Even as provinces discuss opening up direct trade of some alcohol products across Canada, cannabis sales remain under the tight control of provincial authorities.
Most recently, nine provinces and one territory signed a memorandum of understanding to allow direct-to-consumer alcoholic beverage sales with other participating Canadian jurisdictions. Only Newfoundland, Nunavut, and Northwest Territories have not yet signed on. The plan is expected to unfold fully by mid-2026.
The move, while part of a more long-standing effort, has gained considerable headwinds in the wake of recent efforts in Canada to increase domestic and international trade options following US President Donald Trump’s efforts at stoking a trade war with Canada.
But while the provincial rules around alcohol sales are beginning to loosen, the provinces’ grip on their respective jurisdictions’ cannabis sales remains as tight as ever, despite being managed by the same or similar provincial agencies.
Like alcohol, provinces and territories have control over the distribution and sales of cannabis within their borders. Agencies like the Alcohol and Gaming Commission of Ontario (AGCO), the Alberta Gaming, Liquor and Cannabis (AGLC), and British Columbia’s Liquor Distribution Branch (LDB) oversee both of these products, along with others, in a similar fashion.
Similarly, in 2024, British Columbia and Alberta signed an agreement allowing B.C. wineries to ship their products directly to Alberta consumers. Saskatchewan and British Columbia have in the past allowed a limited form of direct-to-consumer sales and shipping of wine and craft spirits from producers in the other province, as well. Manitoba is the only province that has long allowed these types of sales entirely.
Such jurisdictional authority around alcohol sales has been embedded within Canadian law since Confederation, and is reflected in how the federal cannabis rules share similar authorities with procedures around cannabis production, distribution, and sales. While the federal government primarily regulates the manufacturing of alcohol or cannabis products, the distribution and sales of those products are largely controlled by the provinces. A 2012 court case helped solidify that control.
As such, the only cross-provincial sales for cannabis are through the federally-regulated medical cannabis program, where those with authorization from a doctor can purchase directly from cannabis producers and have that product shipped to their home from anywhere in Canada.
When the federal Cannabis Act and Cannabis Regulations were written, a caveat was created that said the residents of any province that did not have a distribution and sales system in place by the beginning of cannabis legalization would be able to purchase cannabis in a similar method. This did not come to bear as each province put such systems in place in time.
The economic benefit of these kinds of cross-provincial sales is unknown, but in 2019, then-Federal Minister of Intergovernmental and Northern Affairs and Internal Trade Dominic LeBlanc said that “removing barriers to trade between provinces and territories fosters economic growth, reduces the regulatory burden on our small and medium-sized businesses, and creates good, middle-class jobs across the country.”
Such changes to provincial cannabis rules could have similar benefits, with cannabis being a comparable sector to alcohol in terms of GDP.
It would also likely provide more opportunities for smaller producers, who sometimes struggle to access their own provincial markets due to the complexity of provincial approval, onboarding, and sales. If those same producers could bypass such a process and ship directly to consumers across Canada, it could be a lifeline to struggling businesses.
So why the focus on liberating alcohol sales but not cannabis? For one, it’s likely due to the popularity of alcohol compared to cannabis among consumers and the general voting public. Opening up alcohol sales will be popular among voters, with little pushback. But the pushback to doing so for cannabis is likely to be more pronounced, given the continuing presence of stigma and good old-fashioned reefer madness at every level of government.
So cannabis remains the red-headed stepchild, at least for now, as provinces continue to rake in the majority of profits from distribution and excise tax.
