Canadian Underwriter

Manitoba government unveils hybrid retail and distribution model for recreational cannabis

November 10, 2017   by Canadian Underwriter

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The government of Manitoba has unveiled a hybrid retail and distribution model for the recreational use of cannabis, one that involves both the public and private sectors.

The model will see the Liquor and Gaming Authority (LGA) given an expanded mandate to regulate the purchase, storage, distribution and retail of cannabis, the provincial government said in a press release earlier this week. The Manitoba Liquor and Lotteries Corporation (MBLL) will secure and track supply of cannabis sold in Manitoba, while the private sector will operate all retail locations, the government reported.

“MBLL oversight of supply and distribution will ensure safety, and retail by the private sector will ensure competitiveness and accessibility which will help achieve our goal of getting gangs out of the cannabis business,” said Manitoba Premier Brian Pallister in the release.

Private sector retail supports the decision not to co-locate cannabis retail with the sale of alcohol, eliminates the need for immediate public investment in new storefronts and provides consumer choice through different retail experiences, the premier added.

“This approach is designed to meet our objectives of eliminating the black market, keeping cannabis out of the hands of youth and creating new opportunities in the marketplace,” said Blaine Pedersen, the province’s Minister of Growth, Enterprise and Trade, in the release. “The private sector’s role in encouraging competitive pricing supports these goals. At the same time, provincial oversight will help maintain supply chain integrity and prevent the diversion of product.”

Provincial regulation of wholesaling, distribution and retail will be through LGA, the minister noted, and a regulatory framework and licensing regime is in development.

MBLL will be responsible for central administration, supply chain management and order processing. The Crown corporation will oversee the wholesale and distribution of product, including leveraging economies of scale through bulk purchasing to undercut black market pricing and support a diverse retail sector, the release said.

All cannabis sold in retail stores must be purchased from MBLL, which will source product from federally licensed producers. Safe storage and shipment of product will be managed through either MBLL-owned and operated facilities and/or contracted third parties licensed through the LGA.

“This is a step-by-step process,” said Pallister. The first step was introducing The Cannabis Harm Prevention Act to target drug-impaired driving and “send a clear message that driving under the influence of cannabis is dangerous and unacceptable,” he noted.

On July 27, the provincial government issued an expression of interest to determine marketplace interest and capability to provide services for the production, distribution and retail of cannabis. “The 60 responses received indicated significant private sector interest in participating in the emerging cannabis industry,” Pallister suggested.

On Sept. 14, Manitoba Public Insurance launched a broad public awareness and education campaign to raise awareness about the dangers and consequences of drug-impaired driving.

“Today’s announcement is the fourth step,” said Pallister. “The health and safety of all Manitobans continues to be paramount and there is still plenty of work to do.”

The premier confirmed the province will be issuing a request for proposals from qualified applicants seeking the opportunity to operate one or more retail locations. The deadline for submissions is Dec. 22, with initial locations to open July 2, 2018. The federal government has proposed a July 2018 timeline to permit the recreational use of marijuana.

Other provinces have proposed frameworks or rules to manage cannabis legalization, including Alberta, New Brunswick and Ontario.

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