Alberta’s cannabis regulator, the AGLC, is seeking further consultation from stakeholders on proposed changes to allow retailers to engage in certain promotional activities.
After analyzing the feedback from stakeholders during a consultation conducted in 2020, Alberta Gaming, Liquor and Cannabis is considering recommending the repeal of rules that prohibit “inducements and prohibited relationships” for cannabis retailers.
Under Alberta’s rules, an inducement is “the exchange of something valuable from a licensed cannabis producer to a cannabis retail licensee”. Currently, such inducements are prohibited for cannabis retail licensees and licensed cannabis producers under sections 118 and 119 of Alberta’s Gaming, Liquor and Cannabis Regulations (GLCR).
The proposed rule change, which Alberta’s regulator is seeking further feedback on, would bring the rules for cannabis retailers in line with current allowances for alcohol retailers. The regulator says one main reason for this proposed change is difficulty in policing it, as the number of retailers in the province continues to grow. There are currently more than 570 approved cannabis retailers in Alberta.
One retailer last year was fined $100,000 for violating the province’s promotional regulations.
Ryan Roch, the owner of Lake City Cannabis, a retailer with a store in Chestermere, Alberta, says he thinks the proposed changes are positive, overall, but could end up benefiting larger companies over small, independent retailers like himself.
“It’s probably an evening of the playing field in terms of allowing those who wish to follow the rules more diligently the ability to now feel more comfortable in moving forward with that and being able to access those types of opportunities,” explains Roch. “But there’s a downside in terms of those with less buying power.”
“So there’s a lot of opportunity in terms of smaller folks like me who can access different things or get better deals to help out their customers in better ways, but there’s still also a very negative side of things if not manned properly, where people with larger budgets, larger amount of stores, who have more buying power can access more in terms of the inducement scale to really benefit them in a positive way.”
Still, Roch says he thinks the changes are inevitable, noting that many have been finding ways around the rules, or simply paying the fines.
John Carle, the Executive Director of the Alberta Cannabis Council, who represents about 160 cannabis retailers in the province, along with cannabis producers and other industry stakeholders, says he sees the proposed changes as positive.
“We’re very happy to see a reduction on red tape inside of the AGLC, which is exactly what this represents,” says Carle. “We’re happy to see that they’re opening competition in such a way that the LPs and retailers can start to develop some brand identity and some more marketing options as the result of the removal of these restrictions from the (Alberta) Cannabis Act.”
According to the AGLC, most feedback received in their survey from last fall was positive, although some retailers say such restrictions made it easier for smaller, independent retailers to compete with larger chains. This second round of feedback allows stakeholders to provide comments by email up until March 5.
Section 118 and 119 of Alberta’s Cannabis Regulations are listed below:
Section 118 of Alberta’s (1) No cannabis supplier or officer, director or employee of a cannabis supplier and no cannabis representative may directly or indirectly make or offer to make a loan or advance or give or offer to give money, a rebate, a concession or any thing of value to a cannabis licensee, to an employee or agent of that licensee or to a cannabis representative. (2) Subsection (1) does not apply where (a)the cannabis supplier has a financial interest in the cannabis licensee as its subsidiary and the loan, money or other thing is given or offered in the normal course of financing the subsidiary, and (b) each corporation is operated as a separate business in accordance with section 90.09 of the Act and section 128.
119(1) No cannabis licensee may buy, receive as a gift, rent or borrow any furniture, furnishings, storage equipment, fixtures, decorations, signs, supplies or other equipment from a cannabis supplier or a cannabis representative. (2) No cannabis licensee or employee or agent of a cannabis licensee and no cannabis representative may (a) directly or indirectly borrow or receive as a gift from any cannabis supplier or cannabis representative money, an advance of money or any thing of value, or (b) request or accept a rebate or concession from a cannabis supplier or a cannabis representative. (3) Subsection (2)(a) does not apply where (a)the cannabis supplier is a corporation that has a financial interest in the cannabis licensee as its subsidiary and the loan, money or other thing is given or offered in the normal course of financing the subsidiary, and (b) each corporation is operated as a separate business in accordance with section 90.09 of the Act and section 128.