Former Ontario advisor Clark not against a private model for cannabis
Ontario is expected to outline how it will manage the sale of recreational cannabis in the province late Wednesday with a full framework to be tabled in the legislature a day later, multiple senior industry sources have told BNN Bloomberg.
The plan may cap the number of cannabis retail licences that any single entity can own at 10 per cent of the total available allocation, the sources said, in a move that would limit the amount of stores one organization can own and prevent it from dominating the market.
A spokesperson for Ontario Finance Minister Vic Fedeli declined to comment on the precise timing and details of the announcement, telling BNN Bloomberg via email “more details will be released soon.”
The anticipated timing of the announcement was earlier reported by Dow Jones.
Premier Doug Ford put the brakes on the previous government’s plan to have the province control the sale and distribution of cannabis shortly after his Progressive Conservatives won a provincial election in late June.
Ford stated that the province would move to a model where the province would be the main distributor of cannabis but opened the door for privately-owned stores to sell the soon-to-be legal drug in April. Until then, the provincially-owned Ontario Cannabis Store would control sales and distribution through a website that it plans to launch on Oct. 17 when Canada officially legalizes marijuana for recreational use.
A cap on retail licences would mirror a similar plan put in place by Alberta in February when the NDP government said that no group will be allowed to hold more than 15 per cent of the allocated licences, a figure that falls in line with what the province's largest liquor retailer holds. Since the announcement, Alberta has received hundreds of licence applications while issuing prospective licencees a 70-page application form and charging a $3,000 deposit for a background check that should take between two to four months to process.
As well, one of the sources said Ontario won’t issue a licence to a firm or person who wishes to sell cannabis but doesn’t already have a lease secured with a physical storefront. That would likely allow for better geographic planning from the province’s perspective while ensuring that licence holders won’t flip their licence on a secondary market.
“It’s a bit of a house of cards game because they’re securing leases against licences that they don’t have,” the source said. “You can’t succeed if you’re not willing to roll the dice.”
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