Growing Relationships Ontario – 2023 Synopsis

On April 15, 2023, StratCann held its most recent Growing Relationships event in Burlington, Ontario. This event brought together more than 180 cannabis businesses, including producers, retailers, ancillary services, and public agencies.

Below is a recap of some of the current industry and regulatory challenges raised and discussed by attendees at the Ontario 2023 event.

StratCann’s Growing Relationships is a series of networking events designed to engage focused discussion on local industry and regulatory challenges, opportunities, and solutions. The second in the ongoing series, our Ontario event included a one-hour industry brainstorming session asking attendees to discuss some of the most critical issues as they see them.

StratCann’s host, David Brown, led attendees through the exercise. With a 10-minute timeframe, 18 tables of 10 stakeholders each discussed what they see as the most critical issues facing their businesses and the industry overall at this time. Each table selected a spokesperson to present their discussion items to the room.

Tables included an array of stakeholders, so while responses varied, particular trends also emerged.

While many of the more commonly-known issues, such as high federal excise taxes and the overall regulatory burden, frustrations with the 10mg THC limit for cannabis edibles, and challenges in accessing capital were raised, attendees also identified several areas where they saw opportunities for industry to lead with needed changes that don’t require regulatory involvement.

A few examples include a need for the industry to develop its own consistent packaging standards and definitions for things such as harvest date and packaging date, terpene levels, and transparency around production methods and processes like remediation/irradiation.

Retailers also spoke about wanting more information from producers that will allow them to talk about attributes other than high THC levels. Several stakeholders spoke about the need for the OCS/AGCO to let producers know which retailers carry their products. This would help them to convey product information more effectively and better understand specific retailer needs.

Also, several micro producers spoke about their interest in the provincial flow-through model, and the topic of direct delivery from producers to retailers—at least for micro or craft producers—was raised several times.

Summary of Discussion Items

Government – Federal

Overview: Regulations and taxes are working against Health Canada’s mandate. The excessive administrative and financial burden on businesses inflates prices and limits innovation. This encourages the illicit market as they can better compete on price and consumer-desired production selection.

Key Topics: Microbial limits too stringent; edible limits too low; challenges with the medical stream; providing grants, subsidies/grants needed to support business development.

Government – Provincial (OCS)

Overview: Provincial listing and supply chain processes are cumbersome, inconsistent, and wasteful. Retailer needs are not taken into account, and rules seem to be applied arbitrarily.

Key Topics: Streamline product listing, delivery; uniform craft designation across provinces; reduce waste.

Marketing

Overview: Inability to provide accurate product information and education to consumers leads to skepticism. Marketing limitations, and the lack of clarity around what is acceptable, are barriers to bringing illicit consumers into the legal market. Businesses need to broaden who they are marketing to, and move beyond the stoner stereotype.

Key Topics: More information on packaging; consumer sampling; how to differentiate products, businesses.

Product

Overview: Lack of transparency and consistency in testing standards leads to producers and retailers feeling forced to game the system, and leaves consumers confused. There are no standards to define quality or production methods, nor consideration for cannabis as an agricultural product with normal variations as found in other crops.

Key Topics: Definitions for terms; testing standards that take agriculture into account; transparency in production.

Supply Chain

Overview: Transportation bottlenecks and requirements cause higher costs and shipping delays.

Key Topics: Streamline processes; improve shipping options; find cost savings.

Communications

Overview: Communication difficulties across all participants is confusing and limits business activities. This leads to unequal interpretation or enforcement of regulations, questionable business partnerships, and skepticism from consumers.

Key topics: More access to sales data; consistency within regulators; timely, accurate communications.

Money

Overview: Difficulties accessing capital, extended receivables terms, and excessive fees hamper cash flow and business success. Limited profitability discourages illicit market participants from transitioning to the legal market.

Key Topics: Improve payment terms; reduce need to rely on predatory lenders; support paths to profitability.

Join us at the next event!