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Rebecca Hardin, CEO and lead retail cannabis consultant at Thrive Liquor & Cannabis Advisors recently wrote an article for Cannabis Retailer Magazine – a national magazine for businesses operating in Canada’s legal retail cannabis sector. “Leveling the Playing Field: Direct Delivery” explores issues facing legal cannabis retailers, most notably the unfair competition from a thriving illegal cannabis market that can sell cannabis at significantly lower prices than licensed legal retailers.
The article also examines Saskatchewan’s direct delivery model, where licensed retailers buy directly from Licensed Producers. BC’s Liquor Distribution Branch has announced their intention to launch a similar direct delivery program in 2022, with the stated aim of eliminating the illicit cannabis market, allowing small-scale producers to enter the market, and increased legal market competitiveness.
Will Direct Cannabis Delivery from LPs Close the Pricing Gap?
It’s hard to say how long it will take for direct delivery to reduce the market share of illicit online cannabis retailers, or if it will. If each province implemented the model, it may have more impact, because illegal online retailers can sell to Canadian consumers regardless of the province the consumer resides in.
According to Statistics Canada’s crowdsourced “Average price of cannabis by province” (2019), the latest crowdsource pricing data available, in Saskatchewan, the average price of 1 gram of cannabis purchased from a legal source was $10.68 – higher than the national average of $10.29. Illegally sourced cannabis purchased in that province had an average price of $5.54/gram. Quebec and BC had the lowest average price per gram for legally sourced cannabis at $7.88 and $9.32, respectively. By these numbers alone, so far it seems that Saskatchewan’s direct delivery model isn’t closing the price gap in that province.
Read “Leveling the Playing Field: Direct Delivery” by Rebecca Hardin in Cannabis Retailer magazine.
Retail Cannabis Startup? Thrive Makes it Easier than You Think
Thrive Liquor & Cannabis Advisors, retail cannabis licensing consultants, have the know-how that start-ups need to navigate the cannabis market in BC. From non-medical cannabis license applications to retail strategy, our consultants make starting and running a successful cannabis business easier than you think!