Private stores will sell pot in Manitoba while province will control distribution – Manitoba

Manitoba has unveiled a “hybrid model” for selling pot in the province when recreational marijuana use becomes legal next July.

The Manitoba Liquor and Lotteries Corp. will secure the supply of marijuana and track it in Manitoba, but private retail stores will be in charge of selling it.

Pot won’t be sold where alcohol is sold, which means the province won’t have to pay for new storefronts, Premier Brian Pallister said at a news conference on Tuesday.

Manitoba Liquor and Lotteries will deal with supply chains and orders from retailers, and retail stores will open as early as July 2, 2018.

Marijuana is scheduled to be legalized under federal legislation on July 1, 2018.

The province is now taking applications from retailers to open one or more stores to sell pot. That process will remain open until Dec. 22, 2017.

“This is a step by step process,” said Pallister, who did not reveal at what age people will be able to legally purchase pot.

Pallister also did not say how many stores will be allowed.

“We’ll wait and see what the request for proposal allows as a response, I suppose. We remain anticipating we’ll have a great response,” said Pallister.

Applications from retailers will have to meet a “wide array of stipulations,” including things such as distance from schools and protection of cannabis supply sources, he said.

“We also want to be sure that we get access to the Manitoba market. This is important in terms of competitiveness. This is one of the main concerns. It’s fine to say, ‘We have stores,’ but people don’t go to stores unless there’s a competitive service or product being offered there,” said Pallister.

The province is open to private retailers selling online, he said, and cannabis should also be accessible within a 30-minute drive for about 90 per cent of the population. 

The government said there was great interest when it put out a provincial expression of interest to test the market. That expression of interest closed in September. 

The province’s approach will make sure there’s a consistent and affordable supply chain, preventing diversion to the black market, said Growth, Enterprise and Trade Minister Blaine Pedersen. It will also send a message: “Manitoba is open for business.”

A regulatory framework and licensing regime is in development, the province said.

All of the cannabis in stores must be purchased by Manitoba Liquor and Lotteries, which will get it from federally licensed producers.

There aren’t currently enough licensed producers in the province to meet demand, Pallister said, but he hopes it will be an opportunity for the industry to grow at home. 

The province plans to displace 50 per cent of the illegal market within a year of legalization because the province “wants to push gangs out of the business, so we need to be able to expand.”

Anyone who wants to get into the Manitoba marijuana retail business needs to show they can adapt as the industry changes, including for edible cannabis products, which are not currently included in the legalization.

Some Manitoba companies already have major money on the table and pushed for a private distribution and retail model. 

Winnipeg-based producer Delta 9, the only producer licensed to sell medical cannabis in Manitoba, went public on the TSX Venture stock exchange last week, gearing up to expand production ahead of legalization. CEO John Arbuthnot said he would like to see Delta 9 storefronts selling recreational cannabis. 

In the wake of Tuesday’s announcement, Delta 9’s stock prices jumped up around 25 per cent in just over an hour. 

Many smaller players, such as vape shops, also pushed for private enterprise, but Vape Haven and Hemp Haven owner Jeremy Loewen said the government needs to play a role to make sure it’s a level playing field for those who want to open dispensaries. 

Pallister also has seen pressure from the public sector, with a union saying ahead of the announcement that government stores are the safest way to run the industry.

Union wanted government-run stores

Manitoba Government and General Employees’ Union president Michelle Gawronsky said the sale should be through stand-alone stores operated by Manitoba Liquor and Lotteries staff. Manitoba Liquor and Lotteries did respond to the government’s call for a request for expressions of interest.

Most provinces and territories are still working through how cannabis will be sold. 

Alberta announced cannabis will be sold in specialty stores, separate from alcohol, tobacco and pharmaceuticals, but there are no details about whether the stores will be publicly or privately operated. 

In Ontario, the cannabis plan announced earlier this fall included about 150 stand-alone stores and an online ordering service that will be overseen by the Liquor Control Board of Ontario. 

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