After years of lobbying by cannabis retailers operating in Alberta, the province’s government recently made the decision to allow merchants to sell retailer-branded merchandise and apparel in their stores.
Restrictions within the province were loosened earlier this year to allow for the sale of branded accessories and merchandise online. However, beginning September 1, 2022, cannabis retailers will have license to merchandise 15% of their in-store inventory as branded items.
The change to regulations comes as part of The Red Tape Reduction Implementation Act, formerly Bill 80, in Alberta, which received royal assent on December 8, 2021 and is meant to address changes to regulations to reflect economic growth and job creation, smart regulation, and improvements to service delivery.
Most significantly, it means that cannabis retailers can now produce, stock, and merchandise items beyond those which Section 4.3.1 of the AGLC’s Retail Cannabis Store Handbook has previously allowed. Up until the change, cannabis accessories like matches, rolling papers, ashtrays or lighters – essentially most things commonly used in the legal consumption of cannabis – were permitted for sale, but could not be retailer-branded. As of September 1, merchants can sell items like retailer-branded apparel, cannabis-themed magazines, books and recipes, and more.
Additional Revenue Streams
It’s a change to regulations in the province that has been a long time in coming. And, according to John Arbuthnot, CEO of Delta 9 Cannabis, which operates 21 stores in Alberta, it’s a change that only makes sense for everyone involved.
“Against the backdrop of a tough market and tight economy, it’s incredibly important for retailers operating within any category or vertical to find and capitalize on additional revenue streams and opportunities,” he says. “Allowing cannabis merchants to sell retailer-branded items in their stores is one way to achieve this, providing them with a means to generate greater revenue and drive their businesses toward more meaningful profitability.”
Though this is a significant regulatory breakthrough for cannabis retailers with stores in Alberta, guidelines for those operating in other provinces differ.
Guidelines around selling ancillary products in other Canadian provinces:
Cannabis retailers in Manitoba are permitted to sell accessories like gift cards and shopping bags, but are not allowed to sell organic solvents, cannabis plants or seeds.
The Ontario government permits cannabis merchants to sell a variety of ancillary products, including shopping bags, magazines, cookbooks, and themed apparel. However, they are prohibited from selling foodstuffs, beverages that don’t contain cannabis, and organic solvents.
Recent regulation changes in BC now allow cannabis retailers operating stores within the province to sell cannabis-related clothing, books, and other items.
Cannabis retailers in Saskatchewan benefit from slightly more liberal regulations than the rest of the country, with the permission to sell any ancillary products, with the condition that they must directly relate to cannabis, which can include cannabis-related cookbooks, magazines, branded or themed apparel, cultivation equipment, home extraction equipment, and gift cards.
Cannabis retailers with stores in east coast provinces, including Newfoundland and Labrador, New Brunswick, PEI, and Nova Scotia, are allowed to sell accessories, including matches, pipes, and lighters, but are not permitted to sell any other ancillary merchandise.
The Yukon’s regulations only permit cannabis retailers to sell cannabis-related accessories, including bongs and pipes, and do not permit the sale of any ancillary merchandise.
Similar to Saskatchewan, the Northwest Territories Liquor & Cannabis Commission allows stores to sell a range of products, including cannabis industry magazines, branded t-shirts, ashtrays, and cannabis artwork. In addition, they are also permitted to sell snacks.
As is the case with most regulations and laws, cannabis guidelines have been developed to be easily amended and adjusted as the industry matures. And, as they do, restrictions will continue to loosen, perhaps to the point when cannabis retailers can begin competing like their counterparts in other retail categories, and the Canadian cannabis industry can be allowed to truly flourish.