Shopify to manage B.C.’s cannabis sales
Tech darling adds latest contract with Crown corporation, private retail
Shopify Inc. has doubled its bet on cannabis, with British Columbia announcing Friday that the ecommerce company will run the province’s legal online marijuana sales channel as well as sales from a provincially run warehouse to private retailers.
This follows a similar announcement from Ontario in February, when the Ottawa-based tech darling inked a deal to manage Ontario’s online cannabis sales along with the in-store pointof-sale system for provincially owned stores.
“You’re seeing us win these contracts because we can help them get where they want to go on the time frames, which are very tight and challenging,” said Loren Padelford, vice-president and general manager of Shopify Plus. “We can ensure they can be live and ready to serve the public on the delivery date of Oct. 17.”
B.C., unlike Ontario, will have a hybrid, public-private system for cannabis retail.
The majority of brick and mortar stores will be privately owned, although the B.C. Liquor Distribution Board (LDB) will run dispensaries, branded BC Cannabis Stores, in some jurisdictions.
The province will also play middleman. All legally grown cannabis will have to be sold wholesale to the LDB, which will resell it to end consumers online or private retailers.
On Friday, the LDB announced that it has secured a 6,500 squaremetre distribution centre in Richmond that will employ about 130 staff “across its logistics, shipping and receiving, customer-care and maintenance departments.”
Shopify’s e-commerce system will be integrated into the LDB’s warehouse to manage orders from private retailers and end-consumers, said Padelford.
“It will be ordered and delivered like any retail package,” he said, speaking of the direct-toconsumer side of the business. “The differences are going to be compliance related, where you’re going to have to have age identity verification, both at purchase but also in delivery.”
“Shopify was chosen for its proven record of on-time execution, user-friendly design and long-term approach to anticipating consumer needs beyond the implementation phase,” said Blain Lawson, LDB’s general manager and CEO in a press release.
Locking up contracts with large provincial Crown corporations appears to a major part of Shopify’s strategy in the emerging cannabis industry. But the opportunity goes beyond government contracts, said Padelford.
Cannabis dispensaries in the western provinces that allow private retail will need point-of-sale and inventory tracking systems, and licensed producers still need systems to run the medical side of the business, where direct-toconsumer sales are allowed.
“We aren’t in the cannabis industry, cannabis is in the retail industry,” said Padelford.
Shopify has teamed up with licensed producers such as Canopy Growth Corp. and The Hydropothecary Corp., said Padelford, and it’s actively pursuing deals with private retailers hoping to sell cannabis.
“As those licences get issued we expect that we will be involved with a number of those retailers. But it’s not the same as Ontario where we’re everywhere because Ontario is centrally run. We have to engage all the retailers individually and get them convinced Shopify is the option,” said Padelford.
The size of the legal recreational market in B.C. and other western provinces won’t be known until after sales begin in October. A recent report by Deloitte, however, suggested legal recreational sales in Western Canada could range from $570 million to $1.37 billion.