Winnipeg Weed Stores’ Loyalty-Points Program May Not be Legal, Lawyers Say

Article by Solomon Israel, Leaf News

City weed stores' loyalty-points program may not be legal, lawyers say By: Solomon Israel On the Garden Variety website, 1000 loyalty points are worth $5 off a cannabis purchase. ( Daniel Crump / Winnipeg Free press. Staff at work at the Garden Variety cannabis dispensary on Ellice Avenue. April 11, 2019.

Legal experts are questioning whether a customer loyalty program offered by a Manitoba cannabis retailer violates federal law, which places strict limits on inducements to buy marijuana.

Garden Variety operates two cannabis stores in Winnipeg. The company lets registered customers earn points on cannabis purchases, which can be redeemed for discounts on cannabis, cannabis accessories and shipping charges. Customers can also earn points for reviewing products on the Garden Variety website, or for celebrating a birthday, sharing posts about Garden Variety on social media or referring friends to create accounts.

“We want to do something that’s going to create an exceptional experience,” said Garden Variety regional manager Sheilagh Dohie. “Our tagline is ‘anything but ordinary,’ and I think that this loyalty program really establishes that.”

Federal cannabis regulator Health Canada reviewed a general description of the loyalty program, and said it couldn’t comment on the specific situation. But “in general, rewards programs are not permitted under the Cannabis Act,” department spokesman Geoffroy Legault-Thivierge wrote in a statement.

Garden Variety believes the rewards program is legal because it doesn’t give away cannabis or accessories.

“Loyalty members must always provide monetary consideration in exchange for cannabis and cannabis accessories,” the company said in a statement.

The Cannabis Act does indeed prohibit offering free cannabis or accessories as an inducement. But it also prohibits marijuana retailers from offering “any thing that is not cannabis or a cannabis accessory, including a right to participate in a game, draw, lottery or contest, if it is provided or offered to be provided as an inducement for the purchase of cannabis or a cannabis accessory.”

That legal language doesn’t explicitly mention loyalty programs, but lawyer Matt Maurer thinks Garden Variety’s rewards initiative could be construed as a violation of the law.

Read the full article here.

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