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Saskatchewan and Manitoba are emerging as testing grounds for cannabis delivery services, thanks to the provinces’ relatively liberal retail regimes, which allow private actors to operate online stores.
The result of those policies — which differ from the regimes in Ontario, Quebec, British Columbia and Alberta, where online cannabis stores are controlled by the province — has been a flurry of cannabis startups, including Super Anytime Inc., Pineapple Express Delivery Inc., and Prairie Records that offer same-day delivery to recreational cannabis consumers.
“Saskatchewan has taken the approach where they are friendly to private enterprise, and things like online cannabis sales. So you can order from us, and we’ll offer you a one- or two-hour delivery option, and that’s how you can get your cannabis,” said Adam Coates, chief commercial officer of Westleaf Inc., a vertically-integrated cannabis company that operates the Prairie Records retail chain.
Prairie Records is one of three companies in Saskatchewan that offer consumers an online purchase option with the promise of same-day delivery. The company, which launched its online delivery service in March this year, has partnered up with Pineapple Express, a delivery-only startup akin to Uber Eats or Foodora, that picks up cannabis orders at retail outlets, and takes them straight to the consumer.
“So essentially, Pineapple Express will get a notification once someone has put in an order in our system. They’ll send a courier out for the delivery and that courier will check the customer’s ID, and make sure the product is in the right person’s hands,” Coates explained.
Online cannabis delivery has long been a contentious issue amongst policymakers, who argue that allowing the proliferation of private companies that offer delivery services risks contaminating the legal supply chain with illegally sourced cannabis.
But it’s a catch-22, says Ian Delves, founder and co-CEO of Super Anytime Inc., a third-party app soon-to-be available in Manitoba and Saskatchewan that offers consumers a platform to order cannabis online. “The black market basically offers a bigger variety of products and same-day delivery through phone or an online platform. How are legal channels going to compete with that if they don’t have an online delivery option besides the province?”
Unlike a traditional online store, Super Anytime plays the role of the connector between a retailer and a delivery service such as Pineapple Express. Customers who download the app, will be able to choose the products they want, order and pay for it. It is Pineapple Express that will then pick up the order from a specific retailer that Super has an agreement with, and deliver it to the consumer on the same day.
“Think of it more like Ritual than Uber Eats,” Delves said, in reference to the food app that allows consumers to order food through its app, and pick it up at a designated time.
Saskatchewan is the only province in Canada in which the government does not act as the middleman or wholesaler between licensed producers and retailers. In both Saskatchewan and Manitoba, businesses that obtain a cannabis retail license for brick-and-mortar stores, are also allowed to sell cannabis online. But in both provinces, there are no explicit rules for or against third-party cannabis distributors like Super Anytime.
“We do not have a retail licence to sell cannabis in Manitoba. But over the course of a few months, we had many conversations with the LGCA (Liquor, Gaming and Cannabis Authority of Manitoba), and they were not able to cite any instances of non-compliance with respect to our app. So they sent out an email to license holders in the province saying hey if you work with third-party apps, that’s fine,” said Delves.
While Super has not officially launched its app yet, Delves confirms the startup is “in conversation” with all the major retailers in Manitoba and a number in Saskatchewan.
Super is also not allowed to sanction orders that contain more than 30 grams of cannabis, which is the maximum amount someone can possess and share. “Our online cart has a cap, where you can’t order more than 30 grams at a time,” said Mike Kniazeff, CEO and co-founder of Boozer, the alcohol-delivery service that owns Super Anytime.
“Frankly, the province liked the solution we provided to them in terms of access to cannabis. So we now have a proprietary legal solution that we’re testing out in Manitoba, that we hope to replicate in other provinces. It is an important asset for us,” Kniazeff added.
On a daily basis, according to Coates, Prairie Records gets between 10 to 30 orders, depending on the week. “I would say consumers are still skewing heavily towards going in-store than ordering online, because they seem to want to learn about a strain, smell it, and see it before buying it. But in the long-run, I believe online cannabis stores will really take off,” he said.
Indeed, Pineapple Express has emerged as the go-to service for retailers in both Saskatchewan and Manitoba looking for a courier service for recreational cannabis. The issue for all these companies, however, is if the larger provinces don’t loosen regulations around cannabis delivery, their growth potentials are capped.
“I’m not going to speculate about Ontario, but if they see that our model is working in Manitoba, then that could be an entry point into that conversation,” Delves said. “Ultimately, we want to be able to say, ‘Look how much we took away from black market activity in this province, versus yours.’”
Copyright Postmedia Network Inc., 2019