ONTARIO POT DISTRIBUTOR TO CUT PRICE MARGINS TO HELP SHOPS COMPETE WITH ILLICIT MARKET
Feb 16, 2023
By Bob Komsic
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The Ontario Cannabis Store has announced it will reduce its price margins later this year in an effort to help retailers compete with the illegal market, which made up 43% of the pot market last March.
OCS says the change will happen in September.
It will come from a fixed markup for each product category that will be standard for all producers and applied as a percentage above each product’s costs, that already take into account producers’ margins and excise taxes.
A report last fall from Deloitte Canada and cannabis research firms Hifyre and BDSA says the average price for cannabis was $11.78 per-gram at the start of 2019, soon after legalization, but dropped to $7.50 per-gram in 2021.
The average price for vape cartridges has also fallen, from $32.02 per-gram in early 2019 to $19 per-gram a year later; a decline of 41%.
The OCS estimates the margin change
will put $35-million back into retailers’ pockets this fiscal year and $60-million in the 2024 fiscal, and more in the years that follow.