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On-Premises Cannabis Consumption

The tourism industry in Ontario has brought to light a ‘regulation gap’ around the consumption of cannabis in a federally legalized context, and is eager to close it with licencing that will allow for new business opportunities to take place.

In November, an online event supported by the Tourism Industry Association of Ontario (TIAO)and in partnership with New Heights Cannabis and Canopy Growth was held to address the opportunities for on-premise cannabis-infused food and beverage consumption in Ontario. The take-home message: cannabis consumption in the form of consumer-packaged goods offer significant opportunities for businesses in the tourism and hospitality industry including (but certainly not limited to) restaurants, bars, cafes, special events, festivals, and accommodations. The only catch: there are no regulations to support the safe implementation of these products into businesses for both businesses and customers alike.

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“Most times, when businesses need to make a change, a regulation is not required. But with cannabis, this is not the case,” says Beth Potter, former CEO of TIAO, whose mandate is to present the government with ideas and recommendations on how the policy environment can be changed to facilitate tourism related businesses in the province. This event represents popular support for regulation and, ultimately, is a call for change from the government with respect to cannabis consumption in its packaged, edible form. If established, Ontario would be the first jurisdiction in Canada to establish a regulatory framework to facilitate the sale of cannabis food and beverages for on-premise consumption.

Market research supports regulating the on-premise sale and consumption of cannabis-infused packaged products. Research from the United States and Canada indicate that not only is there a market for these products, but the Ontario public in general is tolerant of allowing the sale of edible cannabis food and beverage on-site.

Brian Applegarth, founder and CEO of the California Cannabis Tourism Association (CCTA) and Enlighten Strategies, presented American research by MMGY Global that identified a cannabis motivated visitor profile with interest in some form of cannabis-related tourism experience. These experiences range from a spa treatment with a CBD product to visiting a farm and learning about how cannabis is grown. The study found that, of all the cannabis consumption methods that were surveyed for, edibles were at the top of the list. This is evidence that points to an already existing market for cannabis edibles and drinkables, especially as it relates to tourism.

David Coletto from Abacus Data Inc., presented research conducted in partnership with Canopy Growth. The study addressed on-premise cannabis consumption from a public affairs perspective and found that if the province were to move towards allowing for the sale of cannabis-infused food and beverage, it would be fairly broadly supported by Ontarians.

Discussions highlighted a broader issue surrounding cannabis legalization in Canada: that regulation is disproportionality focused on production and, aside from retail, is entirely missing from the consumption end of the cannabis supply chain. Expanding cannabis sales to include consumption spaces will further develop the cannabis sector in Ontario.

With over 300 event attendees, there is significant interest in and support for adopting new cannabis-infused products. The opportunity is timely given the state of the tourism and hospitality sector in Ontario resulting from the pandemic. “We are in a time of re-building and renewal, and it has never been more important to focus on an industry that can drive economic growth and create jobs for the province,” says Potter about the hospitality and tourism sector at large. Cannabis-infused food and beverage not only offers a new revenue stream for businesses that are already established, but is also a vehicle for job creation in both tourism and non-tourism related industries.

Tourism is an institutional arrangement that is supported by the government through regulation. In order for the cannabis tourism industry to move forward in a socially responsible and sustainable way, regulation is required in the area of cannabis consumption. In calling for regulations to reduce risk and support public health objectives, the tourism industry is playing a significant role in establishing order around public cannabis consumption (in its infused edible form).  More than that, regulations are a way to create value, through safety measures, for visitors. As, Applegarth identifies, “Ontario being open about the fact that this is a safe place to come and experience this [type of cannabis consumption] is going to entice a travel audience.”

The tourism industry has a long history of accommodating for and following regulations. Safety and education are prioritized and are values driving cannabis tourism forward.  If anyone can be trusted with providing order for cannabis consumption, in all of its variations, it is the tourism industry.

Susan Dupej, PhD is a SSHRC Postdoctoral Fellow at Langs School of Business, School of Hospitality, Food and Tourism Management, University of Guelph.