150 state-run marijuana stores: Ontario accused of monopoly as it eyes to weed out black market

150 state-run marijuana stores: Ontario accused of monopoly as it eyes to weed out black market
The government of the Canadian province of Ontario has come under fire for its plan to effectively monopolize the recreational cannabis trade by selling it through state-run shops and online. Ontario says it fears the legalization process will result in a thriving black market.

The new measures to prepare the state for the proposed Federal Cannabis Act, were announced at a news conference Friday by the provincial Attorney General Yasir Naqvi, Finance Minister Charles Sousa and Health Minister Eric Hoskins.

At least 80 dispensaries will be opened by July 2019, with a total of 150 state-run stores expected to be operational by 2020 according to the plan. Online shopping will be available as well.

Proponents of the plan argue that having cannabis distributed by the government rather than through private retailers will keep the profit motive out of the equation and will avoid similar problems as those caused by big tobacco and alcohol.

According to the official press release, one of the stated aims of Ontario’s proposal is to squeeze out criminals from the black market, currently run by organizations such as the Hell’s Angels and the Italian Mafia as well as various aboriginal and immigrant street gangs.

"If you operate one of these facilities, consider yourself on notice," Naqvi warned the illegal weed shops that have sprouted up across the province.

However, the scheme that drives out already existing private retailers that operate within the legal field has drawn criticism from Canada’s cannabis activists and businesses.

Jodie Emery, a cannabis legalization activist and human rights advocate, argued on Twitter that the new measures represent a continuing crackdown on private stores, noting that government-controlled supply is unlikely to meet the skyrocketing demand.

“I had 300 inquiries for @CannabisCulture franchises. An enormous supply is needed to feed enormous demand. Gov't monopoly is doomed to fail,” Emery wrote on Twitter.

The Canadian Federation of Independent Businesses (CFIB) also slammed the new plan, arguing that contrary to its desired effect, it will spark a black market boom due to possible inadequate supply by the government.

“One of the government's stated goals in cannabis legalization is to eliminate the underground economy, but shutting out the private sector will only allow the illicit trade to flourish,” CFIB said in a statement as cited by the Canadian media, saying that its members are “deeply disappointed” by the move.   

The new scheme will come with some restrictions. Cannabis products will only be sold from behind the counter, as cigarettes, and not out in the open, while the minimum age for buying will be 19. Smoking will only be allowed at home, while buying cannabis online would mean ID checks, signatures on delivery and no unattended packages left at someone's doorstep.

Pricing and tax decisions will be made after consultations with the federal government, although Prime Minister Justin Trudeau’s Liberal Party want to keep prices low to drive out the black market.

There were also those who voiced support for the plan, but with some reservations.

Camille Quenneville, CEO of the Canadian Mental Health Association, welcomed the government's cannabis proposals but suggested that since the dispensaries are to be government-owned, all profits should be directed towards funding mental health care.

"We've recommended in a recent submission that all revenue should fund mental health and addictions services in Ontario because there is a correlation between cannabis consumption and mental health and addictions issues," she said in a statement quoted by CBC.

Canada aims to legalize marijuana by mid-2018, making it the second country after Uruguay to do so on a national level. In July, the small South American country became the first in the world to put recreational pot on sale after first legalizing it in 2013, the interim four years taken up with questions on how to actually implement the legalization process.