Cannabis Users Will Welcome Private Retailers, But Opposition Is Likely To Emerge

Tony Coulson

Originally published on Tuesday August 7, 2018 in The Toronto Star

Premier Doug Ford and the Ontario Progressive Conservative government have signalled that cannabis will be sold in privately-owned stores rather than through the newly created and government-owned Ontario Cannabis Store (OCS), with Ontario following the lead of the four Western provinces and Newfoundland and Labrador in selling cannabis through a private or mixed retail system.

This policy shift in Canada’s largest province is a game-changing development for the budding cannabis industry. Overnight, private cannabis retailers in Canada doubled their potential customer base, as this decision gives private retailers access to an estimated 2 to 2.5 million adults in Ontario, who will likely purchase recreational cannabis once it becomes legal on October 17.

Among adult residents of the GTA, more than half would prefer a wholly government-owned model

Our research shows that the Ontario PC government’s decision will likely be popular among cannabis users, even if it goes against the preferences of the broader public. Among adult residents of the GTA, more than half would prefer a wholly government-owned model, with three in ten open to a mixed system, and 15 percent preferring a fully privatized system.

However, this overall preference for government-owned cannabis retailers is driven mainly by people who will never walk through the doors of these stores. Current and potential cannabis users are much more open to allowing private retailers to sell the product to consumers: four in ten favour a mixed public-private model in Ontario, while two in ten prefer a fully privatized retail system.

The other critical questions facing Ontario at this stage are how many retailers will be allowed to operate, and to what extent local communities will be able to place restrictions on where they are located.

Initially, the OCS planned to open just 40 stores across the province, increasing to 150 in total by the end of 2020. The province determined where these stores would be located, with local municipalities having an opportunity to provide input on the locations.

Depending on what happens with the regulation and licensing process, private retailers will likely be able to open a larger number of stores more quickly; this could lead to disagreements, however, if residents seek to keep retailers out of their neighbourhoods.

Again, there is a significant divide: nearly nine in ten GTA residents who use cannabis support having a retailer in their community, while only four in ten non-users would support having a cannabis shop in their backyards.

The provincial government’s sudden move creates many opportunities for private companies and is likely to please those who will be lining up on October 17 to purchase their legal cannabis.

There are risks, however, given the preference of non-users for government control. It will be important for local and provincial governments to monitor acceptance to avoid conflicts with NIMBYs who seek to block cannabis retailers from setting up shop in their neighbourhoods.

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