Frequently Asked Questions: Cannabis Retail Opportunities Draw



 

Why is Manitoba holding an Opportunities Draw?

Manitoba is committed to offering access to physical non-medical cannabis retail stores to Manitobans across the province and has a goal of ensuring that 90% of Manitobans will have access to a cannabis store within a 30-minute drive within 2 years of legalization. Allowing retailers limited additional opportunities to establish cannabis retail stores in select communities helps the province to meet its access goals while limiting industry expansion in absence of adequate cannabis supply.

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Why isn’t Manitoba moving to an open market?

Manitoba remains committed to moving to an open market for non-medical cannabis retail sales as quickly as possible. Supply challenges continue to exist across the country and Manitoba continues to monitor developments closely in order to open the market as soon as supply considerations allow.

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What’s meant by “open market”?

The third phase of Manitoba’s Retail Cannabis Framework is called open market. In this phase, a person or company that wants to open a cannabis retail store will be able to enter into a cannabis store agreement through Manitoba Liquor and Lotteries  and establish their store in any Manitoba community that allows cannabis retail. The person or company will also apply to the Liquor, Gaming and Cannabis Authority for either an Age Restricted Licence or a Controlled Access Licence, as they deem appropriate for their business.

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What’s the difference between those licences?

The Age Restricted Licence supports the stand-alone store concept while the Controlled Access Licence supports the store-within-a-store model. For more details about the licences, please contact the Liquor, Gaming and Cannabis Authority directly.

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Who’s in the Opportunities Draw?

On July 23, 2018, Manitoba issued a Request for Prequalification for potential retailers to pre-qualify for future opportunities to operate a non-medical retail cannabis store in Manitoba, if Manitoba were to decide there is an opportunity to operate a cannabis store, either by community request or internal analysis. A list of pre-qualified retailers was established on September 28, 2018, the day that successful respondents were notified of same by the Procurement Services Branch of Manitoba Finance.

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How can I apply for an opportunity to be selected?

The Province released a Request for Pre-Qualification in July 2018, seeking retailers interested in pre-qualifying for opportunities to operate independent retail stores in Manitoba, to be chosen through a selection process and based on random draw according to geographic reference. Successful proponents for these new opportunities will be pulled from the pre-qualified list established as part of this process.  There is no avenue to be added to or considered for the list.

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How will the Opportunities Draw work?

  • The RFPQ (Addendum 3 issued July 23, 2018), directed respondents to indicate communities in which they would be prepared to operate a Cannabis Store. If a pre-qualified retailer did not identify a community designated by Manitoba for a draw, the pre-qualified retailer will not be eligible to participate in that draw.
  • Each pre-qualified retailer will receive one (1) ballot per community in which they indicated interest.
  • One (1) ballot will be drawn for each identified community for the purpose of selecting a retailer, and one (1) additional ballot will be drawn to identify a ‘standby’ retailer, who will be called upon if the selected retailer cannot or chooses not to establish a store in the community. The number of pre-qualified retailer ballots in each community’s draw will vary in accordance with the number of pre-qualified retailers that indicated an interest in the community in question.
  • The draw will take place on the draw date as follows:
    • Ballots will be randomly selected using a randomized algorithm within Microsoft Excel.
    • The draw will be conducted in alphabetical order of communities.
    • The first drawn ballot will be considered the successful retailer for the identified community.
    • The second drawn ballot will be considered the standby retailer for the identified community.
    • A pre-qualified retailer continues to be eligible for each community draw for which they indicated interest, even if they are drawn as the successful retailer for a community.
    • Once a successful retailer and a standby retailer are drawn for each of the seven (7) communities, the draw is concluded.

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Why are you limiting licensing opportunities to stand-alone stores?

Stand-alone stores under an Age Restricted License were the intent of the original RFPQ, not store-within-a-store under a Controlled Access licence.  The RFPQ required proponents to demonstrate that they had access to $300,000 in cash holdings for the start up and initial operations of a retail cannabis store, operating capital to cover three months of initial operating expenses for the retail cannabis store, and the ability to furnish a $50,000 letter of credit prior to operating the retail cannabis store. When Manitoba moves to an open market, the store-within-a-store retail model and controlled access licence will be made available to interested retailers.

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How do I know the Opportunities Draw is fair?

Manitoba Justice reviewed the Opportunities Draw process for fairness and transparency. The draw mechanism is Microsoft Excel’s randomization function applied to a spreadsheet of the pre-qualified parties for each municipality. The Liquor, Gaming and Cannabis Authority of Manitoba assisted Manitoba Growth, Enterprise and Trade in using this function solely and expressly for the selection draw.

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How did you decide which communities will get a store?

Existing retailers will serve seven (7) communities once all stores from phase 1 of Manitoba’s retail framework are open. Based on Manitoba’s geography and local population, it was determined that seven (7) additional communities require a physical retail presence in order for the Province to meet its commitment to provide access to a retail cannabis store to 90% of Manitobans within a 30-minute drive. These communities are Altona, Flin Flon, Lac du Bonnet, Niverville, the RM of Russell-Binscarth, Swan River and Virden.

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Can a pre-approved retailer obtain more than one store opportunity through the Opportunities Draw?

Yes, if a retailer indicated interest in multiple communities in their RFPQ document and is drawn randomly for more than one community during the Opportunities Draw process. As noted in the July 2018 RFPQ, however, financial commitments are per store so a successful retailer must be equipped to open multiple stores or will need to forfeit one of their locations to the community’s standby retailer obtained through the draw process.

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Where will successful retailers get their supply?

Like the existing first phase retailers, the retailers sourced through this second phase process will order supply solely from Manitoba Liquor and Lotteries. Due to national supply shortages, Liquor and Lotteries can fulfill only partial orders; this situation is expected to persist for some time.

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Will there be more retail opportunities in Manitoba? If so, can you say when?

The desired end state for Manitoba is a cannabis retail sector that includes a competitive mix of retailers providing customers with a choice among brand affiliations, service quality, and price. Manitoba intends to move to an open market for cannabis retail sales as soon as national supply considerations allow.


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