Pubdate: Fri, 27 Oct 2017
Source: Calgary Herald (CN AB)
Copyright: 2017 Postmedia Network
Author: Chris Varcoe
Page: A6


NDP MLA mulls hybrid model for sales as marijuana legalization draws

Chatting with MLA Craig Coolahan about the Alberta Heritage Fund this
week, a more burning topic of public debate sparked up.

Should the Alberta government run its own pot stores?

The NDP MLA for Calgary-Klein said the topic keeps resurfacing,
particularly as the deadline for public feedback on Alberta's new
marijuana framework wraps up Friday.

"I've been talking about cannabis all week," said Coolahan, who serves
as chair of the legislative committee on the Alberta Heritage Savings
Trust Fund.

"Everybody wants to talk to about it."

As the federal government moves to legalize marijuana across the
country by July 1, much of the talk in the province has focused on the
prickly question of where Albertans should be able to buy cannabis.

In some ways, it's a re-litigation of the battle over privatizing
Alberta's liquor stores, which occurred in 1993.

Groups like the Alberta Federation of Labour and Alberta Union of
Provincial Employees (AUPE) want the NDP government to set up
government pot stores, as Ontario intends to do.

On the other side of the divide, the Alberta Chamber of Commerce,
industry players and companies believe the province should follow the
liquor store model, with outlets operated by private businesses and
regulated by government.

They believe this system offers better pricing, more selection, longer
store hours for consumers and creates more jobs.

After speaking with a Mount Royal University professor who's studied
the issue, Coolahan believes there's a better option that would see
the government franchise out pot stores to interested

"It's a hybrid model of public and private, which I think is a
fantastic idea," he said.

"Basically, the retailer franchisee would be responsible for getting
their own bricks and mortar … so we wouldn't build it like the Ontario
model, which I think is foolish."

It's interesting an NDP MLA like Coolahan doesn't agree with Alberta's
public unions, which are pushing for a government-controlled system,
and the franchise concept is worthy of deeper debate.

The hybrid idea, the brainchild of economics, justice and policy
studies professor Kelly Sundberg, stems from research the academic did
on legalizing marijuana in Canada a few years ago.

Sundberg, who has drafted a paper on the topic for the MLA, said a
hybrid system would see the province create a single uniform franchise
model for all stand-alone stores authorized to sell cannabis.

Private owners would operate the outlets and hire their own

Franchisees would receive a business with consistent branding,
pre-developed policies, standards for design, training, security and
furnishings. No one could own more than three licences.

These rules would ensure a wide range of people could become

According to the paper, the province will need about 370 licences
issued across Alberta, and they would pay an average of $182,000 each
(based on their revenues) annually to the government.

Sundberg estimates retailers would collect gross revenues of more than
$750 million annually. The province - through taxes and franchise fees
- - would garner more than $214 million each year.

The cash-strapped provincial government wouldn't have to risk
investing capital to build its own chain of stores, which the Alberta
Party recently estimated would cost at least $168 million.

"It's the best of both worlds," Sundberg said Thursday.

"It still allows for innovation and entrepreneurial innovation, but it
also safeguards against criminal elements coming in and monopolizing
this industry."

The professor believes this concept could create almost 1,000 new
full-time and another 1,200 part-time jobs in the province.

People on both sides of the public-private pot rumble are cool to the
hybrid proposal, although curious for more details.

AUPE president Guy Smith said his 90,000 members support a fully owned
government network because it would ensure safety standards are put in
place to protect the public from the controlled substance. It would
also require less regulation and oversight if the province ran the
system itself.

"I do believe, even with a hybrid system, you'd probably need more
regulators, more enforcement, more inspectors out there to ensure
everyone is following the rules," Smith said.

The Alberta Chambers of Commerce filed a submission with the province
last week outlining the benefits of a private retail cannabis sector.

It notes a similar successful model already exists overseeing
Alberta's private liquor stores. Private outlets would give the
province "robust business and job creation, while supporting economic

Chamber CEO Ken Kobly said a hybrid concept is interesting, but he's
concerned it could inflate prices, pushing consumers into the illegal
drug market.

"There's only so much money in the sale of cannabis and there's only
so much revenue to go around," he said.

There are other issues to consider with the hybrid proposal, such as
how much price competition consumers would see in a franchise network
and what product selection would be available.

Justice Minister Kathleen Ganley will be collecting the feedback that
comes in before Friday's deadline and introducing legislation during
the fall sitting of the legislature to deal with the cannabis retail
store question.

Whatever path it chooses, the Notley government will have to make a
decision before the end of the year.

Until that happens, get ready for more pot talk.

"We have a couple of choices," said Coolahan. "We want to make the
best one and that's why I feel somewhere in the middle, we can find
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