With cannabis set to become legal next July 1, many are anticipating a rush to capitalize on the crop – but the sector’s future success isn’t quite clear cut.
While the exact details of legalization are still being worked out, the one thing that is for certain is that the landscape across the country will change. That goes for urban settings, in whatever retail form cannabis and associated products will be offered for sale; and rural ones, as well, with the potential for large-scale greenhouse production of the crop.
For producers of both medicinal and recreational marijuana, there are healthy profits to be made, according to projections.
A CIBC World Markets report from last year estimates the value of Canada’s recreational cannabis market at around $5 billion, while Health Canada says the current medicinal marijuana market is worth approximately $1.3 billion.
Producing an estimate 40 per cent of Canada’s cannabis, B.C. already appears to be munching on a large portion of this cookie. According to The Cannabis Market in Canada and British Columbia, a report commissioned by the Cannabis Growers of Canada – which represents small- to medium-sized growers in Canada – the value of B.C.’s market ranges from $2 billion to as high as $7 billion.
Then there’s the potential for employment. The state of Colorado has licensed around 16,000 people to work in the industry since cannabis was legalized there in 2012, the CGC report says. Using a simple per capita adjustment, that translates to almost 14,000 jobs in B.C.
So it’s clear to see why there’s a lot of talk in agricultural circles about the positive impacts of growing cannabis on a large scale. There’s already been some action, too. In June, Delta-based Village Farms announced it would be dedicating 25 acres of its greenhouse facility to medicinal marijuana production, with an eye on the soon-to-be legal recreational market, as well.
The company, one of the largest growers of greenhouse produce in North America, said there was significantly more revenue to be made than from the vegetables it currently grows – as much as 10 to 15 times more.
That sounded some alarm bells in official circles, with Delta Mayor Lois Jackson decrying the withering of local produce and the consequent potential threat to food security, particularly as Village Farms is based on land registered in the protected Agricultural Land Reserve.
However, local experts and commentators say it’s unlikely we’ll see the fecund fields of the Fraser Valley overtaken by greenhouses.
Firstly, cannabis prices might be high following legalization, but its value will decrease as more competition enters the market.
Then there’s the outlay required to set up cannabis production, particularly in southern B.C. where land prices are inflated. Out in Chilliwack, near the campus of the University of the Fraser Valley where Tom Baumann works, land costs around $80,000-$100,000 per acre. Baumann, associate professor of agriculture at UFV, says it would cost another million or two to build a greenhouse on that acreage – and that’s without all the internal equipment required for plant growth.
This, coupled by the anticipated amount of market competition, means it’s a crop that producers should be wary of putting all their money into, says Kelly Coulter, a cannabis advocate and writer.
“I think it’s going to be very competitive and that people should be cautious,” Coulter says, describing a conversation she had with a farmer friend: “If I was a farmer and if I had a good farm going, I probably wouldn’t go there.”
The arrival of cannabis won’t be a revolution in agriculture as much as it will complement current produce, believes Baumann, who thinks UFV will soon follow Langley’s Kwantlen Polytechnic University in offering courses in cannabis production.
Tom Baumann, associate professor of agriculture at the University of the Fraser Valley. – UFV
Baumann cites hops as a recent precedent for this complementary model, a perfectly legal crop that happens to belong to the cannabis family. Hop fields are appearing across B.C. as farmers aim to satisfy the demand from the province’s booming craft brewing industry.
“I was surprised how fast that went. It was younger growers but also some older growers who were switching some portion of their operation, so I can see this also happening with legal marijuana growing,” Baumann says.
The discussion around cannabis has largely ignored another related crop that has arguably even more revolutionary potential for B.C. agriculture. Hemp, which does not contain the psychoactive compound of cannabis, has a huge range of applications. According to the Canadian Hemp Trade Alliance, these include edibles (seeds, nuts and oil rich in omega-3 and -6), clothing, paper, natural cosmetics, building materials and fuel.
“Why cut down all our forests when we can just grow hemp and that can replenish itself? It’s a great crop to be using for a lot of things that right now we’re chopping down trees for,” says Caleb McMillan, a spokesperson for the Cannabis Growers of Canada.
Hemp was once grown widely across Canada, and still grows well – almost too well – in B.C., Baumann says (“It was almost like trees growing”). What’s lacking is a processing facility in the province to extract the fibres from the crop.
However, hemp’s growth remains strongly regulated by the federal government. The leaves, for example, cannot be harvested and must be discarded, even though there’s evidence of their medicinal potential. Hemp is mostly grown by farmers as a rotational crop, but legalization of cannabis would likely deregulate its production.
The potential of hemp has some experts believing that change in the agricultural sector is far from a bad thing. It’s far from a new thing, as well. The growth of hops in the province should really be called a resurgence; a century ago, the Fraser Valley produced the most hops in the British Commonwealth. Roses were a common sight in B.C. greenhouses until Colombia undercut the province’s market in price. Blueberries have been the latest crop of choice for many farmers, often replacing vegetables.
Cannabis and hemp will likely just be the latest chapter in the evolution of B.C. agriculture, a response to market opportunities and pressures such as ever-higher prices, climate change and creeping urbanization.
“If we go into growing medicinal herbs of any kind, or producing 10-tier high strawberries away from the rain and any of the vagaries of climate change, who’s going to prevent us doing that if that’s what’s going to keep agriculture?” Baumann says.
In fact, bringing cannabis production above ground – literally, sometimes – will have a positive environmental impact, with greenhouses providing much of the light and heat that’s solely generated by electricity in clandestine grow-ops.
And even if sales and prices turn out to be disappointing, or if other countries with a cheaper workforce go on to legalize cannabis and undercut Canada’s product, B.C. can take the route of exclusivity and quality over quantity, McMillan believes.
“I see the future more in strain development, creating strains that people really like, then protecting those strains, those genetics, with intellectual property laws,” he says.
