Winnipeggers were only a few weeks away from being able to buy cannabis while filling a tank of gas, before the provincial government temporarily banned a range of new businesses, including gas stations, from receiving retail licences — a move that may have led to layoffs at one cannabis producer.
Domo, a gas station chain based in Winnipeg, was on the verge of selling cannabis at five gas bars in the city. They would have been the first gas stations in the provincial capital to enter the retail cannabis market.
But those plans were suddenly halted, when the province surprised the cannabis industry last month by temporarily pausing any new licences in urban areas for stores that want to add cannabis to their selection of other products.
The government says it wants to review the rules for these outlets, referred to as controlled-access stores, to ensure cannabis is kept from underage youth. The other type of retail licence is for standalone cannabis stores that are age-restricted.
Domo says it’s “very disappointed” by the government’s unexpected move.
“After a year-long extremely detailed application process, Domo was in the final stages of obtaining … licences for our five stores when government derailed the process,” said an email attributed to chairman Douglas Everett and president Kate Everett.
The statement also expresses concern the government is prioritizing the lobbying efforts of the Retail Cannabis Council of Manitoba, which includes out-of-province members, over a partnership between a gas retailer and cannabis producer that are both Manitoba-owned.
Cannabis producer expects layoffs
Wowkpow, which runs a cultivation facility in Steinbach, is planning to lay off some staff and reduce hours for others, as a result of the government’s decision.
The company ramped up production efforts because of the pending expansion into Domo locations, increasing the number of staff from three people to a dozen.
Wowkpow also bought a 5,000-square-foot facility in Oakbank for a processing lab. It’s sitting empty.
Max Marasigan, the company’s CEO, said Domo was planning to start selling a small selection of cannabis in May.
The government’s decision “kind of broke my heart because there’s a lot of time and funding that went into this. We prepared our facility to make sure we could keep up with the sales,” he said.
“We had to hire more employees. Unfortunately, right now we’re actually thinking about laying them off.”
A cannabis producer and retailer, Wowkpow saw gas stations as a potential untapped retail channel.
The company teamed up with Domo and together pursued controlled-access licences.
They never received any indication from the government or cannabis regulator their applications were ever in threat.
“I feel like we just wasted almost a year planning this and now … I feel like we did all this for nothing,” Marasigan said.
While a Domo spokesperson said the company was at the “finish line” for five gas bars to sell cannabis, it had five more applications in the queue.
Glen Simard, the minister responsible for Manitoba Liquor and Lotteries, stressed the government’s pause of new licences isn’t a final decision, but worthy of future study.
He said he would tell any proponents, including Domo and Wowkpow, the same message: Manitoba has a strong retail cannabis market with more than 200 stores where producers “can still sell their product.”
“We want to make sure that as a government that we get controlled-access sites correct.”
Speaking to media at the NDP convention Friday night, Premier Wab Kinew said the province isn’t hurting for places to buy cannabis.
“You just drive around Manitoba — do we feel like we lack for weed stores right now, I would ask in a somewhat lighthearted fashion?” Kinew said.
“I think we should put the emphasis on getting it right before we take any more steps forward.”
The Retail Cannabis Council of Manitoba met with Simard earlier this year to lobby the government to implement some restrictions on controlled-access stores to protect youth.
Council president Keith Horn, who’s part-owner of Cannabis 204 in Virden, said Domo isn’t their biggest concern, as their gas bars aren’t big enough for young people to hang around, but he worries about bigger establishments receiving the same licence going forward.
“If Domo gets it, good for Domo, happy for them, but then how do you stop the next [gas station] from getting it that has a store attached to it?”
Steven Stairs, founder of the Cannabis Business Association of Manitoba, considers it a misconception that young people suddenly have ready access to cannabis. The sky didn’t fall after the recreational drug was legalized, he quipped.
Stairs appreciates that controlled-access outlets tend to be more willing to sell products from small craft producers, such as Wowkpow.
Before the government-imposed pause, 11 controlled-access licences were granted in Winnipeg, including Ashdown Market on Bannatyne Avenue, Sam’s Food Fare on Garry Street and Sukh Supermarket on Westminster Avenue.
Konard Narth, PC critic for Manitoba Liquor and Lotteries, said the government can re-evaluate the safety of controlled licences while involving entrepreneurs.
“The current government that we have continues to claim that they want to involve all stakeholders, but in a case like this where there was an entrepreneur who was in his final stages of approval for a licence … to put a pause on that without involving those that were involved, I think that’s wrong,” Narth said.
WATCH | Pull up the curb for herb, but not right now:
The Manitoba government’s decision to temporarily pause the issuing of a certain type of retail cannabis licence is derailing Domo’s plans to start selling cannabis at their gas stations.