LDB issues product call for non-medical cannabis, determines wholesale mark-up

The BC Liquor Distribution Branch (LDB) is issuing a second product call as part of a continuing effort to expand its wholesale product assortment for non-medical cannabis.

In July 2018, the LDB entered into memorandums of understanding with 32 licensed producers to form its initial wholesale product assortment to cater to the B.C. market directly following legalization of non-medical cannabis on October 17, 2018.

“Now that we have finalized our initial product assortment, we’re looking forward to engaging with additional licensed producers that are interested in supplying the B.C. market,” said Blain Lawson, LDB’s general manager and CEO. “There are more and more licensed producers coming online, and we are committed to working with them to ensure our product assortment remains as competitive as possible in order to compete with the illicit market.”

Licensed producers are invited to make submissions for dried cannabis (including pre-rolls), cannabis oils, capsules and seeds that comply with federal requirements, across various product segments.

The product call opens on August 13 and closes on August 31. Product calls will be issued on a regular basis going forward. Submission documents are available to licensed producers at: www.bcldbcannabisupdates.com/opportunities/suppliers.

The LDB also looks forward to engaging with craft producers once they have obtained the appropriate micro-cultivation and micro-processing licensing. This process is due to be implemented by Health Canada later in 2018 and will enable smaller scale craft cannabis producers to enter into legal sales agreements.

The LDB also announced that it will apply a 15% mark-up on the landed cost of cannabis distributed throughout the province to retail stores and the LDB’s online store, when non-medical cannabis is legalized on October 17. The landed cost is the total price of a product or shipment once it has arrived at a buyer's doorstep. It includes the original price of the product, transportation fees, duties, taxes, packaging and handling.

All cannabis retailers, including LDB-operated BC Cannabis Stores, will purchase cannabis at a common wholesale price. Retailers will be prohibited from pricing cannabis products below the wholesale price.

“We’ve heard concerns that the LDB will impose a significant mark-up on legal cannabis, in the interests of making money,” said Lawson. “Today’s announcement reaffirms the Province’s principal goal is eliminating the illicit market.”

BC Cannabis Stores and licensed private retailers will access the same wholesale product assortment. The process by which private retailers will access the LDB’s online sales portal will be released at a later date.

When cannabis is legalized on October 17, private and public retailers will be allowed to sell dried cannabis, cannabis oils, capsules and seeds that comply with federal requirements. These stores may also sell cannabis accessories, as defined in the federal Cannabis Act, such as rolling papers, pipes and bongs. Private retailers will be responsible for procuring their own range of cannabis accessories.

For updates on the development of the LDB’s wholesale and retail cannabis business, visit: www.bcldbcannabisupdates.com.