Government-operated BC Cannabis Stores have no advantage over private retailers, says a government spokeswoman.
Responding to criticisms and rumblings of a potential class-action lawsuit by private retailers, a BC Liquor Distribution Branch spokeswoman said there’s a lot of misinformation being circulated.
“We’re all on a level playing field,” said spokeswoman Viviana Zanocco.
In fact, if anyone has an edge, it’s the private sector, she added.
“I think the private retailers had a bit of an advantage – some of them – because they were already operating in the space, so they already have a customer base,” said Zanocco.
“They have a good location that they know works for them, and we are coming in trying to meet the requirements of all the municipalities; there’s not that much space out there that meets the requirements and is far enough distance away from an existing retailer.”
Zanocco said the 17 B.C. government stores are far outnumbered by the more than 200 private stores that are open around the province.
“We’re just a small bit-player,” she said.
A new BC Cannabis Store location opened up in Vernon recently, prompting some private retailers in the area to cry foul. Among their complaints:
• They pay 15% more for the same product.
• They had to pay extra for window coverings before the law was eased.
• Private retailers are capped at eight locations, but the province is not.
• Only the province is allowed to sell online.
Zanocco refuted the claim that provincial stores pay 15% less, saying all stores pay the same mark-up costs — which are far lower than the wholesale mark-up on liquor, ranging anywhere from 70% to 120%, based on the product.
“If you’re going to convert from illicit to legal, we needed to be competitive,” she said.
As far as window coverings, government stores open around the province have been abiding by the same rules as private stores and paid the same costs to cover their windows with frosted glass.
Many municipalities didn’t like cannabis store windows being completely blocked, so the province responded by easing regulations. Stores are still tasked with the responsibility of keeping products out of view from the street, she said.
At the Vernon location, the front doors have no frosting, but you can’t see further into the store because of the way it’s built.
“We’re not changing our existing windows back. If you’ve got all windows, you’ve got to block it somehow,” she said.
“We were compliant just like everybody else.”
Zanocco said the provincial stores try to compete with good service and by stocking products customers want.
“Everybody is buying from the same pool of wholesale products so you have to have the right mix in your store,” she said.
“I see it as very competitive. We have to lease a space in a competitive environment. We’re paying the same costs that they are, in terms of construction and the business licence and all those things.”
Zanocco added that BC Cannabis Stores have the added cost of a unionized workforce.
“I think we are facing the same challenges as private retailers in terms of securing a good workforce, people who are good at what they do,” she said.
The BC Cannabis Store also has locations open in Penticton and Kamloops with stores coming eventually to Kelowna and West Kelowna.
Natasha Raey, a spokesperson for West Kelowna's newest private store, Skye, said it's a shame a government store will be coming along this fall to compete with the city's five exisiting private stores.