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Water Today Title March 21, 2019

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Update 2019/2/19

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Interview with Mohan Denetto, Director General of Indigenous and Northern Affairs Canada

By Gillian Ward

As Indigenous leaders and business investors gathered in Ottawa this past week for the Second National Indigenous Cannabis and Hemp Conference, WaterToday spoke with the Director General of Economic and Business Opportunities for Indigenous and Northern Affairs Canada (INAC), Mohan Denetto. INAC has mobilized resources to support Indigenous community owned ventures and partnerships entering the regulated cannabis industry. We asked Director Denetto to cast Canada's vision for Indigenous participation in the budding industry.

"Potential is unlimited", says Denetto, for First Nations and Inuit participation in cannabis-related business ventures. Deloitte has valued the base market value of cannabis consumption at between $4.9 billion and $ 8.7 billion annually, with the ancillary market of growers, value added production, laboratories and security amplifying the value to potentially 22.6 billion dollars annually.

The opportunities for new business start ups are precedent setting, says Denetto, offering hope to close the socio-economic gap for the First Peoples. Health Canada reports that six Indigenous enterprises have been licensed for cannabis production, processing or distribution, including the first official cannabis licensee under the new regulations, BeeHigh Vital Elements Inc. in Corner Brook, NL.

Health Canada has placed no limit on the number of licenses that may be issued for cannabis production, nor tonnage limits for producers. According to a list provided by Health Canada, 128 cannabis cultivation licenses have been approved to date, with approximately 30 applications in process from Indigenous applicants, according to Health Canada communications staff. Another 18 Indigenous applications are in process for various licenses, including processing and distribution. Health Canada has designated resources to assist Indigenous applicants through the complex regulatory process. INAC has accepted 26 applications for the cannabis industry finance program. Water Today asked about priorities or excluded sectors. Denetto explained that the program is designed to be reactive, rather than prescriptive. The communities will drive the priorities for development by the proposals that come forward, and no particular sector has been excluded.

In terms of strategic opportunities, Denetto says provinces are experiencing a range of supply conditions from glut to scarcity with a general shortage of processing capacity. As processed and labeled products may not be transferred from one jurisdiction to another, there are opportunities in the supply of processed product in certain jurisdictions. Denetto added that the recreational market is expected to be larger than the medical market. Opaskwayak Cree Nation, one of Canada's leading licensees in partnership with National Access Cannabis, would agree with Denetto's assessment. Since launching an on-line cannabis store, 4 on-reserve outlets and 17 storefronts in western municipalities, Onekanew (Chief) Sinclair confirmed his belief in the enormous potential that lies in recreational cannabis, as he repeats, "cannabis is the new coffee!"

When asked about barriers to entry for Indigenous ventures, Denetto advised that the biggest challenge for any business start up in cannabis is going to be working through the requirements of the highly complex and challenging regulatory process. The second significant barrier will be to establish the human resource component with highly qualified, technical staff. Employment and Skills Development Canada offers the Indigenous Skills and Employment Training Program, (ISET) which may be accessed for technical skills training for the cannabis industry. The third barrier is access to the relatively large capital requirements that new ventures require, a topic discussed extensively at the conference. Watch for the details about INAC's financing program for the regulated cannabis industry including eligibility and equity requirements, coming soon.


Cannabis Report

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