Prov­ince de­lays cannabis out­lets

PressReader - Tke Channel - Prov­ince de­lays cannabis out­lets
On­tario is ditch­ing plans for gov­ern­ment-run cannabis out­lets in favour of let­ting pri­vate busi­nesses run the shops.The last-minute switch means peo­ple in On­tario won’t be able to shop in any stores at all when recre­ational mar­i­juana be­comes le­gal across the coun­try on Oct. 17.The gov­ern­ment aims to have pri­vate stores run­ning by April 1, 2019, which leaves time for wide con­sul­ta­tions about the new sys­tem, Fi­nance Min­is­ter Vic Fedeli said Mon­day.How­ever, cannabis will be sold on­line for home de­liv­ery on Day 1, Fedeli promised.The On­tario Cannabis Re­tail Corp., the sub­sidiary of the LCBO set up by the pre­vi­ous Lib­eral gov­ern­ment, will still act as a whole­saler and be re­spon­si­ble for on­line sales.But the plan to set up On­tario Cannabis Stores — four lo­ca­tions had been iden­ti­fied — has been scrapped in favour of pri­vate­lyrun stores.Fedeli threw an­other wrin­kle into the prov­ince’s pot plans by an­nounc­ing that mu­nic­i­pal­i­ties will be given a one-time chance to opt out of hav­ing cannabis stores in their ju­ris­dic­tions.A spokesman for the City of Ot­tawa said it’s too soon to com­ment on this de­vel­op­ment, and the city will wait to see the new leg­is­la­tion.The chair of the Ot­tawa Board of Health, Shad Qadri, said the pub­lic health de­part­ment can’t say much about the de­vel­op­ment un­til it’s taken a close look at the leg­is­la­tion.“We will wait for that and then look at our po­si­tion,” he said.There are so many unan­swered ques­tions at this point, Qadri said, such as where these pri­vate pot shops would be per­mit­ted to op­er­ate and whether they would cre­ate any is­sues re­lated to zon­ing.Many de­tails of On­tario’s plan have to be worked out. Some other ma­jor ques­tions: Will there be a limit on how many stores can be li­censed in On­tario or how many stores can be owned by any one com­pany? What re­spon­si­bil­i­ties will be handed to mu­nic­i­pal­i­ties?De­pend­ing on how it rolls out, mu­nic­i­pal­i­ties may have to ap­prove zon­ing changes to de­ter­mine where stores can be lo­cated. Un­der the LCBO sub­sidiary model, mu­nic­i­pal­i­ties were con­sulted, and pub­lic con­sul­ta­tions were promised, but the pro­vin­cial gov­ern­ment had the fi­nal say in where stores would be lo­cated.Fedeli promised to con­sult with mu­nic­i­pal­i­ties, and of­fered them $40 mil­lion in “tran­si­tion fund­ing ” over the next two years.He also warned his gov­ern­ment has “zero tol­er­ance” for any­one in­volved in the il­le­gal mar­i­juana trade.Asked whether op­er­a­tors of il­le­gal dis­pen­saries would be el­i­gi­ble to run pri­vate stores, he said: “We won’t want to do busi­ness with peo­ple run­ning an il­le­gal busi­ness.”Fedeli said he was con­fi­dent that pri­vate stores could op­er­ate a safe, re­li­able sys­tem. Any store caught sell­ing cannabis to any­one un­der the le­gal age of 19, even once, will lose its li­cence, he warned.The Lib­er­als said they chose the LCBO model to help en­sure a safe, con­trolled roll­out as Canada en­ters the world of le­gal pot. Some en­trepreneurs and cannabis ac­tivists had lob­bied for both pri­vate in­dus­try par­tic­i­pa­tion and more stores to cre­ate a thriv­ing in­dus­try and com­bat the black mar­ket.The change will be a bo­nanza for com­pa­nies ea­ger to do busi­ness in the prov­ince that will be Canada’s largest mar­i­juana mar­ket. The lat­est re­port from Sta­tis­tics Canada es­ti­mated that about 4.6 mil­lion peo­ple na­tion­ally, or close to 16 per cent of Cana­di­ans aged 15 years or older, re­ported us­ing cannabis in the prior three-month pe­riod. In On­tario, the rate was 18 per cent. Given On­tario’s pop­u­la­tion of 13.97 mil­lion, that amounts to about 2.5 mil­lion po­ten­tial pot cus­tomers.Bruce Lin­ton, chief ex­ec­u­tive of Smiths Falls-based Canopy Growth Corp., said his com­pany will ap­ply to run as many stores as On­tario reg­u­la­tions al­low.Pri­vate op­er­a­tors can set up stores much more quickly, pro­vid­ing se­ri­ous com­pe­ti­tion to the black mar­ket, he said.“This is a pretty darn big prov­ince. And 30 or 40 (gov­ern­men­trun stores), even if they dou­bled it each year, is not re­ally go­ing to do it.“I sus­pect this pause will mean we end up with 10 times more stores by the first an­niver­sary. And if we are try­ing to com­pete with the guy in the puffy coat sell­ing il­le­gally you ac­tu­ally have a lot more prox­im­ity (to a store) than you would oth­er­wise.”Canopy has prop­er­ties that can be con­verted to stores in On­tario, in­clud­ing sev­eral Tweed Main Streets, which are in­for­ma­tion and ed­u­ca­tion cen­tres, Tokyo Smoke stores, and Canopy’s Toronto HQ on Queen Street, he said.Since the Con­ser­va­tives were elected, the com­pany has been scout­ing po­ten­tial lo­ca­tions in case of a pol­icy change, said Lin­ton. Once a lease is ob­tained it takes 40 to 60 days to ren­o­vate and set up a store, he said.Canopy has already been cho­sen to op­er­ate stores un­der its Tweed brand in Man­i­toba, New­found­land and Labrador and Saskatchewan, and has ap­plied to op­er­ate 37 stores in Al­berta.An­other large cannabis grower, Aurora, also has am­bi­tions to set up as many stores in On­tario as al­lowed. Aurora has a deal with Al­canna, the largest pri­vate-sec­tor liquor re­tailer in Canada, to op­er­ate cannabis stores un­der the Aurora brand.They ex­pect to open 37 stores in Al­berta in the first year of le­gal­iza­tion, and have de­vel­oped train­ing pro­grams and store de­signs that can be used else­where, said Cam Bat­t­ley, Aurora’s chief cor­po­rate of­fi­cer. “We will be ready to go and to go fast.”Aurora has also be­gun scout­ing lo­ca­tions in On­tario, he said. “We feel like we have a sig­nif­i­cant head start.”The move to pri­vate re­tail will help boost the econ­omy and move the risk onto pri­vate com­pa­nies, Bat­t­ley said. “On­tario tax­pay­ers don’t have to take on the cost and the risk.”Ot­tawa’s Na­tional Ac­cess Cannabis also has am­bi­tions to op­er­ate stores in ev­ery prov­ince in which pri­vate stores are al­lowed. It is now set­ting up stores in Western Canada un­der the Meta brand, some in for­mer Se­cond Cup cof­fee shops.Gatineau’s Hy­dropothe­cary also wants a foot in the re­tail trade. That com­pany, which is chang­ing its name to Hexo, re­cently bought a stake in Fire & Flower, an Ed­mon­ton out­fit that has ap­pli­ca­tions pend­ing to op­er­ate 37 cannabis stores in Al­berta.In­ter­est prob­a­bly won’t be lim­ited to cannabis firms, ei­ther. Loblaw has already been named as a qual­i­fied ap­pli­cant to run 10 stores in New­found­land and Labrador.How much room there will be for smaller en­trepreneurs in On­tario de­pends on the reg­u­la­tions.Al­berta and B.C. have put a ceil­ing on the pro­por­tion or num­ber of li­cences that can be awarded to any one com­pany. To try to keep the mar­ket from be­ing mo­nop­o­lized, B.C. has also banned com­pa­nies that grow pot from op­er­at­ing stores that sell their prod­ucts.

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