November 6, 2019 – In the 2019 Fall Economic Statement, the Ontario Government announced its plan to lift the cap on the number of retail stores in Ontario and open up the allocation of retail licences to match demand. This fall, the number of legal cannabis retail stores in Ontario is increasing from 25 to 75, as the supply of cannabis has leveled out and demand for new products has grown. The government also announced its plan to amend legislation to facilitate the establishment of retail stores by licensed producers at their production sites. In addition, they are proposing to allow authorized retail stores to sell their cannabis products online or over the phone. This will allow customers to pre-order their products and pick them up in store (i.e. the ‘click and collect’ method) which will help ensure that customers get the specific products they are looking for without having to wait in long line ups at physical storefronts. These proposed changes are in an attempt to make the legal market more consumer-friendly and convenient by increasing access to safe and legal products.
Even though it’s been over a year since cannabis legalization, many licensed producers are still struggling with achieving profitability, getting their products onto store shelves and competing with the illicit market. The plan to facilitate the establishment of a retail store by licensed producers at their production site is one that has been long awaited. Licensed producers have lobbied the provincial governments to allow these types of “farm-gate” sales since cannabis legalization back in October 2018. By allowing customers to buy cannabis on-site, licensed producers hope to provide a unique and educational experience, similar to what occurs on-site at breweries and distilleries. This kind of opportunity also has the potential to increase tourism in Ontario and open up a significant revenue stream for licensed producers. These additional on-site stores will also further increase consumer access to legal retail stores and better equip the industry to replace the illicit market. These changes will not only improve access to safe products, which undergo rigorous testing prior to sale, but access to credible product education.
The Ontario government has yet to provide further detail on the exact timeline and when these changes will take effect. There is much more to be done before the illicit market is completely displaced by a fully functional and efficient legal marketplace for cannabis sales in Ontario, however the steps that have been taken by the Ontario government are certainly in the right direction. The government has demonstrated that it is listening to feedback from retailers and licensed producers and that it values the contribution this industry makes to the Ontario economy.
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