Ontario Gov't Monopolizing Weed Like It Did With Alcohol

The Canadian province of Ontario is the first to publicize a detailed plan to sell and distribute recreational marijuana once it is legalized next summer. The Liberal government announced that it will sell marijuana using its liquor control board despite recommendations against the concept. Back in April, the federal government announced the goal of legalization and regulation of pot by July 1, 2018, but left it up to individual provinces to organize distribution and usage regulations.

In Ontario, alcohol is regulated and sold by the Liquor Control Board of Ontario (LCBO). The LCBO has long been criticized for its rigid control of alcohol and lack of oversight. As the only place Ontario residents can purchase alcohol, LCBO stores are a constant source of frustration and anger. Numerous reports have found flaws in their operations, and a report by Ontario’s Auditor General Jim McCarter even stated that the liquor monopoly was failing consumers because it refused to negotiate low wholesale prices from suppliers. Instead, the LCBO decides on retail prices it wants to charge for a product, and then asks suppliers to raise or lower wholesale costs accordingly. It claims it does this to be socially responsible; that by keeping prices high, it’s trying to discourage over-consumption.

Yeah, almost all Ontarians see through that bullshit too. Understandably, that was the LCBO’s mandate when it was established; back when prohibition ended in 1927. But the monopoly has continued, thanks to the dividends it must pay back to the Ontario government.

I want to act surprised that Premier Kathleen Wynne decided to use the LCBO to sell weed, but I’m not. At every opportunity, Wynne and her finance minister, Charles Sousa, have pointed to the LCBO as a secure, established mechanism for selling intoxicating substances. And why shouldn’t they? A CIBC report has estimated the size of the national recreational cannabis market to be at least $10 billion. By deeming LCBO as the controlling distribute, they get to take a huge cut of that profit. Even if Ontario wasn’t a cash-strapped province (which is it), it’s an incredibly appealing concept.

According to Attorney General Yasir Naqvi, the LCBO will look to open at least 150 dedicated stores for marijuana distribution by 2020. So weed won’t be sold with alcohol, but it will still be controlled and sold like alcohol and be subject to the same restrictions as well.

Since the announcement, cannabis consumers and advocates have heavily criticised the decision. By restricting distribution to provincial government stores, it means fewer options for medicinal users and consumers, worse quality weed, and will do little to eliminate the black market for the drug.

“At first, I was pretty happy that they had a plan,” said Peter Thurley, who uses prescribed marijuana for pain management. “But I quickly came to realize that the plan as it’s laid out is essentially a full government monopoly.”

Naqvi says the province won’t act punitively, and will not criminally charge underage users caught with small amounts of marijuana. But given the federal government’s mandate of spending $274 million on enforcement, this seems like a pipe dream.

It’s important to think about exactly who this regulation benefits. Certainly not medicinal users, who are restricted to only taking their medicine in their homes. Certainly not workers and entrepreneurs, as workers from dispensaries will now be unemployed when the small businesses are forced to shut down. According to the president of the Ontario Public Service Employees Union, they’re going to be training their staff for dispensing marijuana, so unless those current workers can somehow get hired by this union, they’re SOL. And have you ever walked into an LCBO and asked for help? Front-line workers at these stores are often better at staring out a window than informing you of different aromas and bodies of wine. I highly doubt the new training will be nuanced enough to successful aid weed enthusiasts. It seems pretty counterproductive to cut out existing operations and their experienced staff, but that’s exactly what the Ontario government is doing.

By seizing complete control of the cannabis market, the Ontario government is ensuring itself the biggest cut of the incoming profits. They have yet to announce any plan on pricing or taxing the product either. But given the lack of consumer-focused pricing the LCBO has, it’s doubtful that they’re going to be focused on the best prices for weed buyers. But what they seem to have forgotten that by eliminating choice and competitive pricing, they’re opening the door to black market competitors. Organized crime alone sells an estimated $60 billion of pot a year in North America. And inevitably, most of the new stores are going to be in the Greater Toronto Area or main urban centres; are folks from outside these centres going to be traveling an hour and a half to pick up legal cannabis? Or are they just going to go to the dealer down the street who has weed at half the price of the government stores? You know, the one who’s available at all hours and not just regular bureaucratic hours? With no options for private stores and sellers as well, there is no branding to encourage quality from suppliers.

What it really boils down to is this: the Ontario government has decided that instead of trying to work on a plausible, reasonable dispensary plan, they’re going to shut down entrepreneurs and other small businesses. They want to squeeze the most money out of profits as possible with zero competition in the market. And they have completely missed the main idea behind legalization--that adults are mature and responsible enough to make their own decisions. Consumers should have the right to demand choice and competition, but instead the Ontario government insists on restricting access to only their stores.

Thanks for taking excitement and logic out of weed legalization, Ontario government. You'll have to excuse me if I continue to buy from my own dealer.

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