Ontario parties pledge different approaches to clustering of cannabis shops

LONDON, Ont. - Ontario's Liberals and New Democrats are pledging to revisit a model for licensing cannabis stores they say isn't working - a problem Progressive Conservative Leader Doug Ford said the market will resolve.

Clusters of cannabis stores have cropped up in some communities, while other Ontario municipalities have banned the retailers altogether, leading to what some describe as unequal access to the drug across the province.

“It's a significant challenge in many communities,” Liberal Leader Steven Del Duca said Saturday during a campaign stop in Toronto's west end. “You literally drive around ... other parts of the GTA and elsewhere and you see that.”

He pointed to other jurisdictions where there are minimum distances between pot shops.

“We would pursue the same thing,” Del Duca said, noting he'd keep municipalities involved in the process.

He described clustering as a “side effect” of the Progressive Conservative government's approach to distributing legalized cannabis.

The previous Liberal government, voted out in 2018, had planned to open 40 government-run retail cannabis shops by the summer of that year, with the network of stores to expand to 150 by 2020.

The Tories changed the cannabis retail model because they said expanding the number of stores and moving to a private system would better address demand and curb black market sales.

Since then, hundreds of stores have opened - some just around the corner from each other.

“It's not good enough,” Del Duca said of Ford's system. “Just having it be a random arbitrary process? Not good enough.”

But Ford said clustering is a temporary problem that market forces will solve without government intervention.

“It doesn't matter if it's cannabis or another type of store. The market will take care of it. There's no way you can cluster any type of business beside each other. It's like putting six convenience stores together. There's going to be two that might survive,” he said at a campaign stop in London, Ont., on Saturday.

As for the municipalities without cannabis stores, Ford said that's their prerogative.

“I leave that up to the municipalities. No one knows their community better than the municipalities,” he said.

NDP Leader Andrea Horwath agreed that municipalities had to be involved in cannabis-related decisions, but said she'd reopen the discussion around clustering.

“The most I hear about this particular issue is concern from communities and municipalities about the overtaking of business districts by this one type of retailer,” she said.

“I'm not afraid to have a look at all of that. I think it needs to be done.”

The NDP said they would give municipalities a greater say in the licensing process, for instance by allowing them to limit the number of cannabis stores on a single block.

Marit Stiles, an NDP legislator currently seeking re-election in the riding of Davenport, introduced a private member's bill to that effect last year, which she said would bring the cannabis licensing process more in line with liquor licensing.

Michael Armstrong, a Brock University business professor who studies cannabis market data, said limiting the number of cannabis retailers that can open in a certain area might have prevented clustering three years ago when the stores started to open.

“If you put in a limit now, well, the places that have clusters, it's too late to change that. And the places that don't have clusters aren't likely to get them,” he said.

Armstrong partially blamed Progressive Conservative policy for the clustering issue, noting the Ford government required those seeking a license to sell cannabis to have a store location when applying.

“(Applicants) got a location to put in their application, not realizing that there were a bunch of other entrepreneurs who had picked very similar locations because they were all thinking, 'Okay, I want a busy street. I want a retail area. I'd like it to be kind of downtown and maybe where there's lots of young adults because that kind of demographic is more likely to buy my product,”' he said.

He said the situation was exacerbated further when the government put a freeze on issuing new cannabis store licenses for a year.

“Because of the government's delays, the clustering that we probably would have had some of has got much worse than we would have had if they hadn't had that long freeze,” he said.

But Armstrong also expressed qualms about granting municipalities primary decision-making rights on cannabis retail locations, noting some local governments may use such powers to effectively confine new stores to areas that aren't convenient for customers.

“There's still quite a few people in Ontario, quite a few municipal politicians who really aren't comfortable with cannabis stores, with licensed legal cannabis in general,” he said.

“What those municipalities might do is put in zoning restrictions that are so strict that they basically won't have any cannabis stores, or they'll only allow cannabis stores in industrial areas.”

This report by The Canadian Press was first published May 21, 2022.

-with files from Maan Alhmidi and Jessica Smith in Toronto.