Pubdate: Sat, 09 Sep 2017
Source: Globe and Mail (Canada)
Copyright: 2017 The Globe and Mail Company
Authors: Jeff Gray and Alexandra Posadzki
Page: A8


Private retailers criticize move to have liquor board unit manage
distribution, saying it will do little to curb black-market activity

The Ontario government is launching a monopoly of cannabis stores as a
subsidiary of the Liquor Control Board of Ontario, a plan private
retailers say will fail to crush the black market and challenge legal
producers to keep up with the demand for recreational marijuana.

The province pledged to open 40 stores next year and a total of 150
separate locations to sell legal weed across the province by 2020. The
announcement comes as the federal Liberal government prepares to make
good on its promise to legalize recreational use of the drug next summer.

Ontario officials are taking pains to stress that restrictions will
still govern marijuana in the province, such as setting the minimum
age for legal pot possession at 19 - higher than the federal minimum
of 18.

"In order to be ready for next July, our government will bring forward
legislation this fall to ensure that even after legalization, cannabis
remains a carefully controlled substance in Ontario," Attorney-General
Yasir Naqvi told a news conference at Queen's Park on Friday.

They also made clear that the new system will mean the end of the many
illegal private-sector storefronts now offering pot. Their
proliferation has alarmed Toronto Mayor John Tory and sparked police
crackdowns. Ontario's Liberal government plan calls for an enforcement
strategy to close down the remaining illegal operators, as well as
prices set low enough at the legal stores to force illegal operators
out of business.

"Let me be clear: These pot dispensaries are illegal and will be shut
down," Mr. Naqvi told reporters. "If you operate one of these
facilities, consider yourself on notice."

The province's legal pot shops will use the LCBO's back office and
other infrastructure. The stores will be completely separate from the
booze retailer, and no marijuana will be sold alongside alcohol.

Only 40 stores are slated to be open in time for legalization next
July, and provincial officials are just beginning talks with
municipalities about where they should be located. Officials say they
intend to target areas with high concentrations of illegal marijuana
dispensaries. Eighty are set to be open by July of 2019.

Online sales, however, are expected to start across the province next

Mr. Tory welcomed the plan but said he wanted to discuss new cash to
defray the costs of police and bylaw officers busting illegal pot
shops: "Cities cannot absorb these costs alone and I look forward to
future discussions on how the costs of legalization for Toronto and
other municipalities will be funded."

Ontario Finance Minister Charles Sousa said federal guidelines on
pricing and taxation had yet to be unveiled. And he cautioned that
opening those 150 stores was contingent on the federal government's
licensed marijuana producers being able to produce enough to satisfy
the demand.

Greg Engel, the chief executive of Organigram, a Moncton-based
licensed producer, says it will likely take three or four years for
legal marijuana growers to be able to produce enough: "There will be a
portion that will continue to go to the black market, there's no question."

Cannabis Canada, an industry group that represents licensed marijuana
producers, said it hoped the Ontario government would change its mind
and allow private-sector retailers as well.

Marijuana activist Jodie Emery, who spearheads a chain of marijuana
dispensaries called Cannabis Culture but faces charges after police
raids, attended the news conference and criticized the government's
plans minutes after the announcement.

She said the strategy was doomed to fail, and would only keep police
busy trying to counter a black market that will continue to thrive:
"Legalization was supposed to be the end of criminalization."
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