Ontario Regulator Warns Hashish Dispensaries About Promoting Unlicensed Hemp Merchandise

Ontario’s cannabis regulator issued a warning to the province’s licensed marijuana retailers last week, reminding them that they are not permitted to sell unlicensed hemp products. The Alcohol and Gaming Commission of Ontario sent a letter to licensed cannabis dispensaries after discovering that at least two retailers were selling products that had not been supplied by the province’s only licensed wholesaler of cannabis products.

“The AGCO has learned that some cannabis licensees are offering and selling cannabis-based products, like lotions, edibles, topicals, etc., that have not been purchased from the Ontario Cannabis Store (OCS),” the agency wrote in the letter obtained and quoted by The Canadian Press.

Ontario regulators have warned cannabis dispensaries that they are not allowed to sell unlicensed … [+] hemp products.

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OCS is the sole licensed wholesaler of cannabis goods in Ontario, as well as the province’s only legitimate online retailer. Brick-and-mortar dispensaries are owned and operated independently and are only allowed to retail cannabis products supplied by OCS, including those manufactured from low-THC hemp.

AGCO spokesperson Raymond Kahnert said in an e-mail that the warning to retailers was issued after compliance officers working for the agency discovered that two dispensaries in southwestern Ontario were selling unlicensed hemp products.

AGCO also reminded licensed cannabis retailers that products may not be repackaged before they are sold to customers. Under Ontario’s cannabis regulations, all licensed cannabis goods must be sold in the original packaging supplied by the wholesaler.

“We also have become aware that some retailers are offering and selling cannabis-based products in different packaging than the original packaging from the OCS,” the regulatory agency wrote in the letter.

Jennawae McLean, the co-founder of Kingston, Ontario cannabis store chain Calyx + Trichomes, said that she had to pick her “jaw up off the floor” when she read the warning letter from AGCO sent to cannabis retailers last week.

“I’m completely shocked that anybody would do either of these things so brazenly,” she added. “It’s pretty bold, openly breaks the law and the regulations and jeopardizes your livelihood. It’s completely bananas.”

Ontario’s Legal Cannabis Sales Eclipse Illicit Market

This month, OCS announced that sales of regulated cannabis in the province exceeded those from illicit sources for the first time ever. Using data collected by Statistics Canada from cannabis consumers, the wholesaler reported that more than half of the province’s cannabis sales had been made by licensed retailers. Sales of regulated cannabis in Ontario, Canada’s most populous province, totaled nearly 394 million Canadian dollars ($306.7 million) between July and September of this year

A Cannabis flower on a Canadian Bill.

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“Ontarians chose to purchase more than half of their cannabis through legal channels, as Ontario’s legal market share increased to 54.2 percent, up from 47.1 percent the previous quarter,” the OCS wrote in its latest quarterly report.

OCS has been the province’s sole licensed wholesaler and online retailer of cannabis products since their sale became legal in Canada in 2018, when licensed retailers accounted for only about 5.4% of the total recreational cannabis market in Ontario. By the end of the following year licensed retailers’ share of the market had risen to 19%, and by the end of 2020, it totaled 44.1%.