Firm prepares storage facility in industrial area
Fire And Flower to Also operate retail Businesses in Yorkton, North Battleford
Inside an unmarked secure facility at an undisclosed location in north Saskatoon’s sprawling industrial area, a company is preparing to help address Saskatchewan’s marijuana supply.
Edmonton-based Fire and Flower is readying its storage facility and has applied for a licence to operate a wholesale cannabis operation, according to the company’s vice-president of government and stakeholder relations, Nathan Mison.
Many of the marijuana retail outlets in Saskatchewan, including all seven in Saskatoon, have yet to open. Many have cited a lack of supply.
“We’re very close, but we’re not open yet,” Mison said in a phone interview last week from Edmonton. “We hope we’ll be able to fill some of the market. We don’t know that we will be able to fill all of the market.”
Mison said the outlet is expected to open in a couple of weeks. The structure for the cannabis market in Saskatchewan is different than in other provinces because of the wholesale component, Mison added.
The Saskatchewan Liquor and Gaming Authority (SLGA) regulates the private-sector wholesale and retail components, SLGA spokesman David Morris explained in an email.
Retailers can purchase marijuana from federally licensed producers or licensed wholesalers, which must have a physical warehouse within the province. They do not have to locate in specific communities, Morris said.
Unlike the lottery system that awarded the province’s 51 cannabis retail licences, including seven in Saskatoon, there are no restrictions on the number of wholesale permits.
Only one wholesale licence in the province has been granted to a company called Running Leaf that was established this year.
Running Leaf officials declined to reveal the location of the warehouse in an interview with The Leader-post this month, citing security concerns. Nine other companies have applied for a wholesale licence, Morris said.
Twenty federally licensed marijuana producers are registered in the province, he added.
Applicants for a wholesale licence are judged “to confirm the proposed facilities and personnel involved are suitable for the operation of a cannabis warehouse and distribution business. Information required includes criminal history, financial history and other personal and corporate information.”
Information on the provincial government’s website says potential wholesale operators must show “good character, storage and transportation security, and capacity to track and report inventory and sales.” The permit fee is $5,000, including a non-refundable $2,000 application fee.
Unlike the eye-popping $20,000 annual business licence required for cannabis retail stores in Saskatoon, the City of Saskatoon fee for a cannabis wholesale operation is the same as for most businesses: $125. Two such business licences have been approved, including one for Fire and Flower.
Mison said he is confident Fire and Flower meets the required criteria and is taking security very seriously. As part of that thinking, Mison would not reveal the street address for the warehouse or allow photos to be taken on site.
“We do not have a big neon sign,” he said.
Wholesale operations are not allowed to sell directly to consumers, only to retail stores.
The company’s national advisory board includes Norm Inkster, the former commissioner of the RCMP and the former head of Interpol. Tim Reid, the president and CEO of the Regina Exhibition Association Ltd., who has roots in Edmonton, is chairing the company’s Saskatchewan advisory board.
Fire and Flower is not limited to the wholesale side in Saskatchewan. The company won a retail licence to operate a store in Yorkton and bought out the licence of an operator in North Battleford.
In addition to the two stores that are up and running and selling cannabis in Saskatchewan, Fire and Flower has opened 10 stores in Alberta. The company aims to open 47 stores in Western Canada.
Mison said the company is also talking to other winners of the cannabis lottery in Saskatchewan.
“We would love to be in Regina and Saskatoon,” he said. “We’re excited about the opportunity in Saskatchewan.”
Mison answered the obvious question about a wholesale operator expanding into the retail sector: No, Fire and Flower is not allowed to show favouritism to its own retail stores under SLGA rules.
“We’re adhering to those, if not exceeding those regulations and expectations,” he said.
We’re very close, but we’re not open yet. We hope we’ll be able to fill some of the market. We don’t know that we will be able to fill all of the market.
The Saskatoon warehouse is expected to employ 45 to 65 people when it is up and running. Mison was not sure if the company had already acquired a business licence to operate in Saskatoon.
Of the seven groups that won the lottery to operate retail outlets in Saskatoon, only three have established locations and none have opened for business. Stores are expected to open this month on Third Avenue downtown, just off Eighth Street on Grosvenor Avenue and on 20th Street West in Riversdale.
Recreational marijuana was legalized on Oct. 17.