After examining a year’s worth of tweets post-legalization, Toronto researchers have concluded something a lot of us already knew: Ontario’s retail rollout was a mess, per the Conversation.
Open for business?
The Conservative party — which ran on the economy-focused tagline “Open for business” — scrapped the previous government’s unpopular plan to expand the government-run liquor and beer monopoly into cannabis. Instead, they went with another head-scratcher — a “dual retail model” that included a government-run e-commerce site and just 25 precious storefront licenses awarded via a lottery.
“Strict licensing protocols resulted in an under-served market, forcing the Ontario Cannabis Store’s website to function beyond capacity,” write the authors. “Higher-than-expected demand, coupled with limited brick-and-mortar stores, created significant issues with online sales and major delays in delivery.” Oof.
The low success rate and poor response to the initial plan motivated regulators to drastically reduce red tape and onerous licensing requirements — so much so, that now the market is flooded with 1000 stores, some/many of which will likely shutter.
“This growth is now creating major concerns with store cannibalization,” conclude the authors. “With many cannabis retailers competing for the same market share, it is increasingly difficult for some of these retailers to remain profitable.”
For more background, read a previous Cannabis Daily: OCS makes the case against… the OCS?