CANNABIS CULTURE – Last week, Ontario’s government came out with a series of rules meant to bust up the cannabis monopolies that are developing under legalization.  

Most notably, the regulations limit federally licensed producers like, Aurora and Tilray, to operating a single store, and bar them from partnering with a licensed retailer in Ontario beyond a 9.9% ownership stake.

“It’s actually looking pretty good” noted Cannabis Culture CEO, Jeremiah Vandermeer, on last Friday’s episode of Cannabis Culture News. “What’s funny about Ontario is that it started as being probably the worst of all the regulations across the country in terms of provincial control and now it might be the best”.

The objective of the new policy is to provide a competitive advantage to small businesses while still meeting supply, but was still met by mixed enthusiasm from the cannabis community.

“There’s a couple of little things that aren’t so great,” admitted Vandermeer.

On the one hand, it is markedly better than the alternative which had been proposed by the previous Liberal government in the province, which was to open a total of 150 government-monopoly Ontario Cannabis Stores (OCS) across the province over three years. Given that there were an estimated 80 dispensaries operating in Toronto alone last year, this target was criticized as being unrealistic in its hopes of meeting demand.

The policy also ensures small producers have a market to sell to, though obviously larger corporations are already developing workarounds to the monopoly restrictions. (Canopy Growth, for example, is reportedly already looking into a franchise model to expand its Tokyo Smoke chain of stores into the province.)

It also aligns cannabis with current smoking laws and allows for public cannabis consumption, which the Liberal government intended to limit to private dwellings.

On the other hand however, despite the improvement in perspective, the popularity of cannabis has still somehow taken the government by surprise, and the delays in providing licenses has meant that the few government-approved suppliers have been unable to meet demand for cannabis, even for medicinal users.

This is true across Canada. The shortages are so bad that James O’Hara of Canadians for Fair Access to Medical Marijuana said “It’s actually more than a supply issue. Really, it’s something of a health crisis now.”

Despite the shortages, Ontario will only begin accepting applications for retail licenses on Dec. 17, and until April of 2019, the OCS website will be the only place where Ontarians can legally buy recreational smoke. But poor preparation has meant that the online store ran out of product so quickly that within hours of legalization they only had one product for sale.

According to the Mayor of Ottawa Jim Watson, local authorities will actually be looking into tightening the regulations further ahead of April, saying that the last thing Ottawa needs is “an over-concentration of pot shops”.

In other bad news for many current cannabis lovers in Ontario, the new policy also means that anyone who is deemed as having operated an illegal cannabis retailer after October 17, 2018 is not eligible for Ontario cannabis sales licenses.

In the second show of force just this month, police raided two dispensaries in downtown Ottawa on Friday, arresting an unspecified number of people. These raids are in addition to the two shops which were raided on Nov. 6, and which resulted in six people being charged.

Many shops are closing down, so as not to fall afoul of the law, but many don’t want to leave their customers hanging. This means many experienced growers will eventually find themselves excluded from the market unless they commit to shutting down shop for at least the next few months, further exacerbating supply issues.

Going outside of the government is still an option for some, but the government is trying to discourage that notion. Under the cannabis act, Ontarians can be fined $150 for buying weed from a source other than the government. Thankfully, it’s unclear – even to police at this point – how they will determine who to give the fine to.

Until the market opens in earnest, Ontarians will have to deal with the growing pains of government regulation in this new market. Things are moving slowly, but at least they’re going in the right direction.