Carting cannabis

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This article was published 12/07/2022 (1361 days ago), so information in it may no longer be current.

Winnipeg’s newest delivery worker isn’t bringing pizza or mail — they’re carting cannabis.

The Half Circle is the first Manitoban business green-lit to deliver a variety of weed companies’ products.

“I fundamentally believe that this is going to be well received,” said Josh Giesbrecht, The Half Circle’s CEO. “It’s compliant, it’s more convenient, it helps fight off the black market, and all those things are check boxes that every legal jurisdiction wants to see.”

He plans to fully launch the company in September. Then, customers can scroll through The Half Circle’s app or website, order a local merchant’s products and get the goods within a half hour (on average), Giesbrecht said.

He calls it the first “on demand” service of its kind in Canada.

“I think in Manitoba, quite often, (we) don’t see ourselves as being innovators,” Giesbrecht said. “On the on-demand economy, we definitely have been.”

SkipTheDishes, a Winnipeg-headquartered food delivery giant, served as The Half Circle’s inspiration.

Giesbrecht has been toying with the concept of cannabis delivery since February of 2021.

He was applying for a pot shop licence — he owns the city’s three Uncle Sam’s Cannabis stores — and said he noticed there was room for a delivery service.

His business partners headed now-shuttered TappCar and Bunnii, two start-ups offering rides and luxury items.

“I learned a lot, even though I wasn’t involved in the day-to-day of TappCar or Bunnii,” Giesbrecht, 31, said, noting he wasn’t legally an owner of either.

The Half Circle’s revenue model needed rejigging after watching the former two companies’ incomes plummet through the pandemic and inflation, Giesbrecht said.

“We can’t price ourselves too low,” he said. “God forbid gas prices keep going up.”

Customers will pay a $1.99 delivery fee per order, plus 70 cents per kilometre travelled, Giesbrecht said. A service fee of $3.99 will be tacked on.

Retailers selling their goods through The Half Circle won’t pay a subscription fee. Giesbrecht said he’s working out the technology fee, but it’ll likely average at 20 per cent of each transaction.

“They only pay if (the app is) actually used,” Giesbrecht said, adding he thinks the rates are competitive to food delivery models’.

The company’s start-up costs land around the $1 million mark, he said.

He’s spending the summer adding businesses to The Half Circle. Parrot Pot Shop, a Selkirk Avenue locale, was the first signer (aside from Uncle Sam’s).

“We’re really focused on those local independents first,” Giesbrecht said. “Then, we’ll start focusing on the bigger retailer chains.”

He couldn’t make deals with entrepreneurs while The Half Circle’s licence was pending.

He applied for a newly created Liquor, Gaming and Cannabis Authority of Manitoba delivery licence last February.

Before then, he’d launched The Half Circle on a remote licence, allowing his staff to deliver Uncle Sam’s Cannabis products.

The new licence — which Giesbrecht received mid-June — lets holders deliver others’ legal cannabis and/or liquor within Manitoba.

“No consumer has had the ability to get (legal cannabis) on demand yet,” Giesbrecht said. “They still go through black market connections to get that experience.”

Manitoban weed retailers have been able to deliver their own products since legalization in 2018. They could also contract third-party delivery companies (like Pineapple Express), but the onus was on them to ensure deliveries complied with their own licence’s terms and conditions.

The new licence “ensures that the LGCA has a regulatory relationship with the third-party delivery company,” Lisa Hansen, the authority’s communications analyst, wrote in an email.

The LGCA will only give a delivery licence to companies who meet their certification requirements.

“There were no other provinces to look to for examples when the LGCA was developing its delivery licence regulatory framework for Manitoba,” Hansen wrote.

The authority isn’t aware of similar models in any other part of Canada, she said.

As of Monday, 16 companies had applied for the licence to deliver cannabis and/or alcohol. Three had full licences, including The Half Circle (the first for cannabis delivery).

Another nine companies are operating on conditional licences, Hansen wrote.

The LGCA does not have a cap on how many delivery licences it can issue.

“Being the first doesn’t always guarantee that you’re going to be the most successful,” Giesbrecht noted. “It’s opened up a door to a whole new side of the industry.”

Just 11 per cent of cannabis users reported buying legal weed online, according to a 2021 Statistics Canada report.

Still, Giesbrecht believes it’s the future.

“Most people are used to getting their cannabis to the door immediately,” he said. “That’s how they got it through the black market.”

He’s planning to hire two or three drivers for The Half Circle. Once about 18 stores sign on, he’ll look at a contract driver pool, he said.

Deliveries will remain within Winnipeg’s bounds for now, he said.

SitBak, which the Free Press reported on in February, is waiting on its licence to be finalized, according to co-founder Dustin Roitelman.

“We’re hoping in the next couple weeks we will have that in our back pocket for use,” he wrote in an email.

It will then take a couple months for the delivery service to start up, Roitelman said.

The market will likely be competitive — just like the cannabis retail industry, with its plethora of stores, Giesbrecht said.

“We’re going to stay focused on what we’re doing,” Giesbrecht said. “(We’re) moving as fast as we can and doing the best job that we can.”

gabrielle.piche@winnipegfreepress.com