Alberta’s regulatory body, Alberta Gaming, Liquor and Cannabis (AGLC) is considering the possibility of allowing white label cannabis products in the province.
White label products are sold by retailers with their own store branding and logo, but the products are made by a different manufacturer. This can provide a way for brands that don’t have their own manufacturing facilities to get their products onto the shelves faster and in a cost-effective way.
Currently, white label cannabis products are not permitted in Alberta but are allowed in several other provinces including Saskatchewan, Manitoba, and Ontario. Last year, Canna Cabana announced a white-label agreement for products sold in these provinces. Other companies have announced similar deals.
In a memo recently sent to people in the industry, AGLC says its regularly receives inquiries from cannabis industry stakeholders regarding the types of products they can sell and what is acceptable within AGLC policy. Some licensees have suggested that amending the policy to permit white label cannabis products would support their businesses.
AGLC is conducting an online survey to gather input on changing white label product policy for all licensed cannabis retailers, registered representatives such as licensed cannabis producers, brand owners, and marketing entities. The survey will be open until August 18, 2023.
Independent Retailers React
Joshua Vera is President and Director of Elevate, which has two cannabis stores in Edmonton. He says there are pros and cons to the potential regulatory changes but believes it will largely favour large, licensed producers (LPs) and retailers and those that have larger commercial footprints.
“Some of the pros include an additional revenue stream, the ability to offer cheap products to consumers, and to edge out the competition,” Vera says. He feels these changes will advance the ‘monopoly and oligopoly agenda’ of larger companies in Alberta.
“The big box stores are going to support big LPs and vice versa. Larger LPs may be able to clear out inventory at a cheaper cost rather than sit on it. Big box stores will also be able to offer white label products at cost or below cost and still make margins off the sale via agreements.”
Vera doesn’t see how allowing white label products will benefit small retailers. “LPs are less likely to do deals with smaller retailers, probably because the cost to create labels with one-off logos will be higher. They are more likely to support big box stores.”
While smaller LPs could struggle to move high-quality, craft product as the market becomes flooded with white label products at cheaper prices, Vera says independent retailers may also have a chance to differentiate themselves by selling craft products.
Elevate does not plan to pursue white label products should the regulations change.