Cannabis Privatization in Ontario: Good, bad, or awful?
We are officially into week three of Cannabis Legalization in Canada, and Ontario (like many other provinces) has chosen to privatize cannabis sales in brick-and-mortar stores. For consumers, this means waiting until April 1, 2019 to purchase cannabis from a retail store. In the meantime, the Ontario Cannabis Store (OCS) has promised to fulfill the demands of cannabis-using Ontarians, but are they living up to that promise? The public says not.
OCS – What is it and how is it failing?
The OCS is the sole legal retailer of cannabis in the province of Ontario – the online store received just over 100,000 orders within the first 24 hours of legalization and consumers are experiencing delays up to two weeks.
Considering the months of anticipation, planning and forecasting (by the Canadian government), the public feels they are entitled to their outrage – with over 1,000 complaints filed at The Office of the Ontario Ombudsman.
The OCS has posted warnings on their website stating that “unbelievably high demand” (pun intended?) will cause longer than expected delivery times and they have added “additional capacity” to its processing facility to meet the “unprecedented demand” for legal marijuana.
Source: Globe and Mail
Economic Impact – Back to ‘Black Market’ – dealers thankful for legalization as it’s driving volume to them
With frustrations mounting across Ontario, many cannabis-users are turning back to the pre-legalization way of doing things – the friend of a friend who still has some inventory. The current situation is a dealers paradise as demand skyrockets for easily accessible cannabis and people open their pockets for what’s available.
The other factor working in favour of ‘black market dealers’ is the price difference. The OCS has priced their dried flowers between $9.50 – $10.25 per gram, while the average black market price is closer to $7.48 per gram according to a Reuters article.
There have been murmurs coming from pre-legalization cannabis users that the price difference is too much of a barrier to transition from their current suppliers to purchasing from the Government. Even if the OCS was able to fulfill delivery within the 3 day window they initially stated would be the expected time, there is not guarantee that seasoned users of the plant will purchase online. The price difference, lack of immediacy, and reputation of the OCS out of the gate are reasons for dealers to celebrate – they can expect high demand for the foreseeable future.
Source: Reuters
Don’t want to go up in smoke?
Sidepart is working with cannabis brands to develop their online presence, consumer analytics, and business processes to ensure they can provide a seamless experience once their physical locations open. Leaders in the cannabis industry will be those getting a head start on developing educational content, creating awareness around different strains, and ensuring their end product does what it says.
Don’t go up in smoke – get in touch with our team and learn how we can work together –>info@sidepart.com
