BCBusiness

tOp LEft: Jim hOLLand phOtOgRaphY; BOttOm: dELOittE 26 BCBusiness nOVEmBER 2018 "startup" isn't a word nor- mally associated with govern- ment, but that's how Blain Lawson describes the B.C. Liquor Distribution Branch's cannabis division. The BCLDB has assembled a group of some 175 people, including contractors, to oversee its new role as the province's lone wholesale distributor of recreational cannabis to a mix of public and private retailers. So far, Lawson says, the biggest challenge was the change- over of government last year, which put the BCLDB six months behind its peers in the other provinces. He took charge of can- nabis that November: "I had seven months, because we were working toward a July 1 go-live, to get a multimillion-dollar business up and running." On October 17, only one legal outlet selling recreational pot, a government-run BC Cannabis Store in Kamloops, was slated to be open. By then, the BCLDB also planned to launch an e-commerce portal that serves businesses and consumers. The agency will start with about 5,000 kilograms of dried cannabis, oils and capsules, provided by 25 of the 32 B.C. and other licensed producers it had signed deals with as of Septem- ber. "Their big challenge has been on packaging, on product descriptions and on pricing to make sure that they're not pric- ing themselves out of the market," Lawson says of the LPs. Subject to demand, he and his team have geared up to open 10 to 12 government stores within the 'rst six or seven months of legalization. By mid-September, 115 hopefuls had paid the $7,500 application fee to seek a private retail licence. With an eye on what consumers will pay for legal weed, the BCLDB's wholesale markup is just 15 percent, versus 89 percent for wine. Retailers are free to charge a premium, but they can't sell their product below wholesale. "The key priority is protecting children and youth and ensuring we keep the criminal element out of cannabis," Lawson says. "We're looking to recoup our costs, cover our overhead, but this is not a big cash grab." —N.R. T H E G A T E k E E p E R BlAin lAWson general manager, British Colum- bia liquor distribution Branch LeT's mAKe A DeAL What Canadians will pay for cannabis "W e're behind the curve, which is a little bit shocking, given that the cannabis industry in British Columbia has been ahead of the curve for an awfully long time," says Cowichan Valley–based kirk tousaw, who worked on several landmark cases upholding patients' rights to medical marijuana. B.C. opened one legal store on October 17, but hundreds of illicit shops will keep selling recreational pot, barring an enforcement drive, he notes. "We particularly need to speed up people who want to transition into the legal industry." as recreational legalization unfolds, tousaw sees these sticking points ahead. Possession the federal Canna- bis act allows people to possess 30 grams of marijuana in public, but they can be fined for possessing 31 grams and jailed for having 60. that strikes tousaw as an arbitrary law that can be challenged for violating section 7 of the Charter of Rights and freedoms. "it doesn't make a lot of sense to me that you can go to the store and buy an unlimited quantity of alcohol, but you're a criminal if you possess just over a couple of ounces of cannabis." PersonAl use the first Canadian charged for grow- ing more than the four cannabis plants allowed for personal use will also have a strong arbitrariness challenge, tousaw says. "at a certain point, if you're growing for your own personal consumption, the number of plants is completely irrelevant." iMPAireD Driving tousaw says he'll probably join the inevitable court challenge to limits on cannabis metabolites in one's body while driving. "if you use cannabis for chronic pain, the idea is to keep a lot of cannabinoids in your system so you're getting the medical benefit," explains the attorney, who has stopped represent- ing private clients but consults for Ontario- based marijuana player Canopy growth Corp. "it doesn't mean you're impaired to drive a vehicle." ADvertising the onerous restrictions on cannabis advertising will face a legal challenge as infringements on commercial free speech, tousaw says. "if you compare the way alcohol marketing occurs in this country–a much more dangerous substance than cannabis–where's the justification for treating cannabis differently?" –N.R. T H E A T T O R N E y kirk tousAW Barrister, Tousaw law Corp. Current average price per gram (illegal market) $8.24 $8.98 $0.74 (9.0%) $8.36 $8.89 $0.53 (6.3%) $8.33 $9.33 $1.00 (12.0%) $7.53 $7.81 $0.28 (3.7%) $8.17 $9.04 $0.87 (10.6%) price users are willing to pay after legalization price difference increase (% difference) CAN ADA W EsT O N TA R I O quE bEC AT L AN T I C

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