With 82 days till legalization, Ontario pot sales will only be online to start: experts
Ontario premier Doug Ford‘s decision to let the private sector handle bricks-and-mortar marijuana sales ends a long period of silence and ambiguity about the province’s plans. But it also means that governments will have to make many high-stakes decisions under pitiless time pressure.
Experts Global News spoke to agreed that too much would have to be done too fast to have retail cannabis stores open on day one, and that Ontarians will have to be content with ordering their marijuana online to start with.
“There’s a lot that needs to happen.,” says Ottawa lawyer Trina Fraser.
“I don’t think it’s realistic that any storefronts are opening on October 17, but I expect the government will announce that their online sales will commence on that date and that retail will be (in place) sometime thereafter.”
The Globe and Mail, which reported the story Thursday night, said that it had three key features:
- The private sector will run physical cannabis stores
- The Ontario Cannabis Store will operate online sales (Shopify will run the software, the OCS announced in March)
- The government will run the wholesale and distribution side
The decision wasn’t a surprise.
If you looked at other provinces’ high-energy preparations for marijuana legalization, and Ontario’s strange state of suspended animation on the file, combined with a near-total lack of communication, it was clear that something was happening behind the scenes.
Still, the news late Wednesday that legal cannabis would be sold by private-sector stores (and online sales by the government-owned Ontario Cannabis Store) will leave many in business and government working well into the night, figuring out how to make it work on such a tight deadline. The time lost while the Ontario PCs made their decision can’t be recovered.
Cannabis companies who hope to enter the country’s largest market were delighted.
The province’s public sector employees’ union, whose members would have staffed the public sector stores the previous Liberal government planned, was not.
Designing a system
Ontario lawmakers must quickly amend laws passed by the Liberal government that gave the government an almost-total monopoly on recreational cannabis sales. Queen’s Park is having a rare summer session, making it easier than it might be.
Then the province needs to attend to a lot of administrative details, quickly.
“There needs to be a package developed – an application form, a guide telling applicants what your site needs to look like, the security features, what the layout has to be, whatever those requirements are, who needs to get security checked and what that security check consists of, what the fees are, all of that,” adds Fraser.
Ontario could save time by copying rules from other provinces, perhaps especially Alberta, which will have a similar system.
“I think there are a number of best practices to be adapted from other provinces, and Ontario certainly has that to go out and lean on,” says Deepak Anand, an executive at Cannabis Compliance Inc., a consulting company.
“We’re looking at more of a Saskatchewan or Alberta type model,” Fraser says.
“Should they be speaking to those provinces and trying to duplicate what they can, and not totally reinvent the wheel? Yes, absolutely, because time is of the essence now.”
But before decisions are made about who will be allowed to sell pot, Ontario will have to decide what to do about the existing grey-market dispensaries. Will people who were involved in selling pot when it wasn’t legal be allowed to sell it when it is?
“Alberta has said they will not grant a licence to anyone who has participated in the illicit market,” Fraser says. “We don’t know yet if that is what Ontario is proposing or not.”
“We don’t know what they plan to do with existing dispensaries – if they plan to give them an opportunity to become legally licenced retail outlets or not?”
As well, should government work toward a mix of big and little companies, or let a few large ones dominate sales?
“Are they going to allow (large players) to mass-blanket the province, or are they going to be sure that some craft producers can start to comply, as well as get into the space?” asks Anand.
Will the province allow farm gate sales from big producers like Tweed in Smith’s Falls to bypass the government wholesale system?
A planned Toronto store site attracted controversy this spring when it turned out to be about 400 metres from an elementary school. But if retailers won’t be allowed to be closer than a given distance from a school, or some other sensitive location, they need to be told that, and what the distances will be. (Quebec will allow cannabis stores to be 250 metres from schools, or 150 metres in Montreal.)
Towns and cities must act fast, at an awkward time
Also, local governments suddenly have a lot of decisions to make, and fast. Awkwardly, the province will hold municipal elections on October 22, and local politicians are firmly in election mode.
“The municipalities are the ones that are most blindsided by this because they really have not had to do much of anything as far as preparing for retail because they’ve had the luxury of knowing they were dealing with one retailer, which was the government,” Fraser says.
But if they don’t make some quick decisions about where to allow cannabis stores — or whether to allow them at all — they will be confronted by facts on the ground that will be hard to undo.
“They will want to have control over the location of the stores. They’re going to have to get their butts in gear, because if they don’t do this by the time the licences are handed out, and these people set up shop and start operating, then they’ve lost control over the ability to shut them down.”
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