The Ontario government is setting a framework for recreational cannabis retailing that emphasizes widespread competition and deals a blow to licensed marijuana producers by limiting their share of the market.
Finance Minister Vic Fedeli and Attorney-General Caroline Mulroney said on Wednesday during a joint news conference that there will be an unlimited number of stores that can sell recreational cannabis in Ontario, but that they will drastically limit licensed growers to just one store each at an Ontario production site. The proposed legislation, which will be introduced on Thursday, also leaves the door open for the province to restrict how many licences a single entity could hold, but no number has been set.
“We want to open up the marketplace,” Mr. Fedeli said at the news conference. “This is an opportunity for small business to get involved. We want to have as many participants as possible be involved.”
Ontario also gave its municipalities a Jan. 22 deadline to decide whether they will ban legal cannabis stores within their borders entirely. Ontario municipalities are holding elections on Oct. 22 and new city councils won’t be sworn in until December. Last month, the province said the new framework would be in place by April 1.
The new details come three weeks before recreational cannabis is legalized on Oct. 17 and a month after Canada’s most-populous province announced a significant shift in the retail model for bricks-and-mortar stores. The previous Liberal government gave the Liquor Control Board of Ontario a monopoly on the sale of recreational marijuana, planning to open 40 shops in the first year. Instead, Mr. Ford’s Progressive Conservatives scrapped that model and turned to the private sector for in-store sales. Under the proposed legislation, the cannabis operations of the Ontario government will now report directly to Mr. Fedeli and will no longer be a subsidiary of the LCBO.
“These are all stand-alone, bricks-and-mortar facilities that will have a common look and feel, you can’t enter if you’re under the age of 19, you won’t be able to see inside,” Mr. Fedeli added. “This is all about the safety of our youth, the safety of our roads and tackling the illegal marketplace.”
Ontario joins Newfoundland in allowing sales at production sites, which is what industry giant Canopy Growth Corp. plans to do at its cultivation site in St. John’s. Sixty-three of the 118 production licences issued by Health Canada are to growers in Ontario. However, the limit of one store for each licensed grower came as a surprise and could derail the large-scale retail plans of some of the largest companies, such as Canopy.