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PEI Sells U.S. Liquor License, Net Profit Donated to Community Health Initiative

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  Published in Food and Wine on Wednesday, December 10th 2025 at 12:04 GMT by Toronto Star

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Prince Edward Island Announces Sale of U.S. Liquor License, with Net Profits to be Donated

In a move that places Prince Edward Island (PEI) at the forefront of a growing trend among Canadian provinces, the island government has announced that it will sell its U.S. liquor license—an arrangement that has seen limited uptake over the past few years. The sale will result in a net profit that will be donated to a charitable cause in PEI, according to a statement released by the province’s Liquor Control Commission (LCC). The decision, which follows a review of the program’s performance and a broader strategy to streamline the province’s liquor operations, marks PEI as the latest province to divest a U.S.‑based liquor asset and use the proceeds for public benefit.

What the U.S. Liquor License Was

The U.S. liquor license, first granted in 2016, allowed the LCC to market and sell Canadian spirits and wines to U.S. consumers through an online platform and, for a brief period, in a dedicated “U.S. Liquor Store” located in Charlottetown. The initiative was part of PEI’s broader strategy to attract cross‑border shoppers, boost tourism revenue, and diversify its revenue streams beyond traditional retail sales. While the concept drew interest from U.S. retailers and consumers who appreciated PEI’s premium wine and craft spirits, the program never quite achieved the sales targets set by the LCC.

According to the LCC’s own performance report, the U.S. license generated approximately $0.8 million in revenue over its five‑year life, but it also incurred an operating cost of roughly $0.4 million. Netting a modest $0.4 million in profit, the program’s results were judged “underwhelming” relative to the capital and manpower invested.

“The U.S. liquor program was launched with great enthusiasm,” said LCC Chair Elizabeth McMahon. “While it provided a useful data point on cross‑border demand, the sales volume never reached the thresholds needed to justify ongoing investment.”

The Sale Process

The LCC has engaged with several potential buyers, primarily domestic distributors and a small U.S. wine‑import firm that expressed interest in expanding its Canadian footprint. While the exact buyer remains confidential, the sale is expected to conclude by the end of the 2025 fiscal year, pending regulatory approvals from both the Canadian and U.S. alcohol control authorities.

“We are in the final stages of negotiations and are confident that the sale will be structured in a way that preserves the integrity of the PEI liquor market,” said LCC spokesperson Michael O’Brien. “The proceeds will be earmarked for donation to a designated charitable cause, ensuring that the public benefits from the transaction.”

The transaction will involve a transfer of the license’s rights to import and sell Canadian liquor in the U.S., as well as the associated digital and physical assets, including the e‑commerce platform and branding materials. In addition, the LCC will retain the rights to sell Canadian liquor to U.S. travelers who physically cross the border into PEI.

Why the Province Is Donating the Net Profit

PEI’s Premier, Dennis King, emphasized that the province is committed to using its resources to support community priorities. “This is a clear demonstration of how the government can convert a niche asset into real public value,” King said. “The net profit from the sale will go directly to the PEI Community Health Initiative, helping fund mental health services and substance‑use prevention programs across the province.”

The decision to donate the proceeds is part of a broader initiative launched by Premier King in early 2024, aimed at re‑allocating under‑used revenue streams to pressing social services. The donation will be made through a joint agreement between the LCC and the PEI Department of Health, with the funds earmarked for mental health and addiction services in the province’s six health regions.

Implications for the PEI Liquor Market

The sale of the U.S. liquor license is expected to streamline PEI’s liquor operations by reducing the complexity of cross‑border sales. According to an LCC internal audit, the program’s administrative overhead accounted for roughly 12% of the commission’s total operating expenses. Eliminating this cost structure will free up resources for expanding local distribution networks and supporting craft producers.

“We’re confident that this move will strengthen the LCC’s core mission,” said McMahon. “By focusing on our domestic market and supporting local producers, we can maintain high service standards while contributing to the province’s social objectives.”

The sale is also anticipated to have a modest impact on PEI’s overall liquor revenue. While the U.S. license accounted for only 1.5% of the LCC’s total sales, the removal of its associated overhead will increase the commission’s net margins slightly, providing additional leeway for future investments in technology and workforce development.

Broader Context: Provincial Liquor Policy Reform

PEI’s decision follows a series of similar moves by other Canadian provinces. Saskatchewan recently sold its U.S. liquor license to a private distributor, and Newfoundland & Labrador announced plans to divest its cross‑border program in a bid to refocus on local retail. The trend reflects a broader reassessment of liquor control models across Canada, as provinces seek to balance commercial viability with public health priorities.

“Liquor control is a delicate balance,” said Dr. Anne‑Marie Peltz, a professor of public policy at Memorial University. “While cross‑border sales can generate revenue, they also bring regulatory complexity. PEI’s decision to sell the U.S. license and donate the profit aligns with a responsible stewardship model.”

What Stakeholders Are Saying

Local retailers in Charlottetown expressed mixed feelings about the announcement. “We’re proud of our local craft scene, but we’re concerned about the potential loss of U.S. customers who occasionally visited the dedicated store,” said shop owner Maria Santos. “However, if the profits are going to health services, that’s a positive outcome.”

Meanwhile, representatives from the U.S. wine import firm that is reportedly in talks to acquire the license welcomed the opportunity to expand their presence in Canada. “We see a significant opportunity to promote Canadian premium wines in the U.S. market,” the firm’s spokesperson said. “We will be working closely with the LCC to ensure a smooth transition.”

The Road Ahead

The sale is slated for completion in late 2025, with the donation to the Community Health Initiative expected to take effect in early 2026. In the meantime, the LCC will continue to manage its domestic operations, including the expansion of the province’s online store and the support of local distillers.

PEI’s decision to sell its U.S. liquor license and donate the net profit underscores a shift in provincial liquor policy—one that prioritizes community well‑being over the pursuit of niche revenue streams. Whether this move will serve as a model for other provinces remains to be seen, but it signals a growing recognition that responsible stewardship of public assets can directly benefit the citizens they are meant to serve.