Manitoba has several private cannabis distributors now available for producers selling into the market and looking for an alternative to direct-to-retail shipping or cross-docking.
Manitoba Liquor & Lotteries (MBLL) began seeking new applicants to offer cannabis distribution services in Manitoba in late 2023. This past February, the MBLL announced five companies that had successfully applied to participate.
Those five companies, Delta 9 Logistics, Open Fields Distribution, Maqabim Distributors, 100 LBS, and Lineage Distribution, have now passed the second stage of licensing and been issued their Cannabis Distributor License from the Liquor, Gaming and Cannabis Authority of Manitoba (LGCA).
“[Cross-docking] just kind of saved a couple bucks on shipping, but in some cases actually increased lead-time because you now had to wait for orders to pile up before you ship it out.”
Graham Taylor, Lineage Distribution
The first four licences were announced on June 20, while the most recent, Lineage Distribution, was issued its licence on July 3. Prior to this, the province’s cannabis operations launched a pilot project for cross-docking services with four distributors with a goal of decreasing lead times for shipments into the province and improving supplier access to small, rural, and remote retailers.
Graham Taylor, the president of Lineage Distribution, says cross-docking was well-intentioned but didn’t really solve the issue of getting products to retailers faster and more efficiently. Cross-docking is a method of distribution in which goods are received and stored on a short-term basis before being consolidated and sent to retailers.
“That really didn’t solve the biggest headaches that suppliers and retailers were both feeling, which is really poor lead times,” says Taylor. “That just kind of saved a couple bucks on shipping, but in some cases actually increased lead-time because you now had to wait for orders to pile up before you ship it out.”
Now, he explains, companies have the option of more long-term storage to better meet market demands for companies unable or uninterested in shipping individual orders to multiple retailers. Manitoba is one of the few provinces without a centralized warehouse or distribution system, instead allowing producers to ship directly to retailers.
He explains that some companies, like Lineage, had previously operated as distributors by storing products under a federal production licence. However, the new licence allows the province to more directly regulate and oversee the process through the MBLL and LGCA. Lineage also offers distribution in four other provinces.
“The original intent of this is to help bring in the best of the best… for all the independent retailers in Manitoba.”
Sean Stewart, Hundred Pound Hauling
Another benefit of going through a distributor vs. direct-to-retailer, adds Taylor, is that it can provide better inventory management in the province to ensure retailers have consistent access to products.
Sean Stewart, the founder of Hundred Pound Hauling (100 LB), which also has a distribution licence from the LGCA, says his team is taking a different approach to distribution by focusing on unique, exclusive products that can supply his own AAAAA Supercraft Cannabis stores, with two locations in the province, as well as other independent retailers in Manitoba.
Stewart says he sees this approach as similar to the legacy cannabis market, where only certain growers or cultivars could be found at certain stores, or in the clothing or sneaker worlds with unique, limited-edition products that can only be found in specific stores.
“The original intent of this is to help bring in the best of the best, not just for Supercraft, but all the independent retailers in Manitoba,” he explains. “I really want to try to give those advantages to those in the know. We’re hand-picking products, and we’re working with producers to create new formats and unique price strategies that are unique for Manitoba.
Manitoba currently has 206 private retail cannabis stores, 124 of which are in Winnipeg.
In the 2022-2023 fiscal year, Manitoba’s cannabis operations earned a comprehensive income of $31.3 million, a 27% increase from the year prior, or $6.7 million. Revenue generated by cannabis operations in 2022-2023 was $130.9 million, a 14% increase from the year prior, or $17 million.
The MBLL also recently told producers it is putting new rules in place to ensure cannabis sold in the province is fresher.
Featured image via Hundred Pound Hauling
