There used to be a BC craft brand called Organnicraft on our shelves. Hand-trimmed, small-batch flower out of Vernon. The kind of product that makes a customer come back and ask for it by name. At one point, it had Byron and I on the road buying out shops in Toronto that had it in stock. Worth it, but they don’t sell to Ontario anymore.
They didn’t leave the Ontario market because customers didn’t want their products, rather, the economics of getting a small BC craft producer’s product from Vernon to a Toronto shelf, legally, reliably, at a margin that keeps the lights on – are *almost* impossible to make work. I say almost because there are in fact many brands still fighting it out across this country, and everyone in Ontario thanks you.
But Organnicraft isn’t alone in this story, not even close to alone, just look to the edible section in Ontario where you may have noticed selection beginning to thin out, look less innovative and in particular, the savoury snack section becoming extremely quiet.
The Math Nobody Talks About
Let’s look at how the numbers work.
The federal excise tax on cannabis is $1 per gram. That rate was set assuming an average retail price of roughly $10 per gram. The actual average retail price in Ontario in 2024 was $4.82 per gram. That means producers are being taxed at more than three times the intended rate on every gram they sell. That gap doesn’t disappear, it gets absorbed somewhere, and it usually gets absorbed by the producer.
Now layer on what it actually costs a small producer to access Ontario specifically. The OCS requires any LP supplying Ontario to carry $15 million in recall insurance which for a micro-cultivator doing modest volume, that cost alone can exceed their entire Ontario margin. This before freight, storage, or OCS’s own markup on the price.
Craft growers aren’t failing to reach Ontario because they aren’t trying hard enough, the system charges them an entry fee that only makes sense if you’re already operating at scale or know how to work the books.
Organnicraft is our anchor, but the exit list runs coast to coast. Sugarbud out of Calgary, a craft Alberta grower that never found a sustainable Ontario path. Houseplant, Seth Rogen’s BC brand, couldn’t make Canada work and went US-only. Astro Nutz from Quebec who brought the most inventive Edible formats we had in Ontario, abruptly left as well. The problem isn’t geography. It’s the economics that greet every producer, regardless of province, the moment they try to reach Ontario on their own.
The Consolidation Wave Running Underneath All Of This
While individual craft brands exit quietly, a louder collapse has been happening at the mid-market level that deserves more attention than it’s getting.
Atlas Global Brands, Heritage Cannabis, and BZAM collectively responsible for some of the most recognizable mid-tier names in the Canadian market, all entered CCAA creditor protection in 2024. Assets were sold piecemeal. Private buyers, numbered corporations, creditor vehicles.
Here’s the part worth slowing down on: in each case, a publicly traded multi-brand operator collapsed and was acquired by a private buyer, often a numbered company or creditor vehicle. The brands may survive, but the shareholders were wiped and the ownership concentrated. This is consolidation by atrophy, not a hostile takeover, but the same outcome. Fewer independent operators, more brands under fewer roofs, less accountability to anyone but the new lender.
Paul’s Parallels covered the retail side of this in a recent piece – the proposal to double Ontario’s retail store cap, who benefits, and what the market looks like in fifteen years if the pattern holds. The supply side is running the same play. The end state is the same: a handful of dominant operators, a narrowed product selection, and a market that stopped serving the consumers and communities it was built for.
So What Would Actually Fix This?
The argument isn’t that producers deserve a handout, it’s that the current interprovincial distribution model is broken by design or at minimum, broken by neglect, and there’s a practical solution that could support a stronger independent economy.
Simply put, a shared distribution hub in Ontario.
Producers pool their Ontario logistics costs: one address, one insurance policy, shared freight contracts, collective storage, and a unified OCS supplier relationship. Farm, brand and product recognition can be shared through extended label information to maintain identity – Brands just share the infrastructure.
The model exists in other industries: Craft brewery distribution co-ops, regional food producer collectives, agricultural marketing boards. The principle is the same: producers who cannot economically justify individual market entry can collectively justify shared infrastructure.
For this to work, two things need to happen beyond the warehouse itself.
The OCS needs to meaningfully lower the margin it takes from producers to allow more viable economics at smaller volumes. While the federal government, which has already been discussing a shift from province-specific excise stamps to a single national stamp, needs to actually follow through. A national stamp, repriced based on the market and the reality of how production operates, would alone meaningfully reduce the per-province overhead that kills small producers before they ever reach a shelf.
What This Means for a Store Like Ours
Minerva is an independent cannabis retailer in Toronto. We carry what the market makes available to us, and the best part of it all is the people behind the products, the ones who genuinely care, who travel from across the country just to get their work on our shelves.
This isn’t abstract policy, it’s what our actual shelves look like and what our customers can and cannot find.
Independent retailers have an interest in this that the chains don’t. A chain running 150 locations optimizes for reliable volume and margin consistency. They need SKUs that move at scale, but independent retailers, particularly boutique operators with educated customers, have a genuine interest in variety, craft, and the kind of regional product diversity that gives a customer a reason to come back and discover something new.
A functioning distribution hub would put product back on our shelves that shouldn’t have left in the first place. It would give smaller BC and Alberta producers or small, innovative edible brands a path to Ontario that doesn’t require them to choose between going into debt and going dark, and it would make the Ontario cannabis market a little bit more like what it was supposed to be: competitive, diverse, and worth choosing over the alternative.
The infrastructure exists in theory. The demand exists. The producers exist. What’s missing is the model, the will, and the pressure to build it.
We’re applying the pressure.