Ontario’s Failure Has Cost Cannabis Industry $325M: Report
It’s no secret that the failure of Ontario’s provincial government to license more cannabis stores has been extremely costly for Canada’s cannabis industry.
How costly? Try CAD$325 million dollars in lost potential revenues – just from October 2018 through August 2019. Roughly $30 million per month.
The calculation is simple, according to an article from MJBizDaily.
“Had Ontario rolled out as efficiently as Alberta, we would’ve have been over CA$510 million in sales from October to August,” said Craig Wiggins, managing director of TheCannalysts.
In actual fact, the province has only generated CAD$185 million over that time period. It’s a differential of $325 million.
Close observers of the Doug Ford regime may claim it is unfair to expect this administration to perform as competently as other governments. On the other hand, given Ontario’s much more concentrated population, there is no reason why Ontario couldn’t have exceeded Alberta in revenue growth (in proportionate terms) for the legal cannabis industry.
However, with only 25 legal cannabis stores versus Alberta’s 306 retail locations, Ontario has arguably been Canada’s biggest provincial underperformer.
Ontario’s population of 14+ million represents nearly 40% of Canada’s total population. Alberta has a population of just over 4 million, less than one-third the population of Ontario.
By that metric, Ontario’s incompetence has cost the legal cannabis industry even more dollars. If Ontario had matched Alberta in cannabis revenues per capita, Ontario would have generated over CAD$600 million over the same time period – a differential of greater than $400 million.
The same article from MJBizDaily notes that the province has now gone completely silent on when it will award the additional cannabis store licenses it has previously promised.
First it was supposed to be “50 new cannabis store licenses”. But the province only selected 42 candidates from its recent “lottery”.
Then roughly one-third of these “lottery winners” were promptly disqualified from further pursuit of a retail store license. Now Doug Ford’s anti-cannabis imbeciles are only working on roughly 30 new store licenses – and can’t even announce any progress there.
At what point does the legal cannabis industry in Ontario cease to see this as mere “incompetence” and starts to perceive a lack of good faith from the Ontario provincial government?
It took Ontario roughly 6 months after legalization just to open its first cannabis store, thanks to the initial incompetence and foot-dragging from the Conservative government.
Ironically, that was April 1st – April Fool’s Day. But when it comes to the Doug Ford government and the legal cannabis industry, every day is April Fool’s Day.
The mainstream media has publicly crucified CannTrust Holdings (CAN:TRST / US:CTST) for operating “unlicensed grow-rooms”. Yet the province has made it virtually impossible for Canadian LP’s to survive from purely legal operations.
Doug Ford may not have been holding a gun to the head of CannTrust management when they made that ill-advised decision. But he certainly created the major financial inducement to break the rules.
Ontario is not the only provincial government to have failed its electorate (and the legal cannabis industry) in rolling out legal cannabis. Quebec and British Columbia – Canada’s 2nd and 3rd largest provinces – also earn clear failing grades in several areas.
But B.C. is finally getting its act together in launching stores. The province is in the process of doubling its cannabis store total to 156.
In the case of Quebec, this seems to be a genuine case of anti-cannabis ignorance (and stupidity). The province recently announced (for absolutely no reason) that it was raising the legal age of cannabis consumption to 21. All that will accomplish is to force young adults in Quebec to shop from the cannabis black market.
Ontario stands alone. It’s not moving forward on its legal cannabis industry. It’s not being in any way transparent about why it continues to badly fail in a process that Alberta has made look easy.
It’s a very costly failure for the legal cannabis industry: CAD$325 million and counting.
Published at Thu, 07 Nov 2019 17:19:10 +0000