Cannabis Storefronts Open in Canada’s Largest Market

In Toronto, dozens of people camped overnight outside the city’s only outlet, Hunny Pot Cannabis Co., while in Ottawa, one customer — bundled up in a parka and knit cap — said he waited two hours in the cold to be the first in line at Fire and Flower.

“This is the opening of the retail market in Ontario, which is Canada’s largest, so we have very high hopes for our flagship store in the province,” Trevor Fencott, chief executive of Fire and Flower, told AFP.

I'm having trouble understanding why the Canadian/Provincial governments seem to think Canadians will flock to "legal" storefronts and happily pay ridiculous tax rates on top of "sin taxes" for irradiated cannabis, possibly sprayed with banned pesticides. #LogicLost

— what should I do with the water (@EamonCyr) October 4, 2018

“We’re expecting brisk sales today,” he said as customers poured in to its Byward Market location in downtown Ottawa.

The retailer, which has nine other storefronts in Alberta and Saskatchewan, partnered with a local accountant and a former home heating and cooling equipment salesman to break into the Ontario market.

In October, Canada became only the second country — and first G7 economy — to legalize the recreational use of cannabis.

Over the past six months, a patchwork of online and physical stores have popped up across the country, as each province rolled out their own marijuana retailing framework.

In Quebec, there were huge lines outside government-run stores during the first few months of sales. Ontario started selling cannabis through an online portal last October and a lottery was held in December for prospective marijuana shop owners. Only 10 of the winners were actually ready to open on time on Monday. “From what I can see they’ve done a great job in terms of (store) decor, sophistication,” said David, one of Hunny Pot’s first customers. “Overall, this is a real nice experience to be able to purchase in a legal, adult recreational store.”

Sticker Price Shock

Eric Lavoie, who with partner Michael Patterson won a license to operate a cannabis store in Ottawa and sold a stake to Fire and Flower for shares in the company worth more than Can$1 million (US$750,000), said: “I’ve never won anything in my life like this, it’s exciting.”

“If we sold out today we’d be very happy, but I think we have ample supply,” he added, noting a nationwide supply crunch.

There is demand for more than 2,000 storefronts in Ontario, according to industry sources, but the province with a population of 14 million allowed just 25 to start.

Sales on Monday were orderly. A man in Toronto who smoked a joint in line was turned away at the counter because he was intoxicated. “The fact that it’s legal now and you can go into a store without getting in (legal) trouble is amazing,” said Hunny Pot customer Stephanie, giving only her first name, after spending 12 hours in line.

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Some expressed sticker shock. Prices for legal cannabis are nearly double the rates on the black market, according to the government statistical agency. “It’s very difficult to see my generation, who have grown up with the grey market, transitioning to this price point,” Ben Schilling, who paid Can$129 for 10.5 grams of pot, told the Toronto Star.

Fencott acknowledged that pricing is “certainly a challenge,” but added that fresh supplies coming soon should put downward pressure on prices.

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