First Nation-owned cannabis retailers in Sask. now exempt from SLGA permits

A recent regulatory amendment now allows First Nations to operate on-reserve cannabis stores without a permit from the Saskatchewan Liquor and Gaming Authority (SLGA). However, some First Nations do not think it will change the way current shops already operate.

The Government of Saskatchewan amended the cannabis act to exempt on-reserve cannabis stores from needing an SLGA permit provided that the First Nation establishes its own regulatory framework in agreement with the province.

It is an effort to establish a “level playing field,” according to government officials.

“First Nations must establish a cannabis regulatory framework consistent with federal and provincial legislation, establish a cannabis authority, and enter into an agreement with SLGA before they can begin regulating cannabis retail under the framework,” the government said in a statement.

“Once established, they will have access to federally regulated cannabis products to sell in cannabis retail stores regulated by the First Nation.”

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Pheasant Rump Nakota First Nation has been operating its own cannabis dispensary, Buds and Blossoms Cannabis Co., for three years.

Chief Ira McArthur said their dispensary, along with other First Nations-owned retailers, strive to meet or exceed the provincial standards for cannabis regulations including product safety, testing and packaging.

“For myself, I really don’t think it makes any difference. I don’t believe the province has the right or the jurisdiction to allow us to do anything on our First Nations,” McArthur said, adding all First Nation dispensaries follow the age limit and ID regulations in their shops.

McArthur said it has been a learning experience since opening the cannabis store and regulations have changed as the years have passed.

“As with any new initiative you’re always learning. You’re always looking for ways to do it better, to do it safer and to do it more efficient,” he said.

McArthur added that Pheasant Rump is in conversations with other First Nations about establishing an Indigenous regulatory body that would “help assist and provide some confidence and reassurance around the products” sold in on-reserve dispensaries.

The Saskatchewan government did not say how many First Nations it has spoken to, nor if any were establishing their own set of regulations in agreement with the province. However, government officials said they “engaged with several First Nations on approaches to participate in the legal market and this does not represent a change in government’s approach to unlicensed stores.”

“A key component of an agreement with SLGA under this framework is that all businesses operating within the province will be subject to substantially the same set of rules governing their operations, establishing a level playing field for cannabis retailers across the province,” according to the statement.

 

“This represents a way forward that enables First Nations-owned businesses to fully participate in the economic opportunities of the cannabis retail market. First Nations that prefer to operate under the provincially regulated framework will continue to have that option.”

Jason Childs, an associate professor at the University of Regina, studies the economics of cannabis. He said a “legal gray area” is what allows on-reserve cannabis stores to operate without permits.

“This whole jurisdictional mess really arises out of the Federal Cannabis Act,” Childs said.

“There is no mention of reserves and there is only one mention of Indigenous.”

He said the provincial cannabis act is just as unclear about who has authority over First Nations cannabis retailers. As a result, he said the SLGA has not enforced provincial cannabis regulations on reserves.

Childs said if First Nations opt into an agreement with the province, they could self-enforce their regulations “depending on what the regulatory structure looks like that gets set up, if it ever gets set up.”

Childs is not convinced that the government’s amendment will entice First Nations stores to operate any differently.

“I don’t think this is going to change a whole lot on the ground,” he said.

“These stores exist, clearly they’re profitable because they are staying open and why change what isn’t broken from their perspective?”

Childs said some on-reserve dispensaries likely have lower “compliance costs,” which makes things cheaper for them. However, he said that is not too big of a concern for licensed shops when it comes to competition.

“There are not that many (on-reserve stores) as I understand it,” Childs said.

“I don’t see those driving the outcomes in this industry. It’s the number of retailers in urban centres, like Saskatoon and Regina, and those licensed competitors are what’s driving this market right now.”