More marijuana re­tail strate­gies emerge

AL­CO­HOL BRO­KER SOUTH­ERN GLAZER’S PART­NERS WITH CANNABIS GROWER APHRIA TO SELL POT

National Post (National Edition) - - FINANCIAL POST - mark ren­dell

TORONTO • The Cana­dian arm of al­co­hol dis­trib­u­tor South­ern Glazer’s Wine & Spir­its LLC is en­ter­ing the cannabis mar­ket by launch­ing a marijuana-fo­cused bro­ker and part­ner­ing with li­censed pro­ducer Aphria Inc.

The new com­pany, Great North Dis­trib­u­tors Inc., will rep­re­sent Aphria prod­ucts to re­tail­ers and reg­u­la­tors across the coun­try, essen­tially act­ing as Aphria’s on-the-spot sales­force, the com­pany said on Thurs­day.

“We’re go­ing to be able to take a lot of the ex­pe­ri­ence we have from the bev­er­age al­co­hol mar­ket and trans­late it to the cannabis mar­ket,” said Doug Wieland, gen­eral man­ager of South­ern Glazer’s Cana­dian divi­sion.

South­ern Glazer’s, the largest wine and spir­its dis­trib­u­tor in the U.S., is al­ready a ma­jor player in the Cana­dian al­co­hol mar­ket, rep­re­sent­ing brands such as Bac­ardi, Rémy Coin­treau and Tito’s Vodka in both pri­vate and gov­ern­ment-run liquor stores.

“We be­lieve there’s go­ing to be a lot of sim­i­lar­i­ties (to al­co­hol) with both gov­ern­ment in­volve­ment, and the way the prod­uct will be re­tailed through those gov­ern­ment bod­ies,” Wieland said.

The part­ner­ship comes at a time when Cana­dian cannabis com­pa­nies are start­ing to fo­cus on re­tail strate­gies for the adult recre­ational mar­ket, which is ex­pected to be­come le­gal some­time later this year.

Much of the in­dus­try’s ac­tiv­ity so far has fo­cused on cul­ti­va­tion: build­ing fa­cil­i­ties and get­ting pro­duc­tion costs down.

WE BE­LIEVE THERE’S GO­ING TO BE A LOT OF SIM­I­LAR­I­TIES

But, as with any con­sumer prod­uct, prof­its will ul­ti­mately de­pend on get­ting marijuana on store shelves and­cre­at­ing­bran­drecog­ni­tion and loy­alty.

That’s led Canopy Growth Corp. to de­velop plans for its own re­tail chain called Tweed Main Street (for prov­inces that will al­low pri­vate re­tail), and Aurora Cannabis Inc. to­buya 20-per-cent stake in Al­berta liquor store chain Liquor Stores NA, which re­cently changed its name to Al­canna.

“Whether it’s peo­ple choos­ing their own route to mar­ket or whether they choose an agency model, we be­lieve the feet on the street are go­ing to be key to the suc­cess of cannabis,” Wieland said.

Great North will ini­tially have a team of 21 peo­ple. It won’t be trans­port­ing and ware­hous­ing Aphria’s prod­ucts, but it will work with pri­vate and gov­ern­men­towned re­tail­ers to en­sure Aphria brands get prime shelf and dis­play space, as well as pro­vide con­sumer data.

“It takes a lot of back of­fice, train­ing and ... an­a­lyt­i­cal tools to start (a na­tional sales­force),” said Jakob Rip­shtein, Aphria’s chief com­mer­cialof­fi­cer.“whatwe’re able to do overnight is gain that ex­per­tise.”

Rip­shtein wouldn’t com­ment on the fi­nan­cial ar- range­ment be­tween Aphria and South­ern Glazer, nor Great North’s cut on Aphria sales. But the dis­trib­u­tor will, at least at first, work ex­clu­sively with Aphria.

“We es­tab­lished Great North Dis­trib­u­tors to be the ex­clu­sive man­u­fac­turer’s rep­re­sen­ta­tive for Aphria in Canada and that is our pri­mary fo­cus at this time,” said South­ern Glazer spokesper­son Cindy Hass. “At such an early stage in this ven­ture, it’s pre­ma­ture for us to spec­u­late how our busi­ness and the port­fo­lio we rep­re­sent will evolve over time.”

Wieland said he ap­proached Aphria around a year ago and pitched them on the idea.

APHRIA VIA THE CANA­DIAN PRESS

Great North won’t be trans­port­ing and ware­hous­ing Aphria’s prod­ucts, but it will work with pri­vate and gov­ern­ment re­tail­ers to en­sure Aphria brands get prime shelf.

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