having a facility that easily allows for expansion is critical. The HarvestPRO is compact and highly modular. It's been specifically designed to combine with additional HarvestPRO containers to easily and quickly expand the cultivation footprint on an as-needed basis.
Cost-Effective Build-Out
The HarvestPRO is designed with affordability in mind, offering a cost-effective solution for small-scale production. Each container is pre-engineered to meet regulatory standards, reducing the need for expensive custom build-outs. Plus, growers can start cultivation just 12 weeks from placing an order, meaning the first harvest and profits are closer than ever.
Plug-n-Play Technology
With the HarvestPRO, there's no need to invest in extensive custom construction or infrastructure. The units come fully equipped with state-of-the-art cultivation technology, including advanced LED lighting solutions, climate control, and integrated monitoring, racking, and fertigation. This plug-and-play approach minimizes upfront capital expenses and ongoing operational costs as cultivation gets going.
The Next Chapter in Canada: Micro Cultivation Licenses
As the Canadian cannabis market matures, new entrants must follow a path different from the one major producers followed in the early days. Instead of going big and producing volume, it's more effective to go small and high quality.
By carving out a corner of the market under a micro-cultivation license, newcomers to the Canadian market can get to market sooner, reduce upfront investment costs, and also avoid directly competing with the major players in a race to the bottom.
TSRgrow's HarvestPRO Cultivation Container is a key to this success. With lower barriers to entry and the ability to produce high-quality products, micro cultivators set up with a plug-n-play cultivation container are well-positioned for the next chapter in Canada's cannabis journey.
To learn more about HarvestPro Cultivation Containers, contact our growing specialists today.
