Shops and Growers: Friends or Foes?

Depending on your view, you may see vertical integration as either efficient or anti-competitive – or maybe as both.

Vertical integration is when a supplier and a vendor have an exclusive relationship, such as when a factory and a store have the same owners, or one of them owns the other.

The Cannabis Act (Bill C-45 as we affectionately call it) doesn’t allow vertical integration between Licensed Producers (including craft growers) and Sellers.  It even goes so far as to prohibit any kind of preferential arrangements or agreements between the growers and the shops.  But does that mean they can’t be friends?

Of course not.

As a retail seller in British Columbia, you can’t have a contract to buy directly from a grower, or to promote one grower’s product over another’s; but you can have a strong business relationship that’s mutually beneficial.  You can call up that grower who has the product you want and let them know you intend to contact the Liquor Distribution Board to buy from them and sell to you.  As long as you keep the BC agency in the middle, and as long as you stay within the promotion and marketing guidelines, you can build a quality network with the growers that fit your retail brand.

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Jeremy Costin

About the Author

Jeremy Costin is an experienced solicitor with a passion for developing effective solutions for a broad range of clients. Jeremy’s practice is focused on business, e-commerce and information management, and estate planning including wills and probate.

Jeremy is the principal of Jeremy R Costin Law Corporation (Costin Law).