Armed with statistics and loaded with data, Aaron Switzer shot down concerns that Orillia, if it opts to allow retail cannabis stores, might one day have pot shops on every corner.
The senior policy advisor for the Ontario Retail Cannabis Accessory Coalition (ORCAC) made a detailed and sobering presentation to city council Thursday night in an effort to provide some information in advance of council’s looming decision in January.
Switzer, an Orillia native, admitted it’s difficult to predict, with certainty, how the legal sale of cannabis will play out. But he has done his homework.
He said based on expected usage, Orillia could only “adequately sustain” one to three retail cannabis operations.
“Using data extrapolated from Stats Canada using census population of those in Orillia of age to consume, divided by 14% of Ontarians that reported using cannabis in the last three months, multiplied by the per capita annual consumption of self-reported cannabis users (21 grams per year) and multiplied by the Stats Canada average of illicit and licit cannabis, which is roughly $7.50 per gram, we are at about $532,000 spent in Orillia on cannabis per year,” Switzer explained.
That, he said, means the market could support, at maximum, three stores. He said that “intuitively makes sense when compared to the number of Beer Stores and LCBO stores” in Orillia.
Switzer predicted about 20 to 30 fulltime positions would be created in these retail cannabis stores and noted there would be spinoffs that would include everything from building contractors to lawyers, accountants and marketing specialists.
Another key factor that will determine the number of retail shops is cost.
Switzer estimated “the cost of opening a cannabis retail business, only considering licensing, security requirements and the initial purchase of inventory is $65,000 to $75,000” at the low end. Factoring in construction, façade work, branding and training, that number could easily escalate to $250,000, he predicted.
“I think that should put to rest any fears there will be cannabis shops on every street corner in Orillia,” he said.
On Thursday night, while Switzer was making his presentation, the provincial government, citing a "severe supply shortage" of cannabis, announced it will grant just 25 licences on April 1.
Previously, the government had said it would not limit the number of licences. There will be a lottery process to determine who will get the licences.
Back at City Hall, Switzer reminded council that if they choose to opt out, and refuse to allow retail cannabis stores, there will be a financial impact to the municipality.
If Orillia opts in and opens the door to retail cannabis operations, the city would have access to funding of up to $100,000 from the province. The money is distributed in three payments.
Orillia recently received its first payment of $36,300 from the Ontario Cannabis Legalization Implementation Fund; that is based on the number of households in Orillia.
If Orillia opts in by the province’s Jan. 22 deadline, it would receive a second payment of $36,300. If it ops out, the maximum the city would receive is $5,000. The third payment, for those who opt in, is based on sales and other factors; the amount is not known.
Whether the city opts in or opts out, it will have to deal with the emergence of legalized cannabis, Switzer said. Already, people can legally purchase product from the Ontario Cannabis Store (OCS). So, issues – such as concerns about using cannabis in public and home-cultivation worries expressed by landlords and property owners – will have to be dealt with no matter what Orillia decides.
“It’s important to reiterate in an opt-out scenario, this issue (of smoking cannabis in public) would remain as consumption of medical cannabis, home-grown cannabis, illicit cannabis, OCS cannabis and cannabis purchased from other municipalities will continue to be consumed in Orillia,” said Switzer.
Ward 4 Coun. Pat Hehn brought some levity to the issue when she admitted she didn’t know much about cannabis.
She said after Happy Dayz, a cannabis accessory store, opened in downtown Orillia a few years ago, she told her daughter about “this new store with hummingbird feeders that were really nice.” She was referring to red bongs in the store’s window.
Hehn, turning serious, said a friend recently told her about a cannabis store in Montreal.
“He was quite impressed with how it was set up,” said Hehn, noting the friend said the staff at the store were “extremely knowledgeable” and provided information on the different types of cannabis; the cannabis was located behind the counter in closed containers.
Switzer said it would be similar if a retail operation opened in Orillia.
“The federal government has laid out some pretty specific criteria and the provincial government has expanded on it,” he said, noting tamper-proof containers will be required. He said the packaging is plain and “it’s next to impossible to experience the product.”
He said the Alcohol and Gaming Commission of Ontario has approved the container. He said it will be attached to a chain, “like a cellphone at Best Buy”, and will have small holes that allow the consumer to “look at the product and smell the product without interacting with it.”
As of now, there are no minimum or maximum size requirements laid out for retail stores. However, cannabis stores must be clearly signed as a cannabis store, cannot be within another store, must have secure, separate back entrances for delivery and branding cannot be used to attract youth or elicit any type or emotional response such as risk taking or relaxation.
The Orillia Police Services Board is having a special meeting about the new cannabis legislation next week.
Shawn Crawford, the city’s manager of legislative services, will present a detailed report on the issue at the Jan. 14 meeting of city council committee. At that time, councillors will debate the issue. They must ratify a decision at their Jan. 21 meeting of council.
The province has decreed a final decision to opt in or opt out must be made by Jan. 22.
