Excerpts from comments by Kamloops-North Thompson MLA Peter Milobar on Monday, May 14, 2018 during debate on Bill 31, Cannabis Distribution Act, second reading.
P. Milobar: …I have a pretty good insight into the whole distribution model as well as the retail side. When you have a government and private industry mix where the government is the distributor, the regulator, and the government turns out to be actually your retail and stiffest retail competition, it makes for a very difficult framework to try to operate under if you’re a small operator, an independent. In my case, I was an independent store of one. So you’re really fighting a very large entity when it comes to the government.
It always makes people have, I think, a little suspicion within the industry when you see rules and enforcement actions taking place that tend to impact a private operator heavily, and government operations on the retail side tend to go unscathed. The response is always: “Well, they’re subject to the same fines.” But the reality is it’s the taxpayer paying that fine as the operator of that retail store. It’s not the individual employee or the operator of the store that sees that financial risk for flouting the rules or not paying attention to the rules.
The reason I bring that up is because when you look at that model and look at what’s being proposed, it’s dramatically different from what the government told us just a few short months ago. Now, I guess we shouldn’t be overly surprised that perhaps there’s another broken promise coming from the government, but when the legislation was first being discussed in broad terms, it was a very clear statement by government.
The government was going to get into the distribution side, and they would create a warehouse much like the liquor distribution branch. In fact, they paralleled the example of the liquor distribution branch, and they would not — and they were emphatic — be operating retail stores.
Now, what we see very quietly being snuck in through this legislation is the ability for the government to operate retail stores. That was never talked about a couple of months ago. It was never even mentioned. In fact, it was emphatically highlighted that that would not happen. Instead, what we now see is an expansion of government retail into a private marketplace….
If you’re going to control distribution and if you’re going to regulate and try to track sales and make sure proper taxes are being collected and that nature, you should be in charge of the distribution network as a government. That I don’t take issue with. But there’s absolutely no reason for the government to expand government even further by going into more retail than they already currently are.
We don’t see an expansion into grocery stores by government. We don’t see government trying to sell sofas. We don’t see government trying to sell a whole bunch of other products in the marketplace if they have no problem jumping in where they think that they might be able to be the regulator, be the distributor and be the retail competition as well. That doesn’t work. It creates uncertainty in the marketplace.
It requires the government to start going out and leasing and hiring retail staff to do a retail service job that the private sector is more than willing to step in and do. The private sector full well knows how to go out and lease a retail space. The private sector full well knows how to go out and make sure that they hire staff. And frankly, the private sector, by and large, knows how to provide a better customer experience at the retail side of things on a wide range of products.
It is not core to government service to have to operate a retail operation — frankly, of any type. But to now add more retail to an existing mix of government does not make any sense. You do not need a government employee to sell cannabis to generate the tax revenue that will come to government.
A private operator can sell that exact same product, still have to collect and remit the same amount of tax that a government store would. The only differences would be that government would not be paying for leases and not be paying for staff. So the government would actually make more money if they allowed the private sector to be the retail operations versus the government trying to suddenly jump in and do another cash reach within this market.
Source: BC Hansard.