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But licensed producers have increasingly become frustrated with the OCS monopoly, arguing that having the province as the middle-man increases the per gram price of legal cannabis, which is currently about 30 per cent higher than the black market price. Major producers have also started reported declining revenues, due in part to pricing adjustments they have had to make to account for supply-chain bottlenecks.

Saskatchewan is the only province in the country that currently allows the private sector to control the wholesale supply of cannabis to retailers altogether. Retailers in the province, such as Fire & Flower, have lauded the system as “efficient,” and have called on Ontario to follow suit.

It is a hybrid model, that will allow private involvement

But the OCS will still continue to be involved in wholesaleing, according to a person familiar with the matter. “It is a hybrid model, that will allow private involvement,” the person said.

The e-mail also states that producers that “continue to have interest in direct-delivery” are advised to schedule a follow-up consultation with the OCS between Nov. 20 and 27. “During this consultation the OCS will share specific terms, conditions and capabilities by which any producer interested in direct-delivery would be required to adhere to,” the e-mail said.

This latest move is yet another signal that the Ford government is open to allowing more private involvement in the cannabis retail sector. In the recent fall economic statement, the government announced that it would allow private retail stores to get involved in selling cannabis online, through a “click-and-collect” system.

The OCS website is currently the only online cannabis store in Ontario.The agency disclosed last month that it has lost $42 million in the latest fiscal year, blaming high initial startup costs.

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