Ontario government loses $42 million selling weed in the last year
Leave it to the Ontario government to lose money selling drugs.
The Ontario Cannabis Retail Corporation reportedly lost a whopping $42 million in the latest fiscal year, according to publicly released documents from the corporation.
Ontario’s expenses totalled a stunning $106 million, with pot revenues totalling only $64 million for the year.
Marijuana has been legalized since October of last year, with the sloppy rollout being criticized by many for their supply chain issues and marijuana shortages, a definite hurdle considering that sales were undoubtedly going to be sky-high.
The supply shortages meant the Ontario government had to cap the number of retail licences at 25, but the province has its eyes on increasing the number of legal pot outlets to 75 by October of 2019.
The Ontario Cannabis Store publicly announced last week that CEO Patrick Ford would be retiring. A replacement is being sought out.
Companies are starting to develop medical treatments from psychedelic drugs such as LSD, ketamine and magic mushrooms. Mind Medicine Inc. is running clinical trials with psychedelic based drugs, according to Bloomberg.
“Our ambition is to be one of the first publicly listed neuro-pharmaceutical companies developing psychedelic medicines,” said JR Rahn, the company’s co-founder and co-chief executive. The company is currently gearing up to list on Canadian stock exchanges, pending final approvals. Mind Medicine Inc. is hoping to list on Toronto’s NEO Exchange by the first week of March.
While it may seem like a bit of a stretch for people to accept the idea of a company working with psychedelic drugs like MDMA and psilocybin, many Canadians quickly became comfortable with the legal use of cannabis since October 2018.
Companies have been experimenting at a growing rate with clinical trials of psychedelic treatments for mental health issues such as depression, post-traumatic stress disorder and curing addiction to other drugs such as nicotine and heroin.
The US Food and Drug Administration recently granted certain companies a legal way to conduct research on otherwise illegal drugs which will open the door to public listings.
Ronan Levy is the executive chairman of Field Trip Psychedelics Inc. and his company is building a network of clinics that will focus on ketamine-enhanced psychotherapy. The first clinic will open in Toronto as early as next month with more clinics to open in New York City in Los Angeles.
The work that these psychedelic companies are doing is legal in the U.S. because they aren’t using cannabis and that allows for “greater opportunity to access growth capital from private investors in the U.S. who may not touch cannabis,” Levy said.
It’s worth noting that this will be an industry separate from cannabis, which can only grow so large due to the substance’s illegality in the US The cannabis industry has also recently seen stock prices collapse amid slower sales in Canada as of late.
“I think that the psychedelics industry could be much bigger than the cannabis industry because it’s going to attract institutional capital and already is starting to,” Rahn said. “It’s also going to be a more concentrated space because the barriers to entry are much higher.”
Cannabis loungers or weed cafes are potentially going to be opening up in Ontario as the province continues to push for an open cannabis market, according to City News Toronto.
The Ford government says that its ultimate goal is for an open market approach to cannabis. For now, however, the PCs say a supply shortage forced the government to start off using a lottery system for limited retail licences. There are no expected changes to the cannabis framework at this time, however the Progressive Conservatives said that the most recent consultation is to understand potential decisions to create an open market in the future.
The Alcohol and Gaming Commission of Ontario has confirmed that it has already received more than 700 applications for retail operator licences which has prompted the provincial government to consider the possibility of “consumption venues” in addition to permits for special occasions such as concerts or outdoor festivals.
Ontario is dedicated to giving the private sector the freedom to build a safe and convenient retail system said Attorney General Doug Downey in a press release. This is an attempt to hopefully combat the illegal market.
Ontario is getting rid of the cap on the number of cannabis shops that can be owned by private retailers. CBC News has confirmed that the Ford government “will be issuing approximately 20 new cannabis store authorizations starting in April 2020.”
Attorney General Doug Downey issued a press release that read:
“In response to the federal government’s decision to legalize cannabis, our government is determined to open the cannabis market as responsibly as possible. We have said all along that opening more legal stores is the most effective way to combat the illicit market, protect our kids and keep our communities safe.”
The new, retailer-friendly approach begins January 6th, when the Alcohol and Gaming Commission of Ontario will start accepting applications from potential retailers.
An Ontario based cannabis producer, CannTrust Holdings Inc, has announced their intention to destroy $77 million worth of cannabis, according to the CBC.
Since the legalization of cannabis, CannTrust has been plagued with scandals. The most notable incident occurred on September 17th where the company had its license revoked by Health Canada for producing unlicensed pot.
As well as this, Health Canada froze a significant amount of CannTrust’s stock. The company previously estimated that the impact of this regulation had lost the producer $51 million.
Since then, CannTrust has been on a P.R. crusade in an attempt to repair their tarnished image. Firstly, they fired their CEO. Now, they are hoping that the destruction of $12 million worth of plants and $65 million worth of inventory will remedy their image in the eyes of Health Canada.
CannTrust plan to regain regulatory compliance also includes measures to recover cannabis that was not authorized by CannTrust’s license.
After this announcement, CannTrust’s shares rose 24 percent.
CannTrust will provide a detailed plan to Health Canada on or before Oct. 21.