The Ontario Cannabis Retail Corporation (OCRC) has announced that the Canadian e-commerce company Shopify will manage the online sale of legal recreational cannabis in Ontario.
The OCRC, a subsidiary of the Liquor Control Board of Ontario (LCBO), was created last year in preparation for the legalization of cannabis in July 2018 and to ensure the safe and responsible distribution of recreational cannabis in Ontario. The plan is to distribute legal cannabis in stand-alone stores controlled by the OCRC in major cities and use Shopify’s interface and technology inside those stores as well as for online sales. Shopify will be used primarily to manage inventory, accounting, human resources, and allows customers to view product health information when making a purchase. Shopify was chosen by the OCRC because it has the necessary features to build a highly regulated in-store and online business solution that aligns with their goals.
The OCRC plans to open 40 cannabis stores throughout Ontario by Summer 2018, which will expand to 80 in 2019, and finally to 150 by 2020. Considering Ontario’s large population, 150 stores doesn’t seem to be enough to meet the projected demands, which is why the goal of opening the Shopify online market is to allow access to small remote cities where there are no plans to open cannabis stores while keeping the whole process controlled and in one online cloud. This is particularly important for Ontario because of the large proportion of the population residing in rural and small to medium population centres. Due to this, it is likely that the online platform will be the best option for most consumers.
In addition, the main goal of keeping an online sale platform is to make the legal purchasing of cannabis more convenient than black market purchasing. Eliminating the cannabis black market is a very important mission for Canada and they are believed to be on track to achieve this.
In contrast, Conor MacAdams, a Masters student in the faculty of environment at the University of Waterloo, feels that the use of Shopify in OCRC’s approach to managing the sale of legal cannabis is not the best idea because its use will likely be taking money away from local communities and government-funded programs and services. “I think the focus should be on assisting the growth of local economies. We should be fostering the growth of small businesses and ensuring profits stay within the communities.”
While a localized and physical approach to cannabis retail has its benefits, for now, Ontario has its focus on keeping cannabis retail public and highly controlled, while still very accessible. Shopify’s privacy policy states that it collects a customers’ name, email, shipping and billing address, payment details, company name, phone number, IP address, and device data. This would make all in-store and online purchases of cannabis trackable.
It is important to take into consideration that the use of Shopify is a business decision that promotes efficiency in the high-level of governmental control over the legal cannabis sales in Ontario. Because of this, it can be seen as a way to bring money into government-funded programs rather than take money away from them and siphon money out of communities. Each province has proposed their respective unique framework to managing legal cannabis distribution and there is no consensus on which is best simply because it has never been done before in Canada. There will ultimately have to be some trial and error within the system and many adjustments to the current plans.
