Ontario is getting the hell out of the cannabis business

Analysts are blaming the “unmitigated retail disaster” for draining revenues of cannabis companies

By Kieran Delamont

2019-10-01

Less than a year into legalization, Canada’s largest province has decided to get the hell out of the weed wholesale and distribution business.

The province is expected to announce as soon as this week that it’s shutting down its wholesale warehouse operation.

Ontario is the second-largest jurisdiction to run a legal weed distribution system in North America, behind California.

But Ontario was arguably only in the business of weed by accident. The sticker-salesman premier Doug Ford privatized the entire retail system just weeks before recreational cannabis was legalized in Canada. Then the province raffled off all licenses for retail stores.

The wholesale operation tethering the province to the pot biz through the Ontario Cannabis Store (OCS), the province’s online retailer, proved to be a colossal waste of money. The Crown corporation running the operation lost $42 million in less than a year.

The province was also never fond of the union organizers hanging around the plant. So now they’re planning on letting weed companies sell directly to stores. 

That distribution system works well in other provinces like Saskatchewan. 

But analysts are blaming the “unmitigated retail disaster” for the mess in Ontario. They say it has drained the revenues of cannabis companies, many of whom don’t have all that much cash on hand.

Can someone in government figure out how to sell weed properly?

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