Skip to content

Merrickville grow op a regional first

Born and raised in Quebec City, Denis Gagnon didn’t move to Ontario until 1981, and didn’t start farming until 1989 when he was 40 years old. 

“I didn’t know anything about farming, but it had always been a dream to have a farm, so in 1989 when we bought this farm we had to learn how to do everything from scratch,” he chuckles.

Come 2018, cannabis legalization presented a new opportunity for Gagnon. Now 70 years old, with 30 plus years of farming experience, he recognized the cannabis market as a legacy opportunity, and started to look into getting his organic farm licensed for cannabis cultivation at the end of 2018.

In mid-December 2019, Euphorium IV:XX was granted the first outdoor micro license for the cultivation of cannabis in Eastern Ontario. 

“I think it is great to see new cannabis companies that are adopting organic, outdoor farming practices,” said Nathaniel Giuffrida-Morris, co-founder and vice-president of research and development at Canada's Cannabis Project, a business accelerator.

Located in Merrickville-Wolford, the new operation will sow its first crop this spring.

“We don’t believe in growing indoors; we’re an organic farm, we believe in sun and soil,” said Gagnon, Euphorium's master grower. 

The arduous part of the journey was getting licensed.

“We decided to embark on this project at the end of December 2018,” he said.

The first step was getting familiar with the new legislation and all the regulations attached to it. There were, according to Gagnon, hundreds of requirements from Health Canada that had to be met to ensure that Euphorium complied with the ministry’s operations, reporting and inventory management conditions.

“We had to develop standard operating procedures and we needed to be licensed by both Health Canada and Canada Revenue Agency. CRA is really concerned with ensuring the legal market doesn’t cross over into the illegal market,” said Gagnon, who had to undergo an RCMP criminal records check as part of the process.

When Gagnon started applying for a license he figured it would take a couple of months, but it’s taken closer to nine months to complete, with both Health Canada and Canada Revenue agency involved in the process.

“As soon as we got our Health Canada license we got a call from CRA within 48 hours, and had two visits from an excise agent, requesting access to our inventory,” said Gagnon.

Since the grow op hasn’t yet started, inventory at this time consists of seed.

“So we showed her the seeds and she counted them one by one, but I have to say she was very pleasant and helpful. She helped us navigate the documentation and reporting processes required under the CRA license,” said Gagnon.

Reporting is stringent. For example, if he were to plant 10 seeds and only eight germinated, but three turned out to be male plants (and he destroys two), he would have to report the number of seeds planted, the number of germinating plants and the number of seedlings destroyed, seeds discarded, and the remaining number of viable seedlings.

“Every step of the process, we have to report in detail,” said Gagnon.

It’s a small operation, and deliberately so.

“We didn’t want to go any bigger. We thought that with a micro license we could make a good living, and I can tend the plants myself. Any bigger, I would need to hire staff, but it was important to me to that I maintain the quality I want to produce.”

Gagnon is very focused on developing his own strains (hence keeping a few male plants) and producing a superior quality of cannabis.

“There’s a difference between greenhouse tomatoes and outdoor tomatoes and it’s the same with cannabis,” he said. 

Under the micro license there is no limitation on the number of plants Gagnon can grow, but there is a restriction of 200 square meters of surface area he can cultivate. This year Gagnon figures he’ll grow around 200 plants.

So far Gagnon and his partners have invested about $75,000 into security, heating and air conditioning and specialized filtration systems.

“I’m talking to other licensed growers and some have invested more than $1 million,” he said.

The difficulty, he explains, is that applicants have to have everything in place before submitting their application to Health Canada.

“You have to submit your site plan, security system and everything has to be ready for operations before you can submit an application,” said Gagnon.

The next step will be distribution… and that’s a whole other can of worms. As things stand micro-producers like Euphorium can only sell their product to a processor. As a cultivator, Euphorium is licensed to produce wholesale product and they cannot sell to retail outlets or directly to a consumer.

“We have to sell our product to a processor who can re-package our product for retail,” explained Gagnon.

The closest such processor is cannabis giant Canopy Growth, in Smiths Falls.

“We have retail operations all over Canada and we sell other producers’ products in our retail outlets, because we want to offer our consumers the variety they want,” said Canopy Growth spokesman Jordan Sinclair.

Even though Canopy announced that it was shuttering greenhouses in Aldergrove and Delta, B.C., and has cancelled plans to open a third greenhouse in Niagara-on-the-Lake, those were largely operational decisions.

“There has been a great deal of news coverage regarding Canopy laying off 500 workers from the greenhouse operations in BC.  What got less reporting was the fact that this decision was made because outdoor growing had become legal, and costs pennies on the dollar compared to commercial greenhouses,” explained Giuffrida-Morris.

Canopy seems to be saying the same thing.

“The demand is there, and pathways to market exist; we’ve been doing a lot of work with other producers through our medicinal platform as well,” said Sinclair.

Still, selling to another producer/processor is not an ideal scenario for the small cultivators. Gagnon and other outdoor producers are lobbying the provincial government for a more open distribution system that treats all cultivators/producers equally.

“This is still a new venture for the government so there are growing pains,” concludes Gagnon.

Heddy Sorour, Local Journalism Initiative Reporter, Brockville Recorder and Times

Looking for National News? viewed on a mobile phone

Check out Village Report - the news that matters most to Canada, updated throughout the day.  Or, subscribe to Village Report's free daily newsletter: a compilation of the news you need to know, sent to your inbox at 6AM.