Vancouver pot shop says licensing holdups costing jobs, burning cash

B.C. cannabis market lags behind most of Canada
WATCH: B.C. cannabis market lags behind most of Canada (Aired: Aug. 27, 2019)

A Vancouver-based retail cannabis company is voicing frustration with mounting delays in licence approval that it says are costing jobs and drying up their cash flow.

In a letter penned to Public Safety Minister Mike Farnworth and East Vancouver MLAs, Eggs Canna CFO Angie Mcnab said the company submitted two applications in Oct. 2018, which have been frozen in the “security check” phase for more than half a year.

READ MORE: Legal cannabis sales in B.C. are some of the lowest in Canada. Why?

“We understand it’s a new process & there were 400+ applications by early Feb,” wrote Mcnab.

“However, our Intake & Financial Integrity processing completed within four months, yet here we are stalled in Security Phase for SEVEN months.”

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Mcnab complained that the company has been unable to get information or timelines from the Liquor and Cannabis Regulation Branch (LCRB) about its applications, and that it has since had to lay off employees and reduce key staff.

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“I find it very hard to believe this takes seven months, and if it does, why is the file manager not communicating that. They keep telling us that they are, but that’s not what they’re doing,” Mcnab told Global News.

“We just get redirected and then redirected back again. It’s very frustrating. And it is also extremely difficult to be able to answer questions to a shareholder.”

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Mcnab compared B.C.’s long delays to Ontario and Health Canada which she said have been able to process security checks in two to four months.

The letter also points to Vancouver cannabis stores that stayed open after legalization and have since earned a licence, arguing it’s unfair to companies like hers that shut their doors to go through the permitting process.

And it goes on to allege that government stores are being fast-tracked, while private applications languish.

Public Safety Minister Mike Farnworth rejected the claims that government stores were being prioritized, noting there were currently just five in operation.

“My expectation is that we will soon be nearing 100 private stores, so the idea that government is fast-tracking government stores is just nonsense,” he said.

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As far as delays in licensing go, he said there were several factors at play.

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Farnworth pointed to the fact that unlike in many other provinces, municipalities in B.C. are allowed to have a say in the licensing process — something he said can slow the process down.

But he said it was B.C.’s deeper background checks, implemented because of the province’s long and robust history with an illegal market, that may be causing the longest delays if any red flags come up on an applicant’s file.

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“What we want to make sure is the individuals getting into the retail market are not associated with organized crime or gang activity, so the background check can be quite thorough as regards to certain applications.”

Government data shows that as of Sept. 9 the province had issued 94 cannabis retail store licences, with a further 49 approved with conditions.

An additional 305 applications have been referred to local governments or Indigenous nations for their approval.