Province announces hybrid model for distribution and retail of cannabis

In order to meet the July 2018 timeline mandated by the federal government to permit the recreational use of cannabis, the Manitoba government unveiled a hybrid retail and distribution model that allows both the public and private sectors to do what they each do best, Premier Brian Pallister announced today.

This model will see the Liquor and Gaming Authority (LGA) given an expanded mandate to regulate the purchase, storage, distribution and retail of cannabis.  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.

“Legalization of cannabis is a major shift in public policy and safety remains our top priority,” said Pallister.  “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.”

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 Growth, Enterprise and Trade Minister Blaine Pedersen.  “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.

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 Manitoba government issued an expression of interest to determine market place 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, the premier added.

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.