Ontario’s decision to not cap the number of privately-operated cannabis shops has been welcomed by industry players, but market share restrictions on licensed producers and the lack of clarity on where marijuana stores can be located may pose headwinds for the sector.
The province’s private-retail framework is positive for smaller retailers who won’t get squeezed out, said Trina Fraser, an Ottawa-based lawyer who advises the cannabis industry.
However, the Progressive Conservative government’s plan to limit licensed marijuana producers to one retail location at a production facility deals a blow to licensed producers, and it is unclear to what degree they can be involved in front-line sales.
“What we don’t yet know is what degree of affiliation will be permitted between licensed producers and retailers,” said Fraser.
The provincial government on Wednesday shed more light on its framework for Ontario’s private cannabis retail marketplace, and introduced related legislation on Thursday.
Ontario officials say they won’t put a limit on the number of pot shops once recreational cannabis is legal across the country on Oct. 17, but indicated that licensed producers could have one retail location at a production facility
In the bill introduced Thursday, it says a licensed grower and its “affiliates” may not hold more than one retail store authorization between them. The definition of “affiliates”, however, would be defined in the regulations later. The bill also stipulated that producers may be subject to “any other restriction that may be prescribed.”