Ontario’s Cannabis Legislation Puts Strain on Legacy License Holders

The legalization of cannabis is one drawn-out battle that’s been going on for a while. Since it is still during the process of international legalization, not every country is going at the same pace to pass out legislatures that permit a smooth operation. The ones who are affected the most are the license holders because they have to conform to the new legislature that’s being declared at a rapid pace. Ontario has been in a long and grueling battle with the black markets ever since the Cannabis Act (C-45) in 2018. The newest legislation intended to combat black markets, which was rolled out in 2020, has put a lot of strain on legacy license holders. Here’s a brief overview of the forces at play.


The Shortage of Supply

Since the initial legislation in December of 2018, municipalities of populations over 50,000 are allowed to sell cannabis. The initial problem was the lack of the national supply of cannabis, which forced municipalities to limit the number of cannabis shops. Until the national supply picked up under the Cannabis License Act, only 25 stores were allowed to open in Ontario. The 25 stores were picked under the basis of a lottery, called the Expression of Interest Lottery, to determine who could apply for the cannabis retail operator license. Winners of the lottery were finally granted the license and they could operate freely.


The Problem

The stores that won the lottery for the license of retail cannabis distribution are now in a pinch. The legacy license won’t be offered again, and this means that it can’t be renewed, forcing these shops to apply for another license after working hard to get the first one. Adopting the glass-half-full mentality is not a bad idea because getting a license now is much easier than it used to be, but it can mean that established shops will have to go over it again under a very strict time limit. One of the most popular electronic directories for marijuana, Weedmaps, will start removing listings found in cannabis delivery directories in a gradual manner starting from August 2019. Businesses on there are expected to obtain the new licenses within the time frame proposed by the new legislation.

The New Legislation

The black market’s persistence is believed to come from the lack of cannabis retail shops around the province. New legislation was put in place to curb some of the creeping black market’s influence. The government changed its course of action and planned to put the lottery system out of commission by replacing it with a new system; 20 new licenses are permitted to be released every month, compared to the total 25 stores limit they had to keep.


Even though there are a lot of supporters for the new cannabis legislature because it allows for the existence of a more controlled environment, there is still a lot of backlash from many conservative communities. Legacy license holders have been under a lot of strain due to the constant changes that are forcing them to dramatically change their operations and practices. Hopefully, the future started looking brighter for new retail shops and industrial operations.


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