B.C. Cannabis Laws Cause Trouble for Local Businesses

Despite high hopes, the cannabis industry in B.C. has been slow to roll out, falling behind other provinces. For businesses like Trees Cannabis, it means layoffs and limbo.

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Alex Robb, Trees CEO, in the Trees Yates Street location. Photo by Belle White.

When recreational cannabis was legalized across the country in October 2018, B.C. was expected to be a model for the rest of the country. Many municipalities, including Victoria, had already zoned businesses for cannabis retail sales, and there was a healthy medical marijuana market.

But a recent report from Statistics Canada says B.C. sold less legal cannabis than any other province except for Prince Edward Island in the first nine months of legalization. The report’s data shows B.C. sold $19.5 million worth of legal pot from October 2018 through June 2019. P.E.I. only took in $10.7 million but has a fraction of B.C.’s population. Officials in B.C. blame supply shortages and a slow rollout of retail stores.

There have also been significant delays in licensing. Only licensed retailers are permitted to sell cannabis — and that cannabis must come from a licensed producer. Retailers must navigate a complex approval process, with both provincial and municipal input.

“Creating a legal cannabis market takes time,” says a spokesperson for the BC Ministry of Attorney General. “Our robust application process has stringent security and financial checks to ensure illegal activity doesn’t take place. Unlike some other provinces, our government gives communities input into if, where and what kind of cannabis stores they want. We are working to continuously improve and speed up the application process for cannabis licences, without compromising the safety of British Columbians.”

Cannabis Crackdown

The Community Safety Unit (CSU) — under the policing and security branch of the BC Ministry of Public Safety & Solicitor General — recently started to crack down on unlicensed dispensaries. Victoria dispensary Trees Cannabis suspended its operations and laid off more than 150 employees after multiple raids this summer.

Trees Cannabis CEO Alex Robb says the company, which had been selling medical cannabis for five years, applied for its retail licenses in October of 2018, but is still in the financial screening stage of its application. According to Robb, the intensive process has caused significant delays for Trees.

“A lot of people have been laying the blame squarely on ineffectual governments, but there were circumstances at the time of legalization that could explain why this took so long,” Robb says, pointing to the new provincial government having to get settled in 2017 and then the municipal elections around the time of legalization.

“The governments really did have to come up with this whole system very quickly,” he adds. “It did cause so much confusion.”

Trees Cannabis intends to open licensed retail stores as soon as its applications are approved. In the meantime, it is running Trees Restaurant, which Robb hopes will eventually be a licensed cannabis consumption space once regulations are established after edibles become legal this fall.

The stringent regulations and delays in licensing have led the B.C. government to adjust its estimated cannabis revenues from $200 million to $68 million.

“I really think that by not seeing cannabis legalization as a real economic opportunity, the
government is shooting itself in the foot,” Robb says. “This could have been a real boom to the B.C. economy.”

This article is from the October/November 2019 issue of Douglas.