Ontario Reportedly Considering Closing Down Provincial Cannabis Operations

It was reported by BNN Bloomberg this afternoon that the Government of Ontario is considering getting out of the wholesale cannabis business. The Ontario Cannabis Retail Corporation, who runs the Ontario Cannabis Store, may be shutting its doors as the government asks themselves why they are in the warehousing business.

The end of the provincial entity wholesaling cannabis would result in Canada’s most populous province shifting to a distribution method similar to that of Saskatchewan, wherein licensed producers ship directly to retailers. The change would likely result in lowering the price of cannabis within the province, as the middleman gets removed from the equation along with associated costing.

Chief in pushing the idea for consideration, is the fact that the entity lost $42 million last year while establishing operations. Another issue lies in the fact that the group is quickly running out of warehousing space at its Oakville, Ontario location where they lease 100,000 square feet. With additional products set to hit Canadian markets by the end of the year as “recreation 2.0” rolls out, coupled with an ever-expanding list of licensed cultivators, there simply is not enough space at the facility to accommodate operations.

Chief among questions that remain unanswered, is what will become of the Ontario Cannabis Store, the online provincial retailer of cannabis. If the retailer were to also close down, residents across the province may be out of luck in terms of online ordering while local dispensaries scramble to offer a replacement service. Within Saskatchewan, online ordering is available from any of the operating dispensaries province wide, however some retailers have been slower to roll out such services than others.

BNN Bloomberg’s sources indicated that an announcement could be anticipated as early as next week on the future of the Ontario Cannabis Retail Corporation.

Jay

As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive's stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.

Share
Tweet
WhatsApp
Share
Reddit