Cannabis – In Or Out


by Deron Johnston

A big decision has been left at the feet of municipalities throughout Ontario by the current provincial government. By January 22, each one must decide if they will agree to allow retail cannabis stores to operate in their municipality. Across the rest of the country, there are approximately 70 retail stores already in operation. In Ontario, the first retail stores will be allowed to open on April 1.

Even if the Municipality of North Grenville decided to allow retail stores, the chances that one would open this year are slim. The reason for this is that the provincial government scaled back the number of retail cannabis licences that they will give out this year to twenty-five. Only five of these licences will be granted in Eastern Ontario (Ottawa is included in Eastern Ontario). So if you want to sell cannabis at a retail store in North Grenville, you must apply for a licence to the Alcohol and Gaming Commission of Ontario (AGCO), your application must be approved by the AGCO, then your municipality must agree to allow stores, then your application is included in a lottery-style draw to determine who gets to be one of the five selected in all of Eastern Ontario.

According to Ivan Ross Vrana, (formerly the national lead for Health Canada cannabis policy development) of Hill & Knowlton Strategies, who has been working in policy development, communications and public relations on the subject of cannabis for the past ten years, the Cannabis Act which came into effect on October 17, contains very strict regulations in all areas, including the production, use and selling of cannabis. Provincial inspectors can show up at retail businesses at any time and any violations of regulations can result in heavy fines, and even jail time, for violators. Federal inspectors can also show up at production facilities at any time and hand out severe penalties for any violations.

There is only one place in Ontario that you can currently buy cannabis from and that is online through the Ontario Cannabis Store (OCS) website. OCS is also the ONLY legal supplier that retail cannabis stores in Ontario can order products from. Additionally, those products available to order at OCS can only come from federally licenced producers (Tweed in Smiths Falls is one of them) of which there are currently just over 140, and that number is growing every week. In fact, there are over 550 pending applications from companies looking to become licenced producers of cannabis in Canada.

One of the key attractions for any level of government in Canada is the revenue from taxation of cannabis. Consider that in Ontario 2.5% federal excise tax is charged on the “dutiable amount of a cannabis product”, plus 7.5% provincial excise tax, plus 3.9% provincial sales tax (for a total of 11.4% provincial tax) on the “dutiable amount of a cannabis product”. In the first two weeks of cannabis sales, $45 million of cannabis products was sold, despite problems at retail stores and significant online ordering problems (especially in Ontario through the OCS website). It is estimated that cannabis product sales could reach between $5-7 billion in Canada.

Ivan Ross Vrana believes that though there may no longer be an opportunity to attract a major licenced cannabis producer like Tweed to North Grenville, he sees an opportunity to get involved in product research and development, especially with the eventual legalization of edible cannabis products including a wide range of items like drinks, foods, supplements, concentrates etc. The Kemptville Campus could be an ideal fit for this sort of work, with over 600 acres of land potentially available for this type of commercial use.

Municipalities will also have some decisions to make over where the smoking of cannabis can be permitted, as people are currently not allowed to smoke cannabis where tobacco smoking is prohibited. They could pass bylaws further restricting where the use of cannabis is legally allowed to take place.

North Grenville Municipal Council has decided to take a consultative approach to their decision on whether or not to allow retail stores. They have created an online survey for residents to submit their input and will be hosting two discussion forums, on Monday, January 7 at the North Grenville Municipal Centre at 6:30 pm, and Tuesday, January 8 in Bishops Mills at the Bishops Mills Community Hall at 6:30 pm. These two meetings had yet to take place as of press time.


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