Pubdate: Sat, 17 Feb 2018
Source: National Post (Canada)
Copyright: 2018 Canwest Publishing Inc.
Author: Mark Rendell
Page: FP3


A group of First Nations looks set to win big in the Manitoba cannabis
market, thanks to partnerships with several cannabis companies chosen
to run the province's private marijuana retail system.

On Friday, Manitoba announced that it had "conditionally accepted"
proposals from four groups - chosen from a pool of more than 100
applicants - to run dispensaries in the province. Canopy Growth Corp.
in partnership with Winnipeg-based Delta 9 Cannabis Inc., took home
one conditional letter; another went to upscale retail brand Tokyo
Smoke, a subsidiary of Hiku Brands Ltd.

The other two winners were less known nationally, but both had
considerable First Nations support, which was part of the criteria
used by the government to assess proposals.

One is a partnership between the Fisher River Cree Nation, the
Chippewas of the Thames in Ontario and cannabis companies Avana Canada
Inc., MediPharm Labs and Native Roots Dispensary. The other is the
cannabis clinic chain National Access Cannabis Corp. (NAC).

NAC, which is backed by cannabis investor Chuck Rifici, co-founder of
Tweed and CEO of Cannabis Wheaton Income Corp., spent the past five
months signing up Manitoba first nations to its retail vision.

By December it had struck deals with the Opaskwayak Cree Nation, Long
Plain First Nation, Peguis First Nation, Brokenhead Ojibway Nation and
Nisichawayasihk Cree Nation.

The Opaskwayak Cree Nation, based in The Pas, even became NAC's
largest shareholder in August, acquiring a 10 per cent stake in the
company shortly before it went public.

"When announced nationally that they were going legalize cannabis,
very specifically they did state that Indigenous people would be part
of this strategy. For the Opaskwayak Cree Nation, we saw it as an
opportunity," said OCN chief Christian Sinclair, who now sits on NAC's
board of directors.

Sinclair l earned about NAC at a meeting in Winnipeg last year hosted
by the company's president Derek Ogden, a former RCMP officer who used
to lead the National Drug Enforcement program.

"I thought, all right we got the most senior anti-drug enforcement
officer, we've got Chuck Rifici, this is definitely a company we want
to meet," said Sinclair. "With my corporate background I started to
recognize very quickly that there was a bigger opportunity for First
Nations in general."

With Sinclair on board, NAC signed partnerships with the four other
First Nations, agreeing to build dispensaries on their reserve land.
The company, which has cannabis supply deals with Tilray, CannaRoyalty
Corp. and Cannabis Wheaton, won't only build on reserve land in
Manitoba. But there's a particular focus on urban reserves in cities
like Winnipeg, Brandon and Thompson.

"Cannabis is a great business opportunity, but it really is a
political issue as much as a business opportunity, and like we saw
with gaming, when there are difficult political issues at all levels
of government, First Nations have an true advantage," Rifici said in
an interview.

Reserve lands aren't subject to municipal zoning rules that may
disadvantage dispensaries in urban settings, Rifici said. There's also
the possibility that First Nations groups may be allowed to open
retail stores even in provinces like Ontario and Quebec, where sales
are otherwise controlled by provincial government monopolies, he added.

"We've been talking to as many nations as possible across Canada,
Chief Sinclair primarily, to essentially try to get agreements with
other urban reserves," said Rifici.

Sinclair's community, as an investor in NAC through the band's
business development arm, obviously stands to benefit from the
company's prospective success. But Sinclair also argues that cannabis
retail could be a huge opportunity for other First Nations, both in
terms of on-reserve job creation and revenue generation for band

It hasn't been finalized, but Sinclair said there are discussions with
the federal government to develop an on-reserve rebate program, like
with alcohol and tobacco, where First Nations communities keep a large
portion or all of the tax revenues.

"When we helped build the country in the fur trade back in 1600s and
1700s, we missed the investment opportunities, we were left out of it,
we missed the technology, we were left out of it. Now we got this
cannabis, which is like Prohibition of alcohol back in the early
1920s. We are now at the forefront of this opportunity," said Sinclair.

"I had to convince our leadership and our elders, we've got to move on
this, we've got to capitalize on this, because it's a once in a
lifetime opportunity."

B. C. and Alberta will be the two most attractive markets for private
retail, said Sinclair.

On Friday, Alberta released rules around private cannabis retail in
the province.

In contrast to Manitoba, the Alberta Gaming and Liquor Commission says
it expects to issue about 250 licences for dispensaries, with no one
company being allowed to own more than 15 per cent of the licences in
the province.

The province will begin accepting retail applications in March.
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MAP posted-by: Matt