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The Ford Government has unveiled further details about Ontario’s private cannabis retail model in preparation for the initial opening of “bricks and mortar” stores on April 1, 2019. This includes new rules to curb the influence of Licensed Producers in the provincial retail market and to keep cannabis stores a minimum distance away from Ontario schools.

The release of Ontario’s new cannabis regulations will add a much-needed dose of clarity and certainty for the public and industry participants, while at the same time setting the stage for several months of interesting political theatre at the municipal level.  Here are the top three takeaways:

1. Ontario among North America’s most business-friendly cannabis regulatory environments. The Ford Government is clearly committed to establishing one of the most business-friendly, free market regulatory environments in North America for cannabis retailers.  This includes a unique single-tier licensing system that has eliminated the traditional business licensing and zoning authorities held by Ontario municipalities.   Ontario’s new cannabis regulations have created remarkably few additional restrictions on a cannabis retailer’s ability to choose locations at will. The only major change is the creation of a 150-metre mandatory “buffer zone” between cannabis stores and schools. Ontario has decided not to follow the approach of other jurisdictions by mandating minimum distances between two cannabis stores (to prevent the clustering of stores in downtown areas for example) or placing a hard cap on the number of stores that can be opened in the province.

2. Canada’s Licensed Producers cut out of Ontario’s cannabis retail market. Ironically, the Ford Government has taken drastic steps to restrict one particular group’s access to Ontario’s cannabis retail market – Licensed Producers.   Under the province’s new cannabis laws, Licensed Producers will be limited to operating a single store that must be located at the LP’s production facility.  Licensed Producers have been barred from partnering with a licensed retailer in Ontario beyond a 9.9% ownership stake.  With the objective of providing a competitive advantage to small businesses, the Ford Government’s approach is a marked departure from other Canadian provinces that have either allowed producers to directly own and operate their own stores (Manitoba, Saskatchewan, and Newfoundland and Labrador) or to directly partner with retailers (Alberta).

3. All politics is local. Some of the most critical political decisions regarding Ontario’s cannabis retail market are yet to come.  In the coming months, we can expect some heated debates in municipalities across Ontario, which will come in two varieties:

• Newly-elected municipal councils across Ontario will be required to decide by January 22, 2019 whether to “opt out”. Will they  side with cannabis-legalization opponents and opt out, considering that they will have no legal authority to control the volume and location of stores in their communities? Or, will municipal politicians embrace the spirit of legalization and the free market and open their borders to cannabis stores?
• It can be anticipated that some municipalities – particularly large urban municipalities like Toronto and Ottawa – will confront pockets of NIMBY-style backlash from parents and community groups who are opposed to stores in their neighbourhood or in close proximity to local schools. These protests will put Ontario’s cannabis regulator in the difficult position of deciding whether to reject store licence applications on the basis of community concerns.

Navigator Ltd. is Canada’s leading high-stakes public strategy firm.  Our national cannabis practice includes a team of experts who can help you navigate the regulatory process with advisory services that include: regulatory affairs, community and stakeholder engagement, government relations, and full-service communications support.

 

Late last week, the Ford Administration introduced the details of Ontario’s cannabis retail model, creating one of the most open and free cannabis markets in Canada.  This bold new approach is expected to generate substantial investment by aspiring cannabis retailers across the province. At the same time, there remains a number of key political and policy issues to resolve in the months ahead which will determine the ultimate size and shape of Ontario’s cannabis market. Here are some key insights from Navigator on the province’s new cannabis rules:

1. The battle for the hearts and minds of municipal politicians begins. Ontario’s cannabis bill will give newly-elected municipal councils across the province until January 22, 2019 to decide whether they will close their borders to cannabis retail stores.  At the same time, the bill limits the authority of municipalities to control where cannabis stores can be located through local licensing and land use planning. The stakes are high, particularly in major markets like Toronto, Mississauga, Ottawa and Hamilton.  In the weeks to come, aspiring retailers will be battling for the hearts and minds of municipal politicians to convince them not to opt out.

2. Dispensaries – in or out of Ontario’s retail market? The province has been clear that illegal dispensaries in Ontario who don’t close their doors by October 17^th will not be eligible to obtain a licence in the legal market.  It is less clear, however, whether those who do choose to shut down by “legalization day” will be able to pass Ontario’s rigorous licensing process. Ontario’s new cannabis regulator, the Alcohol and Gaming Commission of Ontario, is tasked with looking into “the past and present conduct” of every applicant to be assured that they will act “with integrity, honesty and in the public interest”. This may prove too tall an order for many dispensary owners who have spent years operating outside of the law.

3. What is an “affiliate”? It has been widely reported that Licensed Producers were dealt a blow when Ontario’s new cannabis bill revealed that they would be able to operate a single store on the premise of a production facility.  But that may not be the end of the road for LPs.  The law does not expressly prevent an LP from having a commercial relationship with a licensed retailer, unless the licensed retailer is a yet-to-be-defined “affiliate” of the LP.  The meaning of “affiliate” will be defined in forthcoming regulations, meaning the province will be receiving arguments from all sides in the weeks to come.

4. Betting on the buffer zone. The new cannabis bill takes a pass on defining specific “buffer zones”, which refers to the minimum distance that must exist between a cannabis store and certain sensitive use areas, such as public schools.  This decision has been left for forthcoming regulations, which is sure to be causing profound anxiety among aspiring retailers who have already locked in retail locations across Ontario on a speculative basis.  They will have to wait a few months more to find out whether their locations are inside or outside of the provincial buffer zone.

Navigator Ltd. is Canada’s leading high-stakes public strategy and communications firm with a leading national cannabis practice. We apply proven campaign tactics to situations where success is critical and you can’t afford to lose.  Visit us at navltd.com.

 

Navigator is proud to be a gold sponsor of the 2019 Canada Winter Games being held next year in Red Deer, Alberta. Up to 3,600 youth athletes from across Canada will gather in Red Deer to compete in the 27th edition of the Canada Winter Games in 19 different sporting events, providing a platform for Canada’s next generation of international athletes to cut their teeth on one of our country’s biggest sporting stages and experience the thrill of competing at the highest national level.  

Jaime Watt, Navigator’s Executive Chairman explains, that as a national firm, “Navigator understands the importance of sport to Canadians, as well as the benefits that youth sport brings to communities across the country. Navigator has a history of supporting large-scale sporting events such as the 2017 Invictus Games in Toronto. At Navigator, we understand the important role events like the Canada Games play in building strong and healthy communities – and we are thrilled to support the hard working and talented athletes across the country. 

Lessons learned from participating in sport at a young age are applicable throughout life. Teamwork, discipline, and leadership are valuable traits which help shape today’s young athletes into the leaders of tomorrow.” 

Jason Hatcher, Managing Principal of Navigator’s western Canada operations, is a former Canada Games athlete. Jason competed in the 1989 Saskatoon games as a swimmer and has taken lessons learned in the pool as a teenager and young adult and used them throughout his career. “Sport teaches life lessons like almost nothing else can. Those hours training develop qualities such as hard work, commitment and leadership which I still use today. These kids competing at the games are not just Canada’s next generation of athletes, but also Canada’s next generation of leaders and business people.” 

Navigator also understands the importance of corporate sponsorship in keeping grassroots events like the Canada Games alive. The benefits of these events stretch far beyond the personal stories of former athletes. The economic and cultural benefit that these events create is equally important. The 2019 Canada Games has given Red Deer the opportunity to new community infrastructure such as the Gary W. Harris Canada Games Centre which will be used by members of the Red Deer community and athletes from across the province for generations to come.   

For the first time ever, the 2019 Canada Winter Games will feature a major cultural festival including concerts by local and national Canadian musicians, indigenous artists, and local groups. Another new addition to the Games is the MNP torch relay in which the torch will travel from coast to coast stopping in 48 communities across Canada before finishing in Red Deer for the opening of the Games. 

Navigator is proud to partner with the Canada Winter Games and is looking forward to watching the success of athletes from all across the country in Red Deer.  

A look at the state of energy in Ontario ahead of the provincial election.

As the world watched Facebook hauled before the court of public opinion over the Cambridge Analytica scandal, the sense of outrage has reached a fever pitch. Hunched over his microphone before a U.S. Senate committee, Facebook chief Mark Zuckerberg apologized on April 10 for not doing enough to prevent his platform from being used for harm.

The collection of the personal data of up to 87 million Facebook users, including 622,000 Canadians, by Cambridge Analytica for the purposes of selling influence over voter opinion was a massive breach of public trust.

But in the age of the Internet, is the notion of privacy dead?

Even as big data companies come under increasing scrutiny, Canada is now building its artificial intelligence (AI) ecosystem in earnest. The federal government invested $125 million in a Pan-Canadian Artificial Intelligence Strategy in this year’s budget. Ontario has committed  $15 million to fund AI entrepreneurs and start-ups. Quebec is setting up a new $5 million international AI organization to reinforce Montréal’s status as a global AI hub.

These are not insignificant investments in an emerging technology that relies heavily on the mass collection of data. They are important investments, but they face the same challenges as Facebook when it comes to user privacy and the use of predictive models for consumer behaviour.

Given the fallout from the Facebook-Cambridge Analytica scandal, the promise of AI cannot happen without finding a meaningful solution to the issue of privacy — and Canada will not have to venture further than its own backyard for the answer.

Enter, blockchain, a technology most of us know by its first iteration, Bitcoin, a cryptocurrency used by computer geeks, criminals, and now Canadians.

Blockchain is the second wave of Internet innovation, introducing the notion of digital scarcity.

Our current Internet of Information enables people to send copies of information; when you send an email, PDF or Powerpoint, you keep the original and a copy is sent over the web.  

Blockchain technology — also known as distributed ledger technology — is an immutable online record book where transactions are encrypted, validated, timestamped, and settled in a matter of minutes. For the first time ever, we are able to send digital value over the Internet.

You can imagine what the profound implications are for a technology that essentially cuts out the middleman. When I send you Bitcoin, there is no bank, credit company, or Paypal needed – just a change in the permanent online record and the transaction is settled. You don’t have to wait 2-3 days for the e-transfer to show up in your bank account; the transaction is instant and secure.

The technology further introduces some interesting dynamics for the notion of user privacy.

Today, the world’s data is stored on centralized servers in physical locations. Data on a blockchain is stored on thousands, if not millions, of computers around the world.

What this means is hacking a blockchain is not like breaking into a house, it’s more like breaking into a whole town.

Blockchain is not only a form of money, but a store of any thing of value, including data. Records like patient data, supply chain management, and even votes can be stored on a blockchain securely. Through encryption, only the user and the person on the other end of the transaction see the data, the rest is simply a note on the ledger that the transaction has occurred and been settled.

Consequently, users are put back in the driver’s seat of their own data. As a user, I have control over my digital identity, choosing how much information I want to share with each new entity that I interact with. There is even a future where the user is paid for their data and not forced to relinquish their data for free to access online services like social networking or instant messaging.

For both blockchain and AI, it’s less important for you or I to understand the mechanics of the underlying technology, but more to understand the many benefits it will bring to society. Most people don’t understand the algorithms that bring them content from their friends and pages on Facebook (although arguably after all that’s happened, maybe they should), but they do enjoy the features that allow them to chat with friends, play games, and stay in the loop on the things they care about most. In short, it allows them to feel more connected to people that they would not otherwise engage on a regular basis.

The benefits of blockchain and AI together should be complementary and perhaps inextricable. Blockchain provides a level of trust, transparency, and training that the AI black box is sorely lacking. AI could help blockchain overcome its scalability and sustainability challenges in terms of its high energy consumption and settlement rates. At the end of the day, consumers are the real winners if we take the same level of care in cultivating both the AI and blockchain ecosystems in Canada.

So governments take note: a world of big data and AI will need the decentralized future offered by blockchain.

 

Views expressed are those of the author and may not necessarily represent those of Navigator or its affiliates.