Imagine you’re applying for a liquor license. It’s a comprehensive process full of checks and balances, and a fitness test to ensure you are responsible, credible and professional enough to hold a license. But cannabis? Prepare yourself for a different game, even though the rules are virtually the same. B.C.’s Liquor Control and Licensing Act and Cannabis Control and Licensing Act mirror one another. With this being the case, it’s easy to find yourself scratching your head wondering why the amount of paperwork involved in a cannabis license application is a mountain, compared to a molehill for its liquor counterpart. To apply for a Liquor Primary License (bar/lounge) or a Retail Cannabis Store, one must be deemed to be a “fit & proper person” by the Liquor Cannabis Branch, under the respective legislation. However, an application for a cannabis license requires an applicant to reveal everything to the Branch – nearly down to his or her blood type. The photo above demonstrates the severity of the issue. On the left is an application by an existing Liquor Primary licensee (who has already passed the “fit & proper” test) for a new liquor primary license. On the right is the same client’s cannabis retail application. Both applications are being submitted for the same person, to the same licensing branch. This successful business person has held a liquor license for years, in both B.C. and other provinces, and has already been deemed to pass the strict legislative criteria therein. It is also worth noting that government-run cannabis retail stores do not require any of this redundant hoop-jumping. This is only one example of the complete imbalance in the private cannabis retail sector, others including: Applicants for cannabis stores will innately struggle to find space for their locations, as commercial property owners will inevitably elect to lease to government retail locations (which are, of course, funded by tax payer dollars). If they already have space leased/owned for the location, they will have to pay the cost of the lease/mortgage while the space remains dormant, as nothing can be established without a license. Private sector cannabis stores are forced to purchase product from government cannabis suppliers, who of course also supply public sector locations. When faced with the impending shortages we are all expecting, it can be almost resolutely assured that government locations will take priority when considering who is “re-stocked” first. The obvious question is: why? Inadvertently or not, the government has stacked the decked in their favour when considering Retail Cannabis Licensing. The government sets the rules and takes priority. Their response to the question will be that “thorough checks are necessary to keep organized crime out of the newly legal industry.” However, they fail to recognize that penalizing reputable business people, who are active in already legal industries, is doing nothing to help bolster this new world of decriminalized cannabis. California has recently undergone cannabis legalization, a case study with many warnings that B.C. should heed and learn from. That market has, by some measurements, been a success. A recent New York Times article noted there has been much innovation: products popping up include cannabis roll-on pain relievers, cannabis for pets and cannabis-infused sparkling water. But what has it failed to do? Discourage the illegal market. The biggest issue is seemingly the most straightforward: regulated pot costs more. Those who have been involved in the illegal market aren’t usually keen on jumping through hoops to keep doing what they already do. Hezekiah Allen, executive director of the California Growers Association, echoed that sentiment in the New York Times article: It’s hard to persuade pot farmers who have been producing in the shadows for decades to fill out voluminous paperwork, pay taxes and comply with reams of environmental regulations. The next factor that ultimately comes into play is comfort. Consumers who already purchase illegal marijuana know their dealer, and likely get their product cheaper. It’s also heckuva lot more convenient seeing as there’s one lone (government-run) cannabis storefront in this province thus far. That’s despite 173 private cannabis retail applications being submitted, that we know of. To successfully shift illicit sales to the legal market, products must be cheaper, and more readily available. In summary, the issue is clear: the government isn’t forced to jump through unnecessary hoops to set up shop in the first place, or incur huge licensing costs, which are both factors affecting the private sector. Without a strategy that promotes and assists the private sector, these redundant rules will continue to feed the beast that is the illegal cannabis market. B.C.’s pot regulating approach thus far sees the government with a royal flush, the private sector hard-pressed not to fold in the face of adversity, and hopes of a diminished illegal market going down the drain.
Source: Rising Tide Consultants

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