The OCS (Ontario Cannabis Store) acts as both the wholesaler for cannabis retailers and an online retail store. This creates a direct conflict of interest. They also have huge markups for both wholesale and retail customers. Could this be why the illegal market is still thriving in Ontario? Let’s dig into the facts a little more…
The primary role of any manager is to implement strategies that return as much profit as possible. Which is problematic for the OCS. The manager responsible for retail sales wants to generate as many online sales as possible. Similarly, the manager responsible for wholesale is doing the same, and now the two OCS managers are in a direct conflict. Who wins when there is a huge demand for a product? How much does OCS retain for retail sales? These are the difficult questions that the industry would like to see answered open and honestly.
Is OCS delivery needed?
Prior to the pandemic, the OCS was the only way to legally order cannabis online. However, the Alcohol and Gaming Commission of Ontario (AGCO) changed its regulations, allowing home delivery for retailers. Now that cannabis stores have implemented delivery systems, the AGCO has kindly continued to allow cannabis delivery. So why do we need OCS to deliver? There are definitely some rural areas in Ontario where it might be difficult to find a retail store within driving distance. A simple solution would be allowing cannabis stores to sell cannabis in Ontario by mail, the same way the OCS does. Problem Solved!
After reviewing their financial statements for the year ended 2020, retail sales were $75 million. Or roughly to 25% of their $300 million in total revenue. With approximately 1,000 cannabis stores in Ontario open to date, these sales would increase each store’s revenue by more than $75,000 annually.
Doesn’t Doug Ford regard Ontario as “Open for Business”? He also claims to be a huge supporter of small businesses. So, without costing the taxpayers a dime, he could provide cannabis retailers with more than $75K in annual revenue? What a hero he would be for small cannabis retailers. Fair-well OCS!
* The opinions in this article are solely the writers’ and are not associated with any cannabis brand or company.
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