Over ten million dollars wasted on Ontario cannabis stores that were never opened
According to financial statements released by the Ontario Cannabis Retail Corporation (OCRC), at least $10.2 million was spent on cannabis stores that were never opened.
Of this figure, $8.9 million was spent on equipment and renovation write-offs, while $1.2 million was spent on leases and subsequent lease terminations — these were likely connected to a failed store in Guelph which never materialized.
“They are basically writing off all the renovation expenses that they had incurred, and the equipment that they’d purchased for the stores,” says Brock University business professor Michael Armstrong.
“That’s $2 million per location, but there may be some other things in there in terms of stuff that they had in the headquarters, or stuff they had in the warehouse that was going to support the retail stores and now they don’t need that.”
According to an email from OCS spokesperson Daffyd Roderick to Global News, most of the $8.9 million came in the form of transitions between mandates for store fixtures to bolster a larger network. He says the OCS is now trying to recover the value of these assets.
Armstrong also questioned the types of things being written off, such as computers which are still completely functional and could be resold on the market quite easily. He believes the fast-paced nature of opening such a large distributor may be the cause of the OCS’s rapidly accumulating write off lists and quick abandonment of failed projects.
“That could represent maybe a hasty decision,” Armstrong says. “The OCS is a pretty new organization. It’s a little over a year old, so maybe it’s lack of experience, but it’s also not necessarily a priority.
“They’re busy trying to get their online sales working properly, they’re busy trying to get ready for the new government’s private-sector retailing, so ‘Let’s not waste time, let’s get rid of this stuff quickly rather than haggle over some pennies.”