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November 21, 2019 | Ontario Handing Off Pot Distribution to Private Sector

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

The Ontario Cannabis Store (OCS), following New Brunswick’s announcement last week, says that the government-owned agency is planning to let the private sector operate its distribution network.  OCS will also work with cannabis producers interested in taking on direct delivery for their products.

As Canada’s most populous province, home to 39% of Canadians, Ontario is the nation’s largest cannabis market. There are presently 24 licensed cannabis stores in operation as well as the government-run online store. Another 69 stores are currently in the licensing application process.

Bottlenecking at the distribution level has been repeatedly cited by some Canadian cannabis companies as one of the main reasons why revenues had declined.  Over to you private sector. The province can now focus on regulation and tax collection.  We wrote a month-end letter on the Canadian cannabis industry in October 2018, which is available here.

Ontario follows New Brunswick in plans to allow the private sector to handle distributing cannabis from producers to retailers, a sign that the provincial government is beginning to reduce its legal pot exposure.  Here is a direct video link.

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November 21st, 2019

Posted In: Juggling Dynamite

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