Grocery Giant Loblaws Advocates for Cannabis Sales

Grocery Giant Loblaws Advocates for Cannabis Sales

The TDR Three Key Takeaways:

1. Loblaws is actively lobbying to integrate cannabis sales into its retail operations in Ontario, proposing a “store within a store” model.
2. The company seeks regulatory changes allowing medical cannabis sellers like Shoppers Drug Mart to also sell recreational cannabis.
3. Despite ongoing efforts, Loblaws faces regulatory hurdles, impacting its ability to fully implement its cannabis retail strategy.

Loblaws, a major grocery store chain in Canada, has been actively pursuing regulatory changes in Ontario’s cannabis market. This effort, leaked by documents reviewed by Global News, highlights the company’s multi-year advocacy to modify existing cannabis regulations in the province. The focus of Loblaws lobbying is to integrate cannabis sales into their existing retail operations, a move that aligns with the recent adjustments in Ontario’s cannabis laws under the Ford government.

The company’s approach includes discussions with the Ford government and the Attorney General’s office of Doug Downey. Their proposal involves modifying current regulations that restrict the sale of cannabis in establishments where other products like snacks and chocolate are sold. The idea of a “store within a store” model, akin to Wine Racks in Loblaw locations, was initially proposed. However, current regulations enforced by the Alcohol and Gaming Commission of Ontario require cannabis stores to be physically separate from other commercial activities, with distinct entrances and covered windows, preventing the integration of cannabis sales into traditional grocery stores.

In submissions during the summer and fall of 2022, Loblaws sought the removal of several regulations. One significant change involves allowing companies that sell medical cannabis, like Shoppers Drug Mart (owned by Loblaw), to also engage in recreational cannabis sales. Another proposal was to lift restrictions preventing companies with online sales platforms from selling cannabis, which would enable Loblaw to use its existing online infrastructure for cannabis sales.

While Loblaws has yet to realize its primary goals, the company has already made inroads into the cannabis sector under its C-Shop brand, with two operational stores and applications for more. However, these stores face limitations due to current regulations, including separate entrances and obscured visibility from outside.

The reaction to Loblaws’ proposals has been mixed. Some view these changes as disproportionately beneficial to larger retailers, potentially creating a competitive disadvantage for smaller cannabis businesses. Others, like Harrison Jordan of Substance Law, suggest that lifting certain rules could also benefit smaller businesses, such as convenience stores.

Criticism has come from political corners, such as the Ontario NDP’s consumer protection critic, Tom Rakocevic, who expressed concerns about the government’s potential bias towards large corporations and the need for community involvement in decisions about cannabis retail. In contrast, High Tide, a Canadian cannabis company, welcomed the competition and acknowledged the importance of local access to cannabis products.

Despite not achieving their main objectives yet, Loblaws continues its advocacy, as indicated by ongoing entries in the provincial lobby registry. Their sustained efforts signal a strategic move to expand their market presence into the cannabis sector, reflecting a broader trend of diversifying retail offerings in response to evolving consumer demands and regulatory landscapes. This ongoing campaign by Loblaws underscores the dynamic nature of the cannabis market in Ontario and the potential implications of such regulatory changes for various stakeholders.