Buying Your Cannabis Direct From The Grower: It's Allowed In Ontario

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Buying cannabis directly from the grower: it’s allowed in Ontario

The products sold at the Station House store are grown and processed next door, in the facilities of cannabis producer Sensi Brands.

Ontario is known for its vineyards, where tourists come to discover the backstage of wine making and often leave with a few bottles, bought directly from the winemaker. Now imagine a similar concept applied to the cannabis industry. It's a bit like the farmgate, or “direct from the producer” type stores, which are beginning to establish themselves in the province.

Ontario now allows licensed cannabis producers (federally licensed) to open a retail location where their crops are located. This is known in English as the farmgate model.

Sensi Brands was one of the first in the country to open a business of this kind. His store, called Station House, opened last September next to his grow rooms in the small town of St. Thomas.

There are several advantages to this model, according to Tony Giorgi, CEO and Founder of Sensi Brands. It allows us to make the distribution process more efficient, he explains.

In Ontario, all licensed producers of marijuana are required to go through a state agency, the Ontario Cannabis Society (OCS), to sell their products which are then redistributed to retailers. In the case of the Station House store, Sensi Brands also has to deal with the OCS, complete all paperwork, but does not need to ship its merchandise.

Tony Giorgi is the CEO and founder of cannabis production company Sensi Brands Inc.

So you have a locally grown product, which is processed and packaged quickly, stored here, and which is fresher. And we save on some costs, summarizes Mr. Giorgi.

Cannabis is an area where there are a lot of taxes, there are a lot of taxes and having a farmgate store, it gives producers a little bit more control, notes Lucas McCann, chief scientific officer of CannDelta, a cannabis regulatory consulting firm.

These stores also promote direct exchanges between producers and consumers, he continues. So because of that, I think it's something [they are] very interested in.

Federal law very strictly regulates advertising for producers, who have very few means of communication to explain what their products are, recalls Michael Armstrong, associate professor at the Goodman School of Business at Brock University. These interactions, he says, are therefore valuable for the industry, and also allow producers to learn more about what customers are looking for.

Tony Giorgi, for his part, believes that the aspect of proximity in farmer's stores helps to break down certain barriers in relation to a world that remains mysterious. He believes there is an educational opportunity here.

Inside our store, we project images of our grow rooms so that customers who walk in can see the plants growing live, he describes.

People like interactive experience, customization.

But it is a model that still has its limits, notes Mr. Giorgi. In the vineyards, the experience also usually involves tasting, which is not possible in farmgate type cannabis stores, since at present consumption lounges are not not allowed.

For the CEO of Sensi Brands, being able to offer samples on site would be the next logical step.

The expression farmgate refers to the sale at the farmer or producer.

Industry would love to have these places of consumption because it's another way to meet consumer needs, it would be good for demand, observes Michael Armstrong.

And on the other hand, from a public health perspective, it's a concern because the Canadian approach to legalization is really a “harm reduction” approach. p>

For now, the model of cannabis farm shops remains relatively marginal anyway.

According to the Alcohol and Gaming Commission of Ontario, as of July 18, 2022, 25 Licensed Cannabis Producers have applied for Retail Operator Licenses and 14 have applied for Retail Store Authorizations. retail (the two licenses required in Ontario to open a marijuana retail outlet, regardless of form).

Only 4 of these producers have completed the process and opened a store, while the province has some 1,500 regular cannabis retailers.

Elsewhere in the country, New Brunswick has also recently opened the door to farmgate stores, and a regulatory framework is expected in British Columbia.

Lucas McCann is convinced that cannabis has a lot more to offer the tourism industry.

Lucas McCann, Chief Scientific Officer from consulting firm CannDelta.

But in Ontario, you're only allowed to have a cannabis store farmgateper producer, he notes. It is also not an easy model to grow everywhere, since growing plants requires a certain amount of space. There are no production sites in the city center. It is very often in premises far from touristic places. So that's a challenge for those producers.

It's an interesting experiment, it can be an interesting component of retail, but I don't don't think it will take much, predicts Michael Armstrong for his part.

To use the analogy, a visit to a vineyard, a distillery or even an a farm remains a special experience, he notes, that you experience once in a while and which requires a trip. But for the rest, most people buy wine at the Régie des alcools, we buy our groceries at the grocery store, our pharmaceutical products at the pharmacy, we don't go to the producer, the store at the corner of the street remains more practical.

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