By Caleb McMillan
WOMEN IN CARWASH CONFERENCE SPONSORS
Tanknology largest company in the world devoted to compliance solutions for petroleum systems. If you operate an underground or an aboveground petroleum fueling system, you are no doubt governed by multiple environmental regulations. In our blog, we discuss topics of interest to our industry community; whether it be a regulatory development, our take on breaking industry news, news from our company, or anything else we believe may be of interest the tank compliance community. We hope you will join us in the conversation.
With 30 years of technological advances and the strongest end-to-end support network in the world, PDQ is the undeniable partner for car wash solutions and success.
Founded in 1969, Belanger, Inc. is a full-line car wash equipment manufacturer whose offerings maximize wash bay Profit-Per-Foot™.
> NuVinAir Cyclone: Too often, the car’s interior is skipped
With the federal government planning to legalize cannabis by next summer, distribution responsibilities have been handed to provincial jurisdiction. Many provincial leaders are considering restricting the emerging legal cannabis market to an exclusive government monopoly.
This means a loss of opportunity and profit for retailers, particularly western Canada’s convenience stores. Across Canada, tobacco is sold privately by retailers without major issues. Government education campaigns, rather than restrictions on business, have proven effective at deterring teen use.
When it comes to cannabis legalization, Andrew Klukas, president of the Western Convenience Stores Association, says: “We’ve been handling age-restricted products for just about forever. Health Canada has done studies over numerous years that have shown the high level of commitment of the convenience store sector to do age testing, so we’re prepared to handle these products.” When the products are packaged and standardized so the public has “some assurance in the level of quality and what they are ingesting,” then nothing but social stigma and restrictive government policies keep the convenience sector out of the market.
Currently, the British Columbia government is exploring its options on how to distribute cannabis. But BC already has medical dispensaries regulated by municipal authorities, supplied by growers hoping to become licensed. Given its illegality, the exact size of BC’s cannabis market is hard to determine but a study commissioned by the Cannabis Growers of Canada estimated the existing industry worth between $2 to $7 billion. There are endless opportunities for western re-tailers and this cannabis market in a province that has normalized cannabis.
“It would be good for our businesses,” says Klukas, “people aren’t going to have a whole shelf full of cannabis product, but there’ll be some.” After all, an entire product category is yet to be explored. While medical dispensaries cater to patients, recreational weed shops cater to many connoisseurs, like speciality cigar shops do for tobacco users. Convenience store retailers could sell pre-rolled joints to age-appropriate consumers. “What I’m thinking about is prepackaged, standardized, quality-controlled products that I’m sure are going to be out there,” so long as “they can’t be easily counterfeited.”
Klukas envisions a convenience store sector serving consumers who are fine with a person behind the counter without “deep expertise about different types of cannabis product.” With physical attributes similar to tobacco, consumers of convenience store cannabis products would “just need to know that it’s a standard product and that we’re licensed to sell them.”
But acquiring this hypothetical license may be harder than expected. Recently, the Ontario government announced their plans to open new government-owned and operated pot shops. And although the finer details have yet to be completed, convenience stores are not being considered as a distribution point for now.
While Ontario may be a lost cause, British Columbia and its unique history with cannabis is less settled. While John Horgan’s NDP government has referred to working groups and public-opinion surveys to gauge the best course of action, this hasn’t stopped the Responsible Marijuana Retail Alliance of BC (a coalition of public and private liquor stores) from expressing their interest in cannabis sales. Of course, so long as the market is open to everyone, there is no issue. But often, as in the case of convenience stores wishing to sell wine and beer, there are other factors to consider.
Says Klukas: “Why can’t convenience stores carry those products? Well, because there’s an established private liquor industry and they lobby against us. It’s kind of unfortunate because that hurts business. Whenever we’re not allowed to sell legal products that local customers want to buy that makes it harder and harder for convenience stores to stay in business.”
Other barriers to entry include a restrictive approach to branding and advertising. Like with tobacco, the federal government doesn’t want cannabis promoted. Again, this harms consumers who rely on packaged cannabis products to differentiate between their favourite growers, strains, and other interests like terpene flavour, or, most importantly, how strong the psychoactive component is.
Klukas fears that plain-packaging, whether it’s cannabis or tobacco, encourages counterfeit products. “I think it’s very important that they have brand markings to make them harder to counterfeit otherwise, if their goal is to transfer the products into the legal market, then don’t make it easy, and don’t create incentives for people to keep going in the underground market.”
But this isn’t the road governments are taking, says Chad Jackett, president of the Cannabis Growers of Canada. “We’d love to supply pre-rolls to convenience stores, that’s part of what we’re about, but if legalization doesn’t legalize us, the craft growers, then there’s really nothing John Horgan can do.”
Jackett is also convinced that the large licensed producers (LPs) of medical cannabis can’t keep up with demand, “There are going to be lines of people waiting for cannabis like people waiting for bread in a communist dictatorship. That’s why they have to open the market to everyone. If we walked away the LPs wouldn’t be able to handle the market and some people don’t want to go with them because they’ve been caught spraying their medicine. There is greed on the side of the government.”
Allowing convenience stores to sell cannabis will likely help the local “BC Bud” supply that may otherwise be cut off in a stricter retail environment. As Klukas says, “Some of the big distributors that service this industry are all over the place. They potentially can make it possible for these small craft producers who have a really good product to get their product out to market and grow quickly.”
Retailers stand to lose a great deal if the federal government’s hardline approach influences how provincial governments decide to distribute cannabis. If BC’s normalization of cannabis fails to persuade the NDP government, convenience stores may miss out on profitable opportunities.
“We stand to lose something that should be part of our future,” says Klukas. “Any product that attracts customers is important because that creates spin-off, that creates other sales in other product lines, food, and beverages, things like that. It’s not just about the cannabis. Cannabis may be a small portion of the actual sale, but nonetheless, anything that gets people in the front door is very important to us. That’s what we live on.”
Caleb McMillan is a writer living in Vancouver, BC. He holds a Communications Media diploma from Mohawk College. His writings have appeared on ZeroHedge, the Ludwig von Mises Institute, the Cannabis Life Network and BotaniQ.