Manitoba has unveiled a "hybrid model" for selling pot in the province when recreational marijuana use becomes legal next July.

The Manitoba Liquor and Lotteries Corp. will secure the supply of marijuana and track it in Manitoba, but private retail stores will be in charge of selling it.

Pot won't be sold where alcohol is sold, which means the province won't have to pay for new storefronts, Premier Brian Pallister said at a news conference on Tuesday.

Manitoba Liquor and Lotteries will deal with supply chains and orders from retailers, and retail stores will open as early as July 2, 2018.

Marijuana is scheduled to be legalized under federal legislation on July 1, 2018.

The province is now taking applications from retailers to open one or more stores to sell pot. That process will remain open until Dec. 22, 2017.

"This is a step by step process," said Pallister, who did not reveal at what age people will be able to legally purchase pot.

Pallister also did not say how many stores will be allowed.

"We'll wait and see what the request for proposal allows as a response, I suppose. We remain anticipating we'll have a great response," said Pallister.

Brian Pallister

At a news conference on Tuesday, Premier Brian Pallister explained how the public and private sector will be involved with the cannabis industry in Manitoba when the drug is legalized. (Fernand Detillieux/CBC)

Applications from retailers will have to meet a "wide array of stipulations," including things such as distance from schools and protection of cannabis supply sources, he said.

"We also want to be sure that we get access to the Manitoba market. This is important in terms of competitiveness. This is one of the main concerns. It's fine to say, 'We have stores,' but people don't go to stores unless there's a competitive service or product being offered there," said Pallister.

The province is open to private retailers selling online, he said, and cannabis should also be accessible within a 30-minute drive for about 90 per cent of the population. While Pallister said they were still looking at taxation, pot would not be exempt from PST.
 

The government said there was great interest when it put out a provincial expression of interest to test the market. That expression of interest closed in September. 

'Manitoba is open for business'

The province's approach will make sure there's a consistent and affordable supply chain, preventing diversion to the black market, said Growth, Enterprise and Trade Minister Blaine Pedersen. It will also send a message: "Manitoba is open for business."

A regulatory framework and licensing regime is in development, the province said.

All of the cannabis in stores must be purchased by Manitoba Liquor and Lotteries, which will get it from federally licensed producers. There aren't currently enough licensed producers in the province to meet demand, Pallister said, but he hopes it will be an opportunity for the industry to grow at home. 

What is Manitoba's plan for selling legalized marijuana?1:31

The province plans to displace 50 per cent of the illegal market within a year of legalization because the province "wants to push gangs out of the business, so we need to be able to expand."

Anyone who wants to get into the Manitoba marijuana retail business needs to show they can adapt as the industry changes, including for edible cannabis products, which are not currently included in the legalization.

Manitoba money in marijuana

Some Manitoba companies already have major money on the table and pushed for a private distribution and retail model. 

Winnipeg-based producer Delta 9, the only producer licensed to sell medical cannabis in Manitoba, went public on the TSX Venture stock exchange last week, gearing up to expand production ahead of legalization. CEO John Arbuthnot said he would like to see Delta 9 storefronts selling recreational cannabis. 

In the wake of Tuesday's announcement, Delta 9's stock prices jumped up around 25 per cent in just over an hour. 

Many smaller players, such as vape shops, also pushed for private enterprise, but Vape Haven and Hemp Haven owner Jeremy Loewen said the government needs to play a role to make sure it's a level playing field for those who want to open dispensaries. 

Pallister also has seen pressure from the public sector, with a union saying ahead of the announcement that government stores are the safest way to run the industry.

'It is what it is,' NDP says

Manitoba Government and General Employees' Union president Michelle Gawronsky said the sale should be through stand-alone stores operated by Manitoba Liquor and Lotteries staff. 

"I believe that the government has missed an opportunity to ensure the safety of Manitobans is first and foremost," she said.

The private sector is going to be enjoying all of the profits of the sales while tax payers pick up the tab for things like policing, regulation and social costs, Gawronsky said. 

Following the announcement in question period, the New Democrats asked for more details about rules around locations, number of retail outlets and how the government plans to cover social costs like addiction.

"Safety should be top of mind when it comes to cannabis," said NDP leader Wab Kinew.

Nahanni Fontaine

NDP justice critic Nahanni Fontaine says there are still a lot of unanswered questions around Manitoba's marijuana industry. (Trevor Brine/CBC)

NDP justice critic Nahanni Fontaine said the clock is ticking until legalization and "there is a lot of information that is missing."

NDP has previously supported a public model, but Fontaine said if the government can ensure the private industries adhere to stringent regulation then "it is what it is, and we will deal with that."

Manitoba Liberal leader Dougald Lamont said the basic structure of the PCs pot plan seems OK but he still has some concerns, particularly around medicinal marijuana and underage selling. He also wanted to ensure that there was no conflict of interest between the Tories and people getting into the industry.

Last week, Pallister asked every member of his cabinet to come forward to the conflict of interest commissioner if they're investing in marijuana. 

Most provinces and territories are still working through how cannabis will be sold. 

Alberta announced cannabis will be sold in specialty stores, separate from alcohol, tobacco and pharmaceuticals, but there are no details about whether the stores will be publicly or privately operated. 

In Ontario, the cannabis plan announced earlier this fall included about 150 stand-alone stores and an online ordering service that will be overseen by the Liquor Control Board of Ontario. 

Manitoba unveils first part of legal pot plan30:02

With files from Sean Kavanagh, Teghan Beaudette and Jill Coubrough