‘Severe supply shortage’ forces Ontario to start with only 25 cannabis stores

Photo by Sandro Schuh on Unsplash

Canada’s largest marijuana market is about to undertake a phased strategy to cannabis retail due to “severe supply shortages across the country,” the Ministry of Finance introduced Thursday, capping the early rollout to not more than 25 stores.

The licenses shall be issued by lottery, which the ministry described as a short lived mannequin.

The Alcohol and Gaming Commission of Ontario (AGCO) had been slated to start accepting purposes for privately owned adult-use cannabis retail outlets Dec. 17, however that course of has been put aside for now.

Instead, potential retailers can submit an “expression of interest” on-line Jan. 7-9, 2019.

Submissions can be put right into a lottery pool for a draw to be carried out Jan. 11, in accordance to the ministry.

“When Ontario has determined that the federal government has provided for enough reliable supply, Ontario will communicate next steps for additional private retail stores,” the ministry stated.

Licensed producers shall be excluded from acquiring any of the primary 25 licenses.

“Until such time as more than 25 retail store authorizations may be issued, none of the retail store authorizations that may be issued … may be allocated to a licensed producer or affiliate of a licensed producer,” in accordance to the brand new laws.

The Canadian cannabis business has struggled to present sufficient supply to meet demand since leisure use turned authorized in October, and retailers throughout the nation have been confronted with their very own problem: how to keep in enterprise whenever you don’t have sufficient of your essential product.

The scarcity has pressured many retailer house owners throughout the nation to shut their doorways as they await marijuana shipments.

Lottery concern

Saskatchewan, which additionally used a lottery system, acquired greater than 1,500 purposes for 51 licenses to promote leisure cannabis.

However, the province issued only 13 licenses as of this week.

Some say that’s partly as a result of a lottery system doesn’t reward probably the most certified candidates out of a pool of hundreds.

Rod Elliot, senior vice chairman for Global Public Affairs and head of the consultancy’s cannabis apply, acknowledged the supply crunch dealing with the Ontario authorities. But he pointed to the success of Manitoba’s merit-based system.

“I’m not sure a lottery is the best way to allocate those initial 25 licenses for April 1, 2019,” he stated.

“If you look at what Manitoba did, they had a Phase 1, merit-based RFP process that allowed the government to ensure the Phase 1 retailers had retail experience, were well capitalized to service the market and had high compliance standards in place so they can ride out some of the challenges with the supply chain shortages before moving to a lottery.”

Elliot stated a merit-based strategy can be a a lot better means to allocate the preliminary 25 licenses because the province works with cities which have chosen to opt-in to cannabis retail to guarantee a smoother rollout.

‘Measured and reasonable’

On the opposite aspect, Allan Rewak, government director of the Cannabis Canada Council, stated Ontario’s new phased strategy is “measured and reasonable.”

The group’s membership accounts for roughly 80% of Canada’s licensed cultivation when it comes to sq. footage.

“We need to make sure the stores are well-stocked with quality cannabis that has the consistency that consumers need and want,” he stated.

Ontario will situation licenses for:

  • Five stores in Toronto.
  • Six stores in communities simply outdoors Toronto.
  • Two stores in northern Ontario.
  • Seven stores west of Toronto.

“If it takes us a little bit longer, within a reasonable time frame, to open our retail outlets, that’s something industry can live with,” Rewak stated.

Matt Lamers could be reached at [email protected]

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