The Ford government’s decision to hold a second lottery for retail cannabis store licences is drawing a mixed review from the Consumer Choice Centre.
The centre said it is pleased Ontario plans to open another 50 stores, on top of the 25 operating across the province now, but criticized the decision to maintain a cap on the number of stores.
North American Affairs Manager David Clement said the announcement is both good and bad news for Ontario consumers.
“It is great the government is moving to increase the number of storefronts, but the existing cap, and the prequalification criteria, miss the mark,” he wrote in a release. “We don’t see any justification for the cap to continue to exist when the province has stated that it is committed to uncapping the retail market in the long run.”
The centre said the confirmation of $250,000 in cash or the equivalent, a letter of credit for $50,000, and a secured retail space is “a huge barrier to entry, and significantly increases costs for retail operators. Those costs will ultimately end up being passed on to consumers.”
It pointed out that other businesses like bars, clubs, restaurants, corner stores, and grocery stores that sell alcohol and cigarettes do not face the same heavy burdens.
The centre believes the increased cost for consumers and the limit on locations to buy legal cannabis will drive users to the black market.
“A very simple solution would be to approve all applicants who already have retail space acquired, and do so without a cap on the number of stores — This would ensure that applicants are serious, without the heavy-handed financial requirements,” the statement said. “Doing so would drastically improve Ontario’s retail market for cannabis, which would significantly increase the likelihood of Ontario consumers purchasing cannabis legally.”