B.C. cuts marijuana supply deals with 31 producers, some with no sales license

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British Columbia recreational marijuana, B.C. cuts marijuana supply deals with 31 producers, some with no sales license

British Columbia selected 31 licensed producers to supply cannabis for the launch of the recreational market, including a number of cultivators that have yet to secure sales licenses.

Terms of the memorandums of understanding (MOU), including financing, quality and product selection, were not disclosed.

No more suppliers are expected to be announced between now and the Oct. 17 launch of the adult-use market, according to a Liquor Distribution Branch (LDB) spokesperson.

The LDB is the province’s sole wholesaler of nonmedical cannabis.

“Given that we’re 97 days away from legalization, I’m quite concerned that some of the licensed producers will not have a sales license in time to deliver product to B.C.,” said Deepak Anand, vice president of government relations for Toronto-based consultancy Cannabis Compliance.

Without looking at kilograms, I don’t know how B.C. is basing some of their decisions on products. If they’re heavily dependent on companies that don’t have sales licenses, then that would directly impact product availability on Oct. 17.”

The nonbinding MOUs with the LDB lay out how much product the government agency intends to purchase. Those amounts have not been released to the public.

Next, the wholesaler will look to enter into legally binding purchase orders.

Last week, the Liquor and Cannabis Regulation Branch launched an online portal for entrepreneurs interested in applying for a recreational cannabis retail license.

The province plans to start accepting retail applications this summer. There is no cap on the number of stores to be licensed, but franchisers cannot own more than eight stores.

British Columbia will also be the only province with a “cannabis marketing license,” which will open the door for entrepreneurs to market products to cannabis stores.

“There has been considerable criticism of the B.C. system of a central agency that will handle and touch every gram of adult-use cannabis that is sold in B.C.,” said Hamish Sutherland, CEO of White Sheep, a commercial operator and strategic investor in cannabis assets.

“However, this announcement suggests that they have thought long and hard and are prepared to work with even the smallest of licensed producers from across the country to ensure the customers of B.C. have access to the most diverse set of suppliers, strains and experiences available in this country.”

Matt Lamers can be reached at mattl@mjbizdaily.com

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