HOW THE OCS ENABLES THE LEGAL CANNABIS MARKETPLACE IN ONTARIO

PHOTOGRAPHY BY MATT MCDOUGALL

The Ontario Cannabis Store’s distribution centre holds without a doubt, the largest stash of legal cannabis products on planet earth. On any given day, up to two million individual packages of dried flower, edibles, concentrates, beverages and more from over 250 different licensed producers across Canada are stacked, row after row on racks that stretch to the ceiling 30 metres from the ground across a building that covers almost 50 basketball courts. So. Much. Cannabis.

Most of it – almost 96 per cent is destined for one of Ontario’s almost 1,700 cannabis stores and then Ontario consumers. The rest is sold through OCS.ca, the Province’s online retailer, and delivered to consumers across the province.

David Lobo, President and CEO of Ontario’s government cannabis wholesaler the Ontario Cannabis Store (OCS), leans over the yellow safety railing and points to the 1.3-kilometre long conveyor system that snakes its way through the racks.

“We ship more than 1,100 kgs every single day to stores across Ontario while receiving products from our suppliers. This couldn’t happen without great partners, a lot of automation and careful planning,” Lobo says. “What gets us excited is we’re serving a real need and, if we do our jobs right, bringing exciting, innovative products to market while engaging and educating consumers and solving challenges that didn’t exist even six months ago, let alone six years back.”

Ontario’s newest provincial agency, OCS is the link between Canada’s licensed producers and Ontario’s cannabis consumers. The organization’s mandate is to shift cannabis consumers from the illegal market to the legal market and encourage socially responsible consumption and cannabis education. Only producers licensed by Health Canada who follow all regulations and can provide lab reports with strength and purity for their products can sell to the OCS. The OCS then offers the products that get selected through the product call to licensed retailers who all pay the same price. Now, in the fifth year of legalization, the estimates of market capture in Ontario suggest about 60 per cent of consumers have shifted to legal.

While some critics lament this as slow progress, Lobo says it’s important to keep in mind the scale of the challenge. “Since it was more than a century ago, I can’t imagine that legal alcohol displaced the bootleggers as rapidly or with as much enthusiasm as Ontario’s cannabis retail store network.”

“Our goal is to create Canada’s largest, most vibrant marketplace and that means great customer experiences rooted in selection, service, quality and price,” states Lobo.

“Federal cannabis legalisation is still less than five-years-old and we’re still the only G8 country that has achieved it. There’s a lot of room left for evolution, and we’ve shared some of our thinking with Health Canada on how to move the industry and Canada forward.”

Lobo and his team are clearly listening to the industry. In the last three months he’s made major changes that are aimed at supporting the sustainability of the sector. Recently OCS announced changes to its pricing structure, reducing OCS’s net income to the tune of $60 million a year. As well, OCS is reducing the burden of insurance costs to make it easier for micro producers to get in the game.

Since the well-documented bumps of its first couple of years, OCS has quietly gone about building the world’s largest cannabis pipeline. When Ontario retailers log on to place orders, they have access to more than 3,000 different products with more being added every month.

There are still challenges. There’s never enough of the hottest products to go around and competition on both the retailer and the licensed producer sides of the fence is incredibly fierce.

Lobo, who joined OCS prior to legalization, became the agency’s president and CEO last summer after holding a number of senior roles in the organization. It’s clear he’s passionate about the organization, legalization and cannabis. Name a town and he can tell you the names of the stores in that community and its extremely likely that he’s popped in for a visit. He is an individual who brings tremendous focus to his role and a passion for the details.

While getting those details right is critical, standing in this vaguely dank distribution centre with Ontario’s top cannabis executive, it’s hard not to feel excited about Canada’s place in leading this global shift in thinking about KIND’s favourite plant.