Provincial Government Announces Several Developments for the Cannabis Industry
The Provincial Government today announced several measures related to the cannabis industry in the province as it prepares for the implementation of new products later this month. The aim of these measures is to protect public health while also supporting local retailers.
The Honourable John Haggie, Minister of Health and Community Services and the Honourable Tom Osborne, Minister of Finance and President of Treasury Board, will be available to media today (Wednesday, December 4) to discuss these measures at 1:30 p.m. in front of the House of Assembly, East Block, Confederation Building.
Government will not allow the introduction of cannabis vape products in Newfoundland and Labrador at this time with a commitment to review this decision in light of any relevant clinical evidence. There have been reports of severe lung diseases associated with vaping in both Canada and the United States. An analysis by experts in both countries has not been able to pinpoint the specific cause of this lung disease, however the majority of cases involve vaping cannabis. The intent of the decision is to protect the health of the people in this province until there is more evidence about the connection between cannabis vaping products and severe lung disease.
According to Health Canada, as of November 20, 2019, in Canada, there are eleven confirmed or probable cases of severe lung illness related to vaping. There are no confirmed or probable cases of severe lung illness in Newfoundland and Labrador.
As the first year of legalized cannabis came to a close, government held consultations with cannabis retailers about the challenges facing the industry and future growth opportunities. As a result of these discussions and to support retailers starting January 1, 2020, Tier One Licensed Cannabis Retailers (LCRs) awarded through the Newfoundland and Labrador Liquor Corporation’s (NLC) RFP process will see changes to the commission structure. New rates will include:
12 per cent commission on the first $1 million of sales per calendar year;
10 per cent commission on sales between $1 million and $1.5 million per calendar year;
Eight per cent commission on all sales above the $1.5 million.
Stand-alone Tier One LCRs generate revenue exclusively from cannabis and cannabis accessories, and provide a unique buying experience and educational opportunity only offered in an environment restricted to customers aged 19 plus. This new commission rate recognizes the specific challenge of this store format compared with other tiers and seeks to ensure the viability of these specialized stores as an important part of our local cannabis industry.
Also today, the NLC is announcing that in addition to producer agreements already in place, formal agreements have been reached with the following licensed producers, located throughout Canada:
The Green Organic Dutchman
These agreements provide a broad assortment of both phase one and phase two product offerings for sale through licensed retailers.
Finally, the NLC is reviewing necessary changes that would allow stand-alone Tier One LCRs to take advantage of eCommerce to sell its products online. This adjustment to NLC’s cannabis business model requires changes to be made to current regulations. NLC will work with LCRs on details to be announced at a later date.
The NLC and the Provincial Government will continue to work with retailers and suppliers to ensure a stable and secure supply of non-medical cannabis for Newfoundland and Labrador. The changes announced today assist in ensuring the long term viability of this industry and its stakeholders.
“There is a significant issue with vaping in our province. Given the health concerns already identified about cannabis vape products, not allowing the introduction of these products is a prudent measure to protect the health of Newfoundlanders and Labradorians.”
Honourable John Haggie
Minister of Health and Communities Services
“We are very concerned about the apparent links between cannabis vaping and severe lung disease. Therefore, we are delaying the introduction of cannabis vape products for sale in our province to allow time to consider the best approach to mitigate the risks and to ensure we do what is best for the safety of our residents. We are recommending that people do not vape cannabis.”
Honourable Lisa Dempster
Minister of Children, Seniors and Social Development
“Since legalization we have evaluated the performance of the legal cannabis industry and the unique challenges faced by Tier One retailers. The changes we are introducing today recognize the important role these retailers play in consumer education, and will support the continued growth of the industry in Newfoundland and Labrador.”
Honourable Tom Osborne
Minister of Finance and President of Treasury Board
Minister Responsible for the Newfoundland and Labrador Liquor Corporation