Ontario to vet pot shop applicants
Open up the application process for pot shops in Ontario and award new retail licences on a merit basis, let people purchase cannabis directly online from licensed producers and develop a common excise stamp to more efficiently ship products across the country.
Those are just some of the 18 recommendations from a sweeping Ontario Chamber of Commerce (OCC) report that evaluates how the first six months of recreational cannabis legalization have fared in Canada.
“We’re moving in the right direction, but this next stage is going to be critical in getting it right,” said Daniel Safayeni, director of policy at the OCC. “This is marking a new era and it will require thoughtful public policy and evidence-based solutions to make sure we execute this properly.”
Ontario is projected to lead Canada in legal pot sales with US$1.8 billion estimated to be spent by 2024, representing 39 per cent of the country’s total cannabis sales by that year, according to a recent report by BDS Analytics. Due to the slow roll-out of legal cannabis stores and limiting sales to online, Ontario only spent $181 million on cannabis last year, BDS said. By comparison, residents in Alberta spent $216 million.
The OCC notes that while Ontario has a unique role to play in ensuring the legal market remains competitive, the Ontario Cannabis Store has been plagued by shipping delays, data privacy, and mislabelled products that emerged right after legalization. It also criticized the move to cap the amount of private retail store licences issued in the province this year, stating that the limit encourages the illegal market and reduces potential government revenue.
To improve the situation, the OCC recommends that the Alcohol and Gaming Commission of Ontario, the province's cannabis regulator, should re-open the application process for prospective retail operators and licensed producers as quickly as possible and proceed with a licensing system based on merit rather than luck. Additionally, the OCC recommends that Ontario follow Alberta and consider relaxing rules governing the relationship between retailers and cannabis producers, which would allow pot companies to operate retail stores.
“What we’re putting forth is what we see are common-sense solutions that will, in the long run, grow the economic benefits of this industry,” Safayeni said.
Ontario said in its latest fiscal budget earlier this month it plans to work with the AGCO in developing a process to pre-qualify cannabis retailers. It will include a payment or standing letter of credit, providing financial information -- including details about their corporate structure and affiliates -- criminal background checks and any confirmed lease or ownership interests for potential store locations.
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