Ontario pot retail rules pose headwinds for industry players


TORONTO — Ontario’s decision to not cap the number of privately-operated cannabis shops was welcomed by industry players, but market share restrictions on licensed producers and the lack of clarity on where marijuana stores can be located may pose headwinds for the sector.

The provincial government yesterday shed more light on its framework for Ontario’s private cannabis retail marketplace, and it is poised to introduce related legislation today.

Ontario officials say they won’t put a limit on the number of pot shops once recreational cannabis is legal across the country on Oct. 17, but indicated that licensed producers would be able to have one retail location located at a production facility.

Ottawa lawyer Trina Fraser says the restriction is positive for smaller retailers who won’t get squeezed out, but worrisome for licensed producers as it is unclear to what degree they can be affiliated with retail shops that do get the green light.

Canaccord Genuity analyst Matt Bottomley says the restriction on licensed producers represents an “overall headwind” for the sector.

Canopy Growth’s chief executive Bruce Linton said an unlimited number of cannabis shops, whether or not they have its company branding, is positive because it represents more retail points for its products than under the previous government.


The Canadian Press