Ontario Gov't to Open Marijuana Stores

[Canadian Visitor]

The Government of Ontario announced today that the LCBO [[the gov't liquor store monopoly) will oversee and own up to 150 new Cannabis stores.

Said stores are to be the CCBO or Cannabis Control Board of Ontario.

The first stores will open in July 2018 with full ramp up by 2020.

Though no location details have been announced you can safely assume Windsor will have one or more stores.

Minimum legal age to purchase/consume will be 19.

Driving while impaired by Marijuana will be illegal and may be subject to road-side checks.

Service will be behind-the-counter.

The only place you will legally be allowed to consume is a private residence.

https://news.ontario.ca/mag/en/2017/...-cannabis.html

[Jimaz]

♫And there was much rejoicing.♫

Online distribution will be available across the province from July 2018 onward.

That's interesting.

Hopefully sanity will become contagious, this will become NORMLized, then we can move on to the many, much more important issues!

Thank you, Canada, once again, for leading the way.

[[And I don't even use the stuff!)

[Bham1982]

Good for Canada.

Our idiot Attorney General wants to waste billions and endless lives in a new "War on Drugs" and even wants to prosecute medical marijuana. U.S. is hurtling backward, thanks to idiot voters.

[Wesley Mouch]

So Ontario has chosen to go with government run stores. I never cease to be amazed at the prices for liquor in ON. [[Expect about double US pricing, or more). I presume that the state stores with unionized government employees will also be obscenely expensive. That the citizens do not revolt proves that Canadians are among the worlds most passive souls.

I presume that the black market sellers encouraged government stores vs. private retailers. This move will ensure that the black market stays viable in Ontario.

[Lowell]

So Ontario has chosen to go with government run stores. I never cease to be amazed at the prices for liquor in ON. [[Expect about double US pricing, or more). I presume that the state stores with unionized government employees will also be obscenely expensive. That the citizens do not revolt proves that Canadians are among the worlds most passive souls.

I presume that the black market sellers encouraged government stores vs. private retailers. This move will ensure that the black market stays viable in Ontario.

Yeah I hear you but, with alcohol certainly, a government monopoly makes sense. The public largely ends up bearing the high costs of alcohol related-accidents, brawls, crime, addiction, broken families, health issues, absenteeism and more.

The social costs of cannabis are negligible compared to alcohol. So this is clearly a revenue grab. Since anyone can easily cultivate cannabis, as compared to producing alcoholic beverages, enforcement will be difficult and it will interesting to see how it works.

[401don]

So Ontario has chosen to go with government run stores. I never cease to be amazed at the prices for liquor in ON. [[Expect about double US pricing, or more). I presume that the state stores with unionized government employees will also be obscenely expensive. That the citizens do not revolt proves that Canadians are among the worlds most passive souls.

I presume that the black market sellers encouraged government stores vs. private retailers. This move will ensure that the black market stays viable in Ontario.

Canadians are generally agreeable to paying higher sin taxes on alcohol and tobacco in exchange for healthcare and even decent roads so we're passive, thank God. If you think LCBO employees have it so good read on:

https://www.google.ca/url?sa=t&rct=j...pfbCWSbuoRLzUw

[Canadian Visitor]

Yeah I hear you but, with alcohol certainly, a government monopoly makes sense. The public largely ends up bearing the high costs of alcohol related-accidents, brawls, crime, addiction, broken families, health issues, absenteeism and more.

The social costs of cannabis are negligible compared to alcohol. So this is clearly a revenue grab. Since anyone can easily cultivate cannabis, as compared to producing alcoholic beverages, enforcement will be difficult and it will interesting to see how it works.

A few points of clarification.

Criminal Law is federal in Canada.

So what has happened here is that our Federal government has introduced [[not yet passed) a legalization bill.

That bill spells out a few things; and then leaves others to the provinces.

One thing that was left to them was to decide how to regulate commercial sales.

***

The Federal bill spells out that:

Should the Cannabis Act become law in July 2018, adults who are 18 years or older [[Ontario chose age 19) would be able to legally:

• possess up to 30 grams of legal dried cannabis or equivalent in non-dried form
• share up to 30 grams of legal cannabis with other adults
• purchase dried or fresh cannabis and cannabis oil from a provincially-licensed retailer
  
  • In those provinces that have not yet or choose not to put in place a regulated retail framework, individuals would be able to purchase cannabis online from a federally-licensed producer.
  
  
• grow up to 4 cannabis plants, up to a maximum height of 100cm, per residence for personal use from licensed seed or seedlings
• make cannabis products, such as food and drinks, at home provided that organic solvents are not used

Other products, such as edibles, would be made available for purchase once appropriate rules for their production and sale are developed.

[Bong-Man]

Great news ! I've been delaying my road trip to the Maritimes until Canada threw the switch. Hopefully the other provinces will follow soon, as my Fall adventure to Newfoundland has been mapped out for years.

[Wesley Mouch]

Yeah I hear you but, with alcohol certainly, a government monopoly makes sense. The public largely ends up bearing the high costs of alcohol related-accidents, brawls, crime, addiction, broken families, health issues, absenteeism and more.

The social costs of cannabis are negligible compared to alcohol. So this is clearly a revenue grab. Since anyone can easily cultivate cannabis, as compared to producing alcoholic beverages, enforcement will be difficult and it will interesting to see how it works.

Ageed on the social costs of dope vs. booze, although there are some new studies suggesting that dope really does make you a dope. That said, I'm 100% in favor of legalization.

Whether taxation is appropriate, having government employees sell dope isn't necessary. States regulate liquor in the US. And groceries stores sell it. Whatever liquor's social costs, I don't think they're reduced much if at all by taxes, nor by state-run sales. Yet in Canada, the passive masses tolerate a state-operated monopoly on sales of beer and wine*, and will tolerate its expansion into dope? Amazes me.

Major point -> Gov't stores & union sales staff will ensure a good profit margin for the black market. The goal of Gov't stores is not eradication of black market, but is electoral politics. [[Its also good for police departments, who will have more work too!)

* Yes, Wynn has started a small pilot program for grocery liquor sales. It will be widely available in 2086. Her action was to protect the state stores and union employees but make it look like there was reform. Joke.

[Canadian Visitor]

Ageed on the social costs of dope vs. booze, although there are some new studies suggesting that dope really does make you a dope. That said, I'm 100% in favor of legalization.

Whether taxation is appropriate, having government employees sell dope isn't necessary. States regulate liquor in the US. And groceries stores sell it. Whatever liquor's social costs, I don't think they're reduced much if at all by taxes, nor by state-run sales. Yet in Canada, the passive masses tolerate a state-operated monopoly on sales of beer and wine*, and will tolerate its expansion into dope? Amazes me.

* Yes, Wynn has started a small pilot program for grocery liquor sales. It will be widely available in 2086. Her action was to protect the state stores and union employees but make it look like there was reform. Joke.

For clarity, the gov't holds on to the LCBO because it returns a net profit of $1.8B to provincial coffers every year above and beyond alcohol tax.

That's a meaningful amount of funding for programs that does not have to be tax-supported.

Privatization is problematic in that the value of the chain, pegged at around 20B or so....is based on it being a near monopoly.

A private one being no better than a public one, privatization would require breaking it up and seriously de-valuing the asset.

I happen to favour more liberalization of sales of wine and beer.

But the politics of announcing that the sales tax has to go 1.5% to replace the LCBO earnings is a problem here for any government of any stripe.

****

Speaking of said liberalization the rollout is to have 450 non-gov't [[or beer store monopoly) sellers of beer and wine by the end of 2019. Not including craft sales through Farmer's markets.

I fully expect that occur and can personally already buy wine or beer and 2 of the 4 supermarkets in my immediate area w/the program less than 1/2 rolled out.

I also expect you'll see further rollout on weed sales with time.

[Wesley Mouch]

For clarity, the gov't holds on to the LCBO because it returns a net profit of $1.8B to provincial coffers every year above and beyond alcohol tax.

That's a meaningful amount of funding for programs that does not have to be tax-supported.

Privatization is problematic in that the value of the chain, pegged at around 20B or so....is based on it being a near monopoly.

A private one being no better than a public one, privatization would require breaking it up and seriously de-valuing the asset.

I happen to favour more liberalization of sales of wine and beer.

But the politics of announcing that the sales tax has to go 1.5% to replace the LCBO earnings is a problem here for any government of any stripe.

****

Speaking of said liberalization the rollout is to have 450 non-gov't [[or beer store monopoly) sellers of beer and wine by the end of 2019. Not including craft sales through Farmer's markets.

I fully expect that occur and can personally already buy wine or beer and 2 of the 4 supermarkets in my immediate area w/the program less than 1/2 rolled out.

I also expect you'll see further rollout on weed sales with time.

Am I wrong that the rollout involves only sales of Ontario wine? [[Same for beer?)

[Canadian Visitor]

The rollout for wine was conditional on VQA [[Ontario) wine sales for first 3 years, after that it opens up.

For Beer there is no limitation, you can find Coors or Pabst or Bud those markets offering beer now.

Farmer's markets are craft only.

[Canadian Visitor]

I should add w/over 200 Ontario wineries, the selection of quality whites and roses at a range of price points is quite good.

Ontario doesn't produce as many quality reds, well, of the robust variety. Just not warm enough most years.

But there are some excellent Pinot Noirs

[Embee]

So Ontario has chosen to go with government run stores. I never cease to be amazed at the prices for liquor in ON. [[Expect about double US pricing, or more). I presume that the state stores with unionized government employees will also be obscenely expensive. That the citizens do not revolt proves that Canadians are among the worlds most passive souls.

I presume that the black market sellers encouraged government stores vs. private retailers. This move will ensure that the black market stays viable in Ontario.

I don't think Canadians are "passive". There is an understanding among Canadians that in order to have universal health care, a strong social safety net, and quality infrastructure, tax rates have to be relatively high. Obscenely taxing alcohol and cigarettes makes sense given the cost they put on our health care and social service systems.

[Wesley Mouch]

The rollout for wine was conditional on VQA [[Ontario) wine sales for first 3 years, after that it opens up.

For Beer there is no limitation, you can find Coors or Pabst or Bud those markets offering beer now.

Farmer's markets are craft only.

Thanks for the info. I know there were some international trade complaints filed on Ontario, or was it BC? for protecting their products, instead of competing on fair playing field.

[Wesley Mouch]

I don't think Canadians are "passive". There is an understanding among Canadians that in order to have universal health care, a strong social safety net, and quality infrastructure, tax rates have to be relatively high. Obscenely taxing alcohol and cigarettes makes sense given the cost they put on our health care and social service systems.

OK. I'll go with you on booze. Now tell me exactly how cheese tariffs are accepted because of the benefits of excluding American and European cheese? [[$10 for a block of cheap cheddar? $5 CAD for a half-gallon [[~2L) of non-organic milk?). And no revolt? I suggest a Cheeze Party in Lake Ontario.

[Canadian Visitor]

Thanks for the info. I know there were some international trade complaints filed on Ontario, or was it BC? for protecting their products, instead of competing on fair playing field.

Under NAFTA [[and the FTA before it) government owned alcohol monopolies were specifically protected/excluded. [[many US States own one as well)

Ontario, had a unique scenario where 2 wineries, also owned private stores, roughly 200 of them, and were the breweries had their own collective, private, monopoly.

These too were protected, with a couple of caveats. If new private stores were granted, the same favoritism couldn't be shown, and foreign suppliers had to have fair access to the existing selling system.

There has never been a complaint under NAFTA, to my knowledge about this arrangement.

There is a new European Free Trade Deal, I'm not sure how its treated in that text.

I know there were complaints about the way Canada's alcohol taxing regime was structured, at one point, as it showed preference for domestic production.

I'm not certain on the outcome, though I believe we made changes.

The rules are opening up here, not as quickly as I would like; but were coming along.

A Supreme Court [[ours) decision is due in the next few months that could open things up quite a bit, as it has to due w/internal trade barriers in Canada [[non-tariff).

[Canadian Visitor]

OK. I'll go with you on booze. Now tell me exactly how cheese tariffs are accepted because of the benefits of excluding American and European cheese? [[$10 for a block of cheap cheddar? $5 CAD for a half-gallon [[~2L) of non-organic milk?). And no revolt? I suggest a Cheeze Party in Lake Ontario.

This is relatively defensible.

Our dairy industry [[as with chicken) was set up in such a way to deal w/large US and European agricultural subsidies.

Our governments deemed some years ago that it was irrational and affordable to try to out-bid the U.S. or Europe in cutting checks to farmers to produce cheaper product.

So instead, they set up farmer-owned cooperatives with monopolies.

It became defacto illegal to import cheese/milk/chicken etc.

In point of fact, by the way, its not illegal, its just that the tariff wall is huge, I think 650% but don't hold me to that.

The result is that the domestic industry can cover its costs and make a profit without government largesse.

Under the new CETA deal w/Europe, we are opening the market a crack, allowing the Europeans 6% of the market tariff-free.

The industry was protected under NAFTA

The US does similar things [[see SUGAR)

Most Canadians wouldn't mind if dairy were a bit cheaper, but its hardly a massive issue. Its an extra $5 to $10 on a weekly grocery bill for most folks.

But our farmers are financially comfortable and don't get handouts.

Our milk is all hormone free, same w/our chicken and pork.

Of course people who live right at the border will do some runs across, but for most folks its not worth it.

To get a truly open market here, either the US [[and others) would have to drop agricultural subsidies, in which case US prices would rise by at least 40% in dairy.

Or, Canada would have to start subsidizing that industry.

Frankly, I think there are better uses for taxes.

[Canadian Visitor]

Ontario gov't considering price of $10 per gram for marijuana.

https://www.thestar.com/news/queensp...xt-summer.html

[Wesley Mouch]

1) Is $10 cheap enough to get consumers to drive to a Cannibis Control Board store? [[I have not idea what the stuff costs, preferring other intoxicants).

2) Does anyone think is realistic to build new stores [[or at least outfit expensive mall space like the Liquor Board), and then staff them with well-paid and pensioned government employees -- and charge $10/g? Street supply mostly doesn't even pay rent, or often employees. Just middlemen. Are WA or CO selling via stand-alone state stores that don't also sell other products like stamps or distribute welfare cheques?

[Canadian Visitor]

1) Is $10 cheap enough to get consumers to drive to a Cannibis Control Board store? [[I have not idea what the stuff costs, preferring other intoxicants).

2) Does anyone think is realistic to build new stores [[or at least outfit expensive mall space like the Liquor Board), and then staff them with well-paid and pensioned government employees -- and charge $10/g? Street supply mostly doesn't even pay rent, or often employees. Just middlemen. Are WA or CO selling via stand-alone state stores that don't also sell other products like stamps or distribute welfare cheques?

I'm not a consumer of this product either.

But its my understanding that $10 is close to existing street price.

The province says they want to make it low enough to shut down the black market and are still deciding.

***

In terms of how CO and WA do it, I haven't been there since the legalizations but my understanding is they are using private licensees.

***

The LCBO is an adept retailer, my suspicion is that this plan is a combination of trying to max. gov't profit with a sop to the union that reps LCBO workers who just barely accepted their latest labour deal w/o a strike.

They lost Sunday shift premiums and have seen a shift way from F/T employment. Entry-level LCBO retail staff aren't much better off than the typical big box; except that if they stay around long enough, they may get to be F/T and then it is a high wage [[for retail) job. I think the average wait is something like 10 years mind you.

[Wesley Mouch]

I'm not a consumer of this product either.

But its my understanding that $10 is close to existing street price.

The province says they want to make it low enough to shut down the black market and are still deciding.

***

In terms of how CO and WA do it, I haven't been there since the legalizations but my understanding is they are using private licensees.

***

The LCBO is an adept retailer, my suspicion is that this plan is a combination of trying to max. gov't profit with a sop to the union that reps LCBO workers who just barely accepted their latest labour deal w/o a strike.

They lost Sunday shift premiums and have seen a shift way from F/T employment. Entry-level LCBO retail staff aren't much better off than the typical big box; except that if they stay around long enough, they may get to be F/T and then it is a high wage [[for retail) job. I think the average wait is something like 10 years mind you.

Friend in another province worked for their LCB, and newbies are treated like dirt ... required to work all the miserable shifts in differing sites. Sounds like typical unionized world today where the new kids are cannon fodder while the senior workers get the gold. [[This, btw, is one of the reasons new folks aren't so fond of unions -- benefits run uphill.)

Given that the CCBO will be operating expensive stores with overall expensive staff, will they have to subsidize to match market price, or is the market price already high-markup [[due to risk of arrest, imprisonment, death, etc.)? Hard for me to believe that the suppliers who are salivating over the advent of broad, legal sales will be satisified with low markup, but I suppose that's the gov't's idea.

The bigger impediment may be the number of stores. How does the 150 store count compare to Beer Stores or LCBO outlets? Given that 50% or more would be in Toronto area, are 75 stores spread across even a small province like Ontario be enough? I realize the drive from Thunder Bay to Peterborough is only about 30 minutes, but still ... 75 stores? Are there not more than 76 cities with dope heads?

[Bong-Man]

I've been to Colorado, Washington, and Oregon since legalization. Each State's stores are private, and heavily monitored by the local police. Goods in Washington and Oregon are pre-packaged and sealed in set quantities. This means you can't choose your bud or smell the goods. This also cuts down on the variety available, as many dispensaries carry the same product. Colorado is more a free-for-all. The goods are in big jars you can inspect, and your purchase is weighed in front of you. Many of the stores now have their own on-sight growing operations. Except for Denver, stores in Colorado are usually located off the beaten track...usually in industrial areas of small towns. Dispensaries in Oregon and Washington are as common as coffee shops, and located freely everywhere. Old-fashioned weed runs from $5 to $16 bucks a gram in all 3 States, depending on quality. I always ask for the best, which is usually about 27 - 30% THC. New products are always surfacing, and smoking weed is probably only 50% of the market at this time.

[Bong-Man]

I'm sure the $10 cost for Canada is just an estimate. Weed is sold at different prices for different uses. No way you could have a standard price. It also doesn't sound like there is any provisions for growing your own for private use. That's huge in Oregon.

[Canadian Visitor]

Given that the CCBO will be operating expensive stores with overall expensive staff, will they have to subsidize to match market price, or is the market price already high-markup [[due to risk of arrest, imprisonment, death, etc.)? Hard for me to believe that the suppliers who are salivating over the advent of broad, legal sales will be satisified with low markup, but I suppose that's the gov't's idea.

I think Bong-Man's post implies a wholesale price in range of $2-7 per gram based on the old retail axiom of 100% mark-up.

I'm 100% certain the gov't will not subsidize the price, as they are very much after net $$$ here.

The bigger impediment may be the number of stores. How does the 150 store count compare to Beer Stores or LCBO outlets? Given that 50% or more would be in Toronto area, are 75 stores spread across even a small province like Ontario be enough? I realize the drive from Thunder Bay to Peterborough is only about 30 minutes, but still ... 75 stores? Are there not more than 76 cities with dope heads?

The LCBO store count is 600 or so.

And drive time of T-Bay to PTBO is about 16 hours.

The 150 stores will likely be expanded on either through the CCBO or private licensees. But that's a while off yet.

The gov't is currently moving to allow roughly 450 private retailers of wine/beer [[supermarkets).

But in that case, is requiring them to buy from the LCBO at Wholesale prices.

I expect you may see something similar down the road w/CCBO where the gov't becomes the wholesaler.