The problems with how marijuana will be sold in Ontario

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Graphic by Serena Truong

During the 2015 election, I spoke to many people – the majority of whom did not understand politics all too well – that planned to vote for Justin Trudeau because of his support for the legalization of marijuana.

Fast forward almost two years later to present day; Justin Trudeau is our nation’s Prime Minister and the July 1, 2018 date of marijuana legalization is fast approaching. 

As a Libertarian, I am an ardent supporter of marijuana legalization. If someone wants to hit a bowl, eat Cheetos and watch Netflix, that is none of my business. 

Further, legalization can be an effective mechanism to promote entrepreneurship and create jobs that would not have existed under its prohibition. 

Unfortunately, Ontario’s plan for the introduction of legal cannabis to the public is incompatible with basic tenants of the free market.

Recently, Premier Kathleen Wynne announced that the sale of marijuana would be restricted to government run stores in vein of the LCBO.

As a student in Canada that buys alcohol fairly frequently, I feel like I get gouged every time I shop at the liquor store.

Take a 26 ounce bottle of Captain Morgan spiced rum, for example. In Ontario, it costs $29.45 for a single bottle. In the United States, adjusting for the current exchange rate, the same bottle costs $22.13. In this instance, alcohol costs 33 per cent more than it does at the generic run-of-the-mill liquor store in the States.

In Colorado, for example, a whole new generation of entrepreneurs has emerged that specializes in the sale of marijuana. The new breed of entrepreneurs in Colorado spur employment and encourage competition which – ultimately – benefits consumers. 

The average Ontarian spends around $300 on alcohol a year. If Ontario’s prices were brought in line with American prices, using the 33 per cent generated from the Captain Morgan example, Ontarians would spend an average of roughly $225 a year on alcohol. 

The market for alcohol in Ontario does not operate efficiently, arguably due to intervention from the government.

Given the LCBO’s pricing of alcohol, it is likely that consumers of recreational marijuana will be disappointed at the price tags they encounter at the store.

Furthermore, at its core, the government’s monopolization of marijuana is hypocritical.

Anti-trust laws exist in Ontario that penalize companies, preventing new competitors from entering the market in which they already have an established position.

In the domain of alcohol, the LCBO has a stranglehold on the market. They have the freedom of setting prices and Ontarians have little flexibility in deciding where to shop.

The government is breaking their own laws by not allowing independently run stores to serve alcohol to the public. Consumers are denied lower prices and convenience in order for the government to promote their condescending policies.

Ontario claims that the LCBO is necessary in order to protect the citizens of Ontario from themselves. Grown adults above the legal drinking age should be able to consume alcohol without the government lecturing them about how they are the arbiters of appropriate behavior. 

The same logic will likely apply to the sale of marijuana; the government will control the sale and claim they are protecting Ontarians from themselves. 

Meanwhile, for this “privilege”, consumers will pay greater prices and have less variety to choose from that they would have under privatization or decriminalization alternatively.

Finally, the Ontario government is stifling personal initiative with their monopolization of cannabis.

In Colorado, for example, a whole new generation of entrepreneurs has emerged that specializes in the sale of marijuana. The new breed of entrepreneurs in Colorado spur employment and encourage competition which – ultimately – benefits consumers. 

Ontario’s plan lacks this free market element. In the government’s monopoly, less innovation will be undertaken by individuals and there is no incentive to consider consumers first. 

Essentially, they are putting the priorities of the government before those of the constituency.


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