British Columbia‘s provincial government has announced a new cannabis retail licence. This licence will allow licensed producers to sell directly to customers via stores located at their farms.
The so-called “farm-to-gate” license was previously on a trial pilot program with the Williams Lake First Nation.
This new cannabis retail licence is open to all growers.
British Columbia Announces New Cannabis Retail Licence
The new cannabis retail licence is called a Producer Retail Store (PRS). The PRS will come into effect on November 30, 2022.
Applications are available through the Liquor and Cannabis Regulation Branch’s (LCRB) liquor and cannabis licensing portal.
Only federally licensed producers can apply. This includes standard production licenses, micro-cultivation licences, and nursery licence-holders.
The government says this licence is part of the province’s commitment to supporting “a robust, diverse and sustainable legal cannabis economy that is inclusive of Indigenous and rural communities.”
Mike Farnworth, Minister of Public Safety and Solicitor General, said in a press release:
“The fourth anniversary of the legalization of cannabis in B.C. is around the corner, and we continue to look for ways to support the growth of the legal market while providing safe and accessible options for British Columbians.
“The PRS licence is another way we are working to support the success of B.C.-based producers.”
New Cannabis Retail Licence to Forgo the Provincial Distributor?
B.C.’s new cannabis retail licence means direct delivery from producer to consumer. The direct-delivery program also allows producers to deliver directly to cannabis retail stores in B.C.
“The direct-delivery program further enables small-scale cultivators to build brand loyalty with licensed cannabis retail stores and their customers by offering their products in local stores rather than spreading the same volume throughout the province,” says the news release put out by the government.
This licence will be good news for retailers still reeling from the B.C. government workers’ strike. Store shelves emptied as private retailers were unable to access additional inventory.
Government monopoly distributors have been under attack as of late. While cannabis producers and retailers struggle to stay afloat, government retailers have posted record profits thanks to their legal monopoly status.
The push for more privatization has momentum in Ontario, where the government-owned cannabis distributor charges a 30% markup (compared to 15% in B.C. or 6% in Alberta).
In Saskatchewan, there is no central distributor. The provincial Saskatchewan government regulates sales but allows retailers to deal directly with producers and private wholesale companies.
Less Government Involvement = Lower Prices
“I’m a former politician,” George Smitherman, president and CEO of the Cannabis Council of Canada, tells CLN by phone. “I know how the department of finance works. It likes the OCS like the LCBO because it’s one of fifty lines on its revenue chart.”
But Smitherman admits the margins are “ridiculous” and work to counter the intended aims of eliminating the illicit market. “I think there’s a lot of room to push for reform,” Smitherman says.
The Ontario Chamber of Commerce agrees.
When a cyberattack shut down cannabis distribution in Ontario, Daniel Safayeni, the Chamber’s vice president of policy, said in a statement:
“This situation underscores the inherent risks of having the Ontario Cannabis Store (OCS) act as the province’s only wholesale purchaser and distributor of legal cannabis.”
The Chamber wants the Ontario government to follow Saskatchewan’s lead by allowing producers and retailers to have direct relationships.
They say this will enable them “to negotiate their own product mixes, prices, and delivery terms, which would mitigate the risks inherent to the current system.”
British Columbia’s Farm-Gate Cannabis Retail Licence: Beginning of the End?
Will British Columbia’s farm-to-gate cannabis retail licence constitute the beginning of the end for the provincial wholesaler monopoly?
One can hope. In the meantime, the tide is turning in favour of decentralization.