Cannabis retailers urge to delay online sales until issues are resolved

“We need to clearly understand that this is as viable and sustainable as possible”

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Some Alberta cannabis retailers are calling for a delay in launching online sales, citing what they call inconveniences in delivery and age certification requirements.

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The strict age certification rules that go beyond submitting a date of birth and prohibiting delivery to a third party that leads to higher insurance costs – measures not required in many other provinces – should be dropped, according to industry insiders.

“They ask for your credit score to gain access (to online sales),” said Nathan Mison, a former retailer and industry consultant.

That, and the ban on using a third-party cannabis courier — like a service similar to Skip the Dishes — puts the legal cannabis sector at a disadvantage with illicit operators who are widely believed to still control nearly 50% of the market, Mison says. .

“It’s a pretty high bar when the illicits aren’t faced with this,” he said.

“We are asking for 30 to 45 more days to resolve this issue.”

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Late last year, government regulator and wholesaler Alberta Gaming, Liquor and Cannabis announced it was ending its legal online cannabis sales monopoly, which it said captured about 1.5% of the licensed market.

It has set March 8 as the day that private, licensed cannabis dealers can start selling online and delivering their products.

The industry hailed the move, saying it ends a harmful government monopoly.

But some have been disappointed with the rules that come with them, saying forcing retailers to provide the service themselves leaves them underinsured.

“Whose responsibility is it? Most other jurisdictions have allowed third-party delivery,” Mison said.

“We need to be clear that this is as viable and sustainable as possible – we are trying to move an illegal market and it has none of that.”

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The AGLC said providing stores with video identification like driver’s licenses would be acceptable, but it raises concerns about possible breaches of privacy laws, said Matt Anderson, vice president of legal and sales of the Fire and Flower chain of stores.

“There are things that make us think and that’s unfortunate because Alberta is a major market for us,” said Anderson, whose company operates 42 stores in Alberta.

“We want to take the time to do it right.”

Opening of Nathan Mison of Fire and Flower Cannabis Co. on the first day of cannabis legalization in Edmonton on October 16, 2018.
Opening of Nathan Mison of Fire and Flower Cannabis Co. on the first day of cannabis legalization in Edmonton on October 16, 2018. Photo by Ed Kaiser/Postmedia

Some merchants who are ready to start online sales appear set to violate federal cannabis law by offering free shipping for orders over a certain amount, he said.

Some large retailers don’t see the requirements as obstacles and are ready to start online sales and delivery, said Anne Forkutza of Dutchie, which provides e-commerce solutions for cannabis merchants.

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But smaller operators are not yet ready, often due to regulatory barriers, she said.

“If you’re a mom and a dad, it takes time and money,” Forkutza said.

“A lot of these Alberta retailers won’t be ready on March 8…most of them (who we work with) have said they won’t be ready.”

Using the Equifax credit monitoring service for age-checking purposes “can be quite expensive and technically quite difficult to implement,” Forkutza said.

She also said that such retailers’ websites must receive AGLC certification to ensure they are legal operators after an inspection process, which many merchants have yet to complete.

Customers, she said, can visit cannabis stores and register their qualifications for online sales and delivery, a process that would not need to be repeated.

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Cannabis retailers also say a new six per cent wholesale tax included in the Alberta government’s latest budget that went into effect a week ago came as a complete surprise and adds to the cost of their product.

AGLC officials say this will help them post their first profit on cannabis sales since legalization for recreational use at the end of 2018, with a $7 million surplus projected for the coming year.

In a statement, the AGLC said it was working closely with industry players and that the March 8 date for the implementation of online private cannabis sales would continue, adding that some retailers were loans.

“The AGLC requires cannabis retail websites to have robust age verification methods. There are a number of methods a retailer can follow,” they said.

“Some examples include using Equifax, verifying and confirming identification in-store or possibly using video conferencing methods to display identification.”

In addition to a retailer’s own delivery person, these businesses may also use a common carrier such as Canada Post and national courier or shipping companies.

“Age must be confirmed by the delivery person by verifying a government-issued ID,” they said.

BKaufmann@postmedia.com

Twitter: @BillKaufmannjrn

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