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I'm a Toronto native. These are the forces driving this decision: 1. Provincial government is cash poor. The LCBO is a huge source of cash, what government wou

I'm a Toronto native. These are the forces driving this decision: 1. Provincial government is cash poor. The LCBO is a huge source of cash, what government would give up another source? This isn't taxes, this is profit. "Isn't this just another tax?" One might ask, but no it's not. The reason is that Ontario has fewer alcohol distribution centres than a free market would provide. Most people just do a bigger alcohol run and drive / walk / drive further than their American counterparts. There's queuing occasionally, but usually only before long weekends or holidays. 2. The current dispensaries are run by criminals. The optics of giving a windfall to law breakers aren't great. The police keep shutting them down, and they keep popping up. I'm not bashing them, I think cannabis should have been legalized a long time ago and I think it's unconscionable that we have Canadians addicted to heroin because they were given opioids instead of pot, because pot requires a huge hassle to get approved, and I think dispensaries alleviate that stress, but some operations are huuuuge and most certainly are funnelling money into real criminal organizations. 3. The union at the LCBO is huge and powerful. The jobs, even seasonal ones, pay well and Ontarians aren't outraged because the staff is generally competent and friendly and the stores are clean. 4. Controls over potency are a real problem in the current dispensaries and because of the sketchiness of the current people involved and their distribution networks, the government would have to get involved auditing anyway. I hope that they keep the stores open every day of the week. Many Canadians use pot outside the medical system, but for medical reasons and fast access will mean the black market will finally collapse. I also hope there will be a system for legitimizing certain strains that gain popularity in the US, like the LCBO does for wine.

deskamess 9y ago
It is important that the LCBO not be the only source. It needs to be opened up from the get-go and not have to follow the mini-step half measures that we have to go through to get alcohol in grocery stores. The sourcing of alcohol is still controlled by the province. It is a govt sponsored racket and monopoly.
- bupku5 9y ago
  And the Beer Store is terrible and offers a non-existent selection.
- jpetso 9y ago
  Okay, so what? What do we gain from letting Shoppers Drug Mart and Rexall sell pot? The aim here is to provide regulated access, with prices that are low enough to eliminate the black market, but high enough to encourage people to think twice about it. The LCBO has been playing this role pretty well and the profits go towards quality jobs and government investments for the public good. I struggle to see the societal benefit from gifting the profits to established corportations, providing more product than is necessary (or at a lower price), and letting private businesses make the right choice between effective regulation and more sales.
macspoofing 9y ago
>Provincial government is cash poor. More spendthrift than cash poor. The province has more than enough revenue but cannot control its spending. >The current dispensaries are run by criminals. By definition. Just like bootleg operations during prohibition were all run by criminals. Legalization would remove this feature of the system. >Controls over potency are a real problem in the current dispensaries and because of the sketchiness of the current people involved and their distribution networks, the government would have to get involved auditing anyway. Again. This is where Health Canada and the Ontario government can step in and regulate standards. They do that with alcohol (hard to find anything over 40%). If there are unsafe levels of potency, regulate the potency. Government does that with everything else in the market. Pretty much every food item at a grocery store is regulated in some way. My father works at a supplier of frozen food to some of the biggest conglomerates. There are insane amount of regulations related to food safety because if you get sloppy, a Listeria contamination of a TV dinner could kill hundreds of people. And yes, they clean constantly, they have to maintain proper records and have to have an on-site lab that tests samples 3 or 4 times a day - and yes, they get audited.
wolco 9y ago
I haven't heard of one case of a dispensary being run by organized crime since they started randomly shutting them down. People automatically assume these are run by biker gangs but the truth is these are small businesses with some chains moving over from BC. This was a bad decision by a government who is on the way out. All this does is ensure the blackmarket keeps going strong.
- DKnoll 9y ago
  Dispensary operators are not criminals because of gang ties (it's not illegal just to be a member of the HA for example), they're criminals because they contravene the criminal code by operating.
drpgq 9y ago
Well at least people will be able to grow a few plants at home. I'll be curious what percentage of the market that will get.
valuearb 9y ago
This isn't going to produce more net government revenues, it's going to produce more government employees beholden to the current regime. They could net more to spend on other government needs simply by taxing and regulating, with the same set of regulations.
rbobby 9y ago
> The union at the LCBO is huge and powerful. The jobs, even seasonal ones, pay well [...] And oddly enough I'm perfectly happy with that. Ontario's strategy with booze is responsible consumption (or whatever it's called)... essentially price it sufficiently high that we don't get too many drunks on the street. Given how badly alcohol abuse can mess up lives (not just the abuser but their family and friends too, not to mention random folk who they cross paths with) I think this is a sensible strategy. As part of that strategy I don't think trying to have to the cheapest labour costs is that important. It won't change the end price of booze, it will only ensure that the jobs won't be staffed by long term employees (and hence knowledgeable employees, and employees that can save for retirement, etc).
- api_or_ipa 9y ago
  > Ontario's strategy with booze is responsible consumption (or whatever it's called)... essentially price it sufficiently high that we don't get too many drunks on the street. Sin taxes are actually composed of two distinct effects: the effect of increasing price and therefore reducing negative externalities like you mentioned. In addition, a well structured sin tax should use it's gross profit to fund support services like rehabilitation and health services. LCBO only does 1 of those things well. LCBO marks up their product by a percentage, which impacts premium products more than lower priced products[0]. If LCBO was committed to decreasing consumption of alcohol, it would apply a flat fee to each unit of alcohol, which would maximize utility and minimize the impact to the rest of the alcohol industry. 0: http://hellolcbo.com/app/answers/detail/a_id/1251/~/lcbo-pricing-structure%3A-price-markup-example http://hellolcbo.com/app/answers/detail/a_id/1251/~/lcbo-pri...
  - miohtama 9y ago
    In Finland alcohol tax is based on volume (liters) so premium products don't get more expensive
- acchow 9y ago
  > essentially price it sufficiently high that we don't get too many drunks on the street. Other countries don't need artificially inflated prices and a government-regulated sales to accomplish this.
deleted 9y ago
[deleted]
mabbo 9y ago
> The LCBO is a huge source of cash, what government would give up another source The government long ago allowed "The Beer Store", a private non-Canadian company to be part of the alcohol monopoly. It's only coming to an end now that some grocery stores are allowed to sell beer. Come to think of it, since my local Loblaws got beer and wine, I have never set foot inside an LCBO and doubt I'll ever need to again.
WalterBright 9y ago
> Provincial government is cash poor. I've never heard of any government at any time at any level that ever declared it had enough revenue to do its job.
- notatoad 9y ago
  isn't that what the government is saying any time they end up with a budget surplus? It definitely happens.
- thaumasiotes 9y ago
  It's quite common. Some governments, like some people, would rather not appear to be insolvent. In Chinese history, there was a time when the government declared a simultaneous tax increase and tax reform because taxes (in grain) often didn't even arrive at the capital. The reform turned out to be so successful that the increase was canceled.

deskamess 9y ago

It is important that the LCBO not be the only source. It needs to be opened up from the get-go and not have to follow the mini-step half measures that we have to go through to get alcohol in grocery stores. The sourcing of alcohol is still controlled by the province. It is a govt sponsored racket and monopoly.

bupku5 9y ago
And the Beer Store is terrible and offers a non-existent selection.
jpetso 9y ago
Okay, so what? What do we gain from letting Shoppers Drug Mart and Rexall sell pot? The aim here is to provide regulated access, with prices that are low enough to eliminate the black market, but high enough to encourage people to think twice about it. The LCBO has been playing this role pretty well and the profits go towards quality jobs and government investments for the public good. I struggle to see the societal benefit from gifting the profits to established corportations, providing more product than is necessary (or at a lower price), and letting private businesses make the right choice between effective regulation and more sales.

macspoofing 9y ago

>Provincial government is cash poor. More spendthrift than cash poor. The province has more than enough revenue but cannot control its spending. >The current dispensaries are run by criminals. By definition. Just like bootleg operations during prohibition were all run by criminals. Legalization would remove this feature of the system. >Controls over potency are a real problem in the current dispensaries and because of the sketchiness of the current people involved and their distribution networks, the government would have to get involved auditing anyway. Again. This is where Health Canada and the Ontario government can step in and regulate standards. They do that with alcohol (hard to find anything over 40%). If there are unsafe levels of potency, regulate the potency. Government does that with everything else in the market. Pretty much every food item at a grocery store is regulated in some way. My father works at a supplier of frozen food to some of the biggest conglomerates. There are insane amount of regulations related to food safety because if you get sloppy, a Listeria contamination of a TV dinner could kill hundreds of people. And yes, they clean constantly, they have to maintain proper records and have to have an on-site lab that tests samples 3 or 4 times a day - and yes, they get audited.

wolco 9y ago

I haven't heard of one case of a dispensary being run by organized crime since they started randomly shutting them down. People automatically assume these are run by biker gangs but the truth is these are small businesses with some chains moving over from BC. This was a bad decision by a government who is on the way out. All this does is ensure the blackmarket keeps going strong.

DKnoll 9y ago
Dispensary operators are not criminals because of gang ties (it's not illegal just to be a member of the HA for example), they're criminals because they contravene the criminal code by operating.

drpgq 9y ago

Well at least people will be able to grow a few plants at home. I'll be curious what percentage of the market that will get.

valuearb 9y ago

This isn't going to produce more net government revenues, it's going to produce more government employees beholden to the current regime. They could net more to spend on other government needs simply by taxing and regulating, with the same set of regulations.

rbobby 9y ago

> The union at the LCBO is huge and powerful. The jobs, even seasonal ones, pay well [...] And oddly enough I'm perfectly happy with that. Ontario's strategy with booze is responsible consumption (or whatever it's called)... essentially price it sufficiently high that we don't get too many drunks on the street. Given how badly alcohol abuse can mess up lives (not just the abuser but their family and friends too, not to mention random folk who they cross paths with) I think this is a sensible strategy. As part of that strategy I don't think trying to have to the cheapest labour costs is that important. It won't change the end price of booze, it will only ensure that the jobs won't be staffed by long term employees (and hence knowledgeable employees, and employees that can save for retirement, etc).

api_or_ipa 9y ago
> Ontario's strategy with booze is responsible consumption (or whatever it's called)... essentially price it sufficiently high that we don't get too many drunks on the street. Sin taxes are actually composed of two distinct effects: the effect of increasing price and therefore reducing negative externalities like you mentioned. In addition, a well structured sin tax should use it's gross profit to fund support services like rehabilitation and health services. LCBO only does 1 of those things well. LCBO marks up their product by a percentage, which impacts premium products more than lower priced products[0]. If LCBO was committed to decreasing consumption of alcohol, it would apply a flat fee to each unit of alcohol, which would maximize utility and minimize the impact to the rest of the alcohol industry. 0: http://hellolcbo.com/app/answers/detail/a_id/1251/~/lcbo-pricing-structure%3A-price-markup-example http://hellolcbo.com/app/answers/detail/a_id/1251/~/lcbo-pri...
- miohtama 9y ago
  In Finland alcohol tax is based on volume (liters) so premium products don't get more expensive
acchow 9y ago
> essentially price it sufficiently high that we don't get too many drunks on the street. Other countries don't need artificially inflated prices and a government-regulated sales to accomplish this.

deleted 9y ago

[deleted]

mabbo 9y ago

> The LCBO is a huge source of cash, what government would give up another source The government long ago allowed "The Beer Store", a private non-Canadian company to be part of the alcohol monopoly. It's only coming to an end now that some grocery stores are allowed to sell beer. Come to think of it, since my local Loblaws got beer and wine, I have never set foot inside an LCBO and doubt I'll ever need to again.

WalterBright 9y ago

> Provincial government is cash poor. I've never heard of any government at any time at any level that ever declared it had enough revenue to do its job.

notatoad 9y ago
isn't that what the government is saying any time they end up with a budget surplus? It definitely happens.
thaumasiotes 9y ago
It's quite common. Some governments, like some people, would rather not appear to be insolvent. In Chinese history, there was a time when the government declared a simultaneous tax increase and tax reform because taxes (in grain) often didn't even arrive at the capital. The reform turned out to be so successful that the increase was canceled.