Provincial Preview: Saskatchewan is ‘ground zero to the green rush’

Provincial Preview: Saskatchewan is ‘ground zero for the green Dash’

(This is the seventh installment in a series over the next few months that will examine the marijuana markets in each of Canada’s states and territories. Other installments: Alberta, British ColumbiaNew BrunswickNova ScotiaOntario and Quebec.)

The Property of Seed and Honey is throwing its doors wide open to the marijuana industry.

Saskatchewan’s version has been hailed as the very best in Canada in terms of creating opportunities for entrepreneurs.

Everything from retail to wholesale distribution and online sales will be left to the private sector – a sharp contrast to the taxpayer-funded marijuana industries in the works for Ontario and Quebec.

“One of the biggest advantages in Saskatchewan is the pro-business government. They are actively attracting business startups,” stated Jeremy Vokins, co-founder of Saskatchewan-based licensed manufacturer Agro-Greens Natural Products.

  • A pro-business authorities keen to find entrepreneurs succeed.
  • Low-cost power – particularly helpful for cultivators.

Saskatchewan’s impending recreational marijuana business could generate 250 million Canadian dollars ($195 million) in economic activity annually, according to a study at the University of Saskatchewan.

Jason Childs, associate professor of economics at the University of Regina and one of the report’s writers, said the Saskatchewan’s system could allow it to capture a bigger share of the black market than states with heavy government interference.

“It’s significant … they have a fair chance of becoming more than half (of the black market) in the first year,” he said.

The Cannabis Control (Saskatchewan) Act was introduced in the province’s Legislative Assembly on March 14, and the government intends to pass the bill in the coming weeks.

Market snapshot

The data, when corrected for the province’s working-age population, estimates 123,300 annual recreational cannabis users in Saskatchewan in 2018 and 138,000 in 2021.

Aggregate cannabis consumption in the province could be 17,480 kilograms (38,000 pounds) in 2019 and rise to 19,700 kilograms by 2021.

Like neighboring Alberta, demographics suggest Saskatchewan will continue to be a hotbed for medical cannabis.

While that’s less as Alberta’s 2,543 per 100,000 people, it tops Manitoba’s 502 patients per 100,000 people.

Saskatchewan and Manitoba have just 297 and 343 people registered to grow personal-use medical cannabis, respectively.

When all taxes are taken into account, the province could add CA$50 million to its coffers from legal marijuana, according to Childs.

“It’s a big deal, but it’s not going to completely pull the government out of deficit,” he said.

Opportunities

Executives and aspiring entrepreneurs say the province is ripe with opportunity, including companies involving:

  • Cannabis-related tourism
  • Laboratory services to measure quality assurance
  • Pest management for cultivators
  • Security for retailers, wholesalers and cultivators
  • Transport for the Entire supply chain
  • Consumer education on products and consumption

As with other states, Canada’s proposed licensing system will present a number of opportunities for private companies.

These include:

  • Micro-cultivation license holders could be licensed for the very same actions as standard growers, but on a smaller scale.
  • Nursery license holders could be allowed to produce seeds and seedlings, such as clones, available to other licensed producers and researchers.
  • Microprocessing license holders could produce cannabis oil available to other LPs and researchers. The identical permit will also allow for labeling and packaging product sales to the general public.

Retail and distribution

Saskatchewan’s business-friendly framework for recreational cannabis sales calls for the institution of 51 privately owned stores no later than 12 months after legalization.

Retail applicants in Saskatchewan must complete a two-part process that includes first screening and entry into a lottery of qualified applicants.

The amount of retail sales licenses will be capped for the first three decades of legalization.

“On the retail side of things, they’ve largely got it right,” noted Deepak Anand, vice president of government relations for the consultancy Cannabis Compliance. “Saskatchewan’s version, with complete privatization, is the ideal model. ”

“It’ll be interesting to see the province’s approach to that and what interest it has in supporting smaller companies,” he said.

The province is one of the few in Canada that will allow private retailers to sell their products online.

Cultivation

Saskatchewan is home to just four licensed producers.

Vertical integration would help boost their profit margins, giving them a slight advantage over growers in other states that ban it.

“Saskatchewan is the only province that won’t have the government acting as a centralized wholesaler and distributor,” noted Alex Shiff, strategic advisor for Cannabis Trade Alliance of Canada.

“The province will allow for private companies to fill this function, which provides another opportunity for companies to play in the cannabis supply chain, in addition to ensure potentially superior margins for producers compared with authorities where the government will be embedded in the distribution chain. ”

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Published at Fri, 11 May 2018 18:58:36 +0000

Posted in: News

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