Ontario, Canada to Allow Privately Owned Cannabis Distributors

Regulators in Ontario, Canada are moving forward with a plan to allow private businesses to store and distribute cannabis, according to a Crown Corporation e-mail obtained by the Financial Post. Currently, only the province-run Ontario Cannabis Store can store, distribute, and sell cannabis in the province.

In the email, the OCS said that the decision comes in response to “feedback” from licensed producers and as so-called ‘alternative cannabis products’ – such as edibles and topicals – are expected to hit store shelves next month. A September survey by Lift & Co. and Ernst and Young suggested that the market would grow about 65 percent with the introduction of the products.

“The OCS is moving ahead with expanding its privately-operated third-party centralized distribution network and will introduce flow-through capabilities to the network over time to maximize choice for consumers.” – OCS, in an e-mail, via the Financial Post

Producers argued that the OCS monopoly has caused legal cannabis prices to be about 30 percent higher than their illegal counterparts and that the industry’s declining revenues are in part due to supply-chain problems. According to the report, the OCS lost $42 million over the last fiscal year due to high startup costs.

A person familiar with the situation described it as a “hybrid model” to the Post.

Ontario’s rules already allow the private sector to sell cannabis online. Only Saskatchewan currently allows private businesses to control the wholesale supply of cannabis to retailers.