The Ontario Cannabis Store (OCS) announced its plans to transition to a fixed mark-up pricing model, along with reductions in its margins, to help enable a vibrant cannabis marketplace. After completing a detailed review of its pricing structure, the OCS will move to a fixed mark-up pricing model that will create greater transparency and consistency for licensed producers. Reduced margin levels are expected to help enable a vibrant marketplace so that it is better positioned to compete with illegal operators.
With this change, it is estimated that OCS margin reductions will contribute approximately $35M into the marketplace in 2023-24, with a full fiscal year reduction in 2024-25 estimated at approximately $60M and compounding annually in years thereafter as the market grows.
“As the exclusive wholesale distributor for legal recreational cannabis in Ontario, OCS is doing its part to support a vibrant cannabis marketplace that helps to displace illegal operators, while promoting social responsibility in connection with cannabis,” said David Lobo, President & CEO, OCS. “The OCS is pleased to use its growth in scale to establish a more balanced share of product margins to help enable a vibrant cannabis marketplace.”
Pricing changes will be implemented for September 2023, allowing adequate time for OCS to work with licensed producers to consider changes to existing products and products scheduled to launch in upcoming 2023 releases.
