Ontario gets ready for 50 new cannabis stores

As many as fifty new licensed cannabis stores are coming to Ontario, which has lagged behind other provinces in rolling out legal bricks-and-mortar weed shops.

The second set of store licences, announced Wednesday morning by the Ontario government, includes eight permits set aside for provincially authorized stores on First Nations reserves. The remaining 42 licences will be split between five regions of Ontario, with 13 new licences for Toronto, six for greater Toronto, seven for Ontario’s southeastern region, 11 for the southwestern region, and one store each in the northern Ontario cities of Kenora, North Bay, Sault Ste. Marie, Thunder Bay and Timmins. The stores will be allowed to open in municipalities of any size, as long as the local government didn’t previously opt out of allowing cannabis sales.

Since legalization last October, cannabis consumers in many parts of Canada’s most populous province have been left out of storefront access to government-regulated marijuana, with the government-operated Ontario Cannabis Store’s website being the only way for many to legally access the drug. The province’s first set of 25 cannabis stores started opening April 1, but only 22 are fully licensed to date, according to the Alcohol and Gaming Commission of Ontario’s website. In contrast, more than 100 cannabis store licences have been issued in Alberta, which is home to less than one-third of Ontario’s population.

Ontario’s progress towards widespread legal cannabis access was slowed by a drastic policy about-face after Premier Doug Ford’s Progressive Conservative government took power in 2018 and tossed out the previous Liberal plan for government-operated cannabis storefronts, pointed out Alanna Sokic, a Toronto-based cannabis industry consultant at Global Public Affairs. 

Although Wednesday’s announcement represents “incremental progress, it’s progress nonetheless, and I think that this government has well and good intentions to ensure that there is widespread, easy and safe access,” said Sokic, who expects the rollout of the next 50 cannabis stores to go more smoothly than the first 25.

Ontario’s initial 25 cannabis store licences were awarded by lottery, and the province is taking the same approach for 42 of the 50 new licences announced Wednesday. Hopeful store operators will have to show that they’ve secured an appropriate retail location, and that they have access to $250,000 in capital to finance the operation. The lottery will be held on August 20, and new store openings are scheduled to begin in October.

The eight store licences for First Nations reserves will be allocated through a different process, on what the province called a “first come, first served basis.” Applicants will have to prove they have the approval of the relevant band council in order to apply for a store licence. Cannabis industry consultant Alanna Sokic noted that licensed stores on reserves will be subject to the same rules as cannabis store operators elsewhere in Ontario, which are designed in part to keep cannabis producers from owning or controlling more than a certain proportion of the retailers’ parent corporations.

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“I think what we’ve seen from the First Nations stakeholders in Ontario is that they’re eager, willing and able to operate cannabis retail stores, and would like to do so in their own communities,” Sokic said.

The Ontario government previously defended its decision to cap the number of cannabis store licences by citing what it called “severe supply shortages” of legal cannabis, for which it blamed the federal government. That situation appears to be changing, to judge by language in the province’s Wednesday press release, in which new provincial finance minister Rod Phillips cited “marginal improvements in national supply.”

New stores in Ontario should be unequivocally good for recreational cannabis sales, according to one licensed producer.

“The simple reality is, we know from jurisdictions that have a high density of stores that that is the most popular mechanism for people to purchase adult-use cannabis,” said Allan Rewak, vice-president of communications with Victoria, B.C.-based Emerald Health Therapeutics, which has a cannabis supply deal with Ontario’s government cannabis wholesaler.

“We saw sales double in Ontario when we introduced the first 25 stores,” Rewak added. “I expect that growth trend to be replicated in a far more significant way with 42 new stores coming online in urban centres.”

solomon.israel@theleafnews.com   

@sol_israel