Day: August 28, 2019

Ontario cannabis lottery was a disaster. It should be the last

Ontario’s second cannabis retail lottery on Aug. 20 was set up to license an additional 42 stores, which would bring the province’s retail market to the unreasonably low total of 75 stores. Compare that to Alberta, which has 277 licensed cannabis retailers to serve a population of 4.3 million (30 per cent of Ontario’s). The small number of legal stores is a huge problem for Ontario given the persistent nature of the black market. Consumers need retail access in order for the legal market to crowd out the illegal market, and Ontario is clearly behind.

The Ontario cannabis lottery system has been nothing short of a complete disaster. In the second round, there have been numerous issues and peculiarities that are concerning. For each lottery entry, a physical address was required. Once the lottery results were announced, it became quite clear that the system was gamed by those who wanted to submit numerous applications. In one instance, a specific location was entered into the lottery 173 times, with the average amount of entries per winning address a staggering 24 times. This gamesmanship has led some toaccuse the system of being stacked against small businesses, because larger entities could afford to submit hundreds of entries at $75 an entry.

While it is understandable that a prospective business would want to increase their odds of getting chosen, by submitting multiple applications, the mess that the lottery has created clearly shows that the lottery system was a mistake to begin with. On Oct. 1, 2018, then-Ontario Attorney-General Caroline Mulroney explained that Ontario’s cannabis retail market would be one that was uncapped. Specifically, she said: “To ensure we combat the illegal market effectively, the total number of retail store authorizations will be limited only by market demand. We believe this is the right approach.”

An uncapped retail licence system would significantly aid in consumer access, which would ultimately make the legal market more attractive than the black market. Premier Doug Ford’s Progressive Conservative government obviously knows this, which makes one wonder why they are waiting so long to move ahead with the plan.

At several points, the provincial government has stated that supply issues, caused by the federal government, is the justification for the slow approach. Specifically, the government worries that if too many storefronts are allowed, while supply issues exist, that many stores will go out of business. There are certainly supply issues that are created, or at least maintained, by the federal government. That said, the claim that those supply issues justify so few storefronts doesn’t add up.

Supply issues aren’t a proper justification for limiting licences because the Ontario government doesn’t act this way for other businesses that sell age-prohibited goods such as alcohol licences for restaurants, bars, or clubs even though the failure rate for these businesses is more than 60 per cent. The prospect of business failure isn’t a particularly convincing justification for the lottery once you factor in how the province handles alcohol licences.

Beyond the hypocrisy of how the government deals with different industries, the lottery is also misguided because there isn’t evidence that the shortages are really limiting profitability for storefronts. Again, looking at Alberta, it becomes clear that whatever the supply shortages may be, they aren’t bad enough to significantly damage the retail market. Despite being significantly smaller in size, the Alberta cannabis market actually outsold Ontario from Oct. 17, 2018, the day it was legalized, to June, 2019. In that time period, Alberta outlets sold $123-million worth of product, while Ontario sold $121-million. This is relevant because it clearly shows that the Alberta retailers can manage through supply issues, so much so that they can outsell a province that is three times larger. If Alberta can have profitable stores having one store for every 15,000 people, then Ontario can certainly do better than having one store for every 190,000 people.

The Ford government initially made the right decision to make Ontario’s retail system uncapped. The retail market should be whatever the market can bear, and the government should treat these retailers as they do restaurants. Having a lottery was a mistake and holding a second lottery was a disaster. In response, the Ford government should announce, as soon as possible, that August’s lottery was Ontario’s last, and that an uncapped market is in the near future.

David Clement is the North American affairs manager with the Consumer Choice Center

Vaping Supporters Meet with California Lawmakers About Strict Regulations on Vaping Products

Henry I. Miller, M.S., M.D. and senior fellow at the Pacific Research Institute, and Jeff Stier, J.D., a Senior Fellow at the Consumer Choice Center, recently published an article at the Pacific Research Institute concluding the vaping hysteria and disinformation campaign will lead to more tobacco deaths.

Miller and Stier said:

According to a just-released report from the U.S. Preventive Services Task Force, 7.5 million people 12 years old and older in the U.S. have been diagnosed with dependence or abuse of illicit drugs in the past year. But that’s not stopping e-cigarette opponents from trying to score political points by mischaracterizing the problem by conflating e-cigarettes with street drugs. And health reporters have been all too eager to comply, rather than challenge their assertions. The same with regulators. The FDA calls its irresponsible, unscientific anti-vaping media blitz “The Real Cost Campaign.” We think evaluating the real costs is a good thing. But what are the real costs of misleading people about the risks of e-cigarettes, especially in cases like the Wisconsin cluster?

First, adult smokers will be less likely to switch from smoking to vaping because of an unfounded fear of contracting “serious lung disease.” This alone stinks worse than Wisconsin’s most pungent cheese.

Miller and Stier say the not-so-hidden agenda behind the scare is to fool lawmakers into thinking e-cigarettes are as dangerous or more dangerous than “combustible cigarettes,” causing them to regulate these lower-risk alternatives inappropriately. This, too, will prevent smokers from quitting.

Read more here

BRAUN: Beer and wine in subway newsstand shops?

Turns out the posters are from Choice and Fairness, a collective of convenience and other stores, craft beer and wine retailers and consumers, all working together (and in tandem with the Ontario government) to expand sales of beer, wine and cider. The Retail Council of Canada, Convenience Industry Council of Canada, Ontario Convenience Stores Association and consumer advocacy group Consumer Choice Centre are among those involved.

Read more here

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