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Ontario's pot plan a blow to dispensaries, but a boon for the public-service union

 

Marijuana plants sit under a light waiting to be sold at CALM, Toronto's first medical cannabis dispensary, in Toronto, Ontario, May 7, 2013. Tyler Anderson / National Post

   Ontario’s plan to control the sale of marijuana through 150 government-run stores and an online service may be bad news for the province’s illegal dispensaries, but it’s a win for Ontario’s public-sector union, which lobbied hard for government control of the market.

“I’m pretty pleased with what the plan looks like so far,” said Warren (Smokey) Thomas, president of the Ontario Public Service Employees Union. “I’ve been lobbying the government for a long time on this, so I like to think we had some influence.”

Thomas expects the sale of recreational marijuana to create about 2,000 new public sector jobs in Ontario in the next three or four years.

He said he met with Ontario Premier Kathleen Wynne on Thursday, and she told him he’d like what he heard during the official announcement on Friday morning. “I’ll give her credit on this one,” he said.

On Friday, Ontario Attorney General Yasir Naqvi and Finance Minister Charles Sousa unveiled their plan to open 40 stores by July 2018, the deadline the federal government has set to legalize marijuana, with 150 stores to be open by 2020. The outlets will by overseen by the province’s liquor control board (LCBO). Ontarians will also be able to buy marijuana online by July 2018. Dispensaries that have cropped up across the province will remain illegal and will be shut down, Naqvi said. “If you operate one of these facilities, consider yourself on notice.”

Ottawa lawyer Trina Fraser said the government’s decision illustrates the power of the union and Thomas, who’s been arguing that the LCBO has the proper expertise to manage the sale of recreational marijuana.

“He’s been spreading that message wide and far,” she said. “I have to believe that’s had some influence over the decision.”

But Fraser also thinks the decision not to legalize private retailers was the easiest path to take politically. Private sales would require a new branch of the bureaucracy to manage dispensary applications, inspections and compliance, she said. “It’s not frankly what I was hoping for, but I’m not surprised.”

Fraser said the Atlantic provinces and Quebec will likely adopt similar plans to Ontario’s, while the Western provinces are more likely to legalize private dispensaries. In B.C., where the City of Vancouver has already moved to regulate the stores instead of shutting them down, “there seems to have almost been an acceptance that dispensaries are part of our future,” she said.

Still, Ontario’s decision not to include the private sector in its plans raises questions about the province’s capacity to supply the full demand for recreational marijuana.

Kathleen Wynne and Attorney General Yasir Naqvi at an Ottawa announcement, January 27, 2014 Jean Levac / Ottawa Citizen

Aaron Salz, founder of cannabis consulting firm Stoic Advisory, said the decision “will only serve to bolster the black market,” since the 40 stores planned for next July won’t come close to meeting the demand. On Friday, Sousa estimated there are 70 or 80 dispensaries in Toronto alone.

Recent raids on Ontario dispensaries have had limited success, with many shops reopening again almost immediately. Those dispensary owners and workers “will not just go away,” Fraser said. “There’s still going to be conflict and battles ahead of us for sure.”

Salz believes a majority of Canadians already believe that dispensaries are legal, and Ontario’s decision will only increase confusion. “Dispensaries will fill that void where the government is slow online, slow on retail,” he said.

During the announcement, Sousa said he shares concerns about whether there will be enough legal supply to meet the demand. But that responsibility falls to the federal government, which has to license suppliers, he said.

Sousa said Ontario will fight illegal pot shops partly by placing government-run stores close to existing dispensaries to steer traffic away from them. The province will also continue efforts to shut them down.

Marijuana will be sold behind the counter at government stores, he said, without a self-serve option. It will not be sold in government liquor stores, and the legal age will be 19 in Ontario, as it is for alcohol. Naqvi and Sousa would not comment on how much the system will cost to set up, how legal marijuana will be priced, or how much revenue the sale is expected to generate for the province. 

In Ottawa, the House of Commons standing committee on health plans to meet all next week to discuss the proposed federal cannabis legislation.

On Friday, the federal government also announced up to $274 million to train law enforcement officers to recognize the signs of drug-impaired driving and to raise public awareness, fight organized crime and keep cannabis from crossing the border.