In just a few weeks people in Ontario will be able to legally buy marijuana for the first time and we're learning more now about exactly how the new system will work.
The Ontario Cannabis Store announced Monday the names of 26 licensed producers for its online retail platform, the province's only online retailer for recreational pot this fall.
Jay Rosenthal, co-founder and president of Business of Cannabis, a research and analysis group, spoke with the CBC's Conrad Collaco about what people in the province can expect when the online doors finally open on Oct. 17. You can read an abridged and edited version of the interview below or listen to the full audio interview by hitting the play button above.
Jay Rosenthal, co-founder and president of Business of Cannabis
Which companies made the list? Who are the big players?
A lot of the big players made the list — the Aurora's of the world, the Canopy's of the world, the Aphria's, the CannTrusts, — some of the bigger companies that we've known over the last year or couple of years have made the list. Some smaller companies made the list which I think is quite exciting. There's one in Hamilton. Beleave made the list. It's great for them but best for consumers because they will have a lot of choice when the site launches October 17.
Were there any suppliers included on the list that surprised you?
It's more about the overall number that was included. We've seen in other provinces that have signed supply deals with licensed producers that the numbers are relatively small. I think the Ontario Cannabis Store said 'We don't want to have some of the challenges we think other provinces are going to have.' We want to have steady supply. We want to have variety and we want to have it from the get go so they came up with a list of 26 which is a relatively large number to supply their store in October. They want to ensure supply and variety for consumers.
Will the names of this list become well-known household brands?
In some cases maybe yes. In some cases maybe not. For some the product you see will be the only product they provide and that is their product you will know and love. There are others that will be much larger companies that will have many, many brands underneath their umbrella and you may know those brands but not the umbrella itself. It may be a mix but I think it will take time to get there. Between when the online store opens on October 17 and the bricks and mortar rollout in 2019 people are going to try a lot of things.
I think it's going to be much more like wine than something like 'I only drink Ketel One vodka. It's more like a variety and 'I like to have different things for different occasions.' I think it will be more like wine where you try a whole variety and not just one.
What kind of products will be sold in the online store?
It's going to be pretty limited, not just in this online store but across Canada starting October 17. There is only going to be 'dry flower.' That's what we call in the industry the buds you know and love. There will be some oils you'll be able to buy. There will be some seeds you will be able to buy if you want to try your hand at growing at home.
What do you think the online shopping experience will be like?
I think they will try to replicate the in-store shopping experience online, meaning 'let's answer a few questions. Let's talk about what it is you want to do and here's what might be interesting to you.' Otherwise it may be an overwhelming choice of products for the novice consumer or even the expert. You could see 26 brands but maybe hundreds or thousands of products. It's going to be difficult to differentiate. That's part of what we're going to be watching in terms of what it looks like from a user interface, from education from actually purchasing and what products are they recommending to you the first time and the second time.
Do we know of any other place that runs marijuana sales in the way Ontario plans to?
The other provinces will run things fairly similarly. All the provinces have kept the online sale component. But in almost every other province there will also be bricks and mortar stores which may be public or private. Ontario will break new ground in that they will be the largest online cannabis retailer in the world. Retail on the ground won't come until next year.
We've learned from other jurisdictions what works and what doesn't in terms of the questions consumers ask, the types of products they want, how to make a safe environment so people feel comfortable purchasing and giving them the education to back that up. We see online purchasing in other jurisdictions like California but it usually leads to a delivery service like a Uber Eats version of cannabis but Ontario and Canada are breaking new ground in terms of government-run online retail cannabis shops.
What questions do you still have about how the system will work starting in October?
The more difficult nut to crack is consumer behaviour. There are some people who don't like to buy anything online. There are some people who have never bought cannabis before. There are people who have never bought online cannabis before. Anybody who is not a patient now has never done that. There will be interesting behavioural things to watch over time. Closer to home, do you want the person you share your credit card with to know you buy cannabis online? These are the types of things we'll learn over the next six months before retail opens up and beyond that as the market normalizes and we see how large it is, who is buying and what they are buying. We're going to learn a lot on the behavioural side which is what the industry will be based off long term.
What do you think this will do to the cannabis black market?
I think there will be something novel, safe and compelling about buying it online from a source that you know — the Ontario Cannabis Store. It's going to be difficult to combat that. The products are more than you will ever need. If you want an experience that is safe and secure from a trusted source you're going to buy from the Ontario Cannabis Store online and later from retail. I think the black market will be there for some period of time but as the Ontario market develops and matures and more products come online the black market will dwindle and dwindle further.