Ontario’s provincial government recently unveiled it will no longer allow cannabis retailers to provide product delivery or curbside pickup within the province, with deliveries halting as of last night. Back in April, Ontario’s privately-operated cannabis stores were granted approval to provide additional services to their customers as part of the province’s COVID-19 emergency order. However, now that such services are ended, there will be several significant implications as a result.
According to the Ontario Chamber of Commerce, the elimination of curbside pickup and delivery services across the province’s 100-some cannabis stores will result in an estimated economic loss of approximately $180 million. If the additional 450 retail locations that are slated for opening are also accounted for, then losses amount to nearly $1 billion. Not only will the loss of the cannabis services affect economic output, but the jobs of an estimated 2,500 employees will also be at risk.
In lieu of allowing the curbside pickup and delivery services to continue, the Ontario government instead allowed for the reopening of cannabis stores as long as social distancing practices are observed. Nonetheless, the consumer base that once was reliant on courtesy services offered by cannabis stores could turn to the illicit market to meet their demand once again. If in fact that turns out to be the case, then the government will no longer meet one of its most fundamental cannabis legalization principles: eliminate the illicit market.
Information for this briefing was found via Bloomberg and Ontario Chamber of Commerce. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.