More losers than winners in provincial plan,
Producers and LCBO cash in while convenience stores and dispensaries are shut out
The province’s plan to create government-run standalone stores for recreational marijuana sales lit up pot stocks and the LCBO’s chief executive Friday, but it also left many others high and dry.
Here’s a look at the winners and losers in Ontario in the lead-up to legalization next July.
Winners
Marijuana producers: Shares of pot producers all went predictably higher on the news, including those of Canopy Growth Corp., the first Canadian marijuana company with a market value of $1 billion. It rose as much as 5 per cent on the TSX, the highest point it has reached since July 26. MedReleaf Corp. gained 5.1 per cent, Aurora Cannabis Inc. rose 1.6 per cent and Aphria Inc. increased 2.5 per cent. The companies needed some good news to move the stock.
LCBO: The booze monopoly got its long-stated wish to become the official retailer of recreational weed. Not only is LCBO chief executive George Soleas looking forward to taking on the task of overseeing the separate stores, even his workers’ union, OPSEU, is onside. Union president Warren (Smokey) Thomas has always wanted marijuana sales to be overseen by the liquor retailer, particularly as the stores will probably be staffed by unionized workers.
Losers
Convenience stores: Yet again, the mom-and-pop corner stores got shut out, just as they did when the province decided to allow grocers to sell beer and wine. Dave Bryans, CEO of the Ontario Convenience Stores Association, said he is disappointed the group, which represents 9,000 store owners across the province, wasn’t even consulted leading up to the announcement. He pointed out that convenience stores have proven to be very socially responsible, and are also heavily regulated as they sell most of the tobacco and lottery tickets across Ontario.
Grocers: Gary Sands of the Canadian Federation of Independent Grocers is also disappointed that there was not a lot of private-sector consultation on the matter of distribution. “But, that being said, if it is not being opened up to the retail channel, then this is the most appropriate course of action to take with respect to the sale of cannabis,” he said Friday. Plus, grocers are benefitting from the popular sale of vino and suds in their stores now. Loblawowned Shoppers Drug Mart and most other prescription-drug stores were hoping to be the top distribution chain for medical cannabis, but no word on that yet.
Dispensaries: Longtime headshop owners, including Luke Reynolds, predicted this outcome last May at Canada’s cannabis convention, Lift. “It will be government run and I think they’re going to crush all the little guys like us who started this movement in the first place,” said the proprietor of Pipe Dreamz in Ajax. On Friday, the province warned of a crackdown on the hundreds of existing dispensaries across Ontario, many of which have already been the subject of police raids. They have been put on notice that they will be forced to close within 12 months.
Municipalities: And who do you think will be responsible for enforce- ment? Toronto Mayor John Tory weighed in Friday: “While I support the legalization of marijuana, I do not think the people of Toronto would support future widespread location of outlets for the sale of marijuana in residential neighbourhoods or in certain retailing areas . . . I am certain that a big part of the enforce- ment of these regulations will be on the shoulders of municipalities, whether through licensing, zoning bylaw enforcement or municipal policing. Cities cannot absorb these costs alone and I look forward to future discussions on how the costs of legalization for Toronto and other municipalities will be funded.”