by MAGGIE M, Wedgee-in-Chief, Editor, theWedge.LIVE

I experience the birth of the cannabis industry somewhat like a character in C.S. Lewis’s dystopian, Alice in Wonderland.

I am Alice drawn into a rabbit hole. One moment I am right-sized to elucidate a story–the next moment I am wrong-sized.

The Cheshire Cat then reminds me that I have descended into madness.

On December 12, 2017, the Ontario Government released this communique, a portion reproduced here under Fair Use:

Create a new provincial retailer, overseen by the LCBO, to ensure safe and socially responsible distribution of recreational cannabis through stand-alone stores and an online order service. Under Ontario’s approach, approximately 150 stand-alone stores will open by 2020, including 40 stores by July 2018, rising to 80 by July 2019. Online distribution will service all regions of the province by July 2018.

Then on the heels of our national gift-giving holiday in 2018–one year later–the Queen of Hearts howled, “Off with their heads!”

The industry in Ontario felt this decapitation as the world watched:

The government is also moving forward with a tightly regulated private retail model for cannabis that will launch by April 1, 2019. The Alcohol and Gaming Commission of Ontario is the provincial regulator authorized to grant store licences. The Ontario Cannabis Store will be the exclusive wholesaler to these stores. [Only 25] Private stores [by lottery] will be introduced with strict controls to safeguard children and youth and combat the illegal market.

The process feels like a croquet match with the mad monarch. Only 25 licenses by lottery? WAP!

The winners to be announced shortly will be closely scrutinized by the Ontario Gaming and Lottery commission which already oversees with draconian power all forms of gaming, lottery and alcohol sales–even church raffles.

The Cheshire Cat grins.

Edibles Shrinking

Then Alice took another bite and shrunk.

In lockstep with Ontario’s handiwork, December 20, 2018, Health Canada confined edibles to a low 10mg of THC per container, white labeling i.e. no compelling branding, no sugar–to protect our youth. Imagine a white label vodka or craft beer.

It’s a tea party with the Mad Hatter where the conversation makes no sense.

The date for legal cannabis edibles and topicals to reach the market in Ontario is October 17, 2019–exactly one year from its legalization for recreational use.

Recreational Cannabis Forecast By Actual Market Sales

The true potential for recreational cannabis is already evidenced in the province of Newfoundland-Labrador. This story fleshes out the potential for all provinces. Excerpt:

“Consumers prefer retail cannabis sales over online sales – retail sales were 15x higher than online sales in Prince Edward Island. Because of slow roll-outs in other provinces (especially Ontario), it will take time for other Canadian provinces to match Newfoundland’s market share and revenue.

Overall, the biggest winner from Newfoundland’s roll-out is Canopy Growth (CGC).”

*Insight: Watch our interview of Bruce Linton, Chairman, Canopy Growth here.

At some point Alice returns to her sister in the first dimension. This could be the third quarter of 2019.

The water-pipe smoking caterpillar remains indelibly dismissive.

 

A One-Sided Conversation with the Mad Hatter

The  25-stores-by-lottery idea out of Doug Ford’s imaginings is an unforeseen blow to a blooming industry–one that is helping people with pain, insomnia and myriad diseases. The chief driver to this legislation is stated as, “supply issues.”

Economics are driven by the law of supply and demand. Just like the law of thermodynamics, it does not change. There is limited supply today because the demand was great. The supply will meet the overwhelming demand again. Its the nature of agriculture.

It should not be any government’s affair to rule over the industry’s shelves–empty or full. It is a marketing issue.

This limit will likely result in an emboldened illicit drug trade for another year with legal access severely reduced. The legal industry could end up with an over-supply of cannabis as a result.

I can’t help wonder if adequate consultation was made with the leaders in the cannabis industry now mature in the medicinal market. No one died. There were no exigencies driving this legislation.

And then there is the matter of OCS–yet another Ontario agency being the sole wholesaler of cannabis in the province. Really? I mean really. Try that with Molson or Seagram’s or Novartis.

Why is the government increasingly in business competing against independent businesses, regulating and taxing at the same time.

My closing rant is not about cannabis. It is about infringing on our self-actualization. We can be educated on cannabis and make decisions ourselves about its use. We already do that with alcohol, beer, cigarettes and lottery tickets.

We who are over 19 years of age are not children–and we are not stupid.