Ford government set to privatize cannabis retail in Ontario

Reports of a legislative overhaul leading to the privatization of cannabis retail have rocked Ontario, leaving investors speculating, entrepreneurs salivating, and Ontario residents downright confused.

In a dramatic shift away from the previous model of exclusively government dispensaries, the Globe & Mail reported through an unnamed government source that private retailers will now be replacing the previously planned Ontario Cannabis Store (OCS) outlets. The OCS is a subsidiary of the Liquor Control Board of Ontario (LCBO). The switch puts a halt to the province’s expected monopoly on the cannabis market.

The Conservatives are anticipated to announce the move sometime next week.

Deepak Anand, VP of business development and government relations at Cannabis Compliance Inc. announced on Twitter that the official word would come on Tuesday, July 31.

Breaking: Ontario to make announcement on Tuesday 31 July 2018: Private #Cannabis Retail outlets coming across Ontario
OCS to be Buyer and Wholesaler for the Province. https://t.co/DE7Ze6Khhs

— Deepak Anand (@_deepakanand) July 26, 2018

Under Kathleen Wynne’s Liberals, the Ontario government had planned to open 40 OCS stores this year, and a total of 150 stores by 2020. It is unknown how many private retail locations will be licensed by the province, if there will be a limit to the number of licenses issued, or what the application process might entail.

The move to privatize isn’t a total surprise, as Ford touted his plans for private sales during the campaign in March.

See also

• Ontario's cannabis distribution model remains uncertain under Ford government
• Ford government remains silent on Ontario's cannabis distribution model
• This is where Toronto's first Ontario Cannabis Store will be

LCBO rep Nicole told Daily Hive on Monday that “the OCS continues to prepare for retail sales when cannabis becomes legal this fall,” after speculation about privatization reached a fever pitch this week when popular industry publication Marijuana Business Daily reported a freeze on leasing space for OCS outlets. The province had previously announced four OCS locations but has not announced any others since April.

According to the Globe, the provincial government would still be in charge of “the wholesale and distribution to stores,” as well as responsible for selling cannabis online.

With less than three months to go until legalization, the government will have to work quickly to ensure that the necessities are in place in time for October 17, the day the Cannabis Act comes into force. The new plan is said to resemble the Alberta model of sales, whereas under the Wynne government it had more closely resembled that of Quebec.

“The government has been working to launch a cannabis retail and distribution system to meet the federal legalization timeline of October 17,” Ministry of Finance spokesperson Scott Blodgett told Daily Hive in a July 24 email. “Ontario will be ready with a system in place that meets the objectives of protecting youth and eliminating the illegal market.”

More to come.

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