Allowing municipalities to opt out of pot shops helps black market: experts

Allowing municipalities to opt out of pot shops helps black market: experts

Ontario government said that it will only issue 25 retail licences by April

As municipalities across Ontario weigh whether to allow cannabis retail stores in their neighbourhoods, experts and consumer choice advocates warn that having large swaths of the province opt out of brick-and-mortar pot shops could fuel the black market.

Recreational cannabis can currently only be bought online in Ontario, and municipalities have until Jan. 22 to decide if they want to host private cannabis stores, which are set to open next spring.

Under the rules laid out by the Progressive Conservative government, municipalities that opt out can change their minds down the line, but once they sign on, they can’t back out.

In recent weeks, several municipalities — both rural communities and major urban centres such as Mississauga, west of Toronto — have chosen to reject cannabis retail stores, saying they want more control over the number and location of the shops before they consider opting in. Some have also said they want more time for public consultations.

This, combined with the government’s recent announcement that it will only issue 25 retail licences by April — after initially saying it would not put a cap on the number — could embolden illegal pot sellers and allow them to thrive, experts and consumer groups said.

“Unfortunately, it’s turned out to be just a comedy of errors,” said Anindya Sen, an economics professor at the University of Waterloo who specializes in the cannabis industry. “When you take (those things) together, it’s possible that despite being legalized, Ontario might become one of the biggest black markets in the world.”

While the internet remains an option, Sen said delivery hiccups and limited selection at the province’s online cannabis store also undermine efforts to lure consumers away from illegal avenues.

That sentiment was echoed by David Clement, manager of North American affairs for the Consumer Choice Center.

“Community opt-outs and limited storefronts is a toxic combination which pretty much guarantees that the black market will thrive,” he said. “Capping retail outlets and having entire communities opt out makes the legal market in Ontario far less accessible.”

The Ontario government has said it was capping licences in response to a national cannabis supply shortage, which it said can only be tackled by the federal government.

“Ontario intends to transition to an open allocation system as soon as supply permits,” Jesse Robichaud, a spokesman for Attorney General Caroline Mulroney, said in an email.

Robichaud further said that municipalities that have not opted out will have 15 days to provide written submissions to the Alcohol and Gaming Commission of Ontario, the provincial agency overseeing retail cannabis stores, on any proposed storefront location. He would not say whether the province was open to giving municipalities more control over the site selection.

READ MORE: Cities face tight timelines for ‘opting out’ of hosting legal cannabis shops

The province has pledged $40 million over two years to help local governments with the costs of legalization, with each municipality receiving at least $10,000. A first payment will be issued this year on a per household basis, but a second payment doled out after the January deadline will go only to those that opt in, Robichaud said.

As of Wednesday, roughly 30 of Ontario’s 444 municipalities had formally notified the AGCO of their decision, with at least 10 opting out, according to the agency’s website.

In the Town of Erin, south of Orangeville, councillors voted on Dec. 5 to keep cannabis stores out of their community, largely over the site selection issue, said Mayor Al Alls.

“Basically, we feel there’s just too many unanswered questions at this stage of the game and that we weren’t comfortable with proceeding with allowing it to be retailed in our community,” Alls said.

Alls said he would reconsider if the municipality was given more control over the locations, but stressed council has not discussed that possibility and would need to be on board.

The mayor also suggested a pot shop might not be successful in a small community anyway, noting people might be reluctant to be seen going in and out of a store. “It’s going to take civilization a while to accept the fact that my Joe Blow minister down the street goes in to get a joint every day,” he said.

People are more likely to choose to grow it themselves, “especially in the country,” he said.

Mississauga Mayor Bonnie Crombie wrote a letter to Premier Doug Ford outlining the city’s concerns earlier this month, a day after councillors voted to hold off on hosting pot shops for the time being, but hasn’t heard back.

She said that while the city isn’t opposed in principle, officials felt they did not have enough time to prepare for the shift to an open market model from the government-run system proposed by the previous Liberals regime.

Municipalities should be allowed to increase the setback beyond the 150-metre minimum laid out by the province, and should receive funding even if they opt out because they still bear the costs of public education and enforcement, she said.

Asked whether she feared the black market would flourish in the absence of pot shops, Crombie said every municipality has to do what’s right for its residents.

“Cannabis is available online…so there is availability to residents,” she said. “And certainly there’s always the option of purchasing cannabis at a retail store outside of your own municipality, taking a trip into the city of Toronto.”

At least one other municipality on the outskirts of Toronto has also opted out, prompting Toronto’s mayor to raise concerns about the pressure that will put on the city’s cannabis market.

John Tory has also asked the province to give the city more control over where the stores are placed, saying he doesn’t want to see a cluster of them near the highway just to accommodate consumers from neighbouring communities without pot shops.

“I think it is reasonable for us, given that there may be more pressure on the Toronto market, for us to say that we should have a hand in determining that there aren’t clusters of pot shops all together in one place or that they aren’t located near schools or community centres,” he said this week.

“I’m more concerned with that at the moment than the absolute number but there’s no question that the number of pot shops will affect the continued existence or not of a black market we’re trying to eradicate.”

Though she acknowledges there are many outstanding questions on how the retail model will roll out, Pauline Rochefort, the mayor of East Ferris in northeastern Ontario, said councillors wanted to get in on the ground floor.

The community near North Bay chose to opt in, in part to ensure its own residents — which have a high rate of entrepreneurship — have the chance to participate in the cannabis market, she said.

Rochefort said there has been no public outcry over the prospect of retail cannabis stores, but it’s unclear whether the community of roughly 5,000 can keep an outlet in business.

“While we did not have…all the information, we felt comfortable that things were in good hands,” she said.

Paola Loriggio, The Canadian Press

Like us on Facebook and follow us on Twitter.

cannabis

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Visitors relax at the natural hot springs located within Maquinna Marine Provincial Park. (tofinohiking.com photo)
Maquinna Marine Provincial Park boardwalk project on track

“The walk down the two-kilometre boardwalk to the springs itself is by far one of the most incredible experiences.”

WILDLIFE TREE: Tofino Poet Laureate Christine Lowther stands next to a giant cedar tree on District Lot 114, the site of Tofino’s controversial affordable housing project. The tree was pinned with an official Ministry of Forests yellow wildlife tree sign to educate fallers that the tree needs to be left standing for food, shelter and nesting. (Nora O’Malley photo)
Tofino author Christine Lowther calling for poetry about trees

“I’m thrilled to be of service to trees through poetry.”

Tofino will elect a new mayor and two new councillors on March 6. (Westerly file photo)
Tofino’s mayoralty candidates lay out key differences

Tofino will elect a new mayor and two new councillors on March 6.

FILE – A COVID-19 vaccine being prepared. (Olivia Sullivan/Sound Publishing)
B.C. seniors 80 years and older to get COVID vaccine details over next 2 weeks: Henry

Province is expanding vaccine workforce as officials ramp up age-based rollout

Clockwise from top right, chamber executive director Jen Dart moderated a Zoom-based forum last week where Tofino’s mayoralty candidates J.J. Belanger, Andrea McQuade and Dan Law made their pitch to lead their community. (Screenshot)
WATCH: Tofino mayoralty candidates face off at forum

Town to elect new mayor and two new councillors on March 6.

Abbotsford’s Kris Collins turned to TikTok out of boredom when the provincial COVID-19 lockdown began in March 2020. She now has over 23 million followers on the video app. Photo: Submitted
Internet famous: Abbotsford’s Kris Collins is a TikTok comedy queen

Collins has found surprise stardom alone with a phone

A Vancouver restaurant owner was found guilty of violating B.C.’s Human Rights Code by discriminating against customers on the basis of their race. (Pixabay)
Vancouver restaurant owner ordered to pay $4,000 to customers after racist remark

Referring to patrons as ‘you Arabs’ constitutes discrimination under B.C.’s Human Rights Code, ruling deems

BC Ferries experienced heavy traffic on Feb. 27 following cancellations the day before due to strong winds and adverse weather. (Black Press Media file photo)
BC Ferries sailings fill up quickly after Friday cancellations due to high winds

Waits expected on Swartz Bay-Tsawwassen route, Horseshoe Bay-Departure Bay route

1957 photo shows Six Mile House-sponsored #4 1932 Ford stock car with Frank Morris (from left), Ted Mackenzie, Bill Sim and driver Gerry Sylvester. (Bud Glover/Victoria Auto Racing Hall of Fame)
Memories race as Western Speedway approaches its finish line

‘It was life to us:’ Vancouver Island racers, crew will never forget what the track gave them

Nanaimo children’s author and illustrator Lindsay Ford’s latest book is ‘Science Girl.’ (Photo courtesy Lindsay Ford)
B.C. children’s writer encourages girls to pursue the sciences in new book

Lindsay Ford is holding a virtual launch for latest book, ‘Science Girl’

Pig races at the 145th annual Chilliwack Fair on Aug. 12, 2017. Monday, March 1, 2021 is Pig Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of Feb. 28 to March 6

Pig Day, Canadian Bacon Day and Grammar Day are all coming up this week

Staff from the Marine Mammal Rescue Centre, passersby, RCMP and Nanaimo Fire Rescue carried a sick 300-kilogram steller sea lion up the steep bluff at Invermere Beach in north Nanaimo in an attempt to save the animal’s life Thursday. (Photo courtesy Marine Mammal Rescue Centre)
300-kilogram sea lion muscled up from B.C. beach in rescue attempt

Animal dies despite efforts of Nanaimo marine mammal rescue team, emergency personnel and bystanders

Doctors and counsellors warn of an increase in panic attacks, anxiety, depression and suicide ideas between ages 10 to 14, in Campbell River. ( Black Press file photo)
Extended pandemic feeding the anxieties of B.C.’s youth

Parents not sure what to do, urged to reach out for help

Kara Sorensen, diagnosed with lung cancer in July, says it’s important for people to view her as healthy and vibrant, rather than sick. (Photo courtesy of Karen Sorensen)
B.C. woman must seek treatment overseas for inoperable lung cancer

Fundraising page launched on Karen Sorensen’s behalf, with a goal of $250,000

Most Read