Ontario Cannabis Store reduces price margins to help pot shops compete

Chocolate edibles available for authorized retailers are displayed at the Ontario Cannabis Store in Toronto on Jan. 3, 2020. (Tijana Martin / THE CANADIAN PRESS)

TORONTO — The Ontario Cannabis Store says it will be reducing its price margins in a bid to help pot retailers compete with the illicit market.

The provincial pot distributor says the pricing changes will be implemented in September and will contribute about $35 million into the marketplace this fiscal year.

The OCS expects the contributions to hit $60 million in the 2024 fiscal year and compound annually in the years thereafter as the legal cannabis market grows.

The OCS says the changes will include a fixed mark-up for each product category and will be applied as a percentage above each product's landed costs, which already take into account producers' margins and excise taxes.

The OCS will post the markups publicly along with a pricing calculator to give producers more certainty.

It says the margin reduction and fixed mark-up structure will come into effect later in the year to give the OCS and licensed producers time to consider changes to existing products and their release schedules.

This report by The Canadian Press was first published Feb. 16, 2023