The problem with the lack of retail cannabis licenses

Future cannabis retailers in Ontario, Alberta and BC are having difficulties obtaining licenses and this is pushing users towards the black market.

How is not issuing licenses for cannabis retailers going to reduce the shortage of cannabis? It’s not.

Future store owners in British Columbia, Ontario and Alberta are being hampered by the provincial and local authorities as they face one difficulty after another in their attempts to get licensed.

Let’s take a look together at the huge mess the provinces are making by limiting the number of retail cannabis stores and other lackluster preventive measures.

The good old switcheroo

So, after Ontario changed the rules on how its recreational cannabis system will look like for the fourth time some of the future retailers are no longer looking at the opportunity with the same vigor as before.

Just to remind the readers, after the PCs won the provincial election in Ontario they promised to change it for the better.

They removed the cap on the number of stores which can be opened, which is great, but some time later they announced that the retail stores won’t be able to legally open their doors to customers until April 2019.

Then, the Progressive Conservatives led by Doug Ford flip-flopped on their promise even further.

The provincial government announced that those hoping to open a store will only be able to do so if they win the cannabis license lottery.

Worst of all, only 25 licenses would be handed out in the first phase of moving forward with retail cannabis stores.

That effectively means that only 25 stores or less, since having a license awarded doesn’t mean you’ll open the store in time or at all, will be open in April.

That’s not all. Seeing how the lottery process could end up giving by accident all 25 licenses to businesses from Toronto and the GTA.

The regulators made sure this doesn’t happen by predetermining the number of licenses which could be granted for each part of Ontario separately.

So, not only did the government limit how many stores can effectively be opened, but it’s also determining where and when you can open them—if you are awarded the license you have to open the store on April 1st or face paying fines.

Alberta halted license issuance

Alberta was one of the states that initially gave out a large number of licenses to future retailers, but it got burnt once all the cannabis in the province ran out a few days later.

After the legalization on October 17th, Canadians flooded the stores. Retailers sold out all their products and closed doors until further.

Seeing how many cannabis producers are getting licensed these days, or are in the process of expanding their production capability, that shouldn’t be the case for much longer.

The province currently has 65 licensed stores, and in November the government ordered enough cannabis to supply 25o stores, but only received 20% of that.

“There are more than 700 applications from about 430 applicants currently waiting in the queue for an Alberta store licence”, said AGLC spokeswoman Heather Holmen.

The Alberta Cannabis Collective conducted a study of 20 retail-linked organizations according to which this license issue is putting 1,800 jobs in doubt and possibly costing owners $13 million in wasted leases.

Right now, retailers are required to purchase cannabis via the AGLC.

The Alberta Cannabis Collective believes retailers should be able to approach licensed producers on their own in order to cut down on the prices.

Alberta has set a goal to open 250 stores by the end of 2019, with 63 already being open.

That goal is within the reach of possible, however, the government will have to raise the moratorium on the issuance of licenses.

Nobody wants to be the scapegoat

I get why provinces are being careful about the number of stores opening their doors to the public. Nobody wants to be the guy who opened the doors to a river of weed.

However, hitting the abort button as soon as things don’t go as planned shows a lack of faith in the plan the government had already put forward.

It is my strong belief that the government and appropriate authorities are just confused and unsure of how to go about this because nobody wants to be the one that pushed the system way out of balance and into the hands of the black market.

Unfortunately, that is exactly what they are doing with these measures.

I don’t know what could be the thought process of the regulators that are determining the future of the retail cannabis market.

Do they seriously think that if there isn’t enough legal cannabis to go around that legal, licensed businesses, are going to risk their future by buying and reselling illegal cannabis?

Seriously, who does that? Do liquor retailers go out and buy moonshine from bootleggers when they’re all out?

This measure simply slows down the market and pushes users in the other way – towards the black market.

Just think about it from a user perspective—if I can’t get weed from a legal store I’m gonna go and find it wherever I can. I’m not going to order from the OCS because I can’t wait that long, I want it now. And the only way to get it in the shortest manner is from a store or from a dealer.

Whoever thought that limiting access to legal cannabis is going to make the demand go away obviously didn’t think the whole shebang all the way through.
Categories News

Leave a Comment

Please confirm your age

Are you over 19 years of age (over 18 in Alberta and Quebec)?

By entering, you agree to Greencamp's Terms of Service and Privacy Policy.