The cannabis scene in Canada is set to undergo radical changes. In the province of Ontario, the current cap on private cannabis stores will be removed altogether. Additionally, the local government wants to remove its lottery system affecting the number of legal pot shops.
Cannabis Stores in Ontario
Although Canada is a lot more open-minded toward cannabis stores, the current system offers room for many improvements. In the province of Ontario, several restrictions currently still apply. First of all, there is a fixed number of private cannabis stores that can be in operation at the same time. An understandable limitation, albeit one that hasn’t allowed this industry to thrive as well as initially expected.
The second measure is the so-called “lottery system”. This measure has caused a lot of problems among legal pot shops across the province. Producers of marijuana have not been amused by this limitation in the slightest, and will be more than pleased to see it gone. Both of these limits also had a negative impact on cannabis stocks of publicly traded companies, adding more fuel to the fire.
What Will Happen now?
By actively removing both of the systems, the Ontario government has to come up with new solutions. First of all, there will be an “open application system”. Government officials expect that this will lead to 20 new stores being authorized every single month. This will allow for more cannabis store owners to gain a foothold in the region and contribute to a more competitive environment.
Store owners who already have a license – or will obtain one in the future – will also be given a longer leash. It is believed that licensees can operate up to 75 stores. Some time will pass until that milestone can effectively be achieved, yet that is the current plan for Ontario.
A plan is in the works to allow retailers to sell cannabis-related goods as well. This will include, but is not limited to, cookbooks, magazines, and other items yet to be determined and approved.
There will also be a major change regarding the pre-qualification requirements for retailers looking to set up private stores. Under the current guidelines, they need to secure retail space, have access to CA$250,000 in cash, and a letter of credit confirming they can obtain another CA$50,000 when needed.
Although those aren’t problematic requirements, the Ontario government deems it time to remove all of these requirements starting next year. Many feel this latter change has been long overdue. With these changes in place, new opportunities for the industry will be created.