If you are like me and are having a hard time keeping up with the cannabis retail strategy in Canada, well – you’re not alone. With more than half of Ontario’s eligible municipalities opting in to host cannabis stores and an AGCO lottery that awarded 25 retail licenses to those in Ontario to open stores in this April, it has been a hectic time. Obviously retail will benefit the average consumer looking to purchase cannabis each and every day, but how it will happen has been messy as hell. Apparently, retail license holders who aren’t ready to open by April 1st will face fines of up to $50,000. Goddamn!
So to clear up fact from fiction, Canada’s leading conference for retailers, marketers and tech innovators, DX3 taking place on March 6 and 7, is hosting a panel all about – you guessed it – cannabis retail. We sat down with Ray Gracewood, Chief Commercial Officer of Organigram to talk retail cannabis ahead of his panel.
Edit Seven: With only 25 licenses provided in Ontario, how will that affect companies who had plans for retail expansion into the province?
Ray Gracewood: It certainly changes the game. I think everyone in the industry is interested to see how the lottery format will work out, but I do know it’s left several businesses who hoped to get a license out in the cold after spending significantly to secure leases and develop business plans. From our perspective, we’ve always seen Organigram as a licensed producer above all else, so much like other markets, we’re happy to discuss distribution with anyone who feels that our brand is a good fit for their retail environment.
E7: Not all municipalities have opted into allowing private cannabis retail stores – what are the politics surrounding that and why is it still such an issue?
RG: In most cases, municipalities have gone to their constituents and have had some form of public expression to help formulate a strategy. We’ve heard that many municipalities aren’t necessarily happy with the taxation structure which allocates funding to the federal and provincial government, but not municipal. Although this may factor into their decision, there are several other factors as well including attitudes toward cannabis and sensitivities around retail locations.
E7: How is limiting private retail stores going to hurt or hinder sales in the potential future?
RG: Early indications across Canada are that provinces with the strongest retail distribution are best at servicing their market. Considering Ontario only has online sales to this point, retail store openings will only help provide access to consumers, but only to a certain extent. The province needs to balance the needs of regulatory compliance with the needs of Ontario consumers, which naturally results in a conservative approach. Although it is only 25 locations to start, we assume they will open the number of available licenses once the initial process is ironed out.
E7: What can people expect from the retail cannabis store experience, once we do get there?
RG: The bar has been set high by many players across the Country! We have the luxury of distribution from Coast to Coast, so we’ve had a great impression of how well the consumer experience has been developed, especially considering the short timeframe. We would assume that many of these license holders in Ontario will do their due diligence to understand what works in other parts of Canada and take those learnings into consideration when they develop their store layouts and merchandising plans.
E7: Are there any other places in the US (example: Colorado or California) where we could be looking for a retail strategy?
RG: Successful applicants in Ontario should be looking at all regulated markets as part of their due diligence. Like anything else, there will always be stronger and weaker reference points but our experience is that there’s always something to learn, even if it’s what NOT to do. From our experience, some of the strongest retail executions have been in Colorado, California, and Nevada but insights can be found everywhere.
(Story by Contributing Editor, Ama Scriver)