The Ontario Cannabis Store was originally supposed to be the cannabis equivalent of the LCBO – the sole distributor and retailer of cannabis in the province.
Meanwhile, Sundial Growers, a licensed producer from Alberta, recently purchased Spiritleaf and recently signed an agreement to buy Alcanna, which owns and operates Value Buds stores.
That is a great disadvantage for retailers, who must pay labour costs, rent, utilities, security, and credit card processing fees.
Stores that opened under the old lottery system had the advantage of having the market to themselves for almost a year.
Although stores can now deliver until 11 pm, the issue is that technically if it’s past 11 pm, the employee must abandon the delivery and return the product to the store.
The consumer has spoken, and the cannabis market is now divided into three segments: customers looking for value, premium, and high-end products.
The OCS is also purely cash-on-delivery, meaning that a retailer must pay for the product on the day they receive it.
In the normal business world, if you are unhappy with the product delivered, you can return it, no questions asked.
This is masked as remuneration for data, but producers have no option but to oblige or be shut out from large retail chains, some with upwards of 50 stores in Ontario alone.
Being subjected to the sort of scrutiny most individuals and corporations had to go through, just ensured the underprivileged had no chance of entering the industry, as did the $6,000 application fee for a Retail Operator License.
Deloitte, PWC, KPMG are tasked with performing the background checks.
A criminal background check with Toronto police is $20 and a credit report is in the $25 to $30 range.
Turns out, if you want to make a staff schedule, you have to be perfect.
Why would anyone in the illegal market want to enter the legal market? There are dozens, if not hundreds, of illegal delivery services doing phenomenal business without the restrictions, regulations, and reporting required of the legal market.
The CAFÉ location at 104 Harbord actually won the second allocation lottery in August 2019.
Unlicensed dispensaries have multiple advantages over the legal ones in Ford’s poorly constructed legal cannabis market.