The Priorities Committee within Quebec’s Council of Ministers has reportedly reached a decision as to how the legal framework for cannabis distribution is to take shape in the province. According to La Presse, Quebec will establish a similar model to Ontario’s provincially owned LCBO monopoly, but with a few key distinguishing features.
All profits from sales are to be designated for prevention and public health initiatives, and the province will devote less resources to brick-and-mortar retail stores, providing instead a platform for online, delivery-based retail sales.
While Ontario’s plan for 150 point-of-sale locations begins with 40 outlets in the first year, Quebec is set to establish only 20. This may seem counterintuitive given that Quebec is the largest province south of the territories and more than double the size of most Canadian provinces. However, with roughly one fifth of its population living in rural areas, Quebec’s online delivery system could allow access to residents of smaller communities that would otherwise be unsupplied due to geographical challenges.
Until recently, discussions have focused on maintaining health considerations as the chief priority in developing the new framework, but committee members have observed that the province’s health ministry lacks the expertise needed to spearhead the commercialization of a new market. The decision was made to create a new Crown corporation as a subsidiary of the Société des alcools du Québec (SAQ), the province’s answer to Ontario’s LCBO.
Leveraging the expertise and infrastructure already in place, SAQ will provide guidance for the new subsidiary corporation. But the subsidiary will have an explicitly non-commercial ethos, with no mandate to maximize profits, and no requirement to pay dividends to the government.
Breaking the black market
The logic outlined by the priorities committee is clear: in order to eradicate the black market for cannabis, the price must be “broken”, removing the margin for profit from the equation. To achieve this, the only financial goal set out for the new Crown corporation will be to pay for its own operations.
While the profit-free pricing may result in Quebec becoming the only province to have its new cannabis regime run at a deficit, the approach may also position Quebec as the province with the best chance of having its legal market compete in a meaningful way with the black market.
The committee aims to table the bill by mid-November.
Featured image by Chensiyuan.