The Globe and Mail reports in its Monday, Jan. 28, edition that Ontario Premier Doug Ford's decision to put the retailing of cannabis in the hands of the private sector was a good one. The Globe's guest columnists Ian Irvine and Rosalie Wyonch write that the province recently held a lottery to determine who would operate as a cannabis retailer.
The use of a lottery, as opposed to an auction or a "preferred suppliers" rule, to allocate retail outlets is defensible for a couple of reasons. However, the rules defining the recent retail licence lottery have to some degree undermined its ultimate objective -- the development of an orderly market that will serve the province in developing a legal market that will be competitive with, and largely supplant, an illegal market.
The largest drawback to the use of a lottery of 25 retail authorizations is that it will result in a very small number of retail storefronts relative to the ultimate need. Further, no municipality with fewer than 50,000 residents will have a retail location. This means that, in many areas of the province, Ontario Cannabis Store will be the only accessible legal market, which leaves room for the black market to continue operating.
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