Ontario Cannabis Retailers Want Provincial Price Break
Two Ontario cannabis retailers in Cambridge, Ont., say that the money they are paying various government agencies is too much. That includes the Ontario Cannabis Store (OCS), which is both the wholesaler for Ontario cannabis retailers and competition via online sales.
“The government takes 44 cents on the dollar, which I think is ludicrous,” said Brian Garner, who owns Caribbean Oxygen in that city. “The whole system needs to be revamped.”
According to the CambridgeToday article, the OCS currently has a 31 per cent mark-up, up from 28 per cent last year. Taxes and fees in other forms to the government make up the other 13 per cent going to the government from every sale.
“They could still be making a profit if they weren’t charging as much,” said Ramandeep Gill, owner of Hespeler Village Cannabis. Gill said he feels the government is more concerned with profit than eliminating the illegal market – one of OCS’s stated goals.
The OCS made $520 million in profit between April 2021 and March 2022, the article states.
Ontario Cannabis Retailers See Lack of Accountability or Oversight in Provincial Wholesaler – LPC
Meanwhile, the provincial government agency operates without accountability or oversight. Garner said the OCS is the most disorganized business he’s ever worked with.
“They make mistakes weekly and correcting their errors is even tougher for them. Nothing makes sense,” he said. He estimates that he’ll sometimes receive a third of his whole order from the OCS.
Gill told a similar story. “We will not receive a product and they will claim it is out of stock. When you go on their website to order something else, they have that out-of-stock product available on their store for consumers to buy.”
NOW Toronto had previously noted that the OCS will “hoard” popular products to sell to its customers, but won’t make them available to Ontario cannabis retailers. This is one way Ontario is killing cannabis retail, according to the article.
Earlier this year, much of OCS operations – including supplying Ontario cannabis retailers – was effectively shut down and threatened an Ontario cannabis shortage when a third-party partner fell victim to a cyberattack. These are just two examples of how restricting cannabis wholesale to a single, government-owned agency can negatively impact the cannabis industry in Ontario.
For its part, the OCS acknowledges complaints from Ontario cannabis retailers.
“The OCS is undertaking a review of its approach to pricing to assess whether changes are needed to support illegal market capture objectives,” said Daffyd Roderick, OCS senior director of communications.
However, Roderick denied that the province is in competition with Ontario cannabis retailers. He said the OCS goal was to ensure that there is a provincial network – essentially providing cannabis to Ontarians who do not live nearby a cannabis store.
(Of course the solution to that would be to open up cannabis delivery to private retailers as well or instead of…)
These are tight times, in the economy and in the cannabis industry in particular. Passing those half-billion dollars of OCS profits back to consumers would go a long way to reducing the illegal market – and supporting Ontario cannabis retailers.
Read the Full Story on CambridgeToday
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