Cannabis Industry Update: November 22, 2023

Dear ABLE BC Cannabis Members and Industry Colleagues,

Here’s what you’ll find in today’s update:

  • Submission to Minister Farnworth: "Eight-Store Cap"

  • Member Spotlight: Squamish Cannabis

  • BC Cannabis — New Quarterly Sales Report 

  • The BC CSU: Enforcement on Illicit Cannabis

  • WorkSafeBC: New Regulations for BC Employers

  • go2HR: Joint Health & Safety Committee Training

  • Out and About with ABLE BC

Advocacy Update: Submission to Minister Farnworth: "Eight-Store Cap"

Last week ABLE BC initiated the opportunity to directly reiterate to Minister Farnworth, our response on the Liquor and Cannabis Regulation Branch’s (LCRB) review of the number of licences a cannabis retailer can hold. 

Our recommendation is a balanced approach, emphasizing that BOTHprotecting the investments of smaller existing retailers with additional regulatory changes AND a small increase of the eight-store cap to twelve for larger retail brands, should be implemented hand in hand and are essential to improving the retail landscape of BC's licensed cannabis industry. 

More specifically, ABLE BC suggested that any increase to the eight-store cap should be accompanied and supported by: 

  • a provincial 1km distance separation between retailers; 

  • an expedited licence transfer application process for existing licence holders; 

  • and update to the tied house rules to permit “white label” packaging amongst retailers & LPs. 

These conditions will help support existing smaller retailers, allow modest growth for larger retail groups, and discourage the economies of scale that would invite discount retailers to operate our market.

You can read our written submission here. 

ABLE BC looks forward to bringing you more updates on this end — stay tuned.

Member Spotlight

Heading up the Sea to Sky? Make sure to add an extra stop along the way & check out Squamish Cannabis!

Located conveniently at Squamish's Chieftain Centre Mall (on Cleveland Ave), their sleek and custom-built interior is designed to leave you with a unique and memorable time on your journey. 

In a rush? No worries — just preorder online and take a peek at their excellent menu of small batched BC craft cannabis (and tons of other selections). 

With excellent reviews all around on customer service, it's not surprising the awesome staff at Squamish Cannabis are experienced, knowledgeable, and super helpful budtenders. Stop by, say hello, pick your order, and be sure to follow them on socials!

Industry Update: BC Wholesale Cannabis — New Quarterly Sales Report

In case you missed it, the latest BC Cannabis Wholesale’s Quarterly Sales Reportis out now. The report helps in assessing product trends and compares Q2 wholesale data of 2023 and 2022 (July, Aug, Sept). 

Several product categories show a year-over-year increase in sales. Here are some interesting highlights: 

Under the Inhalable Extracts category mix:

  • 930,448 units of Cartridges were sold, which is approximately $22 million (a 25.7% increase);

  • 135,356 units of Disposable Pens were sold, which is approximately $1.9 million (a 98.7% increase);

  • approximately 1.1 million units of "Other Inhalables" (*reminder* aka infused prerolls, not to get confused with regular prerolls), which is approximately $17 million (a 137.7% increase). 

Pre-rolls category: 

  • The overall category saw approximately 2.6 million units sold, which is approximately $31 million (a 19.5% increase);

  • It's interesting to note the growth of the Pre-rolls Variety Pack, an increase from 17,125 units sold to 46,479 units sold (a 193.8% increase). 

Flower category: 

  • The overall category saw approximately 1.2 million units sold, which is approximately $44.2 million. Sizes 3.5g and 28g are still the predominate formats;

  • While there is no past sales figures to make a comparison for the variety pack, it would be interesting to see whether it will follow the trend of the Pre-rolls Variety Pack. 

Cannabis Beverage category: 

  • 525,334 units of Carbonated Beverages were sold, which is approximately $2.2 million (a 38.6% increase). 

Ingestible Extracts category: 

In addition to wholesale data, the report also summarizes changes in the number of licensed cannabis stores. In 2023, there has been an increase of 27 stores in the Lower Mainland (from 113 to 140). Other regions of BC show subtle growth, with zone 3 (which covers Kamloops, Vernon and Kelowna) showing a 7-store growth. Meanwhile zone 2 (Vancouver Island) has been noted to reducing two store counts, bringing the total to 121. 

Lastly, the report also shares the sales results this quarter on the LDB's Direct Delivery (DD) program that was launched in August 2022 — below we compare some of these results to the previous Quarterly Sales Report of 2023:  

  • Flower sales remain stable, going from 51,554 units sold (Q1) to 51,714 (Q2); 

  • Inhalable Extracts went up from 17,768 units sold (Q1) to 22,236 (Q2); 

  • Preroll sales also grew from 61,977 unit sold (Q1) to 70,413 (Q2). 

Overall, we see a small increase of sales in the DD program between the quarters (approximately from $3.6 million to $3.7 million). When compared to the LDB's Central Delivery (approximately $137 million in Q2), the DD program only makes up for 3% of distribution to retailers. Granted, the program is intended for small scale cultivators and eligible producers to participate in, but as we pointed out in our previous industry update — the LDB's current 15% mark up positions a financial disincentive for those on the fence (retailers & cultivators/producers) about participating in the program which then does ultimately hindering the growth of the DD model. 

ABLE BC recognizes this challenge for the industry and has been working with our government partners to see the markup reduced or eliminated. In the meantime, we are always looking to hear your feedback — 

Contact our Head of Cannabis Membership, Bo Chen, to connect.

Industry Update: BC Community Safety Unit: Enforcement on Illicit Cannabis

While there is still much work ahead of us to combat BC's illicit cannabis market, the BC Community Safety Unit (CSU) has been steadily tackling this challenge.  

As the provincial agency responsible for compliance and enforcement under the Cannabis Control and Licensing Act (CCLA), the CSU monitors and enforces the regulations of our province's retail cannabis — particularly focusing on the production and sale of illicit sources. Investigators of the CSU have the authority to conduct education visits, issue penalties, seizures, and place store closures amongst unlicensed retailers and illegal sellers in BC. 

With the year-end quickly approaching, here's a glance at the CSU's efforts: 

  • 2019: illicit cannabis seizure was valued at $6 million CAD; 
    2020: $13 million CAD seized (the most significant seizure to date); 
    2021: $10 million CAD seized; 
    2022: $7 million CAD seized. 

In 2023 so far, the CSU has seized $3 million CAD worth of illicit cannabis — which brings the total to approximately $38 million CAD since the CSU started their operations.They have also closed down 230 unlicensed brick and mortar stores to date. 
In addition, they have been targeting online illicit sources since 2022, disrupting 957 of the 1,443 cases they have. 

To some, these numbers could be taken as a positive reflection of our government's commitment to building up our industry. For some others however, these enforcement numbers may suggest the CSU has not be effective enough. Questions remain about what other measures (i.e., enforcement, education, product innovation, accessibility, product promotions) could be available to shrink the illicit cannabis market. 

Here at ABLE BC, we are committed to strengthening the viability of BC's legal cannabis retail landscape and are looking forward to your input (or questions) on measures against the illicit cannabis market. 

Contact our Head of Cannabis Membership, Bo Chen, to connect.

Industry Update: WorkSafeBC: New Regulations for BC Employers

Starting Jan. 1, 2024, B.C. employers will need to comply with WorkSafeBC’s new return-to-work requirements. Employers and workers will be required to coordinate for the employee’s timely return to work post-injury. Additionally, employers who have over 20 employees will be legally obligated to maintain a worker’s employment post-injury.  

The duty to cooperate between employer and employee is meant to encourage communication and coordination between the two parties. Employers will be required to provide information to WorkSafeBC about the return-to-work support they have provided to employees. This rule applies to injury claims dated Jan. 1, 2022, onward. 

Employers with 20 or more workers, who have employed an injured worker for a year prior to injury, are legally obliged to maintain that worker’s employment post-injury. Employers also need to provide suitable adjustments to the workplace to accommodate the injured worker. This applies to all injury claims dated July 1, 2023, onward.  

More resources from WorkSafeBC are available here: 

Out and About with ABLE BC

It’s been a busy couple of weeks with lots of travel for the ABLE BC team.

Between government meetings in Victoria last week, ABLE BC's Executive Director Jeff Guignard, presented to the Board of Directors of our partners at the BC Hotel Association about our ongoing advocacy work on their behalf. ABLE BC and the BCHA have been partners since ABLE BC’s founding.

Last Tuesday evening, ABLE BC attended the annual Webster Awards, celebrating excellence in BC’s journalism. It was an exciting evening where we had a moment to catch up with Premier David Eby, Vancouver City Councillors Lisa Dominato and Mike Klassen, and dozens of media insiders.

And most recently, Bo had the pleasure to visit a couple of our Cannabis Committee Members at their original locations (Muse Cannabis on South Granville, Vancouver & the flagship store of Burb located on Broadway Street in Port Coquitlam) to discuss both advocacy priorities and overall challenges within BC's cannabis retail industry.

go2HR: Joint Health and Safety Committee Online Training

go2HR is a regular contributor to the ABLE BC Cannabis Industry Update newsletter, providing tips and guidance on current HR trends, new legislation, employee recruitment and retention, and more. To read the latest instalment, sign in to the member portal or sign up for the newsletter.

Ann Brydle