Private cannabis businesses worried B.C. government stores operating at a loss

Click to play video: 'B.C. pot shops claim unlevel playing field'
B.C. pot shops claim unlevel playing field
Private B.C. pot shops say they continue to fight a losing battle against government-run cannabis stores. As Aaron McArthur reports, they say unless changes are made, consumer options could soon be going up in smoke – Feb 22, 2024

B.C. cannabis retailers are worried that the provincial government’s cannabis stores are operating at a loss.

The private industry said it is already facing several challenges in turning a profit, and competing with the B.C. government for customers is just another hurdle that is possibly holding them back.

“When you have control of the wholesale distribution and you have retail stores, you have an advantage. And throw on top of that the fact (the government doesn’t) have to publish (its) financials,” Ehren Richardson, a co-owner of Sunrise Cannabis, said.

“It is very difficult. Typically, (the province) undercuts all the small, independently-owned retailers to try and gain market share. When you are not accountable for your financial performance, you can get away with it.”

The government does not disclose retail sales, or the costs, associated with running retail operations, which means taxpayers have no idea if the stores are profitable.

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When Global News asked the BC Liquor Distribution Branch as to why the information regarding profits is not publicly available, a spokesperson said it’s “because it’s competitive information.”

According to the B.C. government, cannabis sales bring in $485 million a year in revenue, which includes both retail sales and wholesale purchases. That figure is an increase of 15 per cent from the year previous.

The government also says transactions at retail stores have increased by 2.1 million purchases which is a 24-per cent increase in a year.

The Retail Cannabis Council of B.C.’s director, Cory Waldron, told Global News when a government store opens, there is an instant decline in private store sales in the area.

“We saw an immediate and permanent decline of 35 to 40 percent, just dropped right off and never recovered,” Waldron said.

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“The government has endless pockets (and) if they are losing money, it doesn’t matter but as a private operator, I can only lose money for so long before I have to lay off all my staff and close the doors.”

It has been five years since cannabis legalization and the cannabis industry is growing but according to many, it is not thriving.

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