Private Pot Companies Flock to Ontario Ahead of Any Plans

recreational weed

Despite the lack of any official word from the province about how it intends handling the sale of recreational weed when sales go live in October, private companies are flocking to Ontario in droves to set up store. “Ontario is a frenzy right now in terms of entrepreneurs, real estate developers, anybody within the cannabis infrastructure,” says president of Starbuds Canada and Compass Cannabis Clinic, David Martyn.

“The level of anticipation that is building up is massive right now.” Martyn says that Starbuds, a weed retailer based originally in Colorado, has already secured several locations in the province. Compass Cannabis Clinic, which is the medicinal branch of the company, has locations open already throughout Alberta and British Columbia.

On the company’s decision to forge ahead without any formal announcement from the government in Ontario, Martyn said, “Within the industry, the rumblings have been going on for three weeks, through very reliable sources, that private retail would happen in Ontario.” Last week, reports emerged that the province intends opening the door for private companies in the legal pot market.

However, provincial officials have been completely silent since, nor even a whisper. “We can assure you, though, that the government has been working to launch a cannabis retail and distribution system to meet the federal legalization timeline of October 17, 2018,” said spokesperson for the Ministry of Finance, Scott Blodgett, when prompted for comment about when the government will unveil its plan.

Will it be public, private, or both?

Under the former Wynne government, the province had plans to sell recreational marijuana through the Ontario Cannabis Retail Corporation, a new agency under the Crown. It would act as a branch of the Liquor Control Board of Ontario. The crown corporation had plans to set up 40 store locations for legal weed in Ontario by the end of this year. A portal for online sales was due to run the moment federal legalization comes into effect.

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What is unclear, however, is whether the new government will decide to give private retailers exclusive sales, which would effectively nix the previous policy of the Liberals in the province, or have a mixture of both private and state-run stores. Deepak Anand, vice president of business development and government relations at Cannabis Compliance Incorporated, voiced the confusion:

“Initially, we heard this was going to be all private. I think now we are hearing this might be a mixed model, which is basically a mix of public and private stores.” Cannabis Compliance Inc. is a consulting company from Mississauga that, according to its website, helps companies in the industry to navigate “the constantly shifting regulatory framework that has defined the sector.”

“The government seems to be changing its mind before making any announcement here,” Anand said, “so we really do not know what is to come.” However, the Ontario Public Service Employees Union, or OPSEU, is watching the cards steadily to see which way they will fall. It could go either way or both, but it is clear that companies are hedging their bets on a privately run sector, at least partially anyway.

“I have been trying to get the government to answer questions, whether the plan to privatize is real or imagined, or whether they are thinking of some variation of it,” said Smokey Thomas, the president of OPSEU. “If Premier Doug Ford is going down the private road, he should at least have a hybrid system with public stores. You want some competition here, but do not throw away the stores you have already planned on opening.” Either way, the presence of private business must be adding immense pressure.

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