With adult-use sales beginning in Canada Oct. 17, Ontario has apparently and suddenly switched its cannabis regulatory oversight to a licensed private retail business model.
The Globe and Mail first reported the news last week; the provincial government has not yet formally issued an announcement or any guidelines on this regulatory scheme. (Cannabis Dispensary will provide updates as province leaders announce details.)
The sharp pivot comes on the heels of Progressive Conservative Leader Doug Ford sweeping his party into provincial rule in June, displacing the Liberal party’s rule and the province’s plan to open 40 government-run cannabis retail dispensaries under the Liquor Control Board of Ontario (LCBO). Now, prospective business owners are keeping their eyes peeled for any impending announcement on retail licensing and regulations from the province.
The switch follows a series of leadership changes at the Ontario Cannabis Store (OCS) (the brand name for the province’s cannabis agency) and ongoing criticisms from the incoming Progressive Conservative party. “I’m private-sector,” Ford said earlier this summer. “I don’t believe government should stick their nose into everything.”
The provincial government will still control the wholesale and distribution links in the supply chain, according to the Globe and Mail’s reporting. And in a partnership signed earlier this year with Shopify, the OCS will operate online sales.
Earlier this year, the OCS identified four addresses for its future cannabis retail storefronts—in Toronto, Kingston, Guelph and Thunder Bay. It’s unclear how the provincial government will proceed with those properties.
In a recent conversation with Ottawa Morning, Ford said that he will “consult” with his caucus on how best to implement a free-market approach to cannabis in Ontario.
For now, the province awaits a more detailed explanation from Ford’s administration; all eyes are on Ontario. Canadian news reports intimated that additional news on this question may be coming this week.
“Until they do that, it’s really hard for us—even internally or externally—to do too much other than wait for the government to decide how they want to do it,” Alcanna CEO Jamie Burns told Cannabis Dispensary. “We can very quickly thereafter see how that fits into how we’re able to participate.”
Edmonton-based Alcanna, formerly known as Liquor Stores N.A., operates 229 retail liquor stores and has announced plans “to establish and launch a leading brand of cannabis retail outlets.” In May, the company received $34.6 million in an escrow release after Aurora Cannabis Inc. converted subscription receipts into common shares, claiming a 25-percent ownership stake in the retail company.
At the time of the conversion, Alcanna cited plans “to create, initially, some 50 retail cannabis stores in prime retail locations in western Canada.” Burns told CD that the Ontario elections in June piqued his company’s interest in the company’s most populous province.
“Until we get clarification as to exactly what kind of approach they might take in terms of private retail … there’s really not much we can do,” he said. “We’ve been scouting for sites since the election in June, just in anticipation of the potential [for private retail]. … Canada has a few really large landlords that have a lot of the commercial space in the major cities across the country, of which we’re big tenants … in the provinces we operate in, so we know them already and have been actively looking at things."
“The devil’s in the details in this stuff,” he added.
Depending on how Ontario’s next announcement manifests, a possible switch to private retail will surely alter the landscape of the Canadian cannabis market.
Other provinces that will allow private retail business include: Alberta, Saskatchewan, New Brunswick, Newfoundland and Labrador, Manitoba, British Columbia and New Brunswick.
“Commerce dictates customer experience, so the customers will get to vote for what kind of experience they want with their pocketbooks,” Peter Horvath, chief executive officer of privately held Green Growth Brands Ltd., told Bloomberg.
Top photo courtesy of Adobe Stock
