Newfoundland and Labrador are looking to add up to 16 new retail cannabis locations to its current count of 30, and are currently seeking proposals to operate those stores.
The Newfoundland Labrador Liquor Corporation (“NLC”) has issued a current Request for Proposal to obtain a licence for the retail sale of cannabis in Newfoundland and Labrador. The province will also be opening their own distribution centre, moving away from having producers ship products directly to retailers, and will be allowing for some retailers to do online orders, direct delivery, and drive-through windows.
The RFP opened earlier this year and closes on May 11, with successful applicants to be notified by May 28, and an expected open date for new stores on Sept 1, 2021.
In order to judge the applications, the NLC will evaluate all compliant proposals against the weighting point system. Points will be given for a good Business Plan, Social Responsibility, Safety & Security, Physical Store Design and Layout, and Retail Mix & Location. Points will be deducted for locations that also sell beer, wine, and spirits. Companies can apply for and operate more than one location, but must apply for each location separately.
NLC will determine the retail price for all cannabis products sold in retail stores in the province, with operators earning either an 8% or 15% commission on list prices. NLC will require payment of a license application fee of $125 from all successful applicants, plus an annual $125 licensing fee.
Applicants are also encouraged to describe any plants for online ordering, click and collect, as well as home delivery andl drive-thru (only for some locations). Some locations may also potentially be allowed to open a cannabis retailer inside an existing non-cannabis store.
Although cannabis retailers in the province currently have to order products directly from retailers, the NLC also intends to build their own distribution centre to serve existing and new retailers.
The decision to add new retail stores is to ensure better access to cannabis for residents of the province, says a representative from the NLC.
“Given the benefit of over two years’ experience with this new and evolving industry, NLC feels this is the appropriate move at this time,” says Darrell Smith, a Marketing and Communications Manager with the NLC. “In addition, as the industry has grown, so too has the complexity of distribution. Warehousing cannabis in-house will provide NLC with improved control and visibility of cannabis distribution in Newfoundland and Labrador and will better position it to further disrupt the illicit cannabis market. The changes announced are consistent with ensuring access to a safe and secure supply of cannabis.”
The opening of a distribution warehouse will also allow the province to engage in online sales to consumers, similar to most other provinces and territories in Canada. Saskatchewan is the only other province in Canada without a provincial distributor or provincial online sales.
“We recognize that this is an area of growth potential, and an opportunity to further disrupt the illicit market,” continues Smith. “We just recently launched a campaign (“it’s only legal if you see this logo”) to educate the public that ShopCannabisNL.com and Licensed Cannabis Retailers are the only legal means to purchase cannabis in Newfoundland and Labrador. We will continue with such initiatives in the future and will invest in our e-commerce platform to ensure we are offering an online shopping experience that is as user-friendly and as efficient as possible. Once NLC’s warehousing and distribution of cannabis begins in October, customers (both end consumer and retailers) will see a significant decrease in shipping times and a likely reduction in delivery costs, which will make online buying more attractive for customers.”
Smith says the NLC believes that once these 16 new retailers are in place, the 46 total stores, plus online sales, will be enough to serve the entire province.
“We believe that a combination of current Licensed Cannabis Retailers (30) and new retailers we are seeking through the current RFP (16) will be sufficient to fill the needs of Newfoundland and Labrador. These physical retail spaces combined with our online presence at ShopCannabisNL.com help ensure access to a safe, secure supply of cannabis for the Province. We will continue to monitor and evaluate the industry as we have done since legalization and will make adjustments where necessary.”