A recent budget release shows that the debt burden being passed on to the next generation in Ontario is rising rapidly.
The government should develop a strategy to reduce this debt. This can be done by stripping the Ontario Cannabis Store’s (OCS) role down to that of a regulator and getting the government out of the business of selling pot entirely. In Ontario, licensed producers aren’t allowed to negotiate with or sell directly to licensed retailers because the government acts as a middleman between licensed producers and retailers. Arguably, taxpayers are not supposed to pay for government bureaucrats to sell cannabis, and the government should not be competing against non-government licensed retailers.
Ontario Premier Doug Ford said he wanted a free-market approach to the province’s retail cannabis industry before being elected in 2018. He said he didn’t believe in the government sticking their hands in their lives all the time.
Additionally, he said he believed in letting the market dictate. However, since winning the election, his government inserted itself into the cannabis retail business, increasing prices for and competing with legal retailers, which had allowed the illegal sellers to maintain a dominant market share. In its first-quarter report for this year, the OCS calculated that the illicit market made up 75% of pot sales in Ontario.
Ironically, the OCS is allowed to sell and deliver its products while legal dispensaries are forbidden. The OCS was granted a monopoly as the only retailer currently authorized to sell legal cannabis online in Ontario. It’s disappointing that the government that criticized the Beer Store’s retail monopoly granted the OCS a retail monopoly over online sales and delivery of cannabis.
The OCS’ monopoly has driven up the price of legal cannabis, which has enabled the illicit market to maintain a dominant market share. Arguably, there are no reasons taxes should pay the many OCS employees who perform roles that licensed non-government retailers could handle. Ontario’s sunshine list contained the names of 36 employees at the Ontario Cannabis Retail Corporation in 2019, the year after the province lost $42 million selling pot.
The Ontario government has a big task to reduce unnecessary spending to ensure the projection of double-digit deficits in the future does not occur. The government can moderate excessive spending by getting out of the business of cannabis retail to save taxpayers money. This way, the legal non-government cannabis market can grow and displace the illicit market. The Ontario Chamber of Commerce has rightfully called on Ontario’s government to amend the Cannabis Licence Act to allow for delivery and curbside pick-up for licensed retailers.