Health Canada approvals for outdoor cannabis cultivation have increased by more than 25% in the past few months, and growers are bullish for now despite the COVID-19 pandemic that’s encroaching into planting season.
Canadian outdoor cannabis producers contacted by Marijuana Business Daily said they expect their open-air crops will proceed as usual this year.
For example, Charles Vennat, CEO of 48North Cannabis, said he doesn’t anticipate any delays at his company’s Ontario outdoor facility.
“We hope that the government will continue to consider us an essential service, an essential industry, and that they’ll take into account the fact that outdoor cultivation does allow for further social distancing than the indoor would,” Vennat said.
The optimism among cultivators signals continued growth in the higher-volume, lower-cost category in Canada, as large producers have shut down some major greenhouse operations.
Outdoor cannabis cultivation has a high potential to disrupt indoor and greenhouse cultivation in Canada, said Mark Spear, CEO of Canadian outdoor cannabis farmers group Wildfire Collective, “especially with the acceleration of derivative products like edibles and vaporized concentrates.”
“There’s really no reason at all to grow those products indoors,” he added.
“And with the challenges in raising capital, and the big producers trying to shed operating expenses drastically, I would say now, more than ever, outdoor has the potential to disrupt greenhouse and indoor operations.”
By February of this year, Health Canada had approved 33 authorizations to cultivate cannabis outdoors, roughly doubling the number of commercial outdoor grows in the nation from the previous summer.
As of March 31, the number of outdoor cannabis cultivation authorizations granted by Health Canada had increased again to 42 – a 27% gain in only a few months, according to new figures the federal cannabis regulator provided to Marijuana Business Daily.
Those 42 outdoor cultivation authorizations include:
- 27 standard cultivation licenses.
- 13 micro-cultivation licenses.
- 2 nursery licenses.
Figures provided by Health Canada suggest the number of outdoor cultivation authorizations should continue growing in the months to come, although the pace of new license approvals might be delayed because of the COVID-19 pandemic.
At the end of March, Health Canada reported its licensing queue included 121 standard cultivation applications containing an outdoor area, plus 51 micro-cultivation applications with an outdoor area.
However, those outdoor application numbers do not explicitly show whether an applicant plans to actually cultivate cannabis outdoors, according to a Health Canada spokeswoman.
“An outdoor area could be for cultivation or for other purposes, including destruction, composting and parking,” the spokeswoman wrote in an email to MJBizDaily.
“It is only determined later in the review process what the intent for the outdoor area will be.”
Health Canada said cannabis license holders self-reported more than 2.4 million square meters (26.2 million square feet) of outdoor growing area as of January, or 33% more outdoor canopy than the 1.8 million square meters of indoor growing area reported by license holders in the same period.
Canadian outdoor cannabis producers polled by MJBizDaily uniformly said they don’t expect COVID-19 to disrupt their outdoor grows this season.
“Even before COVID, we already started with a very diligent sanitation program and practices that span across all departments,” said Curtis Wallace, director of cultivation at WeedMD, which grows outdoor cannabis in the southwestern corner of Ontario and plans to plant in the first week of June.
“So we’ve made it more robust, with COVID.”
Wallace said that outlook could change if WeedMD experiences a coronavirus outbreak among its employees, or if the Ontario government ordered cannabis cultivators to shut down during the pandemic.
“Those are the only two instances I could see, really, (of COVID-19) affecting progress within the company.”
Aleafia Health CEO Geoffrey Benic said he expects his Ontario company’s outdoor season will go ahead as planned.
“Speaking specifically to outdoor cultivation, the scale of our 86-acre property obviously lends itself very well to social distancing, and that is something we will practice diligently when we commence planting in May,” Benic said in a statement.
In statements to MJBizDaily, major cultivators Aurora Cannabis in Alberta and Canopy Growth in Ontario also said their outdoor cultivation plans were so far unaffected by COVID-19.
Canopy has signaled plans to increase its lower-cost outdoor production in the future after closing some indoor production sites, while Aurora’s outdoor operations are currently used for research and development.
Despite the industry’s general optimism about outdoor cannabis cultivation during COVID-19, 48North’s Vennat warned that the pandemic presents a fast-changing situation for Canada’s marijuana cultivators.
“I think that anybody who tells you, definitively, how this is going to impact them is full of it,” Vennat said.
“The situation is still evolving; it’s still evolving so rapidly.”
Solomon Israel is a reporter for Marijuana Business Daily, based in Winnipeg. He can be reached at firstname.lastname@example.org.
For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.