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What happened to Farmgate & Advice for affecting change

February 21, 2024

Since first launching in 2022, farmgate, or known more formally as a Producer Retail Store Licence (PRS), has been intended to allow “BC cannabis growers to run a retail cannabis store at their farm or facility,” as summarized by David Brown, the founder of StratCann, in the article he wrote on the topic shortly after the program launched. The goal, as reported by the government of BC, is to “support government’s commitment to the development of a robust, diverse and sustainable legal cannabis economy in B.C., inclusive of rural and Indigenous communities, while prioritizing health and safety.” In a follow up article written by Brown almost a year later in late October 2023, however, very few growers had applied for a licence.  

Walker Patton, the Chief Commercial Officer at Woody Nelson, recently sat down with Brown to speak about current Canadian cannabis news, policy, and predictions. A transcript of this interview has been adapted into a mini-series of articles, discussing topics that range from engaging with the public, engaging with government, edible extracts, policy, and effective lobbying.  Here, David discusses farm gate; his opinion on what happened, why the program has been so ineffective, the government’s response, and what that means for policy engagement and activism.  

Some of the transcription may have been altered slightly for clarity or length.

The Impracticalities of Farmgate

David: It was built around engagement from people who don’t have boots on the ground in this industry. I think that’s why it’s a failure, because it was built for something that doesn’t actually exist. The government wasn’t engaging with the people who might actually apply for one of these licenses, or they would have heard overwhelmingly that it doesn’t make sense.

Walker: The idea was that shops like us, Sweet Grass, and a few others would open up these farmgate stores and somebody would be able to do a trip where they visit all of them, not unlike visiting a bunch of wineries in the Okanogan. Buy some bottles of wine and make a make a day of it.

As great as that might sound, what really perplexed me on this was who’s pushing for it. Last time I checked, just about everyone’s running on slim margins. Capital is all but inaccessible, which means that we’d need to come up with a bunch of money to build these farmgate stores out. Then come up with the additional staff necessary for running the store and facilitating tours. And bringing people from the outside into our super clean, hermetically sealed facility on an ongoing basis creates a tremendous amount of risk for contamination. The cost for putting something like this together and being a part of this cannabis tourism concept is extremely expensive and not something that anybody we know is interested in investing in right now.

David: That’s an excellent example of exactly what I’m talking about.

What you’re describing to me sounds like the type of thing where it checks the right boxes in terms of optics, while at the same time it doesn’t actually address what the real needs in the industry are. It’s putting the cart way before the horse. The industry doesn’t need hundreds of thousands of dollars spent on some fancy road signs and a tourist pamphlet that talks about the weed farms in the area. Those weed farms need help even making it to next year because their margins are so slim.

Part of the reason their margins are so slim is that excise tax. Who gets 75% of every dollar of the excise tax that we’re always complaining about? It’s the province. BC brought in $225 million in excise tax so far since legalization. If they gave back even just 1% of that to this industry, to the small craft growers that they’re constantly paying lip service to, to give some of that money back in the form of grants or low interest loans or, you know, something that can actually help them get over the hump. Maybe in a couple of years they can then be in a place where they can start worrying about the bells and whistles of things like tourism or farmgate.

Walker: If we want to create these regions – like the Okanogan is known for wine, Portland is known for beer, and Champagne is known for champagne. We have the Kootenays; we have the Cowichan Valley. We have every opportunity to follow through on that pseudo vision that Trudeau launched with. But we’re struggling just for survivability. There seems to be a disconnect there.

David: Most indoor farms can’t handle a bunch of people coming in, and frankly, don’t want 25 or 30 people hopping off the tour bus. It’d be one thing if you were the only farm they were visiting that day but do you want 25 people tromping in and out of your facility?

Highlighting those kinds of issues, in my opinion, shows that whoever’s developing these kinds of programs isn’t actually engaging with industry, because industry would tell them: “I’ve got a whole list of more pressing issues than how I’m going to manage 25 people tromping in and out of my facility.” That’s of no financial benefit to me. Farming gate isn’t practical.

The BC government’s focusing now on consumption spaces as part of their tourism, and I chuckle because consumption is legal in BC; you don’t need special carve outs. Indoor inhalation is off the table. BC has said that from the beginning. So, if we’re talking about formal consumption spaces in any kind of indoor setting, we’re only talking about food and beverages and , why do you need a formal space for that? And why do you need a formal space for inhalation when you could just step outside and have a smoke? That’s an example where I think BC is going to put a bunch more energy into this idea of cannabis tourism. It’ll sound good, but if they aren’t talking to actual license holders, it’s going to fall flat.

Ignoring the Feedback

Walker: Early 2023 was my first experience with this push. A local consultant hosted a cannabis tourism forum and invited a few of the regional tourism associations to present. Not just myself, but a number of people in the room pushed back strongly against that concept. Simply saying: ‘hey, we understand that this is a fun idea, but it's too soon, too early, etc.’ There was engagement with stakeholders, there was an opportunity to get feedback, and the only folks in that room who showed support for cannabis tourism were non-license holders.

David: To see them get that level of engagement and to still be showing receptiveness to the tourism piece is strange. That shows that I may almost be giving them too much of the benefit of the doubt. I think that's even worse, right? I was saying they're coming up with these bad policy ideas because they aren't talking to license holders. Or they came up with these bad policy ideas because they're ignoring what license holders are telling them.

I think that points to a desire to only want to do superficial work on this file. That brings it back to the fact that there's no one in the industry holding the provincial government's feet to the fire. We have no real organizations to represent industry interests at the retail and producer level. From my perspective, organizations are more interested in cozying up and being seen as being influential than actually holding them accountable. I think that all the policies that this provincial government has put out since legalization reflects that.

Farmgate's a great example. Direct delivery is something I give them a lot of credit for, but that 15% fee is disgusting. It completely undermines the supposed reason for it. Oh, it's to help these small growers. OK, well, then stop taking money from them.

It's one of the most curious regulations I've ever seen. ‘We get that you want this, and we get why it makes sense, and we're gonna let you have it. But you're still gonna pay us.’

Walker: I remember seeing the words ‘Proprietary Charge’ and having to look it up the definition because it's not something I had ever heard of.

David: It’s not a thing. They had to make it up to because they have to be very clear that it's not a tax, it's not a service fee, it's a proprietary charge. Meaning – ‘we're just taking this. It's not tied to our costs. It's just the fee we're going to take because we see this file as a cash cow.’

Looking at the most recent polls, the BCNDP is going to slaughter in the next election. They have no opposition. They know that they don't need this industry. The Conservatives or the BCU care even less about these issues. They know that all they have to do is repeat [what’s already being said]: ‘We support craft farmers, tourism, and farmgate’ over and over again. The industry has shown them that they will be appeased by that. Until there're more people saying: ‘hey this is a real problem.’

They’re spending money building policies. Farmgate is a failure. Only four have applied and only one has been issued (plus two First Nations farmgate locations). It's been a year now. It's a failure. It's a failure because it was built around this idea of some kind of mythical small farm out in the middle of nowhere who was going to then open a retail store. All they did was say: ‘OK, some growers can now apply for a retail license.’ That's all it is.

All they did is just ensure that they built it, made it so complicated. At the same time, if it was actually about helping small farmers, they would create a carve out so that they could have a little trailer that they just open once in a while on the weekends when they have tourists there or something like that. They wouldn't say: ‘sure, you can spend $100,000 to build a brand new store on your farm and then put a bunch of cameras in it and then hire someone full time for the five customers you're going to get.’ It doesn't make any sense. But the industry doesn't hold them accountable for it.

It's because they sit down with the BC government, and the BC government says ‘we're taking the fight to Ottawa,’ and people accept that. That's absurd. The provincial government's job is provincial regulation. Their job is not to be your advocate in Ottawa; although that's a nice bonus. If you go to your dad and your dad says ‘ask your mom’ - they're blowing you off. That’s what the BC government does.

Advice for Affecting Change

David: Very focused engagement and lobbying with the right policy makers at the provincial level goes back to everything we've been talking about so far. If that's not working, shift the conversation and get the public involved. ‘Hey, do you realize they're taking this 15% fee for me to deliver my own product?’

StratCann's great but we're an industry blog. No one from outside the industry is reading that. If you want to talk to the general media, you have to be able to explain it in a way that they can then explain to their audience. That's a tough one. The provincial government knows, at the end of the day, that this industry has very little leverage. The provincial government can just wiggle their nose at the industry and industry has nowhere else to go. There's no opposition government in this province that represents industry interests.

Until the industry can figure out how to become a real thorn in the province's side with this issue, the industry is going to have to accept that not a lot is going to change. We’re all hearing that they're working on this. We’re hearing that they're, at some point, going to lower this. They're going to hold it in their back pocket for politics reasons. I don't think it's going to be as low as people want.

But I'm not saying all hope is lost. I do think there're changes coming. But I do think the fact that that change wasn't implemented already highlights all the things we're talking about. The industry doesn't have the leverage. The province knows it. And part of why the industry doesn't have the leverage is because they aren't engaging properly. They're just trying to buddy up with the provincial government instead of actually holding them accountable. And holding them accountable means having the ability to then go to the public.

I think one of the missing pieces of this whole conversation is the industry hasn't figured out a way to directly engage the public. That's not just tweeting the people on your social media who already agree with you, it's effectively taking that messaging to media or through an ad campaign and ensuring that it's properly conveyed. Until the public is at politician’s doors with pitchforks, they're not going to change their mind. And at this point the public doesn't care about any of these issues. It's just this tiny slice of the general public, which is the industry.

About David Brown

David Brown is the founder of StratCann, a cannabis industry news and events company based in British Columbia. David has been working in the Canadian cannabis space for about ten years now, as a writer, event coordinator, policy advisor, and all-around industry facilitator. David was a founding member of Lift Cannabis from 2014-2018, a Senior Policy Advisor with Health Canada’s cannabis branch from 2018-2020, and the founder of StratCann in 2020 where he has been working as a writer and policy advisor ever since.

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