Canada’s largest cannabis companies are urging Ontario Premier Doug Ford to significantly increase the number of recreational marijuana stores, noting that the province’s retail footprint is “severely challenging” their ability to invest in the new industry.
In an open letter to Ford, the Cannabis Council of Canada said there is an ample supply of marijuana to serve the adult-use market.
“There simply is no longer a shortage,” according to the letter.
Ford’s government has blamed the slow rollout of stores on a shortage of adult-use products.
Ontario currently has only two dozen licensed stores versus more than 300 in Alberta and 157 in British Columbia.
The Cannabis Council – which represents 35 federally licensed cultivators – also urged Ford to reverse a policy that precludes licensed producers from operating more than a single cannabis retail store at one of their production facilities.
The letter calls on Ontario to “immediately” allow producers to open cannabis retail stores at production facilities, a promise the Ontario premier made after being elected – but has yet to deliver on.
“Unfortunately, our ability to continue to invest and sustain the jobs that we have created is being severely challenged by the province’s current retail cannabis policy framework,” wrote the letter’s authors, including CEOs of the largest cannabis companies in Canada.
Health Canada data supports the industry group’s claim that the cannabis supply shortage that plagued the industry’s early months is over.
The amount of dried cannabis that is packaged and ready for sale reached 60,872 kilograms (134,200 pounds) at the end of August. “Finished” cannabis oil inventory was 101,316 liters (26,765 gallons).
By comparison, almost 12,000 kilograms of dried cannabis and 6,000 liters of cannabis oil were sold in August.
The industry group said its members want to invest more in Ontario.
“Unless the Ontario government changes course and allows for an expanded regulated retail network, we won’t be able to meet that objective and consumers will continue to turn to the illegal market,” according to the letter.
“We urge you to instruct your ministers and officials to make every effort to enact all the necessary regulations to allow the number of private cannabis retail points of sale to significantly increase to support Canada’s licensed cannabis producers.”
Ontario experienced poor recreational sales until its first stores opened in April, when adult-use cannabis sales more than doubled in Canada’s largest consumer market.
Before that, consumers displayed a general unwillingness to rely on the government-run online sales channel.
Ontario’s cannabis sales jumped from a lowly 7.6 million Canadian dollars ($5.6 million) in March to almost CA$20 million in April.
Sales have grown steadily since then, reaching CA$34 million in August.
Business groups have cited the sales data as evidence that more stores are needed.
In April, the Ontario Chamber of Commerce called on the province to kill the cannabis store lottery that had been used to dole out licenses.
The Chamber recommended that Ontario:
- Proceed with a licensing system based on merit for private retail.
- Roll out a significant number of new stores.
- Harness the workforce-development opportunities for one of Ontario’s fastest-growing industries.
The Chamber established the Ontario Cannabis Policy Council in September to advocate for the industry’s growth across the province.