Several Ontario cannabis growers have moved one step closer to being able to have a “farmgate” cannabis retail licence.
A representative for the AGCO confirms that there are five licensed producers who have been issued a Retail Operators Licence (ROL) so far, out of 14 who have applied. The ROL applicant/licensee must also submit an application for a Retail Store Authorization (RSA) for a proposed location. Thrive Cannabis, Dykstra Greenhouses, Medz Cannabis Inc, Tweed Inc, and Muskoka Grown Ltd have all received a Retail Operator Licence from the AGCO.
The AGCO also confirms they have received eight RSA applications so far from licensed producers, although none have yet been issued nor reached the public stage. Once fully licensed, an applicant can move forward with opening their farmgate location.
A representative for the Ontario Cannabis store says they are ready to onboard any retailer that has all the necessary approvals to open a farmgate store. Ontario announced last summer that they were prepared to begin accepting farmgate licences.
One outdoor Ontario cannabis producer who received their ROL in December, Thrive Cannabis, says they are busy working towards the next stages of licensing and construction with hopes of being ready later this year. With a large outdoor cannabis farm in the Simcoe area, Thrive says they hope to be able to provide consumers a chance to see the farm where their cannabis is being grown.
Geoff Hoover, CEO at Thrive says they intend for their planned “farmgate” store to operate like any other cannabis retailer in the province, able to carry an array of products from other producers, in addition to products produced on site at their Simcoe facility. The company also hopes to offer some form of tours of their outdoor facility at the same location, although they are still in the planning stage.
“We are now ready to build and commission our store on the farm, which is extremely exciting for us. We look at the farmgate and see similarities to the winery, distilleries, or craft brewery model where you can see the site, connect with the company and brand, and purchase product,” says Hoover.
Economic opportunities for rural areas
“We imagine that we can have customers see our incredible outdoor cultivation areas and then be able to buy products produced on the site. We look forward to being able to bridge a connection between the amazing cultivation work happening on site and the incredible products we are able to produce as a result.”
“Another important thing to note is that there are no cannabis retail locations in Simcoe and Jarvis,” continues Hoover. “With local demand for cannabis, we look forward to being able to provide legal access to cannabis products to our local community.”
Hoover explains that as a farmgate retailer in Ontario, they are required to maintain an official section in their federally-licensed storage area that is technically controlled by the Ontario Cannabis Store (OCS). Products produced on site are transferred to this area before then being transferred to the retail store for consumer sale.
“You simply allocate a portion of your secure warehouse, that has already been approved by Health Canada, to the OCS,” says Hoover. “You basically transfer product in the same way you conduct a sale to them right now. The main difference is, instead of transfering the product to the OCS warehouse, you will instead receive the product in the allocated area of the securced warehouse. Once that transfer occurs, title transfer to the OCS, and you are storing it on their behalf. In order to move the product to your retail location, you have to then purchase the product from the OCS, complete the sale, and transfer the product to your store.”
Thrive cannabis was originally licensed by Health Canada March 2018. They received their sales licence for dried cannabis in 2019 and their sales licence for edibles, extracts and topicals in June 2020. Such licences are all required for a federally-licensed producer to be able to sell to provincially-approved distributors and retailers, including this type of “farmgate” store.
Cheryl Wilson, the owner of KinHana, an Ontario-based micro cultivator, is another of those 14 who have applied with the province for a farmgate licence. KinHana is also in the process applying for a processing and then sales licence from Health Canada. Wilson says she sees another opportunity for farmgate when retailers can sell online.
“The digital landscape is really adding momentum to the cannabis industry – being able to add farmgate, with “click and collect” will put us into a position to better compete,” says Wilson. And I do believe that taking “farm to table” into the cannabis marketplace, with “farm to consumer” will be a huge advantage to those of us that are the actual growers.”
Featured image via Thrive Cannabis