Ontario Cannabis Store (OCS) reduces its margin to position cannabis companies to compete better
New markup structure expected to augment growth in the legal cannabis industry

To help bring vibrancy to the legal cannabis sector, the Ontario Cannabis Store (OCS) lowered its price margins in a bid to help licensed producers gain an upper hand over illegal operators. 

“Consistent with its commitment to social responsibility, OCS will reduce its margins to encourage consumers to purchase safer forms of cannabis, such as edibles and topicals,” the OCS said in a release. The new markup structure will be in place later in September, allowing producers and retailers  to reinvest in their business. It involves fixed markups for each cannabis product category.  

Biggest market reductions will be on vapes, edibles and beverage categories. Modest decreases will be on flowers, pre-rolls and concentrates. 

The OCS estimates that:

  • $35 million CAD ($26 million USD)  will be put back in the hands of the licensed pot companies this fiscal year, beginning April 1 and contribute $60 million CAD in 2024 fiscal year

  • as the market grows, it will compound annually in the years thereafter 

Cannabis industry players are very much aware of the price compression especially in a highly competitive marketplace. Going down on prices alone won’t necessarily mean winning more people over to the legal market. 

The OCS believes this move will accelerate industry sustainable growth and ultimately profitability. 

Further discussions about other concrete measures to safeguard continual industry growth should be done amongst OCS, regulators, federal and provincial governments. 

Twitter opens up to CBD, THC advertising in the US
US cannabis companies can now enjoy increased reach and penetration on online media