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Leave it to the government to manage to lose money in a market that's highly profitable for private enterprise even without a monopoly... Edit: OK, that was pr

Leave it to the government to manage to lose money in a market that's highly profitable for private enterprise even without a monopoly... Edit: OK, that was pretty snarky, but Ontario is the first place I'm aware of that has a "single government-owned retailer" model, and also the first place I'm aware of that has racked up losses of this magnitude in getting started. Did Colorado's private retailers lose $100m collectively the first year they were open? (And even if they did, was it taxpayer money that they lost?)

loceng 7y ago
FTA: '"Cannabis legalization is a new venture for Ontario. There were investments required for setting up a system that could achieve our objectives — which is to protect youth and combat the illegal market. The OCRC's revenue outlook reflected the initial costs for the development of this retail system," Emily Hogeveen wrote in an emailed response.'
- 9nGQluzmnq3M 7y ago
  That's a convenient excuse, but I don't recall Colorado losing $100 million in their first year of operations as the first legal market for cannabis anywhere: https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data https://www.colorado.gov/pacific/revenue/colorado-marijuana-...
  - Rebelgecko 7y ago
    That link only includes revenue, not expenses. I'm sure Ontario has a similar graph showing their sales tax income.
  - slavik81 7y ago
    You're comparing one state's revenues to another's costs as if they were the same thing. That doesn't make sense. In fact, even if you compared to the $42M net loss in the article, it would still be a mistake. Your reference is for tax revenues, but the Ontario accounting excludes tax revenues. StatsCanada states that provincial marijuana excise taxes totaled $79M in this period, though it doesn't break it down by province. https://www150.statcan.gc.ca/n1/daily-quotidien/190619/t001e-eng.htm#fn02 https://www150.statcan.gc.ca/n1/daily-quotidien/190619/t001e...
  - UncleEntity 7y ago
    > That's a convenient excuse, but I don't recall Colorado losing $100 million in their first year of operations as the first legal market for cannabis anywhere: I don't think The State of Colorado sells people the pot but a bunch of private businesses who all have individual profit/loss experiences. If one corporation was granted a monopoly then you'd have a valid comparison.
    - Scoundreller 7y ago
      But that is the complaint: Ontario decided to go with tight control over wholesaling and retail sales, instead of letting just about anyone set up a retail store and using high taxes to make money.
- Scoundreller 7y ago
  They didn't set up their own system. They outsourced the website to Shopify and the logistics to another 3rd party company.
9oliYQjP 7y ago
It was a Conservative government responsible for this debacle. The previous Liberal government which had started legalization would have sold cannabis at LCBO stores which are in every neighbourhood and are run quite efficiently. Under the Conservative retail rollout, you can only buy cannabis via the online store (i.e., a 2-3 day wait for shipping) or a handful of physical stores. Toronto has a ridiculously low number of stores. There are roughly half a dozen stores with a capacity of about 40 people each to serve a greater Toronto population of more than ~6.5 million people. These physical stores which are the only legal way to obtain cannabis the same day, often have 20-30 minute wait line-ups outside. To give you an idea of what we're dealing with in this government, it is headed by a complete shit show of a politician. He's the older brother of the late crack smoking mayor and is a cheap dollar store equivalent of a populist. He basically got voted in because the Liberal government was long in the tooth having governed for 15 years. People wanted change for the sake of change and if that meant throwing out a well researched cannabis legalization plan, then so be it. Of course, the asme people that voted for the premier are some of the loudest to complain how shitty the current legal cannabis situation is.
- amscanne 7y ago
  > LCBO stores which are in every neighbourhood and are run quite efficiently This is pretty funny. On what basis can you make this claim? Putting aside fully private retail systems and considering only Canada, they are waaaay less convenient and accessible than stores in Alberta or BC, return less profits to the taxpayers than the alternative would. Not to mention the ridiculous selection: Ontario, which is much bigger than Alberta, has a total distribution of ~1/3 the SKUs of Alberta. That’s what happens when you have a monopoly, no innovation, no specialization! Seriously, think about cigarettes, food or pharmacies! Governments can regulate, license and tax. They don’t need to run the retail itself! The liberals own study [1] concluded that a privatized system would benefit Ontario far more, and it was promptly buried. It truly boggles my mind to see how many people think the LCBO is great, efficient, provides excellent selection, convenience, etc. It isn’t, it isn’t, it doesn’t and doesn’t. I can only speculate that keeping the LCBO was politically necessary for the liberals (because doing otherwise would require taking on the unions, and they got scared when they considered doing that in the early 90s), so they propagandize this message that the LCBO “makes a lot of money for the public” and they invest is keeping the stores (too) nice and clean so that everyone feels it’s a great system. The change to give private licenses was the right move, and it’s a shame that it was bungled so badly. Though I think it’s fair that the current and previous government should share responsibility, given that it would not have been bungled if they had just elected to do the best thing for Ontario in the first place. /rant [1] https://www.fin.gov.on.ca/en/publications/2005/basr/report.html https://www.fin.gov.on.ca/en/publications/2005/basr/report.h...

loceng 7y ago

FTA: '"Cannabis legalization is a new venture for Ontario. There were investments required for setting up a system that could achieve our objectives — which is to protect youth and combat the illegal market. The OCRC's revenue outlook reflected the initial costs for the development of this retail system," Emily Hogeveen wrote in an emailed response.'

9nGQluzmnq3M 7y ago
That's a convenient excuse, but I don't recall Colorado losing $100 million in their first year of operations as the first legal market for cannabis anywhere: https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data https://www.colorado.gov/pacific/revenue/colorado-marijuana-...
- Rebelgecko 7y ago
  That link only includes revenue, not expenses. I'm sure Ontario has a similar graph showing their sales tax income.
- slavik81 7y ago
  You're comparing one state's revenues to another's costs as if they were the same thing. That doesn't make sense. In fact, even if you compared to the $42M net loss in the article, it would still be a mistake. Your reference is for tax revenues, but the Ontario accounting excludes tax revenues. StatsCanada states that provincial marijuana excise taxes totaled $79M in this period, though it doesn't break it down by province. https://www150.statcan.gc.ca/n1/daily-quotidien/190619/t001e-eng.htm#fn02 https://www150.statcan.gc.ca/n1/daily-quotidien/190619/t001e...
- UncleEntity 7y ago
  > That's a convenient excuse, but I don't recall Colorado losing $100 million in their first year of operations as the first legal market for cannabis anywhere: I don't think The State of Colorado sells people the pot but a bunch of private businesses who all have individual profit/loss experiences. If one corporation was granted a monopoly then you'd have a valid comparison.
  - Scoundreller 7y ago
    But that is the complaint: Ontario decided to go with tight control over wholesaling and retail sales, instead of letting just about anyone set up a retail store and using high taxes to make money.
Scoundreller 7y ago
They didn't set up their own system. They outsourced the website to Shopify and the logistics to another 3rd party company.

9oliYQjP 7y ago

It was a Conservative government responsible for this debacle. The previous Liberal government which had started legalization would have sold cannabis at LCBO stores which are in every neighbourhood and are run quite efficiently. Under the Conservative retail rollout, you can only buy cannabis via the online store (i.e., a 2-3 day wait for shipping) or a handful of physical stores. Toronto has a ridiculously low number of stores. There are roughly half a dozen stores with a capacity of about 40 people each to serve a greater Toronto population of more than ~6.5 million people. These physical stores which are the only legal way to obtain cannabis the same day, often have 20-30 minute wait line-ups outside. To give you an idea of what we're dealing with in this government, it is headed by a complete shit show of a politician. He's the older brother of the late crack smoking mayor and is a cheap dollar store equivalent of a populist. He basically got voted in because the Liberal government was long in the tooth having governed for 15 years. People wanted change for the sake of change and if that meant throwing out a well researched cannabis legalization plan, then so be it. Of course, the asme people that voted for the premier are some of the loudest to complain how shitty the current legal cannabis situation is.

amscanne 7y ago
> LCBO stores which are in every neighbourhood and are run quite efficiently This is pretty funny. On what basis can you make this claim? Putting aside fully private retail systems and considering only Canada, they are waaaay less convenient and accessible than stores in Alberta or BC, return less profits to the taxpayers than the alternative would. Not to mention the ridiculous selection: Ontario, which is much bigger than Alberta, has a total distribution of ~1/3 the SKUs of Alberta. That’s what happens when you have a monopoly, no innovation, no specialization! Seriously, think about cigarettes, food or pharmacies! Governments can regulate, license and tax. They don’t need to run the retail itself! The liberals own study [1] concluded that a privatized system would benefit Ontario far more, and it was promptly buried. It truly boggles my mind to see how many people think the LCBO is great, efficient, provides excellent selection, convenience, etc. It isn’t, it isn’t, it doesn’t and doesn’t. I can only speculate that keeping the LCBO was politically necessary for the liberals (because doing otherwise would require taking on the unions, and they got scared when they considered doing that in the early 90s), so they propagandize this message that the LCBO “makes a lot of money for the public” and they invest is keeping the stores (too) nice and clean so that everyone feels it’s a great system. The change to give private licenses was the right move, and it’s a shame that it was bungled so badly. Though I think it’s fair that the current and previous government should share responsibility, given that it would not have been bungled if they had just elected to do the best thing for Ontario in the first place. /rant [1] https://www.fin.gov.on.ca/en/publications/2005/basr/report.html https://www.fin.gov.on.ca/en/publications/2005/basr/report.h...