Ontario’s ministry of the attorney general announced it will scrap the REC retail lottery system and, as of January 6, and begin accepting retail license applications for unlimited potential operators across the province.
Globe and Mail
- Each company will eventually be allowed to own as many as 75 stores. In the first year, they cannot own more than 30 stores.
- Beginning in April 2020—eight months after the government’s initial announcement in August that it would move to allocating stores based on “market demand”—the province will begin licensing 20 REC stores per month.
MJ Biz Daily, CBC Toronto
- Ontario Cannabis Store CEO Cal Bricker said he was “ready to implement” the plan.
- A Toronto retail consultant I spoke with at MJBizCon in Las Vegas this week mimed her head exploding at mention of the government’s initially stated goal of 1,000 stores, or even half as many. “How much more staff do you imagine the province would need to hire to make that possible?” she said.
Ontario will allow each producer to open a single farm-gate store at one of its facilities, though producers may need to sell the product first to the Ontario Cannabis Store, and then buy it back from them.
Though the province led the nation in total sales during the first year of legalization, the $216.8M in sales pales by comparison to the $325M in business and $50M in taxes the Cannalysts estimate Ontario lost by not following Alberta’s market-demand model earlier.
- BMO analyst Tamy Chen suggested overall industry sales volumes could increase as much as 35% if Ontario opened a total 325 stores over 2020. Unless the government begins approving more than 20 stores monthly, however, Ontario will not have more than 180 new stores by the end of 2020.
- To equal Alberta’s stores-per-person rate, Ontario would need 1,000 stores. At the proposed rate, it would take until 2024 to open that many.