Earlier this month, Health Canada suddenly made changes to the license application process that will affect many new applicants or early-stage applicants. This decision arrived in a bid to reduce application waiting times. According to Jesse Denton, CEO with Kief Cannabis, these changes will have many consequences, especially for smaller players in the industry. Kief Cannabis is a company that produces high-quality craft cannabis. “We focus on growing small-batch, very high-quality craft cannabis. At the same time, we are planning to produce a wide array of ancillary products that will be marketed as soon as Health Canada allows the selling,” Jesse points out.
According to Jesse, Kief Cannabis Company received their Confirmation of Readiness letter just in time to not be affected by the new changes in the regulation. However, he is very much aware of the obstacles new applicants will face. “The regulatory application process, ironically enough, just changed earlier this month, and the hurdle became even higher,” Jesse says. The new application process indeed is a lot more demanding than the previous one, as it asks new applicants to have a growing facility already built. Obviously, this comes at a cost.
Changes in the application process
“Prior to these recent changes, the process itself wanted you to prepare a package, an application which had to have a huge amount of information such as good production practices, quality assurance standpoint; security also needs to be extremely detailed and then you have to submit this application,” Jesse takes care to explain. “After that, you have to work with Health Canada: they will pick through the application to find if there is anything that they want more details on, and you go through this clarification process, which can take up several years.”
However, now things are different. “With the new changes, before you can actually get an application number – before you can essentially apply now – you need to have a fully complete compliant facility already built and ready for inspecting, and then you can apply,” Jesse explains. “Thus, the hurdle is now even greater, because you cannot get financing from banks, and you have to rely on private funding. So, you have to go with a plan to investors, get the investment, build the facility and then you can apply.”
One of the reasons Health Canada made those changes is to fight a cannabis oversupply which some States in the US are already experiencing and to reduce the application waiting time as “Canada is far far below the supply needed for the demand”, according to Jesse. However, he believes this will mitigate the problem on the one hand, but on the other hand it could create others. “From a supply standpoint it may help. However, I think it may add to the problem as it will help the already established players in the industry. This may result in an oversupply of mid-grade quality product with a massive lack in premium craft cannabis. And this is exactly where Kief Cannabis Company comes into play.”
Jesse indeed explains that the company’s plan is to produce incredibly high-quality craft cannabis, part of which will be used to make concentrates and other types of products. “We grow our cannabis in a purpose-built facility for small-batch quality products,” Jesse states. “It is an indoor fully automated structure, especially designed to optimize the environment for each specific strain. We will use HPS lights, CO2 injection and automated irrigation.”
Unlike other growers that have no large-scale cultivation background, Jesse knows very well what it takes to grow high-quality cannabis in such big operations. “One of the common mistakes among novice growers is that they think this is easy,” Jesse observes. “One of the major hurdles is that it is not as scalable as tomato and cucumbers, and it is very difficult to grow high quality cannabis in big rooms on a commercial level.” Another big issue is the type of crop protection products that can be used for medicinal-grade cannabis. There are many limitations in that regard, and many growers struggle to find good solutions. “It is crucial to use extra caution because you are really limited in what you can use in terms of crop protection.”
Thanks to this plan of growing high-quality craft cannabis, Kief Cannabis Company has signed an agreement with Namaste Technologies to provide them with 35% of their production. “We are extremely happy about this,” Jesse says. “Namaste Technologies wants to expand globally. This aligns with our own plan. We look forward to expanding on a global scale together with them.”