The Ontario Cannabis Store Is Set To Lose $8 Million Dollars Of The Province’s Money
The store is not going to be profitable in it's first year.
When the Ontario Government revealed their fall fiscal update yesterday, they also stated that the Ontario Cannabis Store is going to be running a deficit in its first year.
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According to the financial statements, the Ford government projected that the revenue they get from the OCS this year will be less than the expenses they have to spend. The loss is projected at $8 million.
The itemized list in the financial statements shows that during this fiscal year, which ends in March 2019, the government will have to spend $25 million on the Ontario Cannabis Store. As for revenue, while they originally expected $35 million in excise tax revenue, Ontario is now projected to get only $17 million.
This amounts to a loss of $8 million in the first fiscal year of legal cannabis sales. There's a reason for it too. Sales at the OCS are lower than expected and many Ontarians say the poorly run online store is to blame for that. According to some people on Reddit, the terrible service and higher prices at Ontario's only legal weed retailer are driving customers to other sources instead.
Now, Ontarians are responding to the news on Reddit, and they are angry. Many are calling the government incompetent and say that only the Ontario government would manage to lose money selling weed.
One goes as far as to call Doug Ford a terrible dealer. While Doug Ford is in charge of the whole government, the OCS has actually been put under the jurisdiction of the Minister of Finance, Vic Fidelli.
Despite lower than expected sales, the OCS did have around 220,000 orders placed in the first month. That being said, Ontario's ombudsman, which oversees government actions, received over 1000 complaints about OCS service, delays, and payment errors.
Source: BNN Bloomberg