Connect with us

Cannabis Now

Canadian Marijuana Companies Gamble on Privately Owned Retail Shops

Canadian Marijuana Companies Gamble on Privately Owned Retail Shops
Photo Gracie Malley for Cannabis Now


Canadian Marijuana Companies Gamble on Privately Owned Retail Shops

Current plans in Ontario call for recreational marijuana to be sold only in government-run shops, but several big Canadian cannabis companies are banking on a reversal.

Canada’s billion-dollar marijuana giants are banking heavily on the possibility of running cannabis retail outlets once sales begin this fall, following vague hints from government officials at a possible reversal in policy.

And while cannabis companies don’t yet have permission to open commercial retail outlets — and the government hasn’t even indicated if they ever will — several firms have already rushed to secure real-estate in what media has declared a “frenzy,” with the hope that permission will come later.

Commercial sales of recreational marijuana in Canada are scheduled to begin Oct. 17.

Initial plans called for the drug to be sold in retail outlets run by the government, in a fashion similar to how alcohol is sold in 17 U.S. states. Provinces would own and operate shops, where privately produced cannabis would be sold, and the government would also operate an “online retail channel.”

At the moment, medical marijuana is sold to patients by Health Canada-licensed companies, which then deliver the cannabis to patients. There are privately owned dispensaries openly selling cannabis in several Canadian cities, but these are operating illegally.

However, five provinces — British Columbia, Alberta, Saskatchewan, Manitoba, and Newfoundland — have since allowed privately owned cannabis stores.

And recent signals from the government in Ontario, the country’s most populous province, indicate that lawmakers are also willing to reverse course, or at least entertain the possibility of privately run retail outlets.

Doug Ford is the new premier of Ontario. His Liberal Party predecessor’s proposal was to allow up to 40 marijuana shops to open in the province, run by a government agency called the Ontario Cannabis Retail Corp.

But following wins by Ford and his Progressive Conservative party in June elections, reports started surfacing in late July that Ford — who campaigned on a populist, business-friendly platform that included bringing back dollar-per-bottle beers — would consider allowing private companies to sell the drug. Last week, Ford declined to speak publicly about his government’s plans, deflecting reporters with a vague promise to discuss marijuana “in a couple weeks, or a week,” as the Financial Post reported.

Canada is legalizing marijuana to fulfill a promise made by Liberal Prime Minister Justin Trudeau shortly after he took office. The two are “ideological opposites,” the New York Times noted, with a brash and mouthy Ford often earning comparisons to U.S. President Donald Trump.

In the meantime, companies aren’t waiting for the government to come to a decision or craft a plan on its own.

According to Ontario’s lobbyist registry, several companies, including Weedmaps and Aurora Cannabis have been busy meeting with lawmakers to “highlight the benefits of expanding cannabis sales in Ontario to private retail outlets.”

“The government seems to be changing its mind before making an announcement here, so we really don’t know what’s to come,” said Deepak Anand, vice president of government relations and business development with Cannabis Compliance Inc., an Ontario-based consulting company.

And both Aurora and Aphria have inked deals with retailers to sell the drug in those provinces where privately-run sales are already legal.

Aurora paid $82.5 million U.S. in February for a 19.9 percent stake in Alcanna, the country’s largest liquor retailer. And Aphria has struck a deal with producers, distributors, and retailers that would see its products sold nationwide — including in Toronto, Ottawa, and elsewhere in Ontario, should Ford say the word.

TELL US, are you surprised at the plan to have government-run cannabis stores in Canada?

More in Economics

To Top