Article by David George-Cosh, BNN Bloomberg
Canadian cannabis retailers are giving the cold shoulder to Ontario’s revised plans to pre-qualify applications for future pot shop licences, citing concerns that they still don’t know when the province will allow for more store openings.
In its inaugural budget Thursday, Doug Ford’s government unveiled plans to introduce a variety of measures to vet applicants for future legal cannabis stores. They include requiring applicants to provide a standing letter of credit, disclosing financial information, criminal background checks and any details on lease or ownership interests for potential store locations.
But the announcement stopped short of providing details on when the province will lift its 25-licence limit, or what would assuage the government’s complaints of inadequate supply levels in the country.
“This announcement really says nothing,” said Trevor Fencott, chief executive officer at Fire and Flower Inc., in a phone interview with BNN Bloomberg. “What’s the point of pre-qualifying if you don’t have any commercial visibility on when the market is going to open up?”
Opening more retail locations will likely factor heavily into the future of Ontario’s budding cannabis industry, which has yet to really take off. Amid the slow roll-out of legal cannabis stores and initially limiting sales to the provincially-run Ontario Cannabis Store (OCS) website, Ontarians only spent $181 million on cannabis last year, second-most in the country behind Alberta, whose residents spent $216 million, according to a recent report by BDS Analytics. However, Ontario is expected to eventually lead the country in legal pot sales, with US$1.8 billion estimated to be spent by 2024, while Alberta should come in at $941 million by then, BDS added.
Fencott, whose Fire and Flower is working with two of Ontario’s cannabis lottery licence winners in Kingston, Ont. and Ottawa, said the province should allow retailers to build out stores and have regulators inspect them so they’re ready to open as soon as licences become available.