Pubdate: Sat, 11 Nov 2017
Source: Vancouver Sun (CN BC)
Copyright: 2017 Postmedia Network Inc.
Author: Paul Clark
Page: B2


Pot entrepreneurs should be encouraged, says Paul Clark.

Entrepreneurial ism and innovation are key ingredients to Canada's
domestic economy and its international competitiveness. For example,
France has a vibrant wine industry, Cuba is recognized for its cigars,
China has a strong manufacturing role, and Italy and France have their
fashion brands.

To this end, the Government of Canada invests a considerable amount of
money and effort into sparking and supporting entrepreneurial
activities. For example, government-funded Entrepreneurial Incubators
exist across the country, loans to entrepreneurs and small businesses
are widely promoted, and other agencies such as Community Futures
support entrepreneurial activity.

In Canada a good example of an industry with high levels of
entrepreneurship and innovation is the cannabis industry. Across the
country there are hundreds of small entrepreneurial ventures,
including growers, value-added businesses, wholesalers and retail

These companies are keeping pace with rapidly changing consumer
desires; there is now a wide selection of cannabis strains,
cannabis-infused edibles and the number of retailers (online and
brick-and-mortar) is equally extensive. "B.C. Bud" exemplifies the
extent that the province has become Canada's cannabis-industry
entrepreneurial epicentre. In almost any other industry the levels of
grassroots entrepreneurial ism and innovation would be the subject of
provincial and national government pride.

However, impending government regulations seem to be aimed at
annihilating our cannabis entrepreneurs. Specifically, current
barriers to becoming one of the licensed industry producers are high,
requiring extensive business planning and millions in capital
investments. As such, the impending government rules appear to be
favouring a limited number of large, vertically integrated, licensed
suppliers (at this point there are about 45 licensed producers across
the country). Few of the small companies in this industry have the
money and other resources required to receive this licensed producer

If future federal policy does favour only a limited number of large
producers, our vibrant and valuable cannabis-industry entrepreneurs
are on the brink of extinction. The hundreds of small- and
medium-sized enterprises that are now contributing an every-growing
range of innovative products will be forced to close. The consequences
of such "heavy-handed" policy would have multiple drawbacks.

For example, such legislation would limit Canadian consumer's access
to a much more restricted and less innovative range of products.
Secondly, through this kind of market control, the hundreds of
small-business owners would be in the unenviable position of choosing
between either closing their doors or operating illegally. Thirdly,
restricting small-business entrepreneurial ism would damage the longer
term opportunity for these small and innovative Canadian companies to
establish their brands and compete internationally. It is, after all,
often these smaller, dynamic companies competing for position in the
domestic market that will also be posed to compete for markets globally.

Without a doubt, determining how to best regulate this industry isn't
easy for all levels of government. And, as with any industry activity,
clear and effective regulations are needed. For example, government
rules are needed for such things as protecting consumers, limiting
cannabis access to minors and ridding illegal activity among
cannabis-industry participants.

Ultimately, the federal government needs to introduce regulations that
will support continued industry innovation and entrepreneurship among
the many small businesses within our thriving cannabis industry. Rules
enabling the legal participation of small- and medium-sized business
are essential to the continued success of this industry.

Similarly, laws requiring unrealistic levels of investment and
bureaucracy for industry participation need to be avoided, as these
will also only serve to wipe out the innovative activity of the many
small entrepreneurial businesses across our country. Finally, to
contribute to Canada's international competitiveness in this industry,
federal regulations supporting opportunities for companies of any size
to export cannabis brands are also needed. As it is now, export
opportunities are the special and protected purview of only the large
licensed producers.

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Paul Clark is among the sessional faculty with the School of Business 
and Economics at Thompson Rivers University.
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