B.C. party seeks end to government monopoly on cannabis supply and price fixing

Private retailers need to get their cannabis from the Liquor Distribution Branch

Private retailers need to get their cannabis from the Liquor Distribution Branch. Alina Rosanova/Getty Images

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The B.C. Libertarian Party wants to see an end to the provincial government’s monopoly on wholesale cannabis.

The party also seeks a stop in the setting of prices by the government.

In place of the current regulatory system, the B.C. Libertarian Party proposes a light-touch approach.

This means any person can distribute or sell cannabis as long as the individual has a municipal permit.

Under this scheme, the government’s role is limited to the application of provincial sales tax or PST on cannabis sales.

Kyle McCormack wears a number of hats for the party that prizes individual freedom, personal responsibility, and limited government. He sits on the board, acts as secretary, and serves as media leader.

According to him, monopolies kill competition.

“We all know that competition keeps prices low,” McCormack told CannCentral in a phone interview.

He explained if there are many players, they have to compete for a customer’s dollar. This involves providing the highest quality service or product at the lowest cost.

In connection with prices, private retailers cannot go below a certain minimum price.

Monopoly controls wholesale distribution

The province’s Liquor Distribution Branch serves as the sole distributor of wholesale cannabis. It supplies private retailers as well as government-run cannabis stores.

The government sets the minimum retail price at either the wholesale price a retailer paid or the current LDB wholesale price, whichever is lower.

“What they’re doing is artificially increasing the price of cannabis,” McCormack said.

McCormack noted that it is not clear whether the government’s pricing policy was intended to raise revenue or dissuade people from using cannabis.

“The point is that the government should not be trying to dictate behaviour,” he said.

According to McCormack, the government’s proper role should be to protect rights and freedoms, and dispense justice.

“It doesn’t exist to tell us what is good behaviour and what is bad behaviour,” McCormack said.

In addition to its monopoly on wholesale cannabis distribution, the province also operates cannabis stores.

A review of prices on the B.C. Cannabis Stores website on Thursday (October 1) shows a range of prices.

For example, a gram of cannabis bud called Cold Creek Kush, a product by Redecan, retails from $7.99 a gram.

A ready-to-smoke Mandarin Cookie Pre-roll by CannMart goes for $5.97 each or $11.94 per gram.

Cannabis sales fall short

The LDB posted a net income of $1.1 billion for fiscal year 2019-2020, mostly from liquor sales.

In its annual report dated June 24, 2020, the agency noted that the legal cannabis sector is “struggling to remain competitive with illicit producers and retailers on price point”.

“The LDB remains focused on being competitive with the illicit market and keeping cannabis out of the hands of minors,” the agency stated.

According to the LDB, its net income of $1.1 billion was 1.2 percent below target and 0.3 percent higher than the previous fiscal year.

“This was mainly due to lower-than-anticipated cannabis sales and a provision for leasing costs related to a vacant office building,” the agency reported.

As well, the “cannabis division lost $5.3 million this fiscal year, which is included in the LDB net income of $1.1 billion”.

Liquor sales totalled $3.7 billion in fiscal year 2019-2020.

For the first full year of operations for the LDB’s cannabis division, transactions amounted to $135.9 million. The revenues came mostly in “sales in flower, extracts/concentrates, and pre-rolls”.

As of March 31, 2020, the province had 15 B.C. Cannabis Stores.

The Liquor and Cannabis Regulation Branch is responsible for licensing private retailers. As part of its mandate, the branch had issued permits for 178 private stores, of which 168 were in operation.

Liberate liquor and cannabis

The B.C. Libertarian Party’s approach to cannabis distribution represents a logical extension of its policy regarding liquor.

The party wants to disband the LDB, which constitutes a monopoly on the wholesale distribution of liquor in the province.

The LDB also mandates minimum pricing for liquor, the party notes on its website.

The party claims that the provincial agency makes a lot of money “by artificially raising the prices of beer, wine and spirits”.

It asserted that the LDB raises prices by up to 170 percent before distributing to retailers.

McCormack said that while the B.C. Libertarian Party takes a hands-off approach to cannabis possession, it does “not promote its use”.

“We simply believe that individuals should be free to make their own choices and be responsible for the consequences of those choices without the heavy hand of the government coming down on them,” McCormack said.

Follow Carlito Pablo on Twitter at @carlitopablo

Discussion


  • M.G. Bown-Orr October 8, 2020 02:41 AM

    Why must a reader enter their birthday, proving they are of legal age, in order to read an article regarding the sale of cannabis? Ridiculous! Would it harm a 17 year old to read how cannabis is bought and sold in B.C.? Absolutely not! There are no age limitations required to read about any any aspect of liquor sales or distribution. Completely unnecessary “precautions”.

  • Roxy October 8, 2020 03:21 AM

    The Government feel they have a right to own and control everything.
    When fighting to make cannibis legal I don’t believe that meant for the Government to have control, to monopolize the sales and income.
    Did that go along as a condition to make cannabis legal?! Because I don’t remember them asking the people and giving the people a voice.
    Just like the Government to get their dirty hands into it…

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