Cannabis Industry Eyes Ontario After Rumored Switch to Privately-Owned Pot Shops

Cannabis Industry Eyes Ontario After Rumored Switch to Privately-Owned Pot Shops

by Chris Moore
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NEWS
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The Ontario government previously decided to have only government-owned pot shops, but rumors that the newly-elected Premier will allow private stores is exciting the local cannabis industry.

Recreational cannabis sales will go live in Canada on October 17th, but the individual details of exactly how and where weed will be sold are down to each province's government — and the majority of these provinces are still scrambling to draft their regulations before the deadline hits. In Ontario, the country's largest province, privately-owned canna-businesses are rushing to secure retail locations, even though the local government has not yet released their final regulations.

Individual provinces have the right to determine whether pot can be legally sold through government-owned stores, privately-owned stores, or a mix of both. Last year, the Ontario government announced that they would keep the retail market completely under their control, creating a new agency called the Ontario Cannabis Retail Corporation with 40 retail locations and an online sales portal. But during this June's Parliamentary election, the Progressive Conservative Party beat out the Ontario Liberal Party, who previously held the majority in the province’s government.

Rumors have been spreading that new Premier Doug Ford has different plans for his province's cannabis industry than the previous government did, leading to an investment boom in Ontario. Although the province has not officially announced their new regulations, many industry insiders believe that the new government is planning to switch to either a fully privately-owned retail market, or a mix of private and government-owned stores.

"Within the industry, the rumblings have been going on for three weeks through very reliable sources that private retail would happen [in Ontario]," David Martyn, president of Starbuds Canada and Compass Cannabis Clinic, said to CBC News. "Ontario is a frenzy right now in terms of entrepreneurs, real estate developers — anybody within the cannabis infrastructure. The level of anticipation that's building up is massive right now."

"Initially, we heard this was going to be all private, I think we're now hearing this might be a mixed model, which is basically a mix of of public and private stores," Deepak Anand, vice president of government relations and business development at Cannabis Compliance Inc., said to CBC News. "The government seems to be changing its mind before making an announcement here, so we really don't know what's to come.”

The prospect of privately-owned stores in Ontario is an exciting opportunity for cannabis entrepreneurs, as there are an estimated 2 to 2.5 million adults in the province who are eager to buy legal weed. The Toronto Star reports that cannabis users prefer the idea of buying from private stores rather than the government, which is also boosting the anticipation for a private market in the province. This support is highly divided, however, with 90% of cannabis users in support of having a pot shop in their neighborhood, compared to only 40% of non-users.

Switching to a fully-private market could have its own potential downsides, though. Cannabis attorney Trina Fraser told the Ottawa Citizen that there is “no chance” that private pot stores would be ready to open their doors by October 17th. The province's new government still needs to draft their new regulations, creating a new licensing framework for private stores and potentially scrapping the previous regulations regarding government-owned stores.

Fraser added that “there have to be processes and policies and an actual department set up with people to be able to process those applications and inspect premises and grant licenses… There’s quite a bit to it.” After the licenses are granted, the new stores will also need to build out their new locations, hire staff, and stock their shelves — a tall order to be finished within 70 days. Still, it is unclear whether or not the province will even go fully private, as Alberta, Saskatchewan, Manitoba, and Newfoundland have decided — or to allow a mix of private and government stores, as British Columbia has chosen.


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Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.


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