‘One of those death-by-1,000-cuts situations’ Province bumps up wholesale markup on cannabis, leaving independent shops fuming amid intense competition By: Gabrielle Piché Posted: 6:45 PM CDT Wednesday, Jul. 2, 2025 Last Modified: 7:04 PM CDT Wednesday, Jul. 2, 2025 Updates

Shira Bellan faced a question: pass a new tax hike on to customers or take a revenue loss?

Character Co. is one of at least 235 cannabis shops currently open in Manitoba. Since product legalization in 2018, the retail market has become oversaturated, from Bellan and fellow entrepreneurs’ view.

“It kind of blows our minds that stores are still opening,” Bellan said. “If you look on any corner, there’s probably three to four stores.”

Seventy-three cannabis shops opened between April 1, 2023, and June 30, 2025, per Manitoba Liquor & Lotteries Corp. tracking. Just 17 stores closed during that time.

Bellan, however, said she has noticed independent sites closing in recent months. They’re competing with national chain retailers and black/grey market sellers that are accessible online.

A new tax hike isn’t helping, Bellan shared.

“I think that’s absolutely insane if the government wants to be in any competition with the grey and black market,” she said.

Cannabis shops must purchase their weed through Manitoba Liquor & Lotteries. The wholesale product comes with a markup; that markup was bumped on June 9 to 11 per cent from nine per cent.

Character Co. is passing the increase, or part, on to its customers. It has a loyal community around Corydon Avenue, Bellan said, adding the Winnipeg company strives for quality products: “You get what you pay for.”

Still, dealers online and chains might sell cannabis products at a fraction of the price. Taxes make business more difficult, Bellan and another sector entrepreneur relayed.

“Larger businesses … can absorb these costs a lot easier.”–Chris Britton

“Larger businesses … can absorb these costs a lot easier,” said Chris Britton, owner of Black Tie Cannabis in Winnipeg.

His operation started a decade ago by selling vapes. It added cannabis once the drug was legalized.

Now, he’s watching other companies take an alternate course — starting with cannabis and adding vape products to generate more sales. “They’ve had to do that to diversify their income,” Britton said.

But vape products have also undergone tax increases. Ottawa announced a 12 per cent hike last year; Manitoba doubled the levy.

“The additional charge with MLL is just another one of those death-by-1,000-cuts situations,” Britton said.

Black Tie Cannabis won’t pass the additional markup on to its customers. Taking the revenue loss is the result of a competitive environment, Britton explained.

The markup money helps small businesses, but it’s hard to remember amid the revenue loss, Britton added. The cash is funnelled towards social responsibility and law enforcement programs, like campaigns telling people to not drive high.

MLL allocated $12.7 million to “social responsibility” funding in 2023, and $13.3 million in 2024, an annual report shows.

An excise tax on cannabis is separate from the provincial markup.

“This adjustment brings us in line with most provinces,” said Glen Simard, minister responsible for Manitoba Liquor & Lotteries.

Manitoba’s markup is still lowest compared to other provinces, he said. It’s the first change to the rate since cannabis was legalized nationwide seven years ago.

Another change may be coming to the industry: the province is rethinking requiring window coverings at cannabis shops.

“It kind of blows our minds that stores are still opening.”–Shira Bellan

According to the Liquor, Gaming and Cannabis Authority of Manitoba: “The licensee must ensure that cannabis, cannabis accessories and promotional material displayed in an age-restricted cannabis store cannot be seen from outside the cannabis store.”

“We’re nowhere near making a decision on that now,” Simard said.

Officials are reviewing other provinces’ practices. Simard didn’t provide a timeline of when the review would conclude.

Forcing sector retailers to have opaque windows leaves staff and customers vulnerable, advocates say. Ontario and B.C. have in the past two years amended their rules to allow transparent windows on such businesses in an effort to deter crime.

For now, Bellan peeks her head out the door or checks security cameras to get a sense of what’s happening outside. “I feel like it’s a little bit of a security breach,” she said.

Britton agreed: “It’s just crazy that anybody could walk in here and lock the door behind them, and hold me or a staff (member) hostage.”

Stores that sell alcohol aren’t subject to the same restrictions, both noted. Liquor Marts also don’t face the same oversaturation, Bellan added.

Manitoba has no firm number of cannabis stores whereby it’ll stop issuing new licences, Simard confirmed. Retailers can’t surpass 15 per cent of the market in Manitoba.

gabrielle.piche@winnipegfreepress.com