The shortest distance legal cannabis travels from seed-to-sale in Canada just got a lot shorter.
On Wednesday, after passing its final pre-opening inspection, Thrive Cannabis opens the doors to the country’s first on-premise regulated weed store.
Customers can make their first orders from the new shop on Friday, on a click-and-collect basis until provincial pandemic restrictions lift.
“We’re super grateful to be taking these first steps,” says Thrive VP of strategic initiatives Robyn Rabinovich, “particularly with this being a new framework with the OCS and Health Canada.”
Since 2019, regulated cultivators across the country have been lobbying to sell straight from their production sites. Allured by the appeal that on-premise sales bring to wineries and craft breweries, cannabis producers say so-called farmgate sales allows them to boost sales to legal channels, while creating jobs and consumer-education opportunities not otherwise available.
British Columbia Premier John Horgan promises farmgate sales will come to the West Coast in 2022, but Ontario is the first Canadian province to greenlight the retail model. Alberta’s Treasury Board and Finance told Mugglehead in January that it continues to examine the approach in other jurisdictions to help inform future opportunities.
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Farmgate is another opportunity for adult consumers to access legal cannabis and to learn more about products directly from licensed producers, says Ontario Cannabis Store communications director Daffyd Roderick.
“The OCS is excited there is interest from LPs and consumers [regarding] farmgate stores and is ready to onboard any retailer that has received all the necessary approvals and is ready to open,” he said in an email.
Earlier this year, the OCS said it had received 14 retail operator licence applications for farmgate sales. However, at least one of them — Muskoka Grown Ltd. — has since cancelled its on-premise retail plans.
Thrive’s farmgate store is actually on a farm
Canadian cannabis enthusiasts hoping for a first look at farmgate will likely have at least a little road trip ahead of them.
Thrive’s store is tucked away in Ontario’s rural landscape, around a one-hour-and-20-minute drive Southwest of Toronto and 45 minutes from Hamilton, near the small community of Jarvis.
But people who make the journey won’t be able to complain about false advertising. Unlike the majority of cultivators, which only grow indoor, Thrive actually has a farm — thriving with outdoor weed.
Even among the select producers that have tried the outdoor approach, most have struggled to turn an attractive cost-per-gram business case into profit.
Thrive on the other hand sings praises of its open air crops.
“It’s huge for us actually,” says chief technical officer Tyson Cramer on a Zoom call. “I mean, I have a ton of experience with outdoor — I came from Humboldt, Northern California.”
“There’s challenges in Ontario for sure. But by choosing the right cultivars and choosing the right strategies, we find a ton of success in our outdoor, and it’s very, very low cost of production,” he explains.
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“We love that kind of sun-grown, get the terps out — we fresh freeze everything off the outdoor to take it to all of our live resins.”
Even though his company targets knowledgeable consumers with high-end brands like Greybeard Cannabis Co., many buyers won’t be aware of the detailed story the product goes from “soil to oil.”
It’s education opportunities like this that’s a huge part of why farmgate is so valuable, Rabinovich says.
“Because we are a premium producer that is producing concentrates as well as amazing flower, and has unique delivery formats,” she says, “We really saw this as an opportunity to extend the education and storytelling experience.”
“We’ve also understood that the consumers want to understand the company behind the scenes, the corporate values, the principles that they align to. And so having an opportunity to authentically and directly have that conversation with consumers, not only for them to understand our brand ethos, but I think our company ethos, we see a lot of value in extending that storytelling experience.”
But the on-premise store does open up additional revenue, as it allows the company to sell direct to consumer — after a brief stay in a section of their on-site warehouse that’s technically run by the OCS. However, Thrive still has to pay the standard markup to the provincial corporation even though the product never leaves its site.
It will also create seven new jobs, Rabinovich says, adding to the 56 people that Thrive currently employs.
As time goes on, the company will undoubtedly navigate novel regulatory situations, especially as the industry continues to shift and expand.
And as the store changes from unique first to one-of-many, there are greater societal shifts it will be a part of.
“We definitely see it as a tool to reduce stigma,” Rabinovich says. “Finding those parallels to wineries and distilleries, and the ability that individuals have to connect with companies and truly learn what happens behind the scenes, is where we see farmgate being a huge advantage.”
“Particularly when it comes to concentrates, I think individuals need to be taken on a little bit more of a journey from those that aren’t coming from the legacy market, or don’t understand that product category. So that’s why we truly are excited to take them on that journey.”
Update (2021-4-22 10:20 a.m.): This article has been updated since its publication early Wednesday morning. Thrive passed its final pre-opening inspection on Wednesday, the store will begin click-and-collect sales on Friday and Thrive pays the same OCS markup on its farmgate sales.
Top image via Thrive