OPINION: Ontario needs to support province’s budding legal cannabis industry
BY: MICHELLE EATON
Canada is the first G7 country to legalize recreational cannabis, and Ontario can reap the rewards as long as we play our cards right.
The potential is clear: we just need to take the right steps to get the most out of it.
With the first private retail stores opening in Ontario less than a month ago, it’s time to talk pot and what’s next for this fast-moving industry.
The Ontario Chamber of Commerce recently released a report, Supporting Ontario’s Budding Cannabis Industry, which makes recommendations to both the federal and provincial governments as to how they can take advantage of our first-mover status.
Ontario is home to over half the licensed producers in the country.
Close to 6,000 of the 10,000 Canadian jobs in the cannabis industry are located here.
Deloitte estimated the industry could create up to 150,000 jobs country-wide following legalization.
The academic and research opportunities alone are also considerable: Forty-four of Canada’s post-secondary institutions are located in this province, some of which are already offering or developing cannabis-related programs.
- How will Ontario’s cannabis shops work?
- Calgary leads the country in cannabis retail
- Overcoming pot retail anxiety: 5 reasons for municipalities opt-in
Setting the industry up for success is not just a good thing to do — it’s the right thing to do.
Statistics Canada reported that annual Canadian household spending on cannabis totaled $5.9 billion in the fourth quarter of 2018.
Only one-fifth of that went to the legal market.
The sooner we make the legal market competitive, the sooner we offer a viable alternative to the black market.
That means safeguarding public health and responsible adult consumption.
To make the recreational cannabis industry competitive, we need to match, if not exceed, the convenience offered in the black market.
This means cutting red tape to increase supply and improve customer access, both online and in brick-and-mortar retail stores.
Consumers currently have limited avenues to purchase legal recreational cannabis in Ontario as licenses were determined through a lottery for private retail stores.
In the next phase of private retail, Ontario should proceed with a merit-based approach.
As we saw with the lottery, only 10 out of the 25 legal cannabis stores opened across Ontario for the April 1 deadline.
A merit-based approach will ensure that licenses are granted only to businesses with the capital and experience necessary to successfully open a private retail store and ease community concerns about safety and security.
If the government creates a competitive regulatory environment, the industry will be able to get product to the consumer faster.
This can be done by allowing licensed producers and retailers to sell online, updating regulations around partnerships between retailers and licensed producers, and allowing licensed producers to operate more than just one retail store.
The supply issue has been felt across Canada resulting in store closures, reduced hours, and pauses in allocations of licenses.
It has been attributed to several factors such as packaging and processing constraints and Health Canada’s multi-step licensing approval process.
The supply process is also hindered by excise stamps, which are province- or territory-specific and must be manually adhered to each package, slowing down the time to market.
All of these contribute to significant delays in the supply process, pushing consumers to the black market and limiting government revenues. Health Canada could take a common-sense approach to licensing that includes federal excise stamps, which would help speed up the process.
Edibles will be available in the legal market in just a few months.
Working closely with industry to provide public education will be key, particularly as government strikes the right balance between developing regulations around edibles and eradicating the illegal market.
If the entire cannabis market were supplied legally and taxed at current rates, the federal and provincial governments could gain approximately $1.3 billion through taxes.
That is a multi-billion-dollar opportunity our province cannot afford to miss out on.
This is first time in close to a century that recreational cannabis is legal in Canada.
It’s not going to be perfect out the gate, but the closer that industry and government work together as we move forward, the better.
The world will be watching. If we don’t get there first, others will.
— Michelle Eaton (@MichelleLyEaton) is Vice-President of Communications and Government Relations, Ontario Chamber of Commerce