MMPR Grow op: Small Scale

HI,

I am currently developing a website that will allow all LP's to join if they want.
There will be many advantages to joining; networking, consulting, sharing information, group buying, lobbying, ect..
Due to the fact that this forum (I am sure) has many followers that are not posting(not contributing), I cannot get into major specifics.
I am however actively networking with people who are educated and interested becoming LP's so when we launch the site I can reach out to them to join.
I believe having a place (preferably private) where we can hold industry meetings and so forth will be an important factor to success.
If anybody is interested in joining or being part of this, just direct message me and we can exchange contact info.

I agree with Kootenaygirl as far as the goals. To get started I think we need 2 or 3 short term objectives.

1) Get a website and a home.
2) Get members
3) Get a qualified Quality Control Person to do a Webinar for us on what they think will be required.

If we need money as we go. We can informally chip in or start collecting for memberships.

a voluntary regulatory body. Good idea.

Yah, a webinar, to help us be our own quality assurance person (QAP).

Well one of us will eventually have to face this sooner or later.

I thought my husband would be our QAP with his horticulture degree. Let's see... "has the training, experience and technical knowledge relating to the activity conducted and the requirements of this division"(4)
-training - horticulture degree
-experience - 25 years in horticulture,including.... production, shipping, construction, and sales. Set up multiple mmar ops. Currently runs his own PUPL.
-technical knowledge - extensive with regards to growing but the testing is new to him. We bought a "cannalytics" test kit for thc and five other cannabinoids but have yet to try it. It is a bit intimidating I must admit. Working on a $ price $ to have testing done for each crop outside too.
The rest of this division 4 seems to be more about HC rules to follow, nothing too difficult, much of it about tracking everything, which is easy with bar codes and scanners etc.

If I can test thc and cannabinoids what does it take to test for microbial and chemical contaminants.
Validated methods? Where is that official list?
Schedual B in the Foods and Drugs act, requires another book 1 of 8 The Canadian Formulary is one of them, where we should be able to get some of these answers. Anybody know of these books. European Pharmacopoeia etc. $300.oo on amazon.

We need to learn what HC wants in regards to tracking and other things and how to present it to them in the webinar, that would be worth a few bucks.

Hey and on the bright side, I never read anywhere that doctors and now nurses couldn't prescribe more than 5 g's a day, only that as an LP we could only ship 5g's x 30 or 150g's per month. So as an LP with a 40 g a day scribe, no shipping required, shouldn't I be able to fill my own prescription. Do you see any rules being broken that I missed?

I like the website ideas. Count me in on that.

Kootenaygirl said:

I did go to my insurance broker about 2 months ago and she already had companies that would insure me. What we found was that in the fine print the insurance covered very little. No theft, no crop insurance, no water damage, really all it covered was the building and liability. The insurance was expensive, we insure this building, (empty) now for about 300 per year ( not exact because it is tied to our home insurance currently). We would expect the same building to cost with a business over 5000 per year up and running. The building we have is about 3000 sqft and not a greenhouse.

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The liability insurance in relation to the building? Or is that liability insurance in relation to the product you will be producing? There's a big difference there and something that should be checked into.

Kootenaygirl said:

Business licences here are sold without proof of insurance or anything else..

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Business licenses in general? or is that specific to this industry? I'm curious...

Kootenaygirl said:

We decided to incorporate because we believe that if you don't increase the size of your facility with the market you will go bankrupt. In other words we think LP's will need to keep getting bigger and bigger, corporations = big.

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That's shrewd. When the big players get involved and start producing mass quantities they squeeze the little guys out on price margins... lower cost per pound equals lower selling price, obviously. You're right in believing that you will have to keep up. You can get as big as you want without incorporating and remain a sole proprietorship. BUT that leaves you open to liability. If you get sued or go bankrupt then plaintiffs and creditors can go after your personal assets too. As a corporation plaintiffs and creditors can only go after what belongs to the corporation, not personal assets.

Kootenaygirl said:

Our biggest hurdle, by far, is zoning. We have spent over $2000 and will know our fate in July. This has been hard and we pity anybody who is trying this. We live in a marihuana friendly area and we think it would have been impossible for us to get our zoning with any less support. We were also lucky that our municipality was on these new regs and trying to get ahead of it early on..

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The civic level of regulation is usually the hardest to get through. For those who have trouble here I suggest getting involved in local charities and contribute to electorial campaigns to get zoning changed. Read: bribes. That's how the big boys get it done fast, which is a relative term. Sometimes it takes years.

Kootenaygirl said:

There is no limits to the amount of LP's HC will licence. This is stated clearly under frequently asked questions for LP's on the HC website.

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Well there was...and there suddenly and mysteriously wasn't. That's great. But evident by that is that regs can change on a whim and often do. Don't be surprised if all of a sudden the provinces start requiring a licensing fee as well. They won't want to miss their part of the action and will likely make a cash grab... most probably on the excuse that all things medical fall under provincial jurisdiction. Their regs will likely mirror the Fed regs and so there won't be many other hoops to jump through...just a fee.

Kootenaygirl said:

What we have been finding is that everywhere we go, we are the best informed about the MMPR, including... Health Canada, insurance, municipality, police, fire, online, and media (with the exception of this forum). At this point I'll bet that we are more informed then 99% of the lawyers. Would anybody recommend an MMPR informed Lawyer? .

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I imagine that will be very difficult as all of this is so new. Up to now there hasn't been a need for lawyers to acquaint themselves with any of this. Now that there is a way to make a buck I imagine we'll start to see them popping out of the wood-work. But I think you can probably do with a lawyer who is business savy in an industry that deals with Food & Drug.

Kootenaygirl said:

This forum has had little in the way of nay sayers, thankfully. Plenty of that almost everywhere else. It's just that it's so easy to be negative and you don't even have to read the regs first. It is a healthy thing for us all though, it tells us we are way ahead of the curve but to still watch our six. Keep reminding yourself at every hoop that others have given up right here. So bring on the hoops.(especially the cheaper ones) LOL

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Just sayin... I have never been a nay-sayer. My point has only ever been that most people don't realize how difficult it will be to get up and running (as you are finding out) with all of the regulatory bodies that will have to be dealt with AND that it's not going to be cheap. Anyway...good luck to you. It sounds like you are well under way and know what you're doing.

The liability insurance for the business insurance was the big increase, but the building did contribute.

General Business Licence. As far as I know up until the 19 of June 2013 only one BL has been given, Prairie Plant Systems and I don't even know if that was business specific.

You summed up our thoughts on incorporation.

We did not bribe, though a case of scotch to our local leader did cross my...... mind.

From the beginning there was never any limits on the amount of licenses. This was one of many points that was misread then spread everywhere early on. We look at reporting in a whole new light after going through this. Facts are in the eyes of the beholder. You may be right about the provincial fees, but I hope they will wait till it goes recreational leaving medicine alone. Probably wishful thinking.

We agree that we will need a lawyer. What were finding though is that not only are we the educated ones, the questions we would of asked a month ago have already changed again as we learn more and more. Putting this off till they catch up and we catch up may be saving us cash now.

I was not trying to single you out as a nay sayer. Was talking in more general terms across the internet. Though I can see how you may see it this way and I apologize for letting it look that way. I like your posts even though they are a reality check for us sometimes. You make us constantly reevaluate, it's healthy. It is difficult to be accurate, even our glorious reporters rarely get it right and that is their job. Thanks for your support and keep on stepping on our dreams so that we get stronger fast and actually get through all this.

Your right though most think is will be easier than it is. The cheap part is the real hitch, my husband has designed every conceivable size facility and it comes down to the mighty dollar. Our direction now is minimal output of cash to get our production license, then with the license approach a bank with a screaming business plan while running the minimum size operation to show your already doing it.

We are putting the final touches on our website now which we started back in February. We are incorporated as of the 21st.

Concentrating on our security now and it doesn't seem too expensive guys. 20 to 30 per month for 24hr monitoring, who knew! I'll let you know about our system when our guy has fully proposed it and we've run it by HC.

I don't know anymore than you guys, but as I read the Quality Assurance and the QA Person it seems to me to be a smoke screen meant to confuse and misdirect us. At the end of the day I think that any body with a few year growing pot would qualify with the right paperwork and documented routines.

At this point, we think we will qualify for a license for.$.$.$. including boxes, containers, smell proof bags, inventory trackers, security, insurance, rezoning, incorporation, website, domain name reserves, quick books, I'm sure I missed a few things.......under $40,000 We own our own building and currently have a sterile facility though it will only be about 600sqft when were done with shipping and security. Really small scale. Phase 1.

Kootenaygirl said:

Concentrating on our security now and it doesn't seem too expensive guys. 20 to 30 per month for 24hr monitoring, who knew! I'll let you know about our system when our guy has fully proposed it and we've run it by HC.

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Wow. I had no idea it could be that cheap. But my suspicious nature begs me to wonder... is that 20-30 per month with your own equipment configured to be compatible with their monitoring systems or with their equipment which must be purchased?

Kootenaygirl said:

I don't know anymore than you guys, but as I read the Quality Assurance and the QA Person it seems to me to be a smoke screen meant to confuse and misdirect us. At the end of the day I think that any body with a few year growing pot would qualify with the right paperwork and documented routines..

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That entire passage bothers me. I smelled a smoke screen there too. The ambiguity in it suggests that it will be an area that is used to screen or filter applicants...meaning Fed regs usually have a passage in it where they can choose to overlook at will to approve suitable applicants or to scrutinize to deny shady tupes, such as those that might be found suspicious in a background check.[/QUOTE]

Kootenaygirl said:

At this point, we think we will qualify for a license for.$.$.$. including boxes, containers, smell proof bags, inventory trackers, security, insurance, rezoning, incorporation, website, domain name reserves, quick books, I'm sure I missed a few things.......under $40,000 We own our own building and currently have a sterile facility though it will only be about 600sqft when were done with shipping and security. Really small scale. Phase 1.

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So $40k in, with your own building, and yet to plant a seed and still a few major expense to cover prior to that. I wonder if that includes lights, ballasts and etcetera? At any rate, that figure lends some support to my estimate of $250k to go from ground zero to first harvest. I mean, once an operation is up and growing, there will still be cash flow to consider to get the operation through to harvest (utility bills, any wages that might need to be paid, remittances to Rev Can, EI and CPP for the wages paid, WCB and incidentals). This is the biggest challenge for any business, particularly so for farmers, as there are no influxes of cash until the crop is sold. I'm sure your very aware of this, but I mention it to others who may be following this thread (specifically one fellow who was so quick to deride my estimate as being baseless). I'm curious... another thing I didn't think of until just now: protection against power failures. Generators aren't cheap and I imagine several will be required for even a small operation...and to configure them to come on automatically when power goes down is probably a tricky thing?????

Gquebed said:

Wow. I had no idea it could be that cheap. But my suspicious nature begs me to wonder... is that 20-30 per month with your own equipment configured to be compatible with their monitoring systems or with their equipment which must be purchased?

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We buy equipment from security dude who also does installation he will use 4 cameras we already have, in the end we own everything. We will need a dedicated phone line to allow for self monitoring on our cells apparently, so 20-30 goes to 50 per month in our books.

[/QUOTE]That entire passage bothers me. I smelled a smoke screen there too. The ambiguity in it suggests that it will be an area that is used to screen or filter applicants...meaning Fed regs usually have a passage in it where they can choose to overlook at will to approve suitable applicants or to scrutinize to deny shady tupes, such as those that might be found suspicious in a background check.[/QUOTE]

If we believed that there was any funny business like bribery or special treatment we probably would not be taking these risks. probably naive as usual.

[/QUOTE]So $40k in, with your own building, and yet to plant a seed and still a few major expense to cover prior to that. I wonder if that includes lights, ballasts and etcetera?[/QUOTE]

No, 40k with all our major expenses in, currently growing under the mmar. Lights and so on and so forth from mmar purchased before. Say were in another 20k for current op totaling 60k to be able to apply and supply. Remember we do not feel that this is going to be sustainable for long.

[/QUOTE]At any rate, that figure lends some support to my estimate of $250k to go from ground zero to first harvest.[/QUOTE]

If we had to buy land or buildings or both you have a conservative number at 250k. But there are land owners with large buildings who will try to cash in on this too offering increased lease arrangements, so I don't think it's fair to compare that part of it. Add to the 60k lease payments and I'll add land taxes and upkeep.

[/QUOTE]I mean, once an operation is up and growing, there will still be cash flow to consider to get the operation through to harvest (utility bills, any wages that might need to be paid, remittances to Rev Can, EI and CPP for the wages paid, WCB and incidentals). This is the biggest challenge for any business, particularly so for farmers, as there are no influxes of cash until the crop is sold. I'm sure your very aware of this, but I mention it to others who may be following this thread (specifically one fellow who was so quick to deride my estimate as being baseless).[/QUOTE]

What do you think HC will do with us when we want to sell our personal medicine grown under mmar but well within mmpr regs, under the mmpr. LOL. Will they make us start over arbitrarily?


[/QUOTE]I'm curious... another thing I didn't think of until just now: protection against power failures. Generators aren't cheap and I imagine several will be required for even a small operation...and to configure them to come on automatically when power goes down is probably a tricky thing?????[/QUOTE]

Haven't needed one yet though I would need a small one for the pumps. Screwed if anything longer than 2-3 days happens to the grid I bet. With phase 2 this will be address directly.

Tried for your format but failed. How'd you get it that way.

Man this forum is poppin! Few days away and so many things to address.

Don't believe the man who claims insurance is a big barrier. Someone I know has premises insurance (fire/flood/broken windows) for their declared medical marijuana op on commercial property. Many commercial insurance companies in Canada will cover this. Costs a few grand a year.

Yes, this does not cover things like crop theft insurance or liability if someone slips and falls, but you can get extensive business insurance for this specifically tailored for the medical marijuana industry - underwritten by lloyds of london. Yes, this is offered in Canada. Despite what some people have said on here, there is extensive data on this industry = the US of A.

LLoyds and countless other insurance companies (some of which specialize in only providing insurance for the medical marijuana industry) have been providing various types of insurance to the industry over there for years and have found it very lucrative.

Next, not to beat a dead horse with a stick but... why are folks so certain prices are going to fall and soon we'll only be buying from pfizer? Top shelf product will always be top shelf product and will not be replicated by just any industrial warehouse. You don't have corporations dominating the wine industry, one which is similar to cannabis in that quality is appreciated to a large extent. I haven't checked prices down south recently but last I heard top shelf eighths were costing 45$ a pop. Now I'm not saying prices won't drop, moreso that just because there will bigger operations than your uncles basement grow doesn't mean price decline. There are very large warehouses down south. But to be fair, much larger clientele base.

Finally, I wouldn't bother spending 10grand on hiring KPMG to write you up a business plan, the chartered banks of Canada won't finance you without 2 years past financial operating statements. Even then, they will make sure it is personally secured by you.

I'm with kootanygirl in that my biggest concern right now is zoning. That's why I'm not in a rush to get into this industry, although I am losing a first movers advantage in doing so.

/END RANT!

And as for a lawyer familiar with MMPR, there would be none better than kirk tousaw. It will likely be damn near impossible to obtain a consultation with him, luckily I was referred. But he did tell me he will be running info sessions (costly ones at that) on MMPR, so maybe one can inquire to him about attending one of those if one was interested.

Kootenaygirl said:

Tried for your format but failed. How'd you get it that way.

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when you reply with quote there's a quote start and a quote finish. IE: the start of your mesg had this - QUOTE=Kootenaygirl;9264843 (I removed the square brackets so it would show) and then the end has to have this - /QUOTE ..... so a lot of copy and paste because each section that I want to reply to has to have the start quote and the finish quote ...lol

romulanlover said:

Next, not to beat a dead horse with a stick but... why are folks so certain prices are going to fall and soon we'll only be buying from pfizer? Top shelf product will always be top shelf product and will not be replicated by just any industrial warehouse. You don't have corporations dominating the wine industry, one which is similar to cannabis in that quality is appreciated to a large extent. I haven't checked prices down south recently but last I heard top shelf eighths were costing 45$ a pop. Now I'm not saying prices won't drop, moreso that just because there will bigger operations than your uncles basement grow doesn't mean price decline. There are very large warehouses down south. But to be fair, much larger clientele base.

/END RANT!

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Just a guess but I don't think prices will fall initially. Street prices, that is, because of the new minimum mandatory sentences. Down the road though... that will likely change if Big Pharma gests involved. They'll start cranking the stuff out like McDonalds. Maybe there will be a market niche for high-end product??? I dunno...if marihuana stays as medicine probably not. I think the high-end niche market is more likely to come about if we push on recreational use marihuana to be handled like beer and wine, which is the way it should be....

Great info guys. I was really happy to come back online to see all the progress. Koot I agree with you regarding your prediction that this can be done under $40k. Unless something goes sideways, I think we can get it done under $40k. And I agree 100% in your approach. Its the same as mine. Build small, get approved, then scale up.

@Koot, I asked health canada the following

If the licensed producer is also a medical patient needing cannabis. Is the producer supposed to mail the cannabis to himself?

Can the producer be a client of his own business?

And is the producer restricted to 150g/month also?

here is the reply

To answer your question, if the licensed producer is also a medical patient they would need to sell and ship to themselves. All the other MMPR requirements would also apply.

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Now I made some progress for finding myself a place to grow. An offer was made to me. $2000/month for a 3000 square foot cold storage room that I could modify. Its on land where there is 6 greenhouses. However, the 6 greenhouses are sold and are not owned by the land owner. There is also a dwelling on the property. So Im now confused. I asked health canada as long as the dwelling is not used in any way for cannabis can I still use the cold storage building if they share the same property. And how would I handle multiple building owners on the same land. Do you guys think this will be an issue? I dont think the guidline answered my question. Neither did Health canada.

Is this situation allowed under the MMPR?


Rural land. There are multiple buildings on site. 1 Building will be for all cannabis related activity. Building 2 is a dwelling-place. Other bulidings owned by third party. There is no cannabis related activity any except one of the buildings. Would this setup be allowed?

Re: your previous email (dwelling): The production of marihuana under the Marihuana for Medical Purposes Regulations can only be produced indoors and cannot be conducted in dwelling places. Licensed producers must also comply with all applicable provincial/territorial and municipal legislation and regulations. You may wish to communicate with your municipal officials to determine if there are any zoning or by-law restrictions.

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Kootenaygirl said:

We were the first plow truck through the rezoning in our area, waking almost everybody up to the new regs as we went. We were lucky that our senior planner was somewhat educated already. We're trying to get agricultural zoning for our acreage. We won't know till mid July about our zoning fate. Wish us luck.

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GOOD LUCK!!!!

What is your acreage currently zoned?

BigBhuda said:

I agree that we need to get organized. The biggest (or first) obstacle right now to get the application in is the Quality Control report. We need to band together with one company or person familiar with the regulations to provide a quality control manual specific to marijuana. No one seems to want anything for free and seems willing to pay a fair price. In other industries you subscribe to these type of manuals on an annual basic and the author provides updates as required.

I don't know anyone that can create such a manual. If someone does then lets get formal and get at it. If we need to form an association and get a website, I may be able to help with that. Hopefully we could get an association going for $100 membership. We need a place on the web to bring together the trades and professionals with the people serious about becoming producers.

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If we go this direction then I will chip in.

romulanlover said:

Man this forum is poppin! Few days away and so many things to address.

Don't believe the man who claims insurance is a big barrier. Someone I know has premises insurance (fire/flood/broken windows) for their declared medical marijuana op on commercial property. Many commercial insurance companies in Canada will cover this. Costs a few grand a year.

Yes, this does not cover things like crop theft insurance or liability if someone slips and falls, but you can get extensive business insurance for this specifically tailored for the medical marijuana industry - underwritten by lloyds of london. Yes, this is offered in Canada. Despite what some people have said on here, there is extensive data on this industry = the US of A.

LLoyds and countless other insurance companies (some of which specialize in only providing insurance for the medical marijuana industry) have been providing various types of insurance to the industry over there for years and have found it very lucrative.

Next, not to beat a dead horse with a stick but... why are folks so certain prices are going to fall and soon we'll only be buying from pfizer? Top shelf product will always be top shelf product and will not be replicated by just any industrial warehouse. You don't have corporations dominating the wine industry, one which is similar to cannabis in that quality is appreciated to a large extent. I haven't checked prices down south recently but last I heard top shelf eighths were costing 45$ a pop. Now I'm not saying prices won't drop, moreso that just because there will bigger operations than your uncles basement grow doesn't mean price decline. There are very large warehouses down south. But to be fair, much larger clientele base.

Finally, I wouldn't bother spending 10grand on hiring KPMG to write you up a business plan, the chartered banks of Canada won't finance you without 2 years past financial operating statements. Even then, they will make sure it is personally secured by you
I'm with kootanygirl in that my biggest concern right now is zoning. That's why I'm not in a rush to get into this industry, although I am losing a first movers advantage in doing so.

/END RANT!

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great rant. I feel the same as you. Im not jumping in unless I understand fully. Im moving slow. Maybe too slow.

I personally dont see the mmpr written for large industry. If they wanted to price us small producers out they would just have to make similar rules like hemp production. Like minimum land size for cultivation.

I asked health canada for more detail regarding a dwelling on the same property as the outbuilding. In other words. A house and a production facility on the same land.

However my question regarding dwelling-place on property remains unanswered. I understand that cannabis cannot be grown in a dwelling place. There are two buildings on the property. One building is NOT a dwelling and will be used to produce cannabis. There is a second building on the property that is a dwelling. It wont be used in any way for cannabis production. Is this allowed? In other words can there also be dwelling on the property if there is no cannabis being produced in the dwelling?

Thanks again for your professionalism. I appreciate all the effort you guys are putting into this.

Thank you for your email.

In response to your question concerning the location of a facility, the MMPR do not include zoning requirements; production of marihuana can only be done indoors and cannot be conducted in a dwelling place. However, licensed producers must comply with all other applicable provincial/territorial and municipal legislation and regulations.

An outbuilding on your property may be an appropriate location, as long as it complies with all these conditions. It is your responsibility to communicate with your municipality to determine whether there are any by-laws or other municipal requirements that would restrict the establishment of a facility where marihuana will be produced.

If this is still not clear, kindly provide us with a telephone number and a convenient time when we can reach you by phone to discuss.

Thank you.

Licences and Permits Division
Office of Controlled Substances
Health Canada

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I'm interested in speaking with anyone that might think their capable of performing QA in respect to the MMPR. Send me a pm for more details.