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Ontario chamber urges government to ‘modernize’ cannabis

Published on March 16, 2023 by David Wylie

Photo: David Wylie/the oz.

The Ontario Chamber of Commerce says the province needs to “modernize and champion the cannabis sector.”

The influential 60,000-member business group is urging the government to allow cannabis consumption sites and special events permits, as well as stopping what it calls the “clustering” of cannabis stores.

Its recommendations come in a submission to Ontario’s Progressive Conservative government before they table the budget March 23.

“In the three years since recreational cannabis was legalized in Canada, it has quickly emerged as one of Canada’s fastest-growing sectors and has since contributed over $43 billion to our national GDP,” says the chamber’s 27-page report. “Yet major hurdles—including an overly restrictive regulatory regime—inhibit economic growth, deter investment, and squeeze margins for producers and retailers alike.”

The Ontario chamber has been a vocal advocate for the cannabis industry. Last December the non-profit group urged to province to be less cautious in its cannabis policy.

Legal weed stores are suffocating

Cannabis companies, including retailers and producers, have been pushing against a regulatory framework they say is suffocating them with too much tax, too many restrictions, little support, and razor sharp margins.

Rocco Rossi, the chamber’s president and CEO, told the Toronto Star that unlicensed cannabis still makes up over half of sales.

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“In an increasingly competitive world, what you want to be doing is to be constantly evolving — and make no mistake, there have been good steps taken but there’s more that can be done,” he told the paper.

“With multiple levels of government … you’ve got some municipalities that allow (cannabis stores) and some that don’t. So you’ve got a bit of a chaotic rule structure. I think this is an area where three years in, you can and should be having ongoing conversations to make things more transparent, more consistent, and that would help the market significantly.”

Six ways to modernize and champion cannabis

This latest advocacy by the chamber on behalf of legal cannabis includes six recommendations.

1. Work with the federal government to ensure regulations strike the appropriate balance between safeguarding public health and ensuring cannabis companies can develop a distinct brand and product offerings that can effectively compete with illegal actors.
2. Modernize regulations to allow licensed producers and retailers to have a direct relationship.
3. Pursue lost tax revenues from underground markets, and establish tougher penalties for noncompliance, coupled with intensified audits.
4. Require the Ontario Cannabis Retail Store to provide quarterly updates on their progress around the 16 recommendations in the Auditor General’s value-for-money audit report released in December 2021.
5. Facilitate cannabis consumption establishments and implement special occasion permits.
6. Address issues related to the clustering of cannabis retailers by:
   1. Informing the prospective store owner what stores are or may be opening around their proposed location at the start of the application process.
   2. Developing a heat map on the Alcohol and Gaming Commission of Ontario’s (AGCO) website, which includes newly approved stores and applications that have been submitted for a retail license, to allow for more informed business decisions.
   3. Allowing for the market forces of supply and demand to take effect.

Read the chamber’s full submission.