Research. Strategic Planning. Cannabis. One of these things doesn’t belong. Or does it?

When our company, Axxess Point Inc., was approached in January 2018 to provide research, analysis, and strategic planning for an experienced and recognized medical cannabis counselling service operator in western Canada, we were clearly apprehensive. That they were preparing to enter the retail cannabis market for non-medical, recreational use in Canada only added to the trepidation. Did we mention they were potentially our first client?

There were countless reasons to run away from this project. Our preliminary environmental scan warned us of the potential pitfalls and enormous challenges we would encounter even before the federal government fixed the date of national legalization, which would occur sometime after July 1st, 2018. (Marijuana became legal as of October 17th, 2018.)

Without the benefit of legislative precedence or a template, the closest proximity to real-world events we had to work from was the Canadian historical experience with the evolution from government-operated liquor retail stores to privately-operated establishments—an event that took over 100 years to happen and still evolves today. We were asked to do something similar in less than a year. We decided to dive head first into an opportunity of a lifetime.

Preliminary Environmental Scan

Based on our discussions with our new client, and our initial research and intelligence gathering, we understood the following, which formed the backbone of our ongoing environmental scanning:

OUR CLIENT

The client is an experienced and recognized medical marijuana counselling service operator who was preparing to enter the retail cannabis market for non-medical, recreational use across Canada as soon as such operations were legal. They had engaged an experienced retail partner from the United States as part of its Canadian retail operations.

THE FEDERAL GOVERNMENT OF CANADA

This is the responsible government entity to enact legislation that would make the personal use of cannabis products, including but not limited to cannabis flower, oil, seeds, and edibles, legal in Canada.

THE PROVINCIAL GOVERNMENT OF ALBERTA

The provincial government had developed the Alberta Cannabis Framework. And it had introduced and passed Bill 26: An Act to Control and Regulate Cannabis that gives the Alberta Gaming and Liquor Commission (AGLC) the authority for oversight, compliance and retail licensing of cannabis. The Act enables online sale, and creates restrictions on youth possession and public consumption.

MUNICIPAL GOVERNMENTS

There are 352 municipalities in Alberta that are in various states of readiness to move forward on local by-laws and regulations related to legal retail sales of cannabis products.

As we are based in Alberta, we have provided the environmental scan for one of the possible ten provinces and two territories, and it includes the municipalities recognized by the provincial government. We were also asked to look into British Columbia, Saskatchewan, Manitoba, and Ontario. The magnitude of the challenge was not lost on us.

We were inspired to look at the problem as an inverted pyramid. There were a series of legislative and policy events at each of the federal, provincial, and municipal government levels that needed to occur prior to the commencement of retail sales of cannabis products for personal recreational use. At each subsequent level, there was a host of process steps that had to be completed. Further, each level of government needed clarity from the level(s) above it to complete its work. Consequently, the federal government legislation, regulations, and other provisions would need to be completed before the provincial government completed all of their requirements, and as a result, municipalities were lagging behind in regulation and policy approvals. This resulted in many municipalities not being ready to approve retail outlets in concert with the official federal legalization date and provincial approvals.

We had anticipated that municipal regulations (by-laws, land-use, separation distances, consultation requirements, and other operating factors) would vary by municipality, from an all-out exclusion of retail sales to limited early access. These local operating factors would evolve over time, but at the outset it was expected that municipalities would proceed cautiously and slowly. Our approach to the problem and our subsequent research and analysis has proven to be the right one to take from the onset.

Core Tasks

In our initial proposal brief, we partitioned our projected work into three core tasks, which we could work on separately or together depending on local, provincial, and federal regulatory progress. It is important to bear in mind this path had not been trodden in Canada or any other G8 country, for that matter, and much of what we were planning to do had not been previously identified nor mapped. We were going in blind, but so was everyone else. Thus, we formulated our strategic plan and took actions as follows:

DEVELOP AND POSITION THE OPPORTUNITY

  • Research and develop public/government relations strategies and establish contacts with federal, provincial, and municipal governments to achieve a full understanding of the regulatory requirements in each of the primary retail market municipalities, provincial regulations and regulators, and federal policy impacts to the business case.
  • Monitor government initiatives, local media, business media, and cannabis-related media sources, to understand the current and evolving cannabis retail market trends, regulatory initiatives, and operating environment. This was part of our larger environmental scan that we periodically updated to help ensure the best intelligence was available for action.
  • Attend conferences, public events, municipal events and anything else related to cannabis retail to further understand the overall operating environment.

BUILD REGULATORY AND PUBLIC ACCEPTANCE

  • Support our client and partners in working through the regulatory, permitting, and approval process established by federal, provincial, and municipal legislation or regulation.
  • Work with our client and partners (retail, legal, and other) to develop and execute public government outreach initiatives to combat opposition and to smooth the regulatory road for retail operations.
  • Foster or conduct public awareness initiatives that support the application for retail licensing. This could include company-initiated outreach efforts in response to federal, provincial, or municipal requirements, hearings or the like.

BEGIN RETAIL OPERATION AND EXPANSION PLANNING

  • Support the efforts of the new retail outlets to develop brand awareness and acceptance and build on the good will established in the initial retail markets to increase market penetration and expand to other markets.
  • Use the successful strategies and tactics for the initial establishment of retail outlets and tailor them to meet local priorities or requirements in municipal areas outside of the major centres.
  • Tailor the work to the size and scope of the retail expansion initiatives.

As mentioned above, much of the research, analysis, strategic planning, and execution happened over months in varying order and tasks overlapped each other depending on the circumstances. And client requests for information, clarity, or additional intelligence would take us off in a different direction than otherwise planned, with often unforeseen results.

In one such instance, a rumour being circulated among a few less-than- scrupulous commercial realtors, if true, could have inflicted a substantial financial hardship on our client. In a panic, our client asked us to confirm or put to rest the industry gossip. Within the hour, we had proven the rumour to be unfound, which assured our client, and cemented our long-term relationship with them. It was a good day for our team.

Conclusion

Our inauspicious venture into the once-illegal world of cannabis in Canada has, ironically, proven to be the auspicious beginnings of Axxess Point Inc. The past twelve months have offered us one learning experience after another. What we didn’t expect was that the advantage of working in an otherwise unknown environment would be that we could be adventurous and daring in our work and delve into places beyond our imagination.

Our foray into this otherwise foreign territory has also brought us new and exciting word-of-mouth interest from companies in the fields of clean energy and telecommunications. Cannabis legalization in Canada has proven to be a blessing in disguise for our company. Who would have known?

The final irony was that a year ago we would not have been able to tell anyone the difference between CBD (Cannabidiol) and THC (Tetrahydro- cannabinol). Today, we feel comfortable writing about research, strategic planning, and cannabis in the same article. Such is the wonderful life of the information professional. We can’t wait to see what 2019 brings for Axxess Point Inc.

Originally published in AIIP Connections (Dec 2018), p. 8-10