Ontario’s illicit cannabis market is being undercut by government pricing


Bethan Rose Jenkins, Cannabis News Writer/Editorial

The only legal online retailer of cannabis in the Canadian province of Ontario the  Ontario Cannabis Store (OCS) has revealed that its product pricing is cheaper than the illicit market. Consumers and retailers were made aware of the updated figures in a quarterly report covering the months of April, May and June.

Operated by the government, the OCS announced that during its first fiscal quarter of 2020, dried flower was selling for an average price of 7.05 Canadian dollars (USD$5.30); inclusive of taxes. Illegally-operating avenues, on the other hand, are selling a gram of bud for CA$7.98 (USD$6.02).

The OCS also reported that licensed private-sector stores were selling their weed for a quarterly average per-gram price of CA$9.88 (USD$7.46); inclusive of taxes.

“Strong, positive consumer reaction to large-format 28-gram value offerings,” were spotlighted in the OCS quarterly report, which indicated that this segment of the OCS dried flower sales category grew 1.1 percent from the previous year’s quarter to 3.9 percent during Q1 of 2020.

“Some of these volume products are offered to consumers at a price of around CA$4.20 per gram (USD$3.17), including taxes,” wrote officials from the OCS, which also serves as the only legal cannabis wholesaler to private-sector stores in Ontario.

Sales of cannabis in Ontario soared 23.5 percent in one month

By population, Ontario takes the lead as the largest Canadian province. While the naturally diverse economic hub may not be generating the most sales, however, revenue growth shouldn’t be ignored. In July, monthly sales climbed 23.5 percent to CA$60.3 million (USD$45.5 million) largely triggered by an increase in the number of retail cannabis stores that opened across the province in June, when the license count topped 100.

Canada’s recreational cannabis sales grew to a record high of CA$231 million (USD$175.6 million) in July. The impressive figures demonstrate that the adult-use cannabis market has grown 15.2 percent since June and, if Statistics Canada’s calculations are correct, as much as CA$2.8 billion (USD$2.1 billion) could be harvested by Canada’s legal recreational cannabis market on an annual basis.

According to the recently published quarterly report from the OCS which serves customers with delivery services province-wide illicit market prices of cannabis in Ontario were gleaned from the illegally-operating dispensaries. Additionally, prices were pulled from Weedmaps.com a cannabis industry-serving tech company that has previously fallen under fire for listing unlicensed cannabis retail stores on its website.

Cannabis in Ontario: CEO steps down from position at OCS

On Monday, September 28, the OCS confirmed that Cal Bricker had given up his role as Chief Executive Officer (CEO). Thomas Haig the previous president of Ottawa-based discount retailer Giant Tiger will be replacing Bricker in the meantime. Bricker initially assumed his position as cannabis web retailer president and CEO in September 2019.

Efforts from the new CEO of OCS alongside the official store regulator will ensure that consumers are continuously satisfied with their access to legal, regulated cannabis. Ontario’s cannabis store count inflated from 53 at the end of the last quarter to 110 at the end of June. From here on out, 10 new retail store licenses will be issued on a weekly basis.