Cannabis in Canada Pt 6

Cannabis in Canada: A Primer. Part Six.

Part Six: Provincial Distribution Models

The Task Force on Cannabis Legalization recommended that wholesale distribution of cannabis be regulated by provinces and territories. It  also recommended that there be limits on the density and location of storefronts, including appropriate distances from schools, community centres and public parks. In addition, it recommended that there be access to cannabis via a direct-to-consumer mail-order system.

Section 69 (1) of Bill C-45 states that a person may possess, sell or distribute cannabis if the person is authorized to do so by the provinces through legislation that includes provisions that a person may only sell cannabis that has been authorized under the Act; that they may not sell cannabis to young persons; that they are required to keep appropriate records; and that they are required to take adequate measures to reduce the risk of cannabis they possess for commercial purposes being diverted to an illicit market or activity.

The approaches developed by the provinces for the distribution and retail of cannabis vary significantly. Some have limited distribution to public entities, such as in Ontario, where the LCBO will oversee legal retail through the newly created Ontario Cannabis Store, which will be responsible for the sale of cannabis in stand-alone stores and online, or in Nova Scotia, where the distribution and sale will all be through the NSLC. In both of these provinces, e-commerce, or online sales, will likely be where most of the cannabis is purchased. In Ontario, it has been predicted that there will be 150 stores opened by 2020; however, currently only 4 locations have been identified for the first stores (Toronto, Kingston, Guelph and Thunder Bay). In Nova Scotia, 7 locations have been determined. New Brunswick and Prince Edward Island will operate under the same model:  in PEI, cannabis will be sold through the Liquor Control Commission, at four dedicated government-owned retail locations (separate from the liquor stores) across the province. In New Brunswick, Cannabis NB, a subsidiary of NB Liquor, will operate recreational cannabis retail at twenty sites around the province.

Alberta has taken a different approach, and the distribution of cannabis will be the responsibility of the Alberta Gaming and Liquor Commission. Private, licensed retail establishments will be able to sell cannabis provided they do not also sell alcohol, tobacco, or pharmaceuticals; and online sales will be government-operated. As of late March 2018, the Alberta Gaming and Liquor Commissioner had received 87 applications for retail cannabis stores across the province, with an expectation by the commission to issue 250 licenses in the first year. This is a similar approach to that being taken in Newfoundland. The Newfoundland Liquor Commission intends to give out 41 licenses. Manitoba will operate as a hybrid model where the Manitoba Liquor and Lotteries Corporation will secure and track the supply of cannabis sold in Manitoba, while the private sector will operate the retail locations. Saskatchewan is setting up a private wholesale/distribution model in which distributors purchase cannabis from federally licensed producers. Supply retail stores will be selected through a pre-screening process and lottery system, and to date there has been no limited place on the number of distributors.

British Columbia has suggested a public-private recreational cannabis retail market, with government-run stores and online sales alongside stores owned by private retailers. In the province, it is proposed that cannabis producers will sell to the BC Liquor Commission, which will then supply wholesale product to its own stores and private retailers.

In the territories, the Yukon has proposed that the government alone will control the import and distribution of cannabis, although the government has indicated there is some possibility of a public and private mixed model. The draft legislation for the North West Territories has proposed mail order purchase and delivery will be available and cannabis will be sold in existing liquor stores. The liquor commission will be responsible for the distribution and sale of cannabis. Finally, Nunavut is thinking online sales only, but the government has said publicly that they are feeling behind in preparation as compared to other provinces.

Finally, it is worth noting that Nova Scotia, the Northwest Territories and Newfoundland are considering selling cannabis in locations where alcohol is purchased. The task force had recommended that there should be no co-location of alcohol or tobacco and cannabis sales and that, where co-location cannot be avoided, to have appropriate safeguards in place.

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Photo credit: Josiah Weiss from Unsplash.

- By Heather Webster