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Ontario to allow cannabis retailers to sell online and over the phone

Cannabis retailers will soon be able to sell products online or over the phone for in-store pick-up as the Ontario government adopts a “click-and-connect” sales model to expand access to legal marijuana.

Finance Minister Rod Phillips announced the proposed changes in the government’s fall economic statement Wednesday, saying they will decrease waits for cannabis and help combat the black market.

The shift comes as the Progressive Conservative government pledges to lift a cap it imposed on the number of cannabis stores in Ontario.

“All of the provincial jurisdictions are learning and trying to make sure that we take the best approach,” Phillips said. “Our priorities are getting rid of black market cannabis and safety in our communities.”

The government had initially said there would be no cap on the number of retail pot shops after cannabis was legalized. That decision marked a change of course from the previous Liberal government, which created the Ontario Cannabis Store and had planned to tightly control cannabis sales through government-owned stores similar to the LCBO.

But a supply shortage prompted the Tory government last December to cap the initial number of pot retail licences to just 25 so operators would be able to open.

The number of legal pot outlets in Ontario is increasing from 25 to 75 this fall.

The government also said Wednesday it will allow licensed producers to have retail stores on each of their production sites to further increase access.

The Tories had planned to allow that after coming to power in 2018 but did not enact the necessary regulations when the supply shortage caused them to cap the number of retail stores.

The government said Wednesday it will amend legislation and provincial regulations to make the changes but has given no immediate timeline when they will take effect.

Omar Yar Khan, a vice president at strategy firm Hill+Knowlton who advises cannabis sector clients, said the changes will help encourage customers to move from the black market to legal retailers.

“In an era where customers are used to an Amazon Prime experience … anything the government can do to allow these legal markets to reach consumers on channels they’re already on is a step in the right direction,” he said.

Khan said the government needs to uncap the retail market if it wants to continue to fight the illicit market.

“They need to move fast on that, and I think they will,” he said.

One consumer advocacy group praised the move towards “click-and-connect” sales but said the government could have gone further.

“It makes the legal market more consumer-friendly by increasing access and allowing consumers to place orders and pick them up … but it would be that much better if they coupled that with the ability for stores to provide deliver services,” said David Clement, manager of North American affairs for the Consumer Choice Center.

Clement said the changes that allow pot producers to open retail space could create a tourism industry around cannabis.

“If you go to brewery or a distillery, often you can take a tour or talk to the master brewer,” he said. “That on-site selling opportunity has been used to provide consumers with other experiences they otherwise wouldn’t have.”

This report by The Canadian Press was first published on Nov, 6th. I was posted on Yahoo Finance here.


FOR MORE INFORMATION ON SMAT CANNABIS POLICIES CLICK HERE


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at 
consumerchoicecenter.org

$1.1 billion worth of cannabis sold in Canada’s first year of legalization

One year after the legalization of recreational cannabis, Cannabis Benchmarks, a company that tracks cannabis prices, estimates that Canadian licensed producers have sold approximately 1.1 billion dollars worth of pot in the past 12 months, the equivalent to 105,000 kilograms—enough to fill almost two rail freight cars.

According to Statistics Canada, licensed retail outlets sold more than $100 million worth of pot in July, the fifth straight month that sales hit an all-time high.

However, some industry analysts believe those numbers would be much higher if not for the many stumbling blocks the industry has encountered in the first year of legalization. They cite several problems, ranging from non-compliant packaging to the failure of some producers to increase cultivation capacity in time to meet demand. But according to many analysts, the number one problem has been the regulators.

An article published by the Motley Fool, a financial services company, said federal regulators were not prepared to handle legalization of recreational cannabis. Health Canada had more than 800 cultivation, processing, and sales applications when the year started, but took several months or more to review them, the article stated. That “kept cultivators, processors, and retailers waiting in the wings to meet [consumer] demand.”

“There are many risks involved in overseeing cannabis and Health Canada tries to manage risk,” Alanna Sokic, a senior consultant for Global Public Affairs, told Leafly.  “The industry runs at breakneck speed and government does not.”

“Canadian licensed producers have sold approximately $1.1 billion worth of cannabis in the past 12 months, the equivalent to 105,000 kilograms—enough to fill almost two rail freight cars.”

Cannabis Benchmarks

Sales figures should be higher

Analysts have criticized some provinces for being slow to approve retail licenses. In Ontario and Quebec, for example, there are so few brick-and-mortar stores that many consumers are faced with the prospect of buying cannabis online—an unappealing option for the many consumers who want to see and smell their product before buying it legally—or getting it on the illicit market.

Many of them have chosen the latter route. The amount of legal cannabis Canadians have purchased in the past year (105,000 kilos) represents just 11.4% of the total amount they are thought to consume annually.

Canada’s most populous province has completely botched the rollout of the cannabis retail market according to analysts. After Doug Ford became premier of Ontario in June 2018, he announced that his government would award cannabis retail licenses through a lottery system. Two lotteries have been held so far.

This system has been fraught with problems, including inexperienced winners and concerns that some of them have sold their licenses on the illicit market.

“If you needed a brain surgeon, would you pick one through a lottery? Cannabis retail is best left to those who are knowledgeable and reliable,” BCMI Cannabis Report author Chris Damas told Leafly.

There are also indications the lottery system has been gamed by big players. A physical address was required for each entry. In the second lottery, in August, the average number of entries per each winning address was 24. One address was entered into the lottery 173 times. Each entry cost $75.

The amount of legal cannabis Canadians have purchased in the past year (105,000 kilos) represents just 11.4% of the total amount they are thought to consume annually.

Some of the applicants are so unhappy with the system they have taken their case to court. Eleven of them won the right to apply for a retail license through the second lottery but were later disqualified for not providing required documents by the regulator’s deadline. They responded by asking the court for a judicial review. The province’s plan to hold another lottery was suspended until Sept. 27, when the court dismissed the applicants’ request.

There are now just 24 retail outlets in a province that has a population of more than 14 million. “Ontario could support a thousand stores—and that’s a conservative estimate,” Damas told Leafly. “The provincial government blew it. If Ontario was punching at the weight it should be, Canadian sales numbers would be much higher.”

The Ford government attributes the slow rollout of retail to supply issues at the federal level. They say stores might go out of business if they open while there is limited cannabis supply. But as David Clement of the Consumer Choice Center stated in The Globe and Mail, the province doesn’t have the same approach when it comes to granting alcohol licenses for restaurants, bars, or clubs even though there is a high failure rate (60%) for these businesses.

Also, all the provinces are dealing with the same supply issues, yet some have done a much better job of establishing a cannabis retail market. For example, there are more than 300 retail outlets in Alberta, even though the province’s population is just 4.3 million—less than a third the size of Ontario’s population. Alberta outlets sold $124 million dollars’ worth of cannabis in the first eight months of legalization while Ontario outlets sold $121 million.

They key to Alberta’s success is its comparatively free-market regime, say analysts. The province’s regulatory body is the sole distributor of recreational cannabis just as it is in Ontario. However, in Alberta, anyone can apply for a license to open up a retail location. The opening of retail outlets is driven by market demand.

‘Gong show’ will get sorted out

“Sales numbers are what can be expected when some provinces (in the Prairies) embrace a free-market model and others don’t,” Damas said. “It has been a fiasco in certain provinces,” he said, referring to Ontario as well as Quebec, which has 22 stores and a population of eight million.

But Damas and other analysts are optimistic about the future of cannabis retail in Canada. Economist Trevor Tombe at the University of Calgary said in a tweet that “the gong show” in Ontario will get sorted out. Indeed, the province just announced it was launching consultations aimed at getting the private sector more involved in cannabis storage and delivery.

“Sales numbers are what can be expected when some provinces (in the Prairies) embrace a free-market model and others don’t.”

Chris Damas, BCMI Cannabis Report author

“If you look across Canada you will see a patchwork of regulation. Some provinces are performing much better than others because they have prioritized access,” Sokic told Leafly. “In the past year, some lessons have been learned. Provinces who haven’t prioritized market access are considering it so that they can accomplish their objectives. I think the future looks bright.”

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

What should consumers know about cannabis edibles?

In the second season of the Netflix series Rotten, there is an entire episode exploring the world of cannabis edibles. It is highly recommended.

The documentary itself does a great job uncovering the latest innovations, the legal hurdles, and many questions left for consumers who want to try cannabis edibles where they’re legal.

Going beyond the documentary, what should consumers know about cannabis edibles?

Check out Rotten Season Two: “High on Edibles

First, we should make clear that markets are evolving as quick as the laws are being written.

Cannabis products containing THC, the actual psychoactive compound, remain a Schedule 1 drug per the Controlled Substances Act. This means the federal government believes cannabis (all strains) has a high potential for abuse, has no accepted medical use, and there is a lack of safety even under medical supervision.

However, since 2018’s Farm Bill, industrial hemp has been legal, opening the door for cannabis strains that contain the non-psychoactive CBD to be sold around the country. I testified on this important subject at an FDA hearing this spring.

Therefore, though we’re mostly discussing THC edibles, there is also a booming market for CBD edibles in stores throughout the United States, the legality of which seems to be supported by the legalization of industrial hemp. It is a gray zone that has not been clarified by any federal law.

Therefore, for THC edibles, they’re only technically legal for general consumers in the eleven U.S. states (including D.C.) that have legalized recreational cannabis.

Though the states differ in regulation, the most mature markets are in California, Oregon, Washington, and Nevada, which have fully functioning legal markets that include edible cannabis products, topicals, and cannabis extracts.

CANADA

Canada legalized recreational cannabis in October 2018, but the first phase only included cannabis flowers, to be smoked or cooked into edibles by consumers.

My colleague David Clement has written about the problematic laws in Canada, which differ by province and will only allow edible products this year.

Though cannabis edibles and extracts will be technically legal by Oct. 17, 2019 (nearly a year after legalization), Health Canada rules require companies to inform the federal government of their plans starting on that date, at least 60 days before they can sell. So it’ll be December before we see any edibles, topicals, and extracts on Canadian shelves.

EUROPE

The only jurisdiction that has any legal market in (THC) cannabis is in the Netherlands, but it is far from a commercial market. Because the cultivation and shipment of cannabis are technically illegal, the Dutch system is actually also a gray area, one in which the government tolerates cannabis sales but gives very little legal legitimacy.

That said, many European countries have shops that sell edible CBD products, usually containing less than 0.3% THC in most countries. And several countries such as Germany and Spain do offer medical cannabis, including edibles, but only in highly regulated circumstances.

UNITED STATES

Returning to the legal THC edible markets for cannabis in the United States, and to the most mature markets mentioned above, legal products in these states have grown in popularity in the years since legislation.

The latest figures from 2017 in Colorado, for example, show that edibles and concentrates now make up 36% of cannabis sales, up from just 30.5% two years prior.

These edibles range in potency and form, but often are found in gummies, cakes, cookies, lollipops, capsules, chocolates, drinks, and much more. Cannabis “shake” – pre-ground flower – is often sold to be infused with food at home.

According to the market firm CBD Analytics, gummies are now the most popular edible item found in cannabis dispensaries. In the first four months of 2019, sales of gummies alone in California, Oregon, and Colorado amounted to more than $115 million.

The states differ in how many milligrams of THC they allow, but following Colorado’s rules, each package contains 10mg or 100mg, 10mg being the standard “dose”. It is recommended that newcomers not ingest more than 5mg during their first try. Too high of a dose will result in a strong effect on the user.

TESTING

Testing of edibles is a requirement in these jurisdictions, mostly for potency, dangerous substances, and pesticides, and the results of these tests must be made available to both regulators and consumers. Thus far, most testing is conducted by private labs, which must be licensed by the states.

TAXATION

Of course, THC cannabis products are highly taxed in the jurisdictions where they are legal. The average excise tax is 15%, but then one must also add significant sales taxes as well. The Tax Foundation keeps great documentation on the competing tax rates on cannabis in states where it is legal.

It is recommended that these jurisdictions keep taxation moderate, lest they push consumers back into the illegal market because of too high prices.

ADVERTISING AND BRANDING

Laws on advertising and banding also are quite different between legal jurisdictions for these products. As we have noted in our Policy Primer on Smart Cannabis Policy, Washington State has some of the better laws when it comes to how much information companies can share or how much branding they’re allowed to put on the packages for edibles.

More branding and the ability to advertise make it possible for consumers to establish loyalty and root out bad apples. They also give consumers better information on the potency of edibles, the form, tastes, and what the products are best used for. That’s crucial for consumer choice.

WHAT SHOULD CONSUMERS KNOW?

  • Only a handful of U.S. states have legal THC cannabis edible markets
  • CBD edibles, thanks to the 2018 Farm Bill, are now widely available around the country
  • Cannabis edibles range in potency and form
  • Testing of cannabis edibles is highly regulated and must be conducted to check for potency, dangerous substances, and pesticides
  • Taxes are generally very high, but should be moderate to encourage the legal market
  • Advertising and branding rules sometimes limit what companies are allowed to tell consumers

Airbnb regulations a ‘bad idea’ says consumer advocate

A group of consumer advocates is warning against additional regulations for home share services after Windsor city council agreed to move forward with adding regulations. 

David Clement, with Consumer Choice Center, said adding regulations can make home sharing services more expensive.

“When local governments go down this road, they almost always add in a licensing fee,” said Clement. “That licensing fee is usually just a cash grab.”

Regulations passed in Toronto last year are under appeal by Airbnb owners in the city, while the city of Vancouver is calling regulations put in place there a success. 

Redundant regulations

According to Clement, more often than not, the regulations that are passed are redundant. 

East Windsor resident Kipp Baker said the home share in his neighbourhood leaves their garbage cans out all week long. 

“Garbage pails blowing down the street,” is Baker’s main concern. “They put their garbage out on a Sunday or Monday but pickup isn’t until Thursday.”

Baker is worried about skunks and raccoons getting into the garbage and making a mess, especially as it gets warmer outside.

According to Baker, the home share near him is mostly rented on weekends, but the homeowner doesn’t live on site.

“The owners live in Vancouver, but I know bylaw officers are leaving paperwork in the mailbox,” said Baker, who has seen a City of Windsor bylaw vehicle out front “at least three times.”

Bill Tetler, with Windsor’s bylaw enforcement, said they don’t cover home share services.

 “We could have been there for a wide range of issues,” said Tetler.

In Windsor, garbage and garbage pails can only be put out for collection after 7 p.m. the night before collection. The empty bins have to be brought back off the curb by 8 p.m. the day of collection.

Doesn’t matter if homeowner lives off-site

According to Tetler, it doesn’t matter if the house is used for home share purposes, or if the homeowner lives off site — there’s a set fine for leaving garbage can out when they aren’t supposed to be out. 

“The simple solution is applying whatever fines exist, or applying the bylaws as they are written, to whomever the homeowner is,” said Clement. “There has to be a way to communicate with those folks without them being on site.”

Tetler said bylaw officers, in the event of an absent homeowner, would leave warnings and tickets on the door or in the mailbox. If it got to an extreme point, bylaw enforcement could call the homeowner to appear in court. Someone would have to file a complaint for bylaw officers to go in the first place.

Home share platforms ‘regulate themselves’

When it comes to safety measures, Clement said platforms regulate themselves, and additional government regulations on top of that “just make the process more burdensome for hosts.”

“There is an incentive practice built into the rating schemes for these services,” said Clement. “There’s a shift towards encouraging best practices. The system is set up to discourage [behaving improperly].”

Baker said there have been loud parties and crowded street parking because of the home share in his neighbourhood — but even though he wants regulations in place, he doesn’t know what could be done. 

“It should be simple,” said Baker, pointing to bylaw enforcement taking more initiative — something the department in Windsor doesn’t have the resources to do. 

Clement said one solution might be for home sharing services to add a “comments from neighbours” section — but that really people should just go knock on the front door.

“I’d encourage people to talk to their neighbours,” said Clement. “Have a civil discussion about what is and isn’t working.”

Katherine Donaldson, corporate policy coordinator for the city of Windsor said Windsor would likely not move forward with regulations until a decision was made from the Toronto appeal. 

“Until we get that precedent from the Toronto case, the Toronto appeal, we aren’t moving forward with any of the other considerations until we get that legal framework.”

Read more here


Don’t blame Doug Ford for the costs of breaking unfair beer retailing contracts

Opinion: We should blame politicians who set up and maintained a system that has both inconvenienced and overcharged consumers for nearly a century.

A lot has changed in the last 92 years, but Ontario’s alcohol policy is one thing that has remained largely the same. Following the repeal of alcohol prohibition in 1927, the province granted Brewers Warehousing Co. (later Brewers Retail/The Beer Store) a monopoly over beer sales, to appease prohibitionists. Now Prohibition’s legacy lives on through The Beer Store’s near monopoly on beer sales today, and Ontario Premier Doug Ford is facing both political heat and legal threats by trying to challenge it.

If the Ford government follows its plan, beer and wine will be available in corner and big box stores by Christmas. Evidence suggests this policy will enhance consumer choice by expanding variety, increasing convenience, and lowering prices. Anindya Sen, an economist at the University of Waterloo, estimated that roughly $700 million in annual revenue earned by The Beer Store is incremental profit earned because of its monopoly status and ability to charge higher prices. Additionally, The Beer Store’s roots in Prohibition demonstrate that lack of access is a feature, not a bug, of the current retail system. This inconvenience may be why 54 per cent of Ontarians support allowing more privately owned stores to sell alcohol.

Modernizing alcohol sales is good public policy. While the LCBO’s earnings serve as a cash cow for the province, The Beer Store’s profits primarily go into the hands of large multinational brewers — Anheuser Busch-InBev, through its Labatt subsidiary; Colorado-based Molson-Coors; and Japan’s Sapporo, through its Sleeman subsidiary. Additionally, retail monopolies do little to promote social responsibility. As one of the authors’ research has shown, privatization of alcohol sales in Alberta was associated with a lower rate of impaired driving.

The precedent for this change exists, as convenience stores already sell lottery tickets and cigarettes, and face hefty penalties for selling to minors. Furthermore, alcohol liberalization isn’t only good for consumers, it’s good for the economy. By studying similar reforms in British Columbia, a new report from the Retail Council of Canada predicts that Ford’s proposed reforms would result in 9,100 new jobs and a $3.5-billion dollar increase in GDP.

We should not blame the Ford government for pursuing alcohol modernization

However, pursuing this change has had its own set of challenges. The Beer Store has threatened legal action against the province if it moves forward with its plan, citing its agreement with the previous Liberal government that limits the number and type of beer-retailing outlets in Ontario until 2025. Beer-industry insiders claim a breach of contract could cost Ontario up to $1 billion. While there are reasons to doubt this figure, including that estimates have rapidly grown from a previous estimate of $100 million in the short time since the story about the Ontario government’s plans broke, it has proven to be politically challenging for the Ford government. Critics have claimed that moving forward would be irresponsible due to the financial risk, with Ford being directly responsible for the potential losses.

There are two important lessons to take from these exorbitant claims. The first is that the figures that opponents of the plan are claiming are entirely unsubstantiated. They are simply the figures they claim. In order for them to have any legal weight whatsoever, they would have to be proven in court, which would require The Beer Store to open its books. Given the grandiose figures being tossed around, it is entirely possible that The Beer Store is bluffing in an attempt to maintain its privileged treatment. The second important lesson here is the price of cronyism overall. The government over-regulating and picking winners and losers in the market hurts consumers twice over. First through inflated prices and poor customer service, and again as taxpayers via legal challenges. Setting a precedent that the Ford government stands with consumers over special interests would clearly show that it stands for the people.

When it comes to placing blame, there is a lot to go around. We should blame the politicians who set up and maintained a retail system that has both inconvenienced and overcharged Ontario consumers for nearly a century. We should blame the previous government for attempting to tie the hands of subsequent leaders by signing the latest contract with The Beer Store. However, regardless of the outcome of the legal challenge, we should not blame the Ford government for pursuing alcohol modernization. While this move may be costly, it is necessary to right past wrongs and end Ontario’s Prohibition-era alcohol framework. Ford has lots to answer for, but not this.

Heather Bone is a research fellow at the Consumer Choice Center and an economics PhD student at the University of Toronto. David Clement is the North American affairs manager of the Consumer Choice Center.

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