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100 places to buy cannabis? Delta 9 CEO expects more Manitoba stores as province promises ‘open market’

100 places to buy cannabis? Delta 9 CEO expects more Manitoba stores as province promises 'open market'


More mom and pop pot shops once province eases restrictions on prospective store owners, John Arbuthnot says

Delta 9 CEO John Arbuthnot says he's encouraged by the province's approach to retail cannabis, and its promise to streamline the application process for retailers. 'We're not backpedalling or moving backwards or hitting the pause button on the rollout,' he says. (Cameron MacIntosh/CBC )

If one entrepreneur has his way, Manitoba will have as many places to buy cannabis as there are stores to purchase booze.

John Arbuthnot, co-founder of the cannabis producer and retailer Delta 9, said he thinks the province can accommodate more than 100 retail cannabis stores — a projection that may be possible if the retail market for cannabis opens up as promised.

You'll see the full scope

Arbuthnot said.

You'll see the bigger companies like Delta 9 trying to open dozens of stores as we originally announced was our intention, and you'll see now the opportunity for smaller one-off locations. Call it the mom and pop model

More cannabis stores in more places, and less of a role for government in choosing where they go — that's what the  province has said it wants to see,while other provinces grapple with empty shelves and a limited, or non-existent, storefront presence.

'We're not backpedalling'

During its November throne speech, the government signalled it intends to shift retail cannabis to an "open market through a streamlined application process."

We're not going to tell you you can't start up a store because there's already one there, because that's not how the free market works

Premier Brian Pallister said at the time.

The province initially picked four retailers to fan out provincewide for the early months following October's legalization of recreational cannabis. By the end of November, licences had been granted to 14 stores — nine in Winnipeg, two in Brandon and one each in Portage la Prairie, Dauphin and Opaskwayak Cree Nation.

Over the summer, the province issued a second call for retailers. This time, it sought entrepreneurs to set up shop in communities underserved by the initial distribution of stores.

Shoppers browse at Tokyo Smoke's St. Boniface location on Oct. 17, the first day of legalized recreational cannabis use. Licences have so far been granted to 14 cannabis stores in Manitoba. (Darren Bernhardt/CBC)

More than 100 applicants have applied, the province said, but none have been chosen.

Pallister previously said the next round of retailers may be selected by year's end.

It is exciting to hear that we are progressing

Arbuthnot said.

We're not backpedalling or moving backwards or hitting the pause button on the rollout.
Apart from some of the [supply] issues in the first week, there's certainly been stores, our stores included, that have been very well supplied

The province remains intent on ensuring that 90 per cent of Manitobans are no more than a 30-minute drive from a shop selling legal cannabis within two years, he said.

So far, retail outlets in Manitoba are all age-restricted outlets where customers must be at least 19 years old — the legal age for using cannabis in the province — to get through the door.

Stores sell more than pot

But Arbuthnot suspects we're about to see controlled-access stores where the cannabis is locked away, in the same way convenience stores hide tobacco from view.

In those outlets, stores could offer many more products than cannabis and its variations.

The Joint, a head shop in Winnipeg, is eager for a free market.

The government again is the overlord of a product. They've restricted its commercial value

Wild Planet owner Roman Panchyshyn

After selling cannabis accessories for a decade, it would only be fitting to sell the actual product, said Ariel Glinter, director of business development and regulatory compliance for the shop.

We were hoping it would go the way of other things such as liquor licences, where the LGCA [Liquor, Gaming and Cannabis Authority of Manitoba] would have an application process and licences would eventually get issued that way

Glinter said.

It's good to see it going in that direction

Pipes and other products are displayed inside Tokyo Smoke. (Lyzaville Sale/CBC)

But Roman Panchyshyn, owner of Wild Planet music and head shop, said the Manitoba government's claims of opening up the retail market are misleading, when it still oversees product distribution.

All the stores that had already laid out the red carpet for everyone else the last few decades should be allowed to participate, again, in a free-market system rather than having to jump through ridiculous regulated hoops

he said.

Panchyshyn doesn't appreciate the surcharges the province slapped on the drug, including a six per cent tax in effect next year to cover the "social costs" of legalization.

The government again is the overlord of a product

he said.

They've restricted its commercial value

Limits on where stores can open

Fang Wan, a marketing professor at the University of Manitoba, thinks the gradual approach the government has taken is the right one.

There were many unknowns in legalizing a product with a known stigma, and handing out store licences to big, reputable companies likely eased the public's worries, she said.

One of Delta 9's first customers takes a sniff of their product on Oct. 17. A University of Manitoba marketing professor doesn't think retailers who have yet to open will be significantly disadvantaged in the market.(Lyzaville Sale/CBC)

Wan doesn't think smaller entrepreneurs are necessarily disadvantaged because they're late to the market.

We have the Ikeas, we have the Walmarts, but it doesn't stop smaller, boutique retailers from existing

she said.

You always have the monopolies, the giants, but you also have very creative, innovative smaller players

There will still be limits on where cannabis stores go. Many municipalities have bylaws to prevent outlets from opening up near schools, community centres and places of worship, and those regulations won't change if the province takes a hands-off approach.

In Winnipeg, the retail sale of cannabis is treated the same way as liquor. Provincial and city staff evaluate proposed locations and consider the distance from community gathering places.

Any potential changes to that framework have not been communicated to the city, a spokesperson said.

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