Two Manitoba businesses say they were caught off guard by a recent change to the province’s cannabis store licensing program, impacting their business plans. 

In April, the Manitoba government said it was placing a temporary freeze on any new “controlled access” retail cannabis licences for at least six months while the new provincial government looked into the issue more. These licences for retail cannabis stores allow for cannabis to be sold in convenience stores and gas stations that carry other non-cannabis products.

The province currently lists 205 cannabis stores licensed. Eleven of these stores are “controlled access” stores. 

Edwardo Famakin, a spokesperson for Manitoba cannabis producer, WOWKPOW, says he and his partners were “blindsided” by the announcement as they were in the final stages of receiving approval for an agreement with Manitoba retail/gas station Domo to supply the chain with their locally-produced cannabis products. 

Famakin tells StratCann that WOWKPOW and Domo had been in talks with the provincial government about their plans to supply five gas stations in the Winnipeg area with cannabis products, and had expected some of the first licences to be issued in May of this year. 

Instead, he said he learned of the news that the province was pausing the program in media reports, rather than from the government—something that has left him and his colleagues confused. 

He says WOWKPOW signed an agreement in June 2023 with Domo to supply several of their locations with cannabis, an ongoing discussion he says Manitoba Liquor and Lotteries (MBLL) and the Liquor, Gaming and Cannabis Authority of Manitoba (LGCA) were aware of.

“We all had a big meeting about how we were going to do this,” explains a frustrated Famakin. “Then over the next 11 months we all worked together to get everything ready. So seeing this in the news instead of them informing us, it was gut wrenching. It threw us off.”

Now, he says the company is already having to lay off employees they had hired in expectation of this new agreement. 

In a prepared statement sent to StratCann, Douglas and Kate Everett, the chairman and president of Domo Corporation Ltd., said the company was disappointed to hear of the pause on the issuing of licences for Controlled Access Cannabis Stores, a change they blame on lobbying from Manitoba’s Retail Cannabis Council, an organization representing some cannabis stores in the province.

“After a year-long extremely detailed application process, Domo was in the final stages of obtaining Controlled Access Retailer Licences for our five stores when [the] Government derailed the process. We feel it is particularly unfortunate that the Manitoba Government is favouring large out of province chain retailers instead of local Manitoba-based cultivators, distributors, and retailers.”

Some cannabis retailers in the province have in the past expressed concern about such licences. Melanie Bekevich, owner of Mistik Cannabis in Winnipeg and a member of the Retail Cannabis Council of Manitoba (RCCMB), told StratCann earlier this year that the organization had met with the Manitoba government to express their concerns with how these licences are being issued. 

“The RCCMB is pleased that the Minister has been responsive to the industry’s calls for a review on the controlled access licence category,” said Bekevich. “This category was intended to provide access to legal cannabis for rural and remote communities, but we’re seeing most of these licences in Winnipeg and Brandon. A review of the category could ensure controlled access licensing is being used in the spirit of its original intent. The Minister will need to find a balance between limiting exposure of minors to cannabis sales and access for rural remote communities.”

Steven Stairs, the chairperson of the Cannabis Business Association of Manitoba, questions the pause, arguing that Manitoba needs moore access to legal cannabis, not less.

“Why put a moratorium on the Controlled Access licenses? If anything, we need more of these in urban areas to combat the black market. Recent police reports have shown that the black market cannabis industry is selling cannabis through small corner stores and bodegas. Pausing the ability for these types of stores to become legal licensed stores only enables the black market to continue selling out of these locations across the city without obstruction.”

Famakin, at WOWKPOW, says one of his frustrations is that the new provincial government, which replaced the previous government in an election in 2023, had not contacted stakeholders like WOWKPOW or Domo to let them know about the changes in advance. 

“In their review process they should have consulted their regulatory bodies to see the impact of their decisions for stakeholders who had been working with them the entire time. For existing applications already in the system, to just end it without any type of communication or forewarning, is striking. I don’t think there’s just cause for the pause. Manitoba producers need more places to sell Manitoba products.”

Glen Simard, Manitoba Minister of Sport, Culture, Heritage and Tourism, as well as the Minister responsible for Manitoba Liquor and Lotteries Corporation (MBLL), told StratCann the “pause” on such licences was in urban areas and was based on concerns with young people being able to potentially access cannabis in less-than-secure retail settings.

“We know that when legalization took place, that this was a new and emerging market. As with liquor and lotteries, our focus is on ensuring social responsibility,” Simard tells StratCann. “We want to make sure that people are accessing cannabis in a safe and reliable manner.  What we see now is that consumers don’t struggle to access cannabis. With over 200 stores in Manitoba, people in urban areas have access to cannabis.  

“The directive I’ve provided to MBLL, through the board chair, is to put a pause on licences for controlled access in urban areas and cities. We do have concerns about the availability of cannabis for young people and we want to make sure that we’re making socially responsible choices. Widespread availability of cannabis outside of an age restricted area is a concern, and we want to make sure we’re balancing availability and social responsibility.”

“I’ll be frank,” he added, “we’re not hearing an overwhelming desire from Manitobans to see cannabis available in convenience stores. That’s why we’re taking the time to do a review and get this right. People would expect this on the liquor side, where we’ve always considered market viability when looking at liquor retail licences.”

Simard also says the new provincial government has no plans of changing Manitoba’s private retail cannabis model into a publicly-owned retail model, despite some claims from the opposition. 

“One important side note: We’re not looking to bring cannabis sales under public ownership and are committed to working with our existing retail partners to ensure a continued focus on social responsibility.”

Featured image via Google Maps

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