On the outside, still wanting in

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This article was published 27/02/2018 (2501 days ago), so information in it may no longer be current.

Bill Gade had a plan to defeat the black-market cannabis trade in rural Manitoba.

Gade, who lives outside the rural community of Benito, two kilometres from the Manitoba-Saskatchewan border, works as a general manager at 83 North, a diversified company in the nearby town of Swan River.

The way he sees it, cities such as Winnipeg and Brandon will be saturated with cannabis stores after legalization.

“And I don’t think that anyone will ever propose that you could put a full-service cannabis store in Benito,” Gade says. “But yet, as we speak today, there’s four guys in Benito that sell cannabis all day long.”

Responding to the Manitoba government’s request for proposals to operate retail cannabis stores in the province, 83 North outlined a plan that would have used rural grocery stores as authorized distributors for mail-order packages of legal cannabis. The company went as far as finding a low-cost cannabis supplier to ensure rural Manitobans could access an affordable product from someone other than their illegal dealers.

“We thought we had a good idea. We recognized it was an out-of-the-box idea, it wasn’t exactly what they asked for… it was either going to be boom or bust,” Gade says.

It was a bust. With more than 100 applicants competing to be one of just four retail cannabis operators in Manitoba immediately after legalization, there were always going to be plenty of also-rans.

The four winning bids were announced Feb. 16. All four winners are partnerships of one kind or another, and all include at least one Manitoba business or First Nation and at least one larger partner based outside the province. In each consortium, at least one partner has previous experience in some part of the cannabis business.

Some local RFP applicants expressed concern that non-Manitobans were among those who won the first opportunity to sell cannabis legally in Manitoba.

Ashok Chopra, a Winnipeg businessman and hotel owner who applied with a group called Mana Cannabis, says he and other local business owners “create more jobs than anybody else.”

“I think, personally, they should have given the opportunity to Manitobans to do business in Manitoba,” he says.

That sentiment is echoed by Rick Macl, who owns and operates Growers N’ Smokers, a cannabis-growing equipment store and head shop in Brandon.

“They keep on saying they’re trying to help private business, this is going to help private business,” says Macl. “They’re not… they haven’t helped one business that’s been in this business from the beginning.”

Even though the provincial government plans to open the retail cannabis market to new players in the future, Macl is pessimistic about his chances of competing with the first movers.

If those initial retailers have “a year to do whatever they want, there’s going to be no room for any of us,” he says. “There isn’t. It’s just common sense, it’s business.”

Macl applied for the RFP in partnership with Seven Oaks, a Manitoba Métis business seeking opportunities in the cannabis sector. Managing director Grant McLeod says although he feels the RFP process was conducted fairly, he is disappointed in what he considers a lack of local representation.

“This is the one thing that we were really proud of, as applicants, is the fact that we took a local approach, that we went out to Thompson, we went out to Dauphin, we went out to Selkirk and Portage and met with current, local community retailers who were involved in the cannabis space,” McLeod says.

By selecting partnerships between Manitoba entities and larger, out-of-province partners with previous cannabis experience, the province took “what might look, objectively, as being the safe route,” he says.

“But certainly they had other options, I think.”

The Manitoba Métis Federation also responded to the province’s RFP for cannabis stores through its business arm, Métis N4 Construction, says Jack Park, the MMF’s minister of energy and infrastructure. The proposal, which included partners in Ontario, involved a cannabis-production facility in Manitoba that would employ Métis people.

Métis people, Park says, are “willing to contribute to Manitoba’s economy, and every time we get the opportunity to do so, they don’t consider our proposals at all. It seems that way, anyway.”

Park acknowledges that other Indigenous groups in Manitoba succeeded with their RFP applications. (The RFP’s 100-point scoring system offered five points to “Manitoba Indigenous business” applicants, as well as five points to “Canadian Indigenous business” applicants.)

“We’re happy for them,” he says. “But don’t forget the Métis, as well.”

Some unsuccessful RFP applicants say they plan to try again when the next RFP is issued.

“Honestly, it’s our thought that the reason we weren’t chosen was because they could only choose four, and there were many good proposals to choose from,” says Ariel Glinter, director of business development and regulatory compliance with The Joint, which operates head shops in Manitoba and Saskatchewan. The Joint’s proposal would have seen those existing tobacco- and cannabis-accessory stores converted to legal dispensaries.

“We believe that this is just the beginning and that there will be many opportunities in the future,” Glinter says, adding the provincial government deserves credit for opening the retail cannabis market to private enterprise in the first place.

Ontario and Quebec are restricting legal marijuana sales to government-owned corporations.

The Manitoba government’s private-sector cannabis push is “refreshingly progressive,” says Preston Drummond, founder and executive chairman of Toronto-based Modern Leaf Group, which he describes as an “education-first cannabis business.”

“Even though we didn’t win the RFP, we are still looking to do something great in Manitoba,” he says, adding Modern Leaf is currently working on building a cannabis education centre in Winnipeg.

“I’m sure it was a difficult choice for them, and when there’s only four (RFP winners), Manitobans are going to be served well,” he says. “Because it was a tough process to get through, rightfully so.”

solomon.israel@freepress.mb.ca

Twitter: @sol_israel