Reefer Madness in Ontario?

It is too bad premier Doug Ford’s younger brother died. The late Rob Ford might have been a wealth of information about the marketing of street drugs. As it is, it will take years to straighten out the mess the Ontario conservatives are making of legal retailing of cannabis.

But then, almost any street person in Ontario can easily explain the problems. It is the same as any successful retailer knows. It all comes down to location, location and location. In any city, the most important locations (other than around high schools) are where you find the highest traffic from local universities and colleges.

For example, there are three shops in the planning for London. The best guess is that the lucky retailer midway between Fanshawe College and the University of Western Ontario will get more than 60 per cent of the business in the city.

What boggles the mind though is that Toronto—with seven times the population of London—will also have just three legal outlets besides the Ontario on-line store.

This mess is a combination of the conservative’s political interference in the earlier planning for government-only stores, the lottery system for selecting privatized outlets and the rules and regulations set up by the Alcohol and Gaming Commission of Ontario (AGCO).

But now we learn that this great system for Ontario cannot get enough product to supply the few stores they will have by this summer. You can be assured though that the private, unlicensed and less controlled market will be making plenty of product available while the government- controlled retailers struggle with unreasonable government regulation and constraints on production.

And the entrepreneurial, less-publicized, private market should give daily thanks to the politicians who legalized marijuana in Canada and are building a market for them. While the legal stores are setting a lower retail price point, the ‘free’ market can make far more money on the increased volumes.


Copyright 2019 © Peter Lowry

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