While legalization in Canada is delayed until October 17th, 2018, Canadians are celebrating as micro-licenses are finally coming out, ushering in the second wave of legalization. These micro-licenses are revolutionary for the industry, including smaller cultivators and processors more able to adapt to local consumer demand. Additionally, black-market genetics will finally be regulated, opening up the global floodgates.

Health Canada announced multiple classes of licenses including: processing (micro and standard), producers (micro and standard), nurseries, industrial hemp, research, and analytical testing, in addition to medical sales licenses. The regulations and application guide to apply for new licenses are available by request from Health Canada and will be public online soon. Most notably, there will be no restrictions on how many licenses an individual can possess, opening the door to cannabis co-ops with decentralized diverse distribution systems. While current licensed producers face very few changes as they transition, there are a few game-changing regulations.

Another upstart incubator, to be called the Infused Innovations Institute, plans to focus on cannabis food and beverage entrepreneurs. It’s a joint partnership between the Food Innovation and Research Studio (FIRSt) at George Brown College, Toronto non-profit Food Starter, distributor Lifford Wine & Spirits and law firm Dale and Lessmann LLP.

FIRSt at George Brown already works with small- and medium-sized food and beverage companies to develop products, conduct market research and provide sensory and nutritional analysis. (George Brown students are hired to work on at least half of the projects.) Expanding into edibles is a natural move – especially since FIRSt has received inquiries from people with recipes for cannabis-infused products. “We want to educate around regulations and safe production,” FIRSTs director Tricia Ryan says. “What we’re seeing is there’s a lack of understanding about food safety and shelf life and things like that.”

For now, the venture is starting with an edibles conference in October, followed by monthly educational events. FIRSt may eventually apply for a cannabis research and development license that would allow it to work with edibles in a test kitchen, a valuable resource for entrepreneurs. Since edibles are not slated for legalization until next year, existing products are often made in home kitchens. Even without a license, the incubator can assist with market research, as well as legal and regulatory issues.

From Lifford Wine’s perspective, an incubator could act as a business-development channel for its distribution services. Lifford, which works with alcohol makers to place brands in retail outlets, is launching a division for cannabis firms. “Our goal is to take these small craft brands and place them in appropriate markets,” says Lisa Campbell, a cannabis portfolio specialist with Lifford. “The advantage of the institute is it will allow small entrepreneurs to be part of the market, not just big business.”

“[Cannabis edibles] are expected to be legal within one year of legalization,” says Lisa Campbell, cannabis portfolio specialist for Lifford Wine & Spirits. “Now legalization has been delayed to late summer or fall essentially, so within that year we are expecting that Health Canada will approve other cannabis derivative products.”

Campbell went on to add that for a company not already in the cannabis sector to get involved, overhead costs such as added security need to be factored in due to the fact that cannabis is a controlled substance. One of the ways to negate some of these costs would be to work with an existing licensed cannabis producer, of which there are many. “A lot of licensed producers are looking for turnkey businesses they can partner with, or potentially acquire, to add to their product portfolios.”

Along with ascertaining any added costs in logistics, interested companies should consider if they will be processing cannabis oil on-site or acquiring the substances they need elsewhere from an existing manufacturer.

“[Most people] would be dealing with a processed cannabis extract from a licensed producer, but if someone has a processing or micro-processing license they could have that equipment in their facility to process the cannabis flower,” says Campbell.

Yesterday was a historic day for Canadians, as the Cannabis Act passed through the Senateafter two years of intense debate. The landmark decision makes Canada the first G-7 country to legalize cannabis recreationally, with the first legal stores expected to open by October 17th 2018.

The bill passed on a vote 52 to 29, with several opposing Senators cited concerns that legalization for non-medical cannabis violated the UN drug control treaties.  Yet despite heated opposition, Bill C-45 is now making its way into law and is expected to come into effect 8-12 weeks after Royal Assent which is expected by the week’s end.

Independent Senator Tony Dean who sponsored the bill was elated celebrating the end of cannabis prohibition in Canada, “We have seen in the Senate tonight a historic vote that ends 90 years of prohibition of cannabis in this country, 90 years of needless criminalization, 90 years of a just-say-no approach to drugs that hasn’t worked.” Dean emphasized, “I’m proud of Canada today. This is progressive social policy.”

Lisa Campbell, who recently joined Toronto-based wine distribution company Lifford Wine & Spirits to work with cannabis companies, says craft producers will be able to distinguish themselves by growing better-quality marijuana than large-scale producers.

“A lot of the licensed producers right now, their goal as publicly traded companies is producing the cheapest cannabis possible for the commercial market,” says Ms. Campbell. She says craft producers will be able to use different genetics, grow in different soil and use other methods to distinguish their cannabis. “A lot of people say hand-trimmed buds is craft, so the trim is really important. If it’s dense and not fluffy, it’s great, and obviously, smell and flavour are factors … It’s like getting a bottle of wine for thousands of dollars – there will be certain products that will fetch a premium.”

A cannabis vape pen is essentially an e-cigarette, but for cannabis oil instead of nicotine oil. A rechargeable battery powers a heating element, which vaporizes cannabis oil contained in a replacable or refillable cartridge. (Disposable, limited-used vape pens are also available.)

"Vape pens are super-discreet, so unlike smoking cannabis there's very little odour," said Lisa Campbell, a cannabis portfolio specialist with Toronto-based liquor distributor Lifford Wine & Spirits, which is adding cannabis to its product mix. Because vape pens avoid combustion by producing vapour instead of smoke, Campbell and others consider them a less-harmful alternative to smoking.

April’s announcement that Lifford Wine and Spirits, a major supplier of wine to the Liquor Control Board of Ontario, created Lifford Cannabis Solutions to help licensed producers market and sell their products.