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Is Rural Ontario Underserved?

Only one in five people in Ontario live outside of the major cities, but only 11% of retail stores are in these regions. Out of nearly 600 total applications in all stages, only around 50 are for rural areas, and most of them are still in the application process.

The new report released by the Ontario Cannabis Store (OCS) boasts that in the last quarter, they cut the average distance to a cannabis store in half, going from 41 km to travel to a cannabis store to 22 km. When 80% of the population lives within the same 10% of the province, though, that’s a fairly easy task.

But what about the other 20% of Ontarians?

According to the OCS report, Toronto and the Greater Toronto Area (GTA) had 21 stores between them. Granted, the majority of the population lives there, so it makes sense to have a concentration of stores, however, Northern Ontario only had six stores.

Six stores to serve over one million people spread out over an area that encompasses 90% of the province.

Some of the larger population centres include Thunder Bay, Sault Ste Marie, Sudbury, and North Bay.

While the report shows that sales in the northern region were considerably lower than other regions, the more interesting data shows how much of those sales were from the OCS and how much was from private retailers. In larger centres like Toronto, retail stores sold around six times as many grams as the OCS, but in Northern Ontario, the numbers are much closer. The OCS sold 700,000 grams, while private retailers sold 1,100,000 grams, which is a much smaller difference than other regions. This shows that people in more rural areas are more reliant on the online sales option that OCS provides because there are no stores near them.

Mail-order cannabis can be convenient, but it comes with its drawbacks as well. For instance, it can take days to receive your order, and during COVID-19, Canada Post wasn’t delivering to residences, so it became even more difficult for customers to pick up their purchase.

Luckily, there is an easy solution to this that other provinces with large rural populations are already doing. By allowing private retailers to sell their products online, it will provide greater access to rural Ontarians and keep the online marketplace competitive, so that shipping procedures can be perfected and streamlined. If the AGCO offered a licensing option for existing retailers to add cannabis to their inventory, it would be easier for smaller communities to support. Not only that, but it could provide a much needed economic boost to the area.

Fortunately, around 40 new applications for stores outside of major cities have been submitted to the AGCO and may start opening up this year. A 2015 report by the Canadian Centre on Substance Abuse found that college-age people from urban areas and rural areas consumed roughly the same amount of cannabis, so if rural young people don’t have access to legal cannabis, they will obtain it elsewhere.