Opting out of cannabis shops aids black market, experts say
Several municipalities want more control over the number and location of stores. Ontario municipalities weigh big decision
As municipalities across Ontario weigh whether to allow cannabis retail stores in their neighbourhoods, experts warn that having large swaths of the province opt out of brick-and-mortar pot shops could fuel the black market.
Recreational cannabis can currently only be bought online in Ontario, and municipalities have until Jan. 22 to decide if they want to host private cannabis stores, which are set to open next spring.
Under the rules laid out by the Pro- gressive Conservative government, municipalities that opt out can change their minds down the line, but once they sign on, they can’t back out.
In recent weeks, several municipalities have chosen to reject cannabis retail stores, saying they want more control over the number and location of the shops. Some have also said they want more time for public consultations.
This, combined with the government’s recent announcement that it will only
issue 25 retail licences by April could embolden illegal pot sellers and allow them to thrive, experts said.
“Unfortunately, it’s turned out to be just a comedy of errors,” said Anindya Sen, an economics professor at the University of Waterloo who specializes in the cannabis industry. “When you take (those things) together, it’s possible that despite being legalized, Ontario might be- come one of the biggest black markets in the world.”
Sen said delivery hiccups and limited selection at the province’s online cannabis store also undermine efforts to lure consumers away from illegal avenues.
That sentiment was echoed by David Clement, manager of North American affairs for the Consumer Choice Center. “Community opt-outs and limited storefronts is a toxic combination which pretty much guarantees that the black market will thrive,” he said. “Capping retail outlets and having entire communities opt out makes the legal market in Ontario far less accessible.”
The Ontario government has said it was capping licences in response to a national cannabis supply shortage, which it said can only be tackled by the federal government.
“Ontario intends to transition to an open allocation system as soon as supply permits,” Jesse Robichaud, a spokesperson for Attorney General Caroline Mulroney, said in an email.
The province has pledged $40 million over two years to help local governments with the costs of legalization, with each municipality receiving at least $10,000.
Mayor John Tory has also asked the province to give the city more control over where the stores are placed.
“I think it is reasonable for us, given that there may be more pressure on the Toronto market, for us to say that we should have a hand in determining that there aren’t clusters of pot shops all together in one place or that they aren’t located near schools or community centres,” he said this week.
“I’m more concerned with that at the moment than the absolute number but there’s no question that the number of pot shops will affect the continued existence or not of a black market we’re trying to eradicate.”