Some years ago, Health Canada made changes to its license application process. The necessity to tweak this process arose from the great volume of applications Health Canada was processing, slowing down the system, and granting licenses to entities that would not move forward with their businesses. So from that moment, prospective cannabis companies were required to have the cultivation facility already built and set up, and only after that, they could apply for a license. “They did it because 75% of applicants who got a letter of readiness didn’t go any further,” says Jack Procop with ProGrow Farms. “Many people thought that they could raise capital with the banks, which of course didn’t happen. This slowed down Health Canada a lot.”
At the same time, submitting an application has become more costly than it used to be. “But you are paying for a functioning service,” Jack points out. This, however, means that the entry barrier has also gone up, especially when one considers that in Canada it can be hard to work with banking institutions if you are a cannabis business. “Generally speaking, banks don’t help too much, as they get involved mainly if you have a sales track record to show. It might be harsh, but considering the initial experience, all of this is to prevent people that are not serious about this, as you still have to sustain yourself for a few crops.”
The challenge of the pandemic
Yet, while Health Canada speeded up the process, there was something else that slowed them down. “Covid shut us down for two months,” he says. “When we were setting up the company, we wanted to lease a facility for our cultivation. But then we realized that we would be at the mercy of the owner of the property. So, we started looking at properties to buy, and ended up in Thorndale, Ontario, my native city.”
So, once Jack and ProGrow Farms decided on the location, they started with the construction. “But then, Covid prevented us from proceeding as fast as we wanted to. As I said, for two months we stood still, because there were delays in getting critical equipment.” The 10,000 sq. ft. building of ProGrow Farms is a purpose-built indoor facility, equipped with 1,000W HPS lights. “For instance, we only got our HVAC units for the back a few days ago.”
Eventually, ProGrow Farms was able to have everything ready. “After everything that has happened, we finally received the cultivation license,” he says. “We are a micro-business, as we want to grow together with the market and expand when it would make sense to us. This is also the reason why we have set up the facility to scale up when necessary.”
Jack hoped that ProGrow Farms facility would be operational by December, but the cultivation is already up and running. “For starters, we are looking at the wholesale market,” says Jack. “Then, when we have processing too set up, we will package our own products."