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Ford Government Blamed for Disappointing Cannabis Sales

Canopy Growth
Canopy Growth

Canopy, Aurora, Organigram Cite Lack of Retail Outlets – LPC

Aurora, Canopy, and Organigram all blame Ontario's retail cannabis policies for disappointing cannabis sales. Two companies reporting this week, Canopy Growth and Aurora Cannabis, both blame lack of retail outlets in Ontario for disappointing cannabis sales. Canopy CEO Mark Zekulin blamed the Ontario government directly for not opening up the legal retail market.

“The fact of the matter is there are not enough stores, and enough supply,” Zekulin said. “The Ontario government has made it clear their desire to have more stores, but why wait three months? Fix it now.”

Aurora was indirect about it, citing only the “slow pace” of retail store licensing. However, given the country’s most populous province only has 24 or 25 open stores, the implication was clear.

Organigram Holdings showed a 34 per cent decline in revenues. It too stated lack of retail stores in Ontario contributed to disappointing cannabis sales.

Canopy’s net revenue dropped 15 per cent while Aurora’s dropped 24 per cent. Canopy also took a writedown of over $15 million for overstock; Aurora previously dumped $20 million of cannabis.

Disappointing Cannabis Sales Solely Ontario’s Fault? – LPC

Blaming the Ford government for disappointing cannabis sales is a bit of an oversimplification. Cannabis investor optimism is definitely at a low point. But a boom/bust cycle is not uncommon in a brand new industry. Besides, analysts have been predicting cannabis oversupply in Canada for months.

However, there is evidence Ontario’s policies have led to overall disappointing cannabis sales. From the beginning, the Doug Ford’s PC government has been vocally pro-cannabis, but seemingly anti-cannabis in its actions. During the 2018 Ontario election, Ford promised privatization instead of the Liberal’s government-run model. For months though, the only legal retail outlet was the government-run online Ontario Cannabis Store (OCS). That was plagued with problems including privacy concerns to out-and-out selling of customer data. Then, 25 retail licences were awarded for 14 million people, one of which may still not be open. Over a year after legalization, that number stands today.

Once the first 18 stores opened, legal cannabis sales in Ontario doubled suggesting that people did prefer bricks and mortar. Also interesting is that Canopy noted an increase in sales in Alberta, which has 300 cannabis retailers.

Clearly, Canada in general and Ontario in particular can use more retail cannabis outlets. The question is, would fixing disappointing cannabis sales in Ontario really fix the cannabis industry? And will Ontario change its retail cannabis policies in any case?

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.

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