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Retailers face uncertain market for cannabis
Drugstores seeking way to enter market, putting them at odds with pharmacist regulatory bodies

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Wednesday, August 15, 2018 – Page B1

A number of drugstores and major retailers with instore pharmacies want to enter the medical and recreational cannabis market, but some of their own regulatory bodies are opposed to the idea.

A tangle of rules currently prevent them from selling recreational and medical cannabis, prompting some to press governments across Canada to open up the market to them as legalization of recreational marijuana approaches.

The Neighbourhood Pharmacy Association of Canada, which represents small and big drugstore retailers - including major players such as Loblaw Cos. Ltd. and Walmart Canada Corp. that operate in-store pharmacies - says pharmacies are best equipped to sell cannabis because they have experience distributing controlled substances and counselling customers about their effects.

However, the National Association of Pharmacy Regulatory Authorities, the voice of provincial regulatory bodies, does not support pharmacies selling recreational cannabis in their dispensary areas. Some provincial regulatory pharmacist groups also frown on pharmacies selling medicinal marijuana because of inconclusive evidence of its therapeutic effects.

As a result, drugstores and bigbox retailers that run pharmacies are caught in a difficult position.

They don't want to be left out of what is shaping up to become an economic boon for businesses.

Through the pharmacy association, they are pushing governments to amend existing laws to give them the green light to participate in selling both recreational and medical cannabis.

"What we've asked for is a level playing field so that our members can make decisions about whether or not they should participate in the recreational cannabis space," said Justin Bates, chief executive officer of the Neighbourhood Pharmacy Association. "But the emphasis has really been on the medicinal market."

The battle to sell cannabis is heating up as Ottawa prepares to legalize the sale of recreational cannabis on Oct. 17, with a bevy of businesses vying to launch stores while established pharmacy retailers seek the nod from various governments to sell cannabis to gain an edge in a coveted new legal market.

On Monday, the Ontario Progressive Conservative government said it is opening up the instore sale of recreational cannabis to private retailers, joining provinces such as Alberta, Saskatchewan and Manitoba. This dramatic policy shift will see bricks-and-mortar stores open in Ontario by next April. The previous Liberal government had planned to let a subsidiary of the Liquor Control Board of Ontario sell cannabis in stand-alone outlets.

Pharmacy chains have been pushing Ottawa to drop its ban on drugstores selling medicinal cannabis, which is authorized by doctors for an array of ailments such as pain, sleep disorder and epilepsy.

Currently, Canadian patients have to buy their medical marijuana directly from a producer through an online store, as stipulated by federal rules. Then, the product is shipped from the grower to the patient's home, bypassing pharmacies completely.

Adding the pharmacies to the process could dramatically bolster access to medical cannabis for patients and help validate the legitimacy of using marijuana for medical purposes among doctors and patients alike.

Some of the major licensed producers, such as Aphria and CannTrust, have said they are fans of the medical market because profit margins are high and there is an opportunity for innovation that can lead to even higher margins.

The Ontario government, for one, isn't ruling out allowing pharmacies to sell cannabis and is instead inviting them to take a seat at the consultation table, said Clint Thomas, spokesman for Minister of Finance Vic Fedeli.

"Pharmacies are regulated by the Ontario College of Pharmacists, which means the regulatory body would have to approve the sale of cannabis in their stores," a government source said. "This is not strictly a government decision."

Amid the uncertainty, drugstore retailers are refraining from weighing in on their position on selling cannabis.

Loblaw will consider selling recreational cannabis in its stores or on its properties "where we see the right opportunity," spokeswoman Catherine Thomas said.

In Newfoundland, the retailer already applied and got licences to sell recreational cannabis in 10 of its Dominion supermarkets. In New Brunswick, its real estate arm got approval from that province to develop a handful of cannabis stores for the province.

Shoppers Drug Mart, which is owned by Loblaw, has no plans to sell recreational cannabis, she said. It has been pushing to sell medicinal marijuana.

A Walmart spokeswoman would not comment, while Rexall spokesman Darius Kuras did not respond directly to a question about its interest in selling medicinal or recreational cannabis.

Instead, he said Rexall and its U.S.-owned parent McKesson Corp. "is and will continue to be interested and focused on ensuring a safe and secure supply chain of pharmaceutical products in Canada."

Grocer Sobeys Inc., which runs in-store pharmacies and owns the Lawtons drugstore chain, isn't focusing on selling recreational cannabis "at this point," executive vice-president Vivek Sood said. But he said the company is closely watching how regulations tied to medical cannabis evolve.

"While the current regulatory environment does not allow for pharmacies to dispense medical cannabis, we are committed to providing a high level of care and education for our patients on all of their medical needs, including education and counselling for medical cannabis users," Mr.

Sood said.

Jim Danahy, CEO of pharmacy think tank and training firm AdhereRx, which co-owns a drugstore in Gibsons, B.C., said the full picture of how cannabis sales will play out is still murky.

"Many big retailers privately confide that they have been trying to enter recreational cannabis sales as provincial regulations permit, just as grocers and convenience and private dedicated retailers do now for wine and beer in some provinces," he said. "But they don't want to appear overly opportunistic."

Many drugstores and retailers with in-store pharmacies have been increasing preparations for the possibility of selling cannabis by teaming with producers and other marijuana players.

Shoppers has applied to become a licensed producer to sell medical cannabis and signed deals with growers such as Aphria, Aurora, MedReleaf and Tilray. Two weeks ago, Manulife Financial Corp. unveiled its plans for a new benefits program for medical cannabis that offers patients access to virtual support from a team of pharmacists at Shoppers Drug Mart Corp.

Lovell Drugs is working with Maricann, which is also working with McKesson. McKesson says the pair are focused on educating its pharmacists on cannabis.

PharmaChoice has partnered with CanniMed.

The possibility that conventional retailers with in-store pharmacies could enter the cannabis market raises new questions. "As a pharmacist I have to be honest, I have a problem with pharmacies selling purely 'recreational' cannabis, especially in the dried flower smokable format, for the same reason cigarettes are not sold in most pharmacies across Canada," said Malay Panchal, CEO of licensed producer Pure Global Cannabis Inc.

Associated Graphic

A worker stocks shelves at Rexall Drugs in Toronto in 2014. Owing to fear of being left out of the market, pharmacy chains are urguing Ottawa to drop its ban on drugstores selling medicinal cannabis.


Thursday, August 16, 2018
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