Ontario Chamber of Commerce calls on province to allow cannabis lounges

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The largest provincial business advocacy body in Canada is calling on the Ontario government to allow cannabis consumption establishments as part of efforts to modernize and champion the sector.

That was just one of six recommendations made by the Ontario Chamber of Commerce to address major hurdles inhibiting the growth potential of the industry – barriers it says are deterring investment and squeezing margins for stores and producers.

The recommendations were made in a public submission in Ontario’s pre-budget consultation process.

Industry sources have been calling for reform at the provincial and federal level for years.

“The Canadian cannabis industry remains conspicuously absent income and cash flow, let alone profit,” Dan Sutton, CEO of British Columbia-based cannabis producer Tantalus Labs, told MJBizDaily via email.

“Its cultivators and processors have never been profitable, and to this day there are no demonstrable case studies of self sustaining financial fundamentals across the supply side of the industry.”

Sutton said high tax and tariffs inhibit business models for firms of all sizes.

“Continued government inaction is disproportionately punitive to small businesses, whom lack the treasury funds to sustain continued losses quarter after quarter,” he wrote.

The chamber’s submission notes that, despite cannabis being one of the fastest-growing sectors in Canada, an “overly restrictive” regulatory regime is putting a damper on the industry’s economic potential.

The chamber is recommending “the province work with the federal government to ensure regulations strike the appropriate balance between safeguarding public health and ensuring cannabis companies can develop a distinct brand and product offerings that can effectively compete with illegal actors.”

The chamber would also like the province-owned Ontario Cannabis Store to provide quarterly updates on any progress around more than two dozen recommendations made by the auditor general in December 2021.

Other recommendations include:

  • Modernizing regulations to allow licensed producers and retailers to have more direct relationships.
  • Pursuing lost tax revenues from underground markets.
  • Addressing issues related to the clustering of cannabis stores.

Matt Lamers can be reached at matt.lamers@mjbizdaily.com.