July 19, 2018 MJ Shareholders
This article was originally published by The Conversation.
Cannabis retailing isn’t Doug Ford’s top priority as Ontario’s new premier. But it’s on his agenda. As he said in June: “The stated goal … is to ensure that we can tackle the illegal market.” To pursue that goal, Ontario and other provinces with only public sector cannabis retailing have a lot to do before sales begin Oct. 17.
One of Ford’s first meetings this month might be with the Ontario Cannabis Retail Corporation (OCRC). Back in December, Ontario became the first province to pass enabling legislation. But it’s fallen behind in implementation.
One problem is that the OCRC hasn’t confirmed any cannabis to sell. It asked growers to submit offers in April, but hasn’t announced any contracts yet.
Similarly, Nova Scotia is apparently still considering growers’ proposals.
Stores and staff preparations
OCRC’s retail preparations also seem stalled. It announced four store addresses in April, but since then hasn’t posted any updates about them or the other 36 planned locations. A reporter who visited the Toronto site in June found just a papered-over storefront.
OCRC also lacks employees, aside from a president. Currently, staff from its Liquor Control Board of Ontario (LCBO) parent company are temporarily assigned there.
New Brunswick is leading on this. In June, it showed reporters one of 11 finished outlets. Nine more are under renovation.
Improve convenience through agents
Ford also should discuss store numbers with OCRC. New Brunswick’s 20 stores will serve its 760,000 residents. By comparison, Ontario’s planning only 40 this year to serve 14 million people. Despite almost 20 times the population, it’ll have only double the stores.
Legal cannabis will be more competitive with illicit pot if stores are conveniently common. Ontario needs far more than 40, or even the 150 planned by 2020. One reporter estimates Toronto alone currently has more than 100 illegal shops.
Ford should add at least some private retailers, as five other provinces are doing. Ontario’s current law doesn’t permit independent cannabis stores. But it does allow OCRC to sub-contract to outside agents.
The LCBO does this with alcohol. Its 212 agency retailers serve sparsely populated areas.
Why not have OCRC contract with licensed cannabis producers as its agents? They’re already vetted by Health Canada and clearly understand cannabis. If Ontario’s 59 licensed growers each opened one on-site shop, the provincial store count would more than double.
For large corporate growers, these would basically be factory outlet stores. Canopy Growth already wants a “greenhouse outlet” for its Smith Falls grow-op. (Its building there, a former chocolate factory, had a popular discount outlet.)
Smaller growers might attract tourists by modelling themselves on microbrewers and vineyards. That could help such micro-cultivators survive. They’ll have trouble supplying large retailers like OCRC that need cannabis by the truckload.
More private sector?
Other retailing changes would require amending Ontario’s legislation. Should independent private sector retailers operate alongside OCRC? That’s British Columbia’s model and the Ontario Green Party’s preference. The Association of Municipalities of Ontario particularly wants small businesses let into cannabis-selling.
It would also fit Ford’s election platform regarding alcohol. His party promised to keep the LCBO, but expand beer and wine sales into more private-sector stores.
Or should the government go further and limit OCRC to online sales, leaving all other retailing to private businesses? That’s the prairie provinces’ approach. Ford has a stated preference for free markets over government monopolies. This option may become attractive if OCRC doesn’t make a good first impression.
Private-sector cannabis smoking lounges are another possibility. They’d particularly attract people living in non-smoking apartments. But our society has spent decades cutting back tobacco smoking. Cannabis lounges would seem a step backwards.
Ford should certainly change the law requiring cannabis to be kept out of customers’ sight. That’s how liquor stores treated alcohol in 1928.
Consider: Ontario cannabis stores exist to sell cannabis. They’ll feature computerized cannabis databases and trained cannabis advisers. But they’re seemingly forced to pretend such products don’t physically exist, nudge-nudge, wink-wink. Virtual cannabis, perhaps?
(Hopefully the computers will indicate which products are in stock. Customers may otherwise find themselves reliving a Monty Python sketch.)
By comparison, New Brunswick’s stores display products in glass-covered cases. Nova Scotia will display them behind the counter. Its largest store will even allow customers to smell samples.
Governments understandably don’t want to be seen promoting cannabis use. But legal cannabis products are already handicapped by federal packaging regulations. And legal retailers must compete with existing illegal shops, some of which provide great shopping experiences. Can’t legal vendors at least display their wares?
Top photo courtesy of Adobe Stock
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