Colby Cosh: The (totally expected) outcome of Ontario’s cannabis lottery

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Some sellers, like Bigioni, intend to reinvest their lottery winnings in new stores, having learned the newly legitimate trade and made a decent go of it. Some, the CP story has an expert speculate, may have been relatively naive people who had a rational response to what was explicitly called a lottery, and are just collecting the cash value of retail properties they never intended to operate in the long run.

But I can’t tell if the story is intended to upset people and, if so, what they ought to be upset about. The lottery system has been tossed out, so licence applications are now first come, first served. Unfortunately, Ontario is serving hardly anyone. Alberta’s open system has issued more than 500 licences for shops, most are serving customers, and applications are still being approved — at a rate, right now, of a couple dozen per month.

Ontario, with more than three times Alberta’s population, has authorized about 130 licensees to open for business so far. The Alcohol and Gaming Commission of Ontario, Ontario’s provincial agency in charge of licit sins, has promised to try to approve 20 licence applications a month going forward, since the government noticed late last year that the growth in the legal market was crawling and there were still a lot of unlicensed dispensaries and other outlets open.

You can do the math as easily as I can on how long it might take Ontario to catch up to Alberta even if the retail market here freezes tomorrow. Obviously it’s not a mature line of business, and many of the Alberta stores may go bust eventually, but if Ontario is destined to have on the order of 1,500 shops, it’s going to take a while.