Ontario Starts Online “Click-and-Collect” System for Cannabis Retail

Ontario is slowly loosening its grip on the cannabis retail space in the province.

In the 2019 Fall Economic Statement released on Wednesday (November 6), the Ontario government announced its plans to allow private cannabis retailers to sell their products online for in-store pick up in a new “click-and-collect” system.

The move marks a disruption of the Ontario Cannabis Store’s reign over online sales.

With the change, consumers will be able to browse through the sites of multiple cannabis retailers to search from a variety of products and then pick them up at a physical store of their choosing, as opposed to being limited to the Ontario Cannabis Store’s website.

The Ontario Chamber of Commerce (OCC), a body that supports Ontario’s businesses, recommended the switch to the online system in its Supporting Ontario’s Budding Cannabis Industry report released in April this year.

The OCC said this new system would create a “consumer-friendly” option for cannabis purchase while combating the black market for the drug.

“The government remains committed to moving to an open allocation of cannabis retail store licences where the number of stores is limited only by market demand,” the province said, though it did not offer a timeline for when consumers could expect more stores to open.

This follows an announcement from the Ontario Cannabis Store, the provincial cannabis retailer, that it was in talks with licensed producers and stores to figure ways to increase engagement in the cannabis market from private retailers.

The new changes were lauded by the Cannabis Council of Canada in a statement.

Megan McCrae, board chair of the council, said the province did well to take the concerns of the industry into consideration and that the economic statement sent “a strong signal to the legal cannabis industry in Ontario.”

The council is a group vying for the interests of Canadian licensed producers (LPs). It recently sent a letter to Ontario Premier Doug Ford requesting the opening of more stores in the province.

McCrae added, “It will improve how consumers purchase and access legal cannabis products and better equip the industry to replace the illicit market.”

New Brunswick-based cannabis producer Organigram Holdings (TSXV:OGI,OTCQX:OGRMF) also applauded the changes. Company CEO Greg Engel said the improvements come at a “crucial time.”

“We have heard time and again from consumers and retailers across Canada about the importance of face-to-face transactions in the cannabis purchase decision; with limited stores in Ontario, consumers have not been receiving the same level of service those in other provinces appreciate,” Engel said.

The Ontario government is also allowing LPs to build stores at their production sites, further opening up consumer access, which was part of the original plan from the province back when it confirmed a block for LPs to own stores.

Ontario’s marijuana retail landscape has long been criticized for its lottery-based licensing regime. Currently there are only 25 brick-and-mortar locations serving the province’s population of over 14 million, with another 50 slated to open by the end of the year.

In comparison, the Alberta Gaming, Liquor & Cannabis has over 300 cannabis providers listed.

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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.