A cannabis store in BC has been ordered to pay a $1,000 fine for selling cannabis at too low of a price. 

Cost Cannabis in Revelstoke, BC was ordered to pay a $1,000 fine after it was ruled in a hearing in October that it had violated provincial rules that prevent a retailer from selling cannabis at a price below the price that the licensee paid to the government for the cannabis, and below the wholesale price of the cannabis on the day the licensee sells it to the patron.

A Notice of Enforcement Action (NOEA) issued to the business alleged that on April 22, 2024, BC’s Liquor and Cannabis Regulation Branch (LCRB) received a complaint that the retailer was advertising all products and accessories in the store were for sale at 50% off.  

Following that report, an LCRB inspector conducted an inspection of the store on April 25. In the report, the inspector noted that they had asked about four specific products, and the staff member they spoke with confirmed that their sale prices were lower than their list prices.  

A few days later, on April 29, the same inspector then sent a request to the store licensee asking for a list of cannabis products inventory, a list of cannabis sales records, monthly Health Canada reports, and cannabis purchase records for January through April. The licensee provided responses to these requests in May, except for the monthly Health Canada compliance reports. 

Through this process, the inspector determined that the retailer had sold products below the price they paid the provincial wholesale distributor (LDB) for them.

From the options of a one to three-day licence suspension and/or a $1,000-$3,000 monetary penalty, the licence holder received a $1,000 fine. This was because it was the retailer’s first violation of this type within a one-year period. 

The retail licence holder admitted that the province’s minimum pricing rules had been broken, accepting a financial penalty, but also argued that the rule for minimum pricing is not effective in the government’s stated goal of preventing over-service and/or over-consumption. 

Instead, they argue the rule should be changed.

“The Licensee says the historical illegal market in cannabis sales continues to be significant,” reads the document. “These ‘grey sale’ cannabis products can and are being sold cheaper than the government-supplied cannabis products, and this disparity is pushing the industry to remain underground.  This (the underground market) is much more likely to be a source of over-service and over-consumption than sales by Licensees for less than the minimum pricing.  This is especially concerning as the grey market products may be tainted and are not as safe as the government-supplied products.”

The licensee will be required to pay the $1,000 penalty to the general manager of the Liquor and Cannabis Regulation Branch, on or before November 23, 2024. Signs will also need to be posted within the store showing that a monetary penalty has been imposed, and be placed in a prominent location by a Liquor and Cannabis Regulation Branch inspector or a police officer.

Featured image of a Cost Cannabis location in Ontario