Lack of locations poses headwind for pot industry players
Ontario’s new cannabis framework welcomed, but questions abound Licensed producers could have one retail location at a production facility.
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 Fra- ser, a lawyer who advises the cannabis industry. However, the 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,” Fraser said.
While there will not be a cap on private pot shops, Ontario has reserved the right to set “concentration limits” on stores in certain areas.
Canopy Growth’s co-chief executive Bruce Linton said an unlimited number of cannabis shops, whether or not they have its company branding, is still a plus because it represent a larger retail footprint than under the previous provincial government’s framework.
Even for those who meet the retail licence requirements, where retailers will be permitted to set up pot shops remains hazy.
Municipalities have until Jan. 22 to opt out of hosting pot shops. The province would also have the ability to set a distance buffer between pot shops and schools.