Exploring Progressive Solutions: Innovating Within the Regional Cannabis Sector A 3-YEAR REGIONAL ECONOMIC DEVELOPMENT PROJECT BACKGROUND RESEARCH FINDINGS AND FEEDBACK SESSION Prepared for licensed producers & processors Breakfast Meeting, April 23, 2025 Dr. Tracey Harvey, Selkirk Innovates Agenda • • • Logistical Overview & Introductions Meet the Research Team Background Research Summaries & Feedback o Literature Review o Policy Scan o Landscape assessment 10 min break • • • Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis & Feedback Open Discussion Wrap-up & Next Steps Meet the Research Team Dorothy Beale Denis Gertler Ron LeBlanc Tracey Harvey Literature Reviews – Key Insights Goal: Summarize the most relevant research on regional cannabis economic development and branding/marketing models What the Literature Tells Us 1. Cannabis Economic Development: • Post-legalization studies focus heavily on national metrics (tax revenue, public health, youth use) • Little attention paid to rural or legacy-producing regions’ transition and their informal economies • Barriers include federal bureaucracy, stigma, and disjointed governance 2. Regional Branding / Marketing Models: • Wine and craft beer sectors (e.g., BC Ale Trail, VQA, French appellation systems) show strong success by combining placebased identity & quality assurance & collaborative marketing • Cause-related marketing, and story-telling communicate values and build trust • Cannabis tourism, farmgate, consumptions spaces, and Geographic Indication models (e.g., in California, Oregon) are emerging Nelson Museum Archives and Gallery, Grow Show, 2021 Case study: Promoting Wine Regions of France Bordeaux, Burgundy, and Champagne have spent centuries building global recognition and premium value 1. Appellation d’Origine Contrôlée (AOC) 2. Quality Standards & Classification Systems 3. Collective Marketing through Interprofessions 5. Wine Tourism and Events 6. Global Education 4. Regional Identity and Storytelling “Wine is deeply embedded in French culture, enjoyed in restaurants and at home, and seen as a source of national pride" Let’s get your Feedback Literature Review Mentimeter Cannabis Policy Scan – Key Insights Goal: Highlight the regulatory opportunities and constrains around marketing & branding Kootenay cannabis — especially what’s in local vs. provincial and federal control. We also looked at regulatory models. Federal: Constraints: Strict prohibitions, no celebrity endorsements, plain packaging & labeling Opportunities: Information promotion like “brand-neutral” education-based marketing and storytelling about place, people, and processes. Terroir, heritage and production methods = regional differentiation Image from Reddit of a Farm ers Market in Paraguay Provincial: Constraints: BCLDB limits product listings, no provincial/regional promotion Opportunities: Direct Delivery and farmgate sales, event permitting. BCLDB could support regional identity and develop educational programs to celebrate regionally grown cannabis. Public patio consumption permitted w/smoking, reserved campsites. Consumption spaces = cannabis infrastructure & give people a reason to visit and stay Local: Constraints: No public consumption in many areas. While promoting cannabis consumption on public patios is allowed provincially, Nelson’s current zoning regs do not accommodate such spaces Opportunities: Nelson could be a leader in cannabis tourism. Local governments could introduce cannabis-friendly economic development strategies (e.g., lounges, festivals, events, tourism) Case Study: California’s Cannabis Appellations Program (CAP) Origins & Intent: - Rooted in Emerald Triangle legacy - Craft cannabis from distinct geography and history - CAP = Protected designation of origin + cultivation standards Timeline Highlights: - 1996–2016: Medical and Recreational Legalization milestones - 2017: Medicinal & Adult Use Cannabis Regulations & Safety Act mandates framework - 2022: Regs take effect - 2024: Revised in-boundary cultivation rules Key Elements: - Petitioners: 3+ businesses/region - Requirements: • Outdoor/in-ground only • Geographic/climate data • Legacy/reputation evidence - Goal: Stop mislabeling & promote quality Mendocino Appellations Project outreach map at the California Department of Food & Agriculture meeting in Ukiah, Calif. on Sept. 10, 2018 Case Study: Cannabis Quality Alliance Models – California & Jersey California Certification Models: • • Sun + Earth Certified: • Regenerative, ethical • 3-tier: Brown, Green, Gold • Complements CAP OCal Program (CDFA): - Comparable to USDA organic - Aligns w/ USDA standards - Robust guidance & support Jersey’s Quality Framework (Emerging): Led by Cicada Cannabis Based on EU-GMP + ICH Q8–Q11 Three Pillars: - Physiochemical - Physiological - Physical Goals: - Define Critical Quality Attributes & Critical Process Parameters - Align w/ appellations - Avoid irradiation - Improve pricing & consistency Let’s get Your Feedback Policy Scan Mentimeter Landscape Assessment – Key Insights Goal: To map the current state of the regional cannabis economy “We are not competing for market share in BC and Canada; we are competing globally. So, if we form a cohesive unit, people will see that around the world, and we become Team Kootenay or Team BC, and that is stronger than to be an individual” Kootenay Grower, January 2025 Images taken from Kootenay farms Provincial Look: CTLS data provided by the Cannabis Secretariat Fresh Cannabis Production (kg) by Economic Development Region 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 Mainland / Southwest Vancouer Island / Coast Thompson / Okanagan Production3 (kg; 2024) 100 Production3 (kg; 2023) Kootenay Production3 (kg; 2022) Licensed Producers by Class 80 60 Not publicly available, obtained permission to share with growers 40 20 0 Mainland / Southwest Total Vancouer Island / Coast Thompson / Okanagan Standard Micro byNursery Licensed Producers Class 1 Kootenay Medical Sales Only Landscape Assessment: What’s on the Ground Today Images taken from Kootenay farms Assets: • Craft Cannabis modelled after premium wine is the region’s focus • Informal and formal collaborations & notable community resilience • Regional industry employs about 550 people (273 Full-time) • About half the region is 90-100% Domestic; almost all of you sell in BC • Strong interest in cannabis tourism (i.e, tours, farmgate, accommodation, events, consumption, samples) & regional identity development • More than half the businesses grow in living soil, and all pursue at least one sustainability initiative Challenges: • More than half of businesses supplement with another business = not sustainable • Top challenges are taxes, regulatory & bureaucratic hurdles, and access to capital • Big revenue spread, with half under $1M revenue, and half over • Lack of coordinated marketing or export framework • Stigma still exists Map of the regional cannabis economy • • • 22 Producers 29 Retailers 13 Ancillary business <- likely missing detail PROOF OF CONCEPT Let’s get Your Feedback Landscape Assessment Mentimeter SWOT Analysis • • Goal: • to capture opportunities, challenges, and gaps that may influence sector development • To inform our proposed strategies and focus Our Approach: • A cannabis tour with Cannanaskis Tours at Calgary’s Heritage Park. (Photo: Kyle Thiessen/Cannanaskis Tours) We started with the 2019 SWOT analysis “Slocan Valley Cannabis Synopsis- The Business of Transition- A Grassroots Perspective” and updated it based on project scoping conversations & background research Strengths and Weaknesses Strengths Weaknesses 1. Kootenay Reputation 2. Pristine environment = excellent weed 3. Scenic Location 4. Collaborations 5. Strong Genetics 6. Skilled Workforce 7. Government Support 8. Entrepreneurial spirit 9. Community Engagement 10. Business Support 11. Tourism backed 12. Education Ideals 1. Geographic Isolation 2. Diverse Opinions 3. Inexperienced Businesses 4. Operational Inefficiencies 5. Funding Challenges 6. Low Marketing Capacity 7. Housing issues 8. Cash flow delays 9. Failed Co-op models 10. Ego driven industry 11. Professionalism gaps 12. Over inclusivity Opportunities and Threats Opportunities Threats 1. International Medical Markets Markets 2. Micro License Growth 3. Regional Identity Development/Regional Development/Regional Marketing Marketing 4. Quality Standards Certification 5. Regional Appellation 6. Cannabis Procurement Map 7. Governance structure: Non-Profit Society 8. Cannabis Tourism 9. Marketing Storytelling: Kootenay Documentary Documentary 10. Educational “Promotion”: Kootenay Podcast 11. Budtender Marketing Product Education 12. Events & Competitions 13. New Market Niches 14. Cross-industry Collaboration 15. Knowledge Sharing 1. Marketing Regulations 2. Market Saturation 3. Domestic Market Challenges 4. High Taxation 5. Lack of Recognition 6. Export Impacts 7. Stigmatization 8. International Market Volatility 9. Fixation on THC 10. Farmgate Barriers 11. Scale Challenges 12. Loosing Kootenay Brand 13. Advocacy ROI Let’s get Your Feedback SWOT Analysis Mentimeter General Discussion Period Next Steps 1. 2. 3. 4. Share summary of feedback, and what we heard Apply feedback to draft components Share / make available final documents Join us at the May Breakfast meeting • • • • Location: TBA Date: Proposed for Wednesday Friday May 30, 2025 Time: 8:30 am Purpose: to pitch 3-5 Action plans (with timelines, rough costs & deliverables identified)