Saskatchewan selects retailers for cannabis stores

Saskatchewan has chosen the 51 owners who will operate cannabis retail stores in the province.

“This represents the next step in the process of having a privately-operated cannabis retail system carefully regulated by SLGA,” Minister Responsible for SLGA Gene Makowsky said.

“There was a lot of interest in the public Request for Proposal process, resulting in many new businesses that will invest in our province.”

The successful proponents were selected through a two-phase Request for Proposal that began in March. The first phase involved a screening qualification focused on financial and sales/inventory tracking systems. Everyone who qualified from phase one was entered into phase two which was a lottery draw to select the operators.

The 51 permit holders have one last hurdle before they start getting ready to set up shop. They have to pass a “good character test”.

“Good character is part of this second phase, so anybody that has criminal charges or other fraud related charges will be investigated in this second phase,” Makowsky said.

Only charges that could be related to the operation of a dispensary will be counted in this test. For example, a person who was convicted of impaired driving wouldn’t have their permit revoked.

Makowsky said that each permit has two runner-up winners from the lottery. If a permit holder fails the good character test the runner up will be notified. These runners-up do not know their potential permit status.

The successful proponents have 45 days to begin the permitting process. As a condition of their permit, retail cannabis permits must be operating within 12 months of legalization. Permits will take effect once legalization occurs.

More than two-thirds of the successful applicants are from Saskatchewan or have operations in the province.

SLGA critic Nicole Sarauer said she would have preferred to see application from Saskatchewan given preference over those from out of province. Makowsky said they wanted to keep a fair and open market.

Sarauer is also concerned about some applicants receiving multiple permits despite more than 1,500 applications.

Applicants could only have one permit per jurisdiction, but some, like Yorkton based Canopy Growth, won permits in five communities. Steep odds against dozens of other applicants in Fort Qu’Appelle, Humboldt, Meadow Lake, Melville and the RM of Corman Park.

“Seeing multiple permits being given to one or two organizations despite knowing that there were over a thousand applicants leaves some cause for question,” Sarauer said.

Makowsky said KPMG, the third party accounting firm that oversaw the lottery, will issue a fairness report on the entire permitting process.

Cannabis stores must be stand-alone operations, selling only cannabis, cannabis accessories and ancillary items as defined by SGLA.

Cannabis retail stores are also subject to local municipal zoning bylaws.

SLGA president and CEO Cam Swan said that permit holders may sell their store rights to another interested party. There is not predetermined price, but buyers must also pass a financial stress and good character test.

This is only the introductory round of cannabis retail permits. Depending on market demand, more may be made available.

“We can all speculate, but that’s really what we’re all doing is speculating. At this stage we feel it’s a reasonable approach to initially allocate this, assess the market and determine what our next steps are,” Swan said.

Below is a list of the selected stores across the province: