N.W.T. opens up bidding on contract for private pot shop in Yellowknife
June 9, 2020

More than a year and half after the legalization of cannabis in Canada, the Northwest Territories is finally accepting proposals for a private pot shop.

That’s right: one shop. And that one store will be located in Yellowknife — though procurement documents say the territorial government may authorize other private cannabis retailers in the future.

But Deneen Everett, executive director of Yellowknife Chamber of Commerce, says a “phased-in approach” to private weed sales makes sense, and that the market will decide if there’s appetite for more than one store.

“The first step is opening it,” she said. “If there’s demand for it, we’re going to hear about it, and certainly we’ll be lobbying that that number increases.”

The territorial government put out a request for proposals to pre-qualified bidders on May 29, inviting three companies — ReLeaf NT and 507413 NWT Ltd. from N.W.T. and Canna Cabana Inc. from Alberta — to apply.

Unsurprisingly, the winning company will have to abide by a list of rules, from the obvious to the unexpected: minors are not to be allowed inside without a guardian; drive-thru windows are prohibited; and cannabis, like alcohol, cannot be sold while polls are open on municipal, territorial and federal election days, to name a few.

According to the request for proposals, the private pot store will only be allowed to buy its cannabis from the Northwest Territories Liquor and Cannabis Commission, which regulates the distribution and sale of alcohol and cannabis in the territory.

The documents also say liquor stores will continue to sell cannabis after the private shop opens, even though in Yellowknife, this would seem to go against expert recommendations to the federal government. A task force on cannabis legalization said wherever possible, cannabis and alcohol should not be sold in the same location.

Everett, however, said the current liquor-cannabis store model is working in the N.W.T., so why change it?

“There’s room for growth. I don’t think that necessarily means we need to cut those who are already participating out,” she said. “We just need to make sure that we’re opening it up to private businesses through a fair and transparent process, and letting the market decide.”

The government is putting a cap on how much the private retailer can charge for weed: the markup can be no more than 25 per cent of the wholesale price, before GST.

So, for example, if the wholesale price is $8, the store could raise it to $10, meaning after tax, the customer would pay a maximum of $10.50.

It’s against Canadian law for retailers to promote cannabis in a way that makes it seem glamorous or edgy.

In keeping with those rules, the store is not permitted to use the words “chronic,” “stoned,” or “high” in its name. Nor are “pharmacy,” “apothecary” and “dispensary,” allowed, as they could lead customers to believe the shop offers medicinal cannabis, which it is expressly prohibited from selling.

The territorial government will have to approve the name.

The request for proposals warns bidders that winning the government contract isn’t a guarantee their store will be successful.

The N.W.T. has been marred by cannabis supply shortages and COVID-19 could could further curtail business.

The contract is for five years and may be extended for another five years.

Bids are due on July 30, but it’s unclear when the liquor and cannabis commission will award the contract.

Written by: Sidney Cohen
Source: CBC