What Government-Regulated Cannabis Retail Could Mean for Producers

Provinces in Canada will tightly control the supply, distribution, and sale of cannabis. With mostly just a single buyer, the government, cannabis producers will have little defense against one of Porter’s five forces: the bargaining power of customers. For example, in Ontario, the government has proposed to sell recreational cannabis, in stores and online, through OCRC (Ontario Cannabis Retail Corporation), a subsidiary corporation of the LCBO (Liquor Control Board of Ontario), which is a government enterprise and currently retails and distributes alcoholic beverages in the province. By July 2018, Ontario plans to have 40 retail locations.