Ontario Retail Cannabis Market (Finally) Opens Up
Province Starts Accepting Replies January 6 with New Stores Open in April – LPC
The Ontario cannabis retail market is finally opening up. The province announced it will do away with its controversial cannabis retail licence lottery.
The Alcohol and Gaming Commission of Ontario (AGCO) starts accepting operator licence applications on Jan. 6, 2020. Store authorization will come March 2, 2020 with new stores open in April, according to the Financial Post.
“In response to the federal government’s decision to legalize cannabis, our government is determined to open the cannabis market as responsibly as possible,” said Attorney General Doug Downey. “We have said all along that opening more legal stores is the most effective way to combat the illicit market, protect our kids and keep our communities safe. That is our number one priority.”
The Ontario retail cannabis market currently consists of 24 stores and the government-run online Ontario Cannabis Store (OSC). With a population of over 14 million, Ontario has the lowest number of cannabis retail stores per capita in the country.
Starting in April, approximately 20 stores per month will open. That’s similar to Alberta’s pace. Licensed producers (LPs) growing in Ontario will also be allowed to have a storefront at their premises – something most LPs have called for. Among other things, this will help encourage craft cannabis growers and cannabis tourism.
The Ontario Ford government signalled in November that it might be ready to take down cannabis retail barriers. That was after public calls from licensed producers (LPs) that lack of retail outlets, particularly in Ontario, has led to oversupply and financial losses. The Ontario Cannabis Policy Council also openly called for a system more like Alberta’s. Alberta cannabis retailers are seen as the gold standard in Canada with almost 300 stores.
What Does an Open Ontario Retail Cannabis Market Mean for LPs? – LPC
Despite the lowest number of stores, Ontario still sold the most cannabis of any province during the first year of legalization. Ontario accounted for $217 million or 24 per cent of national sales from October 2018 to September 2019. Alberta was next at $196 million.
In other words, an open Ontario retail cannabis market could mean a huge bonanza for LPs. Some analysts have already called for a cannabis bull market in 2020 – and that’s possible. Ontario’s population is roughly 3.5 times that of Alberta. That puts the Ontario cannabis retail market at roughly $700 million per year. That’s not much less than the entire Canadian market this year.
Any way you cut it, an open Ontario retail cannabis market will be a good thing.
This editorial content from the LPC News Team provides analysis, insight, and perspective on current news articles. To read the source article this commentary is based upon, please click on the link below.