Alberta
Ontario Cannabis Store reducing price margins to help pot businesses compete
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 announced the margin change Thursday, saying it will be implemented in September.
The OCS estimates the move will put $35 million back in the hands of licensed pot companies this fiscal year and $60 million in the 2024 fiscal year. The OCS expects these amounts to compound annually in the years thereafter as the legal cannabis market grows.
The margin reduction will come from a fixed mark-up for each product category that will be standard for all producers and applied as a percentage above each product’s landed costs, which already take into account producers’ margins and excise taxes.
The margin drop was largely triggered by the strength of the illicit pot market, which still made up 43 per cent of Ontario’s cannabis market last March.
“This announcement will allow producers to better compete with the illicit market, particularly when it comes to dried flower,” said Charlie Bowman, chief executive and president of licensed producer Hexo Corp. in an email.
“This is an important step in giving Canada’s cannabis companies the upper hand over illegal producers.”
The average price for cannabis was $11.78 per gram at the start of 2019, shortly after legalization, but fell to $7.50 per gram in 2021, a November report from Deloitte Canada and cannabis research firms Hifyre and BDSA said.
The average price for vape cartridges has similarly fallen by 41 per cent from $32.02 per gram around legalization to $19 per gram a year later.
Pot producers, which are mostly unprofitable, have blamed illicit sellers, along with excise taxes and OCS margins, for a series of cuts they have made over the last few years. Many of them have laid off hundreds of staff, closed facilities, moved to rationalize their product mix and embarked on restructuring initiatives meant to reduce costs.
In the last week alone, Canopy Growth Corp., one of Canada’s most prominent pot companies, said it would lay off 800 workers as part of a transformation plan that will also include the closure of a former Hershey chocolate plant in Smiths Falls, Ont. it took over and the consolidation of some of its cultivation operations.
Then, licensed producer SNDL Inc. announced a layoff impacting 85 employees at its Olds, Alberta facility that it said would deliver $9 million in savings.
To combat further cuts and remain competitive with the illicit market, licensed producers have been slashing their prices, but complain the reductions are eating into their profits.
With prices in decline and profitability targets under pressure, licensed producers and retailers were pleased to hear about the OCS’s margin reduction.
However, the changes won’t come into effect until later in the year. The OCS said the delay is meant to give it and licensed producers time to consider changes to existing products and their release schedules.
But some have already made sense of the margin reductions and decided not to change their prices as a result.
“The OCS deserves credit for implementing these important changes which will accelerate industry sustainability and ultimately profitability as we intend to hold our prices due to the already highly competitive product pricing within the sector,” said Canopy Growth Corp. chief executive, in an emailed statement.
High Tide Inc., the cannabis company behind Canna Cabana stores, was equally pleased with the OCS’s decision, but said “more needs to be done especially by the federal government, to ensure the sustainability of Canada’s legal cannabis sector.”
“We look forward to further discussions with the OCS, regulators, as well as the federal and provincial governments about additional concrete measures that can be taken to ensure our industry continues to grow and create jobs while protecting public health.”
This report by The Canadian Press was first published Feb. 16, 2023.
Tara Deschamps, The Canadian Press
Alberta
Premier Danielle Smith In Washington for Trump Inauguration Promoting a New Era of Partnership with the U.S.
Premier Smith at dinner with Florida Republican Senator Rick Scott. Facebook
Premier Danielle Smith will travel to Washington, D.C. to solidify Alberta as the answer to North American energy, food and data security during the week of President-elect Trump’s inauguration.
While in the U.S. capital from Jan. 18 to 23, Premier Smith will meet with key decision makers, governors, members of Congress and private sector leaders. Alberta’s on-the-ground presence will help build relationships and start critical conversations that will lay the groundwork for collaboration with the new U.S. administration and reap benefits for Albertans, Canadians and Americans.
Premier Smith will champion Alberta as the largest exporter of oil and gas to the U.S. and highlight the unprecedented opportunity that lies ahead for Alberta to work collaboratively with the new administration to develop secure supply chains and strengthen energy security for the U.S. and Canada. Alberta’s approximately USD $100 billion in energy exports to the U.S. are upgraded into USD $300 billion in value-added products by American workers at refineries in Ohio, Indiana, Michigan and other states, and then sold by American companies all over the world.
“Given the serious threats of tariffs, it is imperative that we do everything we can to engage directly with the incoming administration, members of Congress and key officials to emphasize Alberta’s critical role in North American energy security and economic prosperity. In all my meetings and events in Washington, D.C. I will work to ensure Alberta is recognized as a partner of choice for establishing North American energy security, to reinforce our century-long friendship and to further solidify our trade relationship that greatly benefits both Americans and Canadians.”
This visit will build on the Premier’s previous discussions with the President-elect, key members of his cabinet and other elected officials. With the ongoing threat of tariffs on all Canadian products, including those from Alberta’s leading industries, meeting with officials face-to-face is crucial. This work is a continuation of the efforts that were discussed by all Premiers to do all they could to build bridges with the U.S.
Conversations will also focus on highlighting the deep economic ties that underpin our economies and how they contribute to creating jobs and prosperity on both sides of the border in industries like energy, agriculture, forestry, manufacturing and technology.
Premier Smith will travel with five staff members. Mission expenses will be posted on the travel and expense disclosure page.
Quick facts
- The U.S. is Alberta’s largest trading partner and Alberta is the second-largest provincial exporter to the U.S.
- In 2023, Alberta’s exports to the U.S. totalled USD $115.58 billion, accounting for about 90 per cent of total provincial exports in 2023.
- Energy products accounted for about USD $94.4 billion, or 82 per cent, of the province’s exports to the U.S.
- Other important export sectors included plastics, forestry, meat and machinery.
- Alberta’s government has also launched the Alberta is the Answer campaign, a targeted advertisement campaign focused on reaching key decision makers in the U.S. and amplifying Alberta’s message on the energy partnership it has with the U.S. and how this partnership can grow.
Itinerary for Premier Smith*
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Why Alberta?
Alberta is one of the most reliable and secure energy partners for the U.S.
Alberta and the U.S. share the same values – and a border. Alberta is the friendly, freedom-loving democracy right next door.
Alberta has the fourth largest oil reserves on earth, and significant natural gas resources. Alberta already accounts for 56% of all oil imports to the U.S. – twice as much as Mexico, Saudi Arabia and Iraq combined – which is helping to drive job creation and prosperity on both sides of the border. The U.S. must import crude oil in order to refine it and produce light oil, which they export around the world, and Alberta believes that we are a far better trading partner than Iran, Iraq, or Venezuela.
Alberta is also the largest producer of natural gas in Canada and remains positioned to support the U.S. in filling their domestic supply gaps, currently accounting for nearly 60% of U.S. total annual natural gas imports. The reliability and security of those imports cannot be understated.
Furthermore, Alberta has a stronger environmental record, stronger democratic institutions and stronger human rights standards than other energy producers.
This is a win-win relationship. Alberta’s approximately U.S. $100 billion in energy exports to the U.S. is upgraded into U.S. $300 billion in value-added products by American workers at refineries in Ohio, Indiana, Michigan, and other states, and then sold by American companies all over the world.
More than 450,000 kilometres of pipelines already link Canada and the U.S. – enough to circle the Earth 11 times. The province also has ambitions to double its oil production by 2050, and increase its pipeline capacity significantly. Enabling Alberta to export even more crude oil to the U.S. This will help the U.S. achieve global energy dominance and increase energy affordability for Americans.
Alberta is a global leader in responsible oil and gas production
Alberta is the top foreign supplier of energy products to the United States. Alberta has been a global leader in responsible energy production for decades, leveraging cutting-edge technologies that allow the province to continue increasing production while protecting our air, water, and land for generations to come.
Alberta is unapologetic in its goal to increase oil and gas production to meet the world’s basic needs and maintain the quality of life we all enjoy in North America. The province is doing so responsibly and will continue to lead the way with new technologies that support this ambition.
Reliable Alberta energy will fuel the technologies of the future
As the world becomes increasingly electrified, the need for reliable energy is growing and Alberta has the resources to meet that demand.
The province is home to world-class energy industry leaders with the expertise developers are looking for to find innovative solutions to meet their energy needs. Coupled with Alberta’s competitive power market structure, natural incentives for cost-savings and a government committed to reducing red tape, Alberta is a premier destination for AI data centres.
Alberta’s AI data centre strategy arose from a pressing need for AI data centres in North America – a need that is in fact global. With the rapid growth of AI and machine learning, global demand for data centre capacity is expected to triple by 2031.
Alberta is a trusted and safe partner of the U.S. that has the capacity and resources to support these data centres and ensure that U.S. companies remain on the forefront of AI technology and that the U.S. maintains its technology dominance.
Offenders and accused who pose a public safety risk may now be subject to 24-7 court-ordered electronic monitoring by Alberta Correctional Services as part of their community supervision conditions
Alberta’s government is taking action to combat rising crime and restore safety by launching an electronic monitoring program as part of its Safe Street Action Plan.
Alberta’s government is keeping a promise and implementing a new ankle bracelet monitoring program in response to the country’s problematic bail system. The ongoing catch-and-release policy brought in by Ottawa forced Alberta’s government to take additional action to protect families and communities.
Starting Jan. 15, the new provincial ankle bracelet electronic monitoring program to help hold high-risk and repeat offenders accountable will officially launch. Through this program, offenders and accused who pose a public safety risk may now be subject to 24-7 court-ordered electronic monitoring by Alberta Correctional Services as part of their community supervision conditions.
“Ottawa’s Bill C-75 has broken the bail system. We are taking an important step toward combating rising crime. High-risk offenders pose a significant risk to public safety and require enhanced supervision in the community. As government, it’s our duty to protect Albertans and their communities. Ankle bracelet electronic monitoring is another tool in the toolbox for courts to consider when determining sentencing or bail conditions, helping us combat rising crime and create safer Alberta communities.”
Announced alongside other measures to enhance community safety in last spring’s Public Safety Statutes Amendments Act, 2024, individuals under a court-ordered electronic monitoring condition will be required to wear a Global Positioning System (GPS) tracking device monitored by a new unit within Alberta Correctional Services, ensuring compliance and consistent oversight of high-risk offenders on bail and community release throughout the province.
Ankle bracelet electronic monitoring will protect Albertans and communities by helping to secure offender-restricted areas, such as victims’ residences, places of employment or any other area deemed off-limits as part of an individual’s bail or community-release conditions. Probation officers within Alberta Correctional Services continue to supervise individuals under provincial community-based court conditions and bail supervision. Previously, this supervision primarily occurred during regular business hours and did not involve the use of GPS electronic monitoring ankle bracelets. Anyone under court-ordered electronic monitoring conditions will be informed of the program requirements, including the tracking of their location.
“Alberta’s government continues to call for federal bail and sentencing reform to stop violent criminals from re-entering our communities. We remain committed to prioritizing the safety of Albertans through measures like the use of ankle monitors, strengthening the Crown Prosecution Service, the courts and policing to protect Albertans from violent criminals.”
Following extensive stakeholder engagements and an open technology vendor procurement process, the launch of the provincial electronic monitoring program enhances community supervision with around-the-clock monitoring and adds to the various methods and community supports already used by probation officers, including regular reporting, referrals to community programs and ongoing engagement with policing partners. Additionally, this program aligns Alberta with programs in other provinces across Canada.
Quick facts
- The new program will supervise individuals whose conditions include court-ordered electronic monitoring.
- Alberta’s electronic monitoring program is supported by $2.8 million to cover implementation costs for the 2024-25 fiscal year.
- In August 2024, the government selected SCRAM Systems as the technology vendor for the ankle bracelet electronic monitoring program through an open procurement process.
- The estimated end date for the electronic monitoring vendor contract is March 31, 2029.
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