Craft Cannabis Partnerships: Where Craft Meets Corporate

Growing pains are common in any new industry and cannabis in Canada is certainly one of them. Some openly wonder if Canada’s cannabis industry can be fixed. With strict regulations and not much political will to change them, much of the change is coming from the industry itself. Craft cannabis partnerships are one of the developments coming to the forefront.

Craft Cannabis Partnership Between Aurora and North 40 Could Be Saving Both – LPC

Yahoo! Finance recently reported on a craft cannabis partnership between behemoth Aurora Cannabis and North 40 Cannabis. For some in the cannabis industry, it’s a little like Microsoft’s Bill Gates coming to Steve Stores rescue in the 1990s.

First pictures of “Farm Gas” trimmed up. These are some bottom buds. The sticky is strong with this one. I’ll take this “larf” all day long. pic.twitter.com/mnyXjJR2Rm

— North 40 Cannabis (@40Cannabis) July 5, 2021

“(Aurora) stepped up and provided what many small legacy producers couldn’t. I’m glad I put my preconceived notions aside, and decided to go with them,” said Gord Nichol, owner of North 40 Cannabis – and the Steve Stores in this scenario. “They might have saved my company. So, I’m forever in debt for that.”

In Aurora’s case, North 40 could provide the premium brand they are looking for to boost sales. But genetics isn’t something the company was known for.

“There were questions about whether Aurora is capable of producing this type of genetics,” said Aurora CEO Miguel Martin. “Having someone like Gord validate it was really a big deal for us.”

The result of this craft cannabis partnership is Farm Gas. With a frosty appearance and THC levels above 30 per cent, it “has the makings of a commercially successful cannabis strain” the Yahoo! article concluded.

Both parties hope it saves Aurora’s recreational sales.

“Just look at their recreational market share. It’s dropping. That’s all because of small producers bringing in better products,” Nichol, said “Honestly, they haven’t performed very well. A lot of people lost a lot of money (in the stock market) and continue to do so.”

Craft Cannabis Partnerships Not New – LPC

This isn’t the first craft cannabis partnership announced in Canada. The newly formed Entourage cannabis play is a merger between WeedMD and CannTx. The Hexo/Zenabis deal was about positioning for the US market. The Tilray/Aphria deal was about positioning for global domination.

There have been broken partnerships too. Houseplant split from Canopy Growth and set up shop in the United States instead. Both Houseplant and Canopy stated it was a mutual agreement, though it’s pretty clear that quality issues were at least part of the problem.

In other words, what craft cannabis partnerships need to succeed is that blend of high-quality product that craft cannabis brings, and the huge distribution network that larger cannabis companies already have. The struggles for craft cannabis to get shelf space are well documented. And, the consumer complaints about quality as big cannabis companies race to the bottom with cannabis prices undercutting the illegal market are also known. Perhaps partnerships like the Aurora/North 40 arrangement will bring the best of both worlds. If that’s the case, it’s likely everyone will win – including consumers.

Read the full Yahoo! story here.

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