B.C. selects Shopify to set up legal online cannabis sales

British Columbians will be able to buy cannabis online and at least at one B.C. Cannabis Store on the Oct. 17 rollout of legalization, the B.C. Liquor Distribution Branch said Friday, while would-be private retailers are still waiting for the province to unveil its licensing regime.

B.C. LDB, the province’s exclusive wholesale distributor for legal, recreational cannabis, announced that it has picked Canadian online-shopping expert Shopify Inc. to build its ecommerce portal, which was a priority for the branch.

“Having the portal operational before the deadline is more important,” said B.C. LDB spokeswoman Viviana Zanocco. “That means we can provide a safe and reliable and quality product to anybody in the province.

“In terms of the stores, we’ve always said it was going to be a process. You can’t go from zero to 60 overnight.”

While the province hasn’t unveiled its retail-licensing regime, in unveiling guidelines in February, Public Safety Minister Mike Farnworth said stores will have to have the support of municipalities.

Some municipalities are more comfortable with legal cannabis than others, Zanocco said, and the LDB is working with those that are further along in their regulation process to locate stores, but “we haven’t signed any leases yet.”

“We want to make sure the communities we move into are comfortable with us,” Zanocco said.

It’s a good thing that municipalities have some autonomy in the process, according to Deepak Anand of Cannabis Compliance Inc., but the province needs to make its licensing regime clear soon.

“On the retail side, it’s a matter of coming up with a good policy that municipalities need to be able to follow,” said Anand, vice-president of business development and government relations at the firm. “I think what the province has done is downloaded a lot of responsibilities on municipalities and cities saying, ‘You come up with a framework that works.’ ”

Some municipalities, such as Vancouver and Victoria, have considerable experience with medicinal dispensaries and are better prepared, Anand said, but others are also waiting for some guidance from the province.

“We have all these dispensaries,” he said. “Either we license them and zone them, or let them know they’re going to be shut down. There can’t be a free-for-all.”

Richmond is one of the municipalities that has declared an outright ban on storefront-retail cannabis sales, although ironically, that is where the B.C. LDB has found the warehouse it will lease as its wholesale distribution point.

With a shortage of industrial land in the Lower Mainland, Zanocco said the 75,000-square-foot facility on No. 6 Road was the only location that the branch could find to accommodate all of its requirements in terms of security, having space to expand and be ready for July 1.

The warehouse will include a customer call centre and online sales, and use modern warehouse-management systems to track product information, such as expiry dates and lot numbers.

“We talked with (the City of Richmond) way before we signed the lease,” Zanocco said, and are comfortable with what the B.C. LDB proposed.

Richmond Mayor Malcolm Brodie said he is OK with the warehouse, which is in an industrial zone and will only be supplied with packaged products, but the city has “never adopted the permissive attitude we’ve seen in neighbouring cities.”

Brodie said council now has the chance to watch the experience of other municipalities, “but (prohibition) is definitely our position at this point.”

However, anyone in the province will be able to buy cannabis online as of Oct. 17, according to Shopify executive Loren Padelford.

“We are totally confident on the time frame, being able to deliver this as fully functional by the go-live date,” said Padelford, Shopify’s vice-president and general manager.

LDB GM Blain Lawson said in a new release that Shopify won the bid because of its “proven record of on-time execution.”

The task will be to develop two websites, one to serve online sales for B.C. LDB’s in-house B.C. Cannabis Stores brand, and a second to fulfil orders for the yet-to-be licensed private stores.

Padelford said Shopify has about four years of experience with the medical-marijuana market, handling sales for its big players, such as Canopy Growth, so is familiar with the challenges, such as age verification, that come in dealing with a regulated product.

“It’s a combination of data points,” Padelford said.

Buyers will have to input a government ID number at the time of sale to complete a transaction, which will be verified at the time of delivery.

B.C. will be the second province that Shopify will work with. Ontario, in May, selected it as its online provider.

“This is what we do for a living,” Padelford said. “It isn’t a challenge from a technological standpoint. It’s just that this is a new product being sold to a consumer base for the first time in the world on this scale.”

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