The Changing Face of Cannabis Sales Across Canada

The COVID-19 pandemic hit businesses hard across the country and forced the cannabis industry to react quickly. Depending on the province or territory in which they operated, private and government-owned cannabis retail locations either found themselves on or off essential business lists, and were forced to adapt accordingly.

Stores allowed to remain open had to adopt social-distancing, customer-reduction and other in-store protective measures. In some cases, brick-and-mortar-only operations were allowed to start doing click-and-collect orders, and curbside and even home deliveries.

As provincial governments bestowed greater powers upon retail operations, it has made them think long and hard about giving a greater role to private cannabis merchants, helping to get products to hands of consumers more efficiently and making legal sales grow.

Now, with the doors of businesses opening again in Canada as the pandemic seems to be settling down, there is a strong sense that it won’t be a return to business as usual for cannabis retailers.

Having had a taste of new freedoms and possibilities, dispensaries are pushing for their own new normal.

British Columbia

When the pandemic struck, the provincial government here deemed cannabis retailers and licensed producers as essential businesses, allowing them to keep their operations going. B.C. has a mix of private and public sellers. Private retailers are now permitted to accept orders on the phone and online, but complain that this is not enough and the situation gives the government an unfair advantage, with its home deliveries.

The private retailers want to continue to do online sales and start doing home deliveries. Kamloops This Week points out: “The Association of Canadian Cannabis Retailers is pushing the province to go further, arguing online payment allows customers to avoid contamination points and accommodates people who are unable to leave their homes.

“The association said the problem with the new rules is that customers still need to pick up the product and pay for it in store — not what people have come to expect from online shopping, which includes delivery of alcohol.”

Alberta

Alberta has the highest concentration of cannabis stores in the country, with 36 new private retailers opening between March 16 and June 11, bringing the provincial total to 469. Alberta Gaming, Liquor and Cannabis (AGLC) continues to have a monopoly on online sales of recreational cannabis and also takes care of home deliveries. Privately owned dispensaries were allowed open during the pandemic, providing in-store click-and-collect services but no curbside or home deliveries.

Saskatchewan

Licensed cannabis stores were deemed an “allowable business service” and permitted to stay open, unlike some other types of retail business. The stores that didn’t elect to close their own doors saw a spike in sales in March.

The Saskatchewan Liquor and Gaming Authority had previously announced a plan to open submissions for licenses for new stores across the province, in September, doing away with previous limits on how many stores could operate in a given jurisdiction. The government argued that the reforms will provide consumers more choice and cut into illicit cannabis sales. Critics argued that the reforms favour big chain retailers and put smaller operations at risk.

Manitoba

Licensed cannabis retailers and producers were allowed to stay open, and customers could come into stores, using proper social distancing measures. In May, the provincial government announced that it would start making the cannabis retail market more competitive. Crown Services Minister Jeff Wharton announced:

“We are pleased to open the market further by allowing more retailers to apply for retail licenses. This move will enable local entrepreneurs to create jobs and support Manitoba’s economy, which is a critical step as we work toward rebuilding Manitoba in the wake of COVID-19.”

Starting June 1, the cannabis retail application process has been opened to all interested and qualified retailers. Manitoba is introducing a new controlled-access license for retailers, and will also continue to offer age-restricted licenses for retailers wishing to open standalone stores.

Ontario

The largest province deemed private cannabis retailers a non-essential service and then quickly making it an essential service. Cannabis retailers scrambled to conform to the new regulations allowing them to do curbside pickups and home deliveries.

Along with other retail businesses, cannabis stores with street entrances were then allowed to reopen, and emergency orders granting them special permission to offer delivery and curbside pick-up were also extended. The order is set to expire on Friday, July 24, 2020, but the Ontario Chamber of Commerce and the cannabis industry is fighting to allow private retailers to continue online sales and delivery instead of the Ontario Government having a legislated monopoly for online recreational cannabis sales and delivery services.

Quebec

The Société Québécoise du Cannabis (SQDC), the government-owned monopoly for recreational cannabis sales, was deemed an essential business by the province. Social-distancing policies were put in place to ensure health and safety measures, and delivery services continued to be provided via Canada Post.

Recently, the SQDC announced that it would start offering same-day home delivery services starting in July, using an as-yet-unnamed delivery company. After selling more than $311 million worth of cannabis and accessories last year, and opening 28 new stores (for a total of 41), the SQDC hopes the new, convenient delivery service will help dampen the illicit market for cannabis.

New Brunswick

When this province declared a state of emergency, the government-owned Cannabis NB stores were allowed to stay open, but at reduced hours.

Last November, the provincial government had announced that it wanted to hand over recreational cannabis sales to the private sector. Finance Minister Ernie Steeves said that it had issued a request for proposals for a single, private operator to “undertake the operation, distribution and sales of recreational cannabis in New Brunswick.”

While the corona virus may have slowed down this process, apparently it is on track again, as the province reviews the proposals by private operators to take over.

Nova Scotia

As the only legal cannabis retailer in the province, the Nova Scotia Liquor Corp (NSLC) stayed open when the COVID-19 pandemic hit, but with reduced hours and social-distancing measures. The addition of the cannabis to the liquor stores and the pandemic lockdown helped to boost NSLC profits 9.7% over the course of a year to $726 million — $655.1 million from alcohol beverages and $71 million from cannabis.

In February, the province said it would double the number of stores selling cannabis to 28, with some locations ready to open by this fall and all by the end of March 2021.

Prince Edward Island

The province temporarily closed down its four cannabis retail stores when the pandemic hit but continued to do online sales. On May 22, the stores were allowed to open again, with restrictions that included temporarily eliminating cash payments, encouraging “touch-free” shopping and online ordering, restricting the number of people in a store, and social-distancing measures taken both inside and outside. Delivery fees for orders under $100 have been reinstated.

Newfoundland & Labrador

Cannabis retailers here reacted to COVID-19 by adjusting store hours, enforcing social distancing, installing protective measures like Plexiglas shields, offering click-and-collect services, limiting numbers of customers in the store and, in some cases, temporarily suspending retail operations.

In June, the province announced that it had struck a 20-year deal with a private cannabis producer to convert an old fish factory in Burin into a cannabis production facility, which would produce 4,000 kg a year once it was fully underway. The license comes with permission to open two cannabis retail locations.

Yukon

The territory has five private cannabis retail locations, which developed their own precautions for customer safety during the pandemic, including restricted access and online ordering for expedited pickup. Online orders through government-run Cannabis Yukon are delivered by Canada Post, which during the pandemic stopped delivering parcels requiring a signature or proof-of-age to the customer’s door, and required that orders be picked up from the closest post office.

Northwest Territories

The territory decided not to close down its stores selling liquor and cannabis during the pandemic. The sparse population and product markups at the government-run online store led to $136,000 in losses in the last fiscal year.

Earlier in June, the government starting accepting applications for its first privately run cannabis store, due to open in Yellowknife. It is considering allowing other private dispensaries to open in the future, in a phased-in approach.

Nunavut

On June 1, this territory started to take applications for more cannabis retail stores. During the last year, two companies have been permitted to sell their cannabis products, taking orders over the phone and online.

Now, apparently both enclosed stores and “integrated stores” — cannabis sales within existing retail stores — will be considered for licenses. Standalone stores can display a small amount of cannabis product but integrated stores will have to keep them under lock and key. As well, physical retailers will be eligible to be licensed for online sales and telephone orders.

Communities will be consulted before any licenses are awarded.

Want to set up in-store, click and collect or ecommerce payment processing for your cannabis business? Email info@merrco.ca or call 1-800-957-0534.