OCS to reduce product margins in latest move to combat illicit cannabis market - BNN Bloomberg

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Ontario’s cannabis business said Thursday it will reduce margins on the legal marijuana products it sells to the province’s retailers later this year in a move aimed at competing more forcefully with the still-thriving illicit market.

The Ontario Cannabis Store , which sells cannabis online throughout the province but also acts as the provincial wholesaler to brick-and-mortar retailers, said it will introduce a fixed mark-up pricing model that will ensure greater transparency and consistency for licensed producers when selling products to consumers.

The mark-up plans also come after Ontario’s Auditor General blasted the OCS in Dec. 2021 for implementing a “value-based pricing” model without completing background research to justify switching to that scheme. After the Auditor General’s report was released, the OCS said it would complete a detailed review of its pricing policy.

“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 CEO David Klein in a statement.

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