Processing co-op planned for Slocan cannabis growers

·5 min read

Craft cannabis growers in the Slocan Valley are banding together to overcome one of the biggest obstacles they face to entering the legal market.

Nearly 50 growers are forming a co-op to build and operate a central processing facility for their crops.

“The whole idea that appeals to me is having a local co-op helping growers with all aspects of entering the legal market, whether they are legacy growers, or someone who has never grown cannabis before,” says Gary Krempl, an early recruit to the co-op from Winlaw. “I’m very, very excited by this. It’s very important to me.”

Krempl will be selling his outdoor-grown cannabis to refine into a concentrate for edibles and other products, rather than smokeable ‘flower.’ He also has a hemp licence, and says the processing plant might be able to prepare that crop for market as well.

“That makes it a perfect fit for my business plan,” he says.

Damon Kessell is another Valley outdoor grower with a micro-licence who’s joined the co-op, as a founding member of the board. He says the co-op is good for Kootenay growers.

“It fits with the Kootenay way of doing things,” he says. “People in the Kootenays don’t want to be supporting big corporations. They want to shop local. They want quality products. It’s what we’re all about.”

The processing facility, planned for Playmor Junction (at the site of an old cement company), will see up to 10,000 kilograms of bud processed in its first year, and 20,000 by its second, says Paul Kelly of the Cannabis Business Transitions Initiative, a branch of Community Futures Central Kootenay.

“This will help legacy growers in the West Kootenay achieve legal status,” Kelly told the Valley Voice.

The West Kootenay is estimated to have had more than 2,000 people who grew cannabis pre-legalization, setting up the region to become a production powerhouse. But small growers face huge obstacles to enter the legal market. One of the biggest is how to get their world-class product into market.

Any cannabis grown in Canada has to meet strict federal regulations for growing, quality control, and packaging. A facility to get local weed market-ready will cost about $3 million to set up, and hundreds of thousands more annually to operate. That’s well beyond the scope of the majority of individual farmers – especially since banks won’t lend money to such enterprises.

“You have got to use a processor; there’s no way to get to market without one,” says Krempl, who emphasizes he’s speaking as an individual grower, and not a co-op official. “You can’t package it up yourself and send it to your local store; it’s not that simple.”

And processing itself has proven to be a tough business.

“Early processors from the Lower Mainland who had contracted to purchase and process Kootenay bulk cannabis have disappeared due to poor financial management or failed operational strategy,” Kelly says.

Relying on Lower Mainland processors for the first two years of legalization has proven a “precarious sales strategy, and puts the emerging local cultivation sector at risk,” he adds.

A grower-owned, regional processing cooperative for cannabis, “would bring the supply chain dollars and jobs back to the region,” Kelly says, estimating up to 30 full-time jobs by the second year of operation. “It would ensure packaging and processing is managed in the best interest of local growers and in line with co-operative principles.”

“By doing this project we’re trying to continue the service of supplying the Kootenays with locally grown cannabis products,” adds Kessell. “One of our board members is a store owner. And he says people are asking for local weed, and they can’t supply it. So that’s our mission.”

The co-op’s planned building is 4,800 square feet, and can easily be upgraded to meet or beat federal security and odour-mitigation regulations, proponents say. If all goes well, the co-op will be able to get product to distributors by next spring.

The Cannabis Business Transition Initiative is lending money to the co-op to get started, and shepherding the group of traditionally independent growers through establishing the co-op, financing, and business practices. That’s why Kelly wrote to the RDCK board in November, seeking local political support for the initiative.

“At a buildout cost of approximately $3 million and initial operating expense before revenue of $1 million, the facility does need broad political and financial support to start up,” Kelly wrote to the RDCK board. “Your letter of support will help in approaching funders to help make this needed project a reality. “

The board passed a motion to support the project, which also has the endorsement of the local area director, Walter Popoff.

In the meantime, Krempl says he’s looking forward to helping others rise out of the grey or black market economy.

“We’re all at the spearpoint of the industry, we’re all learning the ropes, and the goal is community economic viability,” says Krempl. “To me it’s got a wide-open future. Getting the building, the licence and the equipment is just the first step. I think we can be a national brand, an international brand, and revive the economy here.

“And it’s helping people transition from being quasi-legal growers to something they can be proud of and make a decent living with – that is one of the biggest things to me.”

The co-op will also work to build diversity and respect in the white male-dominated industry, says Kessell. Women now make up a third of the board of directors and will be well-represented in its future workforce, and space is being provided for Indigenous representation on the board as well.

“We’re going to be educating ourselves and our business is going to run with respect to the land we’re on, the land of the Sinixt,” he says.

“Hopefully we’ll succeed,” Kessell adds. “We’ve got a good group of people working towards this, we’re proud of what we’ve accomplished so far and we’ll keep plugging away here.”

The co-op is planning a formal membership drive in the near future. Anyone interested should get hold of Paul Kelly at Community Futures Central Kootenay.

John Boivin, Local Journalism Initiative Reporter, Valley Voice