OCS: Cannabis Reform

The Ontario Cannabis Store (OCS) is calling for cannabis reform. The country’s largest monopoly distributor wants to see THC limits increased and the level of single-use plastics decreased.

Health Canada is currently undergoing a review of Canada’s cannabis regime. Organizations are submitting their input.

Ottawa Public Health, for example, suggested harsher edible laws and more restricted packaging.

The OCS‘ cannabis reform paper – “Opportunities to Improve the Canadian Federal Cannabis Framework” – offers sensible suggestions.

OCS: Cannabis Reform Report

The OCS’s cannabis reform report joins groups like the Competition Bureau and Canadian Chamber of Commerce to demand increased THC limits. And they are one hundred percent correct.

You can’t displace “illicit” markets and have a robust cannabis industry if nanny-state regulations handicap the legal businesses. It’s basic cannabis economics.

Adjusting THC limits is issue #1 in the OCS’s cannabis reform report. They suggest a 10mg THC cap per unit contained in a single package. Therefore, a 10-piece chocolate bar would be 100mg.

Issue #2 is reforming the plain-packaging regulations. The OCS wants more “consumer literacy” in making “informed and responsible purchasing decisions.”

This means:

• Incentive non-combustible cannabis products
• Clarify rules about customer reviews and promotions.
• “Loosen typography” and allow businesses to brand and market themselves.
• Allow businesses to provide far more content on the packages (e.g., cannabinoids, terpenes, nutritional information, brand narratives and information on cultivation processes)
• Reduce restrictions on CBD-dominant products.
• Adjust labelling requirements for cannabis extracts to increase consumer literacy.

But that’s not all in the OCS’s cannabis reform report.

They also want stronger quality controls. A sort of “public-private” partnership between licensed producers and the government to develop national testing standards.

That is one of the few blights in the report because the OCS also calls for reforming the cannabis packaging industry.

The report wants the feds to align cannabis packaging with federal rules on single-use plastics. They want to support recycling options through financial incentives.

So, all in all, the OCS report isn’t terrible. Many of these are sensible suggestions.

Where the OCS’s Cannabis Reform Goes Wrong

In the OCS cannabis reform report, they mention an estimate from Deloitte. Between October 2018 and December 2020, Ontario‘s legal cannabis industry contributed $13.3 billion to Ontario‘s GDP. That’s about 48,000 new jobs.

Cannabis has contributed $43.5 billion to Canada’s GDP and sustained 151,000 jobs. There are more cannabis workers in Canada than clothing manufacturers and gold miners.

For these reasons, the OCS sees itself as essential in “working with Health Canada and other government partners to protect public health and safety,” by undercutting the underground cannabis market and rewarding cronies with deep pockets.

While the OCS’s call for recyclable packaging and higher THC is sound, at the end of the day, the OCS is a government-granted monopoly that has no place in a free society.

If not for Premier Ford, the OCS would be more than a regulator. Like Ontario‘s liquor stores, the OCS would also be a monopoly retailer.

And if given that power, you can be sure any argument for private enterprise would be met with unfounded claims that “for profit” retail doesn’t protect the children or displace black markets.

We get a glimpse at the OCS’s true colours in the report. For example, they want to keep the advertising ban on cannabis smoking and vaping in place. But they want the feds to legalize edible and topical cannabis promotion.

The idea is to disincentive Canadian cannabis consumers from smoking.

They’re also OK with mandatory health warnings, the red “THC” stop-sign symbol, and promoting only low-THC cannabis edibles. The potent stuff is still taboo, albeit legal in the OCS world.

Do We Need the OCS?

The OCS’s cannabis reform report is sensible, although not without its problems. The real question, though, is: does Ontario need the OCS?

Producers cultivate cannabis and manufacture cannabis products. The OCS purchases these products in bulk. It is the province’s only legal wholesaler, buying everything from flowers, pre-rolls, edibles, extracts, topicals, beverages, etc.

The OCS operates an online retail store where Ontario customers can purchase cannabis. The OCS also sells to private brick-and-mortar stores. These private stores cannot purchase directly from licensed producers.

Instead, the OCS has a distribution centre. Just one. It’s not even theirs. The bureaucrats of the OCS outsource cannabis distribution to a third party, Domain Logistics.

Every day, the single distribution warehouse ships 1,100 kilograms of dried flowers across the province. They deal with more than 3,000 SKUs. The entire process is complex and capital-intensive.

And unnecessary.

A cannabis producer should not be shipping their products halfway across the province, only for the products to be sent back their way via Domain Logistics.

It’s like building a bridge without power tools or heavy machinery because it’ll take longer and create more jobs.

With everything riding on a single warehouse in Guelph, Ontario, it’s little surprise product shortages, and cyberhacks have become routine.

The OCS may have made some sensible suggestions in the cannabis reform report to Health Canada. But the institution itself is unnecessary, wasteful, and impedes free and prosperous cannabis markets.