Small batch, micro cannabis products are bringing a quality and bag appeal to the consumer market that is changing the game in Canada, say several retailers and growers across the country.
Although much of the first two years of legalization in Canada has been dominated by cannabis produced by some of the country’s larger, often publicly traded cannabis producers, this is changing as more small-scale producers begin making it to retail shelves.
“A lot of these smaller growers are coming in with some fire, and if I was a big LP right now I would have some concerns,” says Ryan Roch of Lake City Cannabis just outside Calgary, Alberta.
Quality cannabis over quantity
“We’re seeing a lot of these smaller growers that are coming out with products that are finally meeting consumer expectations,” continues Roch. The micros like Habitat or North 40 Cannabis are both doing amazing stuff. Even the big LPs seem to have admitted defeat in a way and are now trying to build partnerships with small producers that produce good product and then sell it under their craft label. The 7ACRES Craft Collective is one really good example.”
One of those products his store has been able to stock and has been selling well, says Roch, has been a Cake cultivar from Habitat Craft Cannabis in British Columbia. Habitat, an indoor micro cultivator using an aquaponic system that raises fish alongside their cannabis, says their focus on a small scale approach has allowed them to focus on quality rather than quantity.
Whereas standard cannabis cultivators have no size limit, micro cultivators are a license category meant to allow smaller-scale growers an entry point into the market. Because of this, they have certain advantages in terms of licensing requirements and also have a canopy limit of no more than 200m2 of cannabis growing at any given time.
Although they are one of these companies licensed for up to 200m2 of canopy space, Rudi Schiebel, the founder of Habitat Craft Cannabis in British Columbia, says his team has been only operating under about 75m2 for their first year of operation, focussing on R&D and dialing in their systems before expanding to their full 200m2 canopy.
This small-scale approach, he says, helps them ensure they aren’t compromising quality for quantity.
“A lot of it is pacing and growth,” explains Schiebel. “Our philosophy is to start small and dial in and know every angle of the system that we’re using, especially with aquaponics. Having a size that’s manageable so that once you make those adjustments and learn, then you can start to incrementally scale up without having to drink from the firehose right away.”
Schiebel says Habitat’s products have been available in BC, Alberta, Manitoba, and Saskatchewan, and consumer and retailer feedback has been positive. Because of their small size, though, he says they are looking to begin working somewhat exclusively with the BC government’s distribution arm to supply the BC market, rather than spreading themselves too thin.
Although some provinces, including BC, have been reluctant to deal with smaller producers up to this point, Schiebel says the province has expressed an interest in working with more BC micros to help them make it to retail shelves in the province.
“I think they’re open to wanting to promote and help facilitate BC micros, and will make that exception for companies like us who might not reach that minimum order quantity that they’re looking for but they also want to really reinforce and see the success of the BC craft market grow.”
Another BC micro cultivator who has recently made it to market, Dunn Cannabis, says reception of not only his product, but of his new business from local retailers has been very positive.
Dunn Cannabis founder, Logan Dunn, a long time cannabis grower in BC’s lower mainland, says local retailers have been eager to learn more about his product. He’s even had a few come out and visit his facility to learn more about the product. Despite not being able to market his brand in more traditional ways, he says just being active on social media and the community has really helped get the word out.
“A lot of it is stopping in to talk with people,” says Dunn. “There’s so many cool little marketing strategies I can utilize now. One of them is stopping in and just talking to retailers. I’ve stopped by the local retailers, and they already know who I am, what I’m doing, and what product I have before I even start talking about it, which is a huge surprise to me.”
Like Schiebel, Dunn says he sees BC’s distributor showing an interest in helping stock his products, even if it means a slightly higher price than some of the larger LPs can wholesale for.
“Through my conversations, I can tell they want that local grower on their platform, and that might come at a different price than they are normally willing to pay, but I think they are willing to compromise to make that happen.”
Andrea Dobbs, the co-owner of The Village Bloomery in Vancouver, BC, who carries the first cultivator available from Dunn Cannabis, an Island Pink Head, and will soon be carrying a variety from North 40, says her clientele are interested in supporting these kinds of small businesses.
“When micros come in, we want to carry them,” explains Dobbs. “We want to support small players so they can play in this space. The cool thing about micros is they have stories that are easier to relay…as opposed to an organization with multiple brands underneath them. Those become harder to connect to because you don’t know what differentiates them.”
“What I’ve found is people want to know the history, they want to know who the people are behind the brand, what their story is,” she continues. “Those are the things that people are excited about, at least in our shop.”
Micro cannabis changing consumer perception with high quality
Gord Nichols, another micro cultivator who, like Dunn, is very active and well known on social media, says reception for his product has been overwhelming.
Nichols is the founder of North 40 Cannabis, a micro cultivator in Saskatchewan, has had several products reach consumers in BC, Alberta, Saskatchewan, and Manitoba, where he says it’s been selling as fast as they can stock it. He also offers products to registered medical users through Shelter Cannabis’ online platform.
Like his micro colleagues, Nichols says his focus on quality rather than quantity gives him an advantage.
“I feel that the micros are going to drive up quality across the industry because as the market matures, they’re going to move to a higher quality product and I think the micros are well-positioned to deliver that product,” says Nichols.
“Overall it’s been fantastic and the reception we’ve had from consumers has been great. It’s not without its challenges, but I like to focus on the positives,” Nichols continues. “Retailers reach out to me steadily and I reach out to them too. And any time I drive by a pot store I stop, go in, introduce myself, and see if they carry my product.”
One of those Saskatchewan retailers says they have been carrying North 40’s products and are excited to support a local company, and have seen consumers very happy to support it, too.
“We love to support them because they’re local and we always want to support local business,” says Kayla Tait, the Manager at Lush Leaf Cannabis in Esterhazy, SK. “Tons of positive feedback, and as a consumer myself, it’s one of my favourite products, too. It’s beautiful quality.”
Lush Leaf has been open for business since the first day of legalization on October 17, 2018, and Tait says she’s seen quality and pricing and product variety improve significantly since then, bringing in more consumers from the illicit market.
“When we first started out it was so difficult to even convince people to come over from the black market,” explains Tait. “But now that 2.0 has rolled out and we have all of these concentrates and distillates and everything else, and flower dropping in prices has made it a lot more competitive.
Although the craft or micro products like North 40 and others’ are a slightly higher price point than some other products, Tait says consumers seem eager to support a local, craft product.
“There’s always going to be the demographic who wants the cheapest they can get, but we do have quite a few customers who care about quality and are willing to pay a little bit more for craft. Especially when it’s local and based out of Saskatchewan, they seem happy to support it.”