The retail rollout is delayed again and online stores are underperforming

Latest reports are saying that several of the first 25 retail stores granted licenses to sell cannabis in Ontario will not be opening on April 1st.

It’s been more than 5 months since recreational cannabis has been legalized in Canada, and some provinces are still not on the money making track.

Ontario is still fiercely struggling to make anything happen on that front as the retail rollout date (April 1st) is just a few days away.

Several store owners who won the Ontario license lottery announced they won’t be ready to open their stores on April 1st.

Aside from having issues with the rollout of brick-and-mortar stores, Ontario’s online cannabis sales platform—the OCS—has been plagued with issues such as shortages, infested shipments, and more.

Late to open

Winners of the Ontario cannabis license lottery were announced in mid-January. Applicants were warned that if they aren’t able to fill out their duties and open stores by April 1st they risk getting fined and ultimately losing their license.

Now that April 1st is just around the corner, some owners are getting ready to open their store, while others are gathering money to pay the announced fines.

The Alcohol and Gaming Commission of Ontario said fines will be as following:

  • Failing to open a store by April 1st — $12,500 CAD
  • Failing to open a store by April 30th — risk losing $50,000 letter of credit
  • Failing to open long term — risk losing your license

The PC government in Ontario has said that they don’t intend on rushing the vetting process, even though the applicants are facing fines.

“We’ll wait and see on April 1 how many open,” said Finance Minister Vic Fedeli. “There was prohibition for 100 years and we’re going to be in this business for 100 years. We will not rush into anything.”

Fedeli also pointed out how the AGCO is working to make sure that the 25 that were approved get their stores open on time.

Canadians are avoiding the OCS

Currently, cannabis can only be sold in Ontario through the government-run website, the OCS. However, Canadians are not with it.

According to Stats Canada, a shocking number of Canadians outright refuses to use the OCS for multiple reasons.

Around 80% of Quebec’s cannabis revenue has come solely from brick-and-mortar stores, while an astounding 94% of sales in Nova Scotia and 95% in New Brunswick were made in stores.

Deepak Anand, CEO of Materia Ventures, a cannabis supply and distribution company, said that this is obviously the result of Canadians wanting the touch-and-feel aspect of the experience.

However, that is definitely not the only reason. Many users have pointed out how the pricing on the OCS store is totally unreasonable and completely unacceptable.

The black market growers are still very much in business, although users point out that legalization made them drop the prices so they would stay in competition with the legal market.

Another thing many shoppers pointed out is the privacy aspect, and not leaving a data trail behind after leaving the store.

“You have to share your ID in a store, but one you’ve done that, there’s no record of you having been there,” Brock University business professor Michael Armstrong says.

Armstrong also pointed out how online shops demand you to make a profile on their website and pay with a credit card, which is two types of data that could be leaked.

This raises questions and issues, especially since some countries, such as South Korea, announced that cannabis use and shopping abroad may cause issues when they return home.

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