Shifts in Ontario’s Upcoming Legal Cannabis Market

byhellomd3 minutes

After months of investigation and planning by former Ontario Premier Kathleen Wynne’s Liberal government, newly elected Progressive Conservative Premier Doug Ford is shaking things up.

Wynne had planned to give the Liquor Corporation Board of Ontario (LCBO) a monopoly over the retail of recreational cannabis in the province. But now, thanks to Ford, Ontario will follow a private sales model like ones adopted by other provinces including Alberta, Saskatchewan and Manitoba.

This means the government will still operate online marijuana sales in Ontario, but brick-and-mortar cannabis stores will be privately run—though the government’s Ontario Cannabis Store (OCS) will be the marijuana wholesaler to those businesses.

Cannabis Stores in Ontario: A Move From the Public to Private Sphere

Toronto-based cannabis lawyer and advocate John Lloyd, who represents dispensaries and cannabis activists, has called the privatization of the recreational marijuana market a win. He hopes that Ford’s decision will mean that dispensaries that have been operating as illicit market businesses can make a move towards the legal recreational cannabis marketplace.

However, there’s still a major possibility that only large businesses such as Shoppers Drug Mart and certain grocery store chains will receive licences from the provincial government. Lloyd argues that licensing existing dispensaries instead of letting large businesses monopolize the cannabis market will save the Ontario government billions of dollars and undoubtedly strengthen the province’s economy.

Despite the potentially welcome changes for small businesses, recreational marijuana consumers may be disappointed to learn that Ontario won’t open any cannabis storefronts until at least April 2019.

Though cannabis will be available online through a government-operated online store when legalization starts in October, the change in Ontario’s provincial plan for recreational cannabis sales has led to serious delays in rolling out a plan for physical cannabis stores.

Concerns With Private Sector Marijuana Sales

While many cannabis advocates and entrepreneurs applaud the provincial government’s decision to privatize recreational cannabis sales, some scholars and politicians are concerned. They’re worried about possible consequences to public health and how this new system will be enforced.

Robert Schwartz, a University of Toronto professor focusing on public health, says that the previous Liberal government’s retail plan was less risky than that of the current Progressive Conservative government.

Schwartz is apprehensive: A private business’s main motivation is profit, he says. And with that sole goal, private marijuana vendors may not be so careful about following regulation and enforcement standards.

Andrea Horwath, leader of the provincial New Democratic Party and John Fraser, Interim Liberal Leader, are also both opposed to the private model. Regarding cannabis distribution in Ontario, Horwath has been quoted as saying, “LCBO staff have the experience and training to ensure socially responsible (cannabis) access. The model selected by the government needs to push the criminal element out of the picture.” Fraser is worried that enforcement problems that may lead to a complex change from the original plans.


Marijuana Legalization News Throughout Canada

Elsewhere in Canada, Manitoba’s provincial government has announced its residents won’t have to pay a provincial sales tax (PST) on legal cannabis. However, the province has put a 6% social responsibility fee on the annual revenue of each legal cannabis seller.

From an industrial perspective, investment dollars are pouring into the development of recreational cannabis products across Canada. Last week, Constellation Brands announced that they’d invested $5 billion into licensed producer (LP) Canopy Growth, in an effort to further develop and produce cannabis-infused beer.

This news item follows in the footsteps of a Aurora Cannabis’ $3.2 billion acquisition of LP MedReleaf in May of this year.

Even with recreational cannabis set to be legalized in Canada in less than two months, news about how consumers will be able to legally purchase and consume the plant continues to evolve. With Ontario's newly elected government uprooting the Liberal party's previously initiated policies, the remaining steps in Canada's marijuana legalization process are bound to be interesting.

Photo credit: MURUCUTU