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610 CKTB | Canadian Cannabis Tourism Decline & Lost Opportunities · Kvetch & Release

• 0:00
  Speaker 1: Good friend John Letke, who's with us on the line.
• 0:03
  Speaker 1: Good morning John, Good morning Gene. Now among the many
• 0:07
  Speaker 1: hats you wear is you are a reporter for the
• 0:10
  Speaker 1: cannabis industry in Toronto, and what we're going to talk
• 0:13
  Speaker 1: about today is Canada's cannabis tourism industry and why it's
• 0:19
  Speaker 1: not working. So you recently wrote for the newsletter stratcan
• 0:23
  Speaker 1: about the decline of the Canadian as you call it,
• 0:26
  Speaker 1: Canada tourism dream. Now, we were the first major G
• 0:30
  Speaker 1: seven nation to legalize, but you say we're stuck in
• 0:33
  Speaker 1: what you call retail purgatory. So what happened to that
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  Speaker 1: big global lead we were supposed to have.
• 0:40
  Speaker 2: Well, it didn't just stall, Gene. We systemically dismantled our lead.
• 0:45
  Speaker 2: By design. We had a chance to be the global Amsterdam,
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  Speaker 2: a mecca for tourism, but instead we engineered the hyper
• 0:52
  Speaker 2: regulated landscape of sterile, high security iPhone store pharmacies that
• 0:57
  Speaker 2: you've seen. I'm sure right now we've got over five
• 1:00
  Speaker 2: thousand products on the market, but nowhere to legally consume
• 1:03
  Speaker 2: them indoors in public. We've managed to make cannabis as
• 1:06
  Speaker 2: boring and friction filled as possible. It's a profound market
• 1:10
  Speaker 2: failure where customers are legally allowed to buy a product
• 1:13
  Speaker 2: but barred from even viewing it before the transaction is finalized.
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  Speaker 2: We've traded hospitality for compliance. It's the result is a
• 1:21
  Speaker 2: retail blood bath that I'm sure you've been seeing on
• 1:23
  Speaker 2: your streets of stores opening and then closing. When I
• 1:26
  Speaker 2: operated Higher Limits Cannabis Lounge and Windsor, we had thirty
• 1:30
  Speaker 2: thousand patrons a year. We brought in the likes of
• 1:32
  Speaker 2: Kenny and Spenny, trailer park Boys, musical acts, Juno Award winners,
• 1:36
  Speaker 2: the Sades. We had a capacity of five hundred people.
• 1:40
  Speaker 2: It was a live entertainment venue. And then what happened.
• 1:43
  Speaker 2: Cannabis was legalized and Doug Ford made our business illegal.
• 1:46
  Speaker 2: So from the federal government making it almost impossible to
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  Speaker 2: buy and sell it in ways that are frictionless, to
• 1:52
  Speaker 2: how the province is dealt with it, to even municipalities,
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  Speaker 2: we have taken an opportunity, a golden goose and decided
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  Speaker 2: to stomp on its eggs.
• 2:00
  Speaker 1: You know, it's fascinating as you're describing this, I was thinking,
• 2:05
  Speaker 1: you know, comedian Carla Collins, who I have on every Wednesday,
• 2:08
  Speaker 1: when she was through the Niagara region. You know, I
• 2:11
  Speaker 1: went to yuk Yuks and I checked out her act
• 2:13
  Speaker 1: and other comedians and it was great, and everybody was
• 2:16
  Speaker 1: having cocktails, but you're right, nobody was smoking pot.
• 2:20
  Speaker 2: Yeah. And you know what's the most interesting thing as
• 2:22
  Speaker 2: well that we found at higher limits is we would
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  Speaker 2: have these big shows and only thirty percent of the
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  Speaker 2: audience would actually be consuming cannabis on site, which showed
• 2:31
  Speaker 2: that people were not offended by the product, They weren't
• 2:35
  Speaker 2: concerned about being in an enclosed space with it. These
• 2:38
  Speaker 2: were adults. We didn't allow anyone under the age of
• 2:40
  Speaker 2: nineteen to come in. So people were taking that, you know,
• 2:43
  Speaker 2: that risk, if you will, of their own accord. They
• 2:46
  Speaker 2: said that they were willing to do so. So I
• 2:49
  Speaker 2: don't think the government needs to step in between that.
• 2:51
  Speaker 2: The same goes for employees who were willing to take
• 2:54
  Speaker 2: that on. But there's still obviously hurdles to overcome right
• 2:57
  Speaker 2: now to get to that point.
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  Speaker 1: Yeah, well, you've identified it in your article as a
• 3:01
  Speaker 1: final boss in this regulatory game. It's not actually the
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  Speaker 1: Cannabis Act, it's the provincial laws like the Smoke Free
• 3:09
  Speaker 1: Ontario Act. And you say these so called health laws
• 3:13
  Speaker 1: are killing the industry.
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  Speaker 2: Yeah, they absolutely are. When the Smoke for Ontario Act
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  Speaker 2: was updated when we were open at higher limits to
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  Speaker 2: include cannabis and not just tobacco, that was the final
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  Speaker 2: nail in the coffin for us. What it did was
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  Speaker 2: allowed for the tobacco enforcement officers at our local health
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  Speaker 2: unit to not only ticket us as owners operators, which
• 3:34
  Speaker 2: we were willing to take on to fight this fight,
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  Speaker 2: but they were threatening tickets to our employees and our
• 3:39
  Speaker 2: customers of up to five hundred thousand dollars one hundred
• 3:42
  Speaker 2: thousand dollars individually, without a limit on the number of
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  Speaker 2: tickets that they would issue. At that point, we realized
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  Speaker 2: that this was not an endeavor that anyone would take
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  Speaker 2: the risk of having to spend one hundred thousand dollars
• 3:54
  Speaker 2: to walk into the business to pay that ticket. So
• 3:57
  Speaker 2: we ended up shutting down. But meanwhile, you know, just
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  Speaker 2: down the street from we operated in Windsor, Caesar's Windsor
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  Speaker 2: has a designated smoking area for tobacco that's just off
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  Speaker 2: site of their main drinking area and their gaming floor.
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  Speaker 2: It's an enclosed space with a covered area that's just
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  Speaker 2: off of a bar This is a double standard. Quite frankly,
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  Speaker 2: that exists, and we know it exists. We need to
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  Speaker 2: overcome it. But even for people like me who were
• 4:21
  Speaker 2: in this sphere, we didn't expect that it would all
• 4:23
  Speaker 2: happen overnight. But I didn't think that we would regress
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  Speaker 2: as quickly as we did.
• 4:26
  Speaker 1: Yeah, you know, the cannabis is surging. You know, the
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  Speaker 1: numbers you said in the article are staggering, and you
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  Speaker 1: talk about the eleven point five billion dollar substitution. So
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  Speaker 1: if the demand is there, why is the government still
• 4:41
  Speaker 1: standing in the way of consumption spaces or are people
• 4:45
  Speaker 1: just turning to things like gummies where there is no smell.
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  Speaker 2: Well, this is the interesting thing. I mean, it's a
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  Speaker 2: multi billion dollar question. We're seeing a massive substitution effect.
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  Speaker 2: Per capita alcohol consumption is plummeting, cannabis retail is surging.
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  Speaker 2: The government is already capturing fifty cents of every dollar
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  Speaker 2: spent on cannabis at one level or another, calling in
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  Speaker 2: multi billions, but they're leaving billions more on the table
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  Speaker 2: by refusing to allow cannabis adjacent experiences like confused dining,
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  Speaker 2: broader farm tours, tasting rooms, experiential sharing, we're trying to
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  Speaker 2: fill an alcohol hole that is popping up in our
• 5:21
  Speaker 2: provincial budgets, Yet we refuse to give cannabis the same
• 5:24
  Speaker 2: logistical dignity as a winery or a craft brewery. The
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  Speaker 2: math is not mathing here, gene as the kids say.
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  Speaker 1: You know, some critics might argue that people really don't
• 5:34
  Speaker 1: want lounges. They'd rather, you know, consume their marijuana, whether
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  Speaker 1: they're smoking it or whether they're ingesting it or drinking it,
• 5:42
  Speaker 1: you know, at home watching TV. So are we trying
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  Speaker 1: to build a third space that maybe nobody even wants.
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  Speaker 2: I think that there is a want for it. Listen,
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  Speaker 2: if you are someone who has a nice sized house
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  Speaker 2: a backyard. We saw this during COVID. Some people were
• 5:56
  Speaker 2: comfortable with lockdowns, whereas other people weren't comfortable with it
• 6:00
  Speaker 2: because they had added amenities. And I think that that's
• 6:02
  Speaker 2: what this is what comes down to. If you live
• 6:04
  Speaker 2: in a retirement home, an apartment building, or a condominium
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  Speaker 2: for example, that has regulations or restrictions on where you
• 6:09
  Speaker 2: can consume your cannabis or even your medical cannabis, these
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  Speaker 2: spaces are increasingly necessary for those who just want to
• 6:16
  Speaker 2: have social experiences it's there as well. And then of
• 6:19
  Speaker 2: course it's that last mile for the tourism sector where
• 6:22
  Speaker 2: you have people who are coming into a city and
• 6:24
  Speaker 2: they can't consume in their hotels. They maybe they can
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  Speaker 2: consume on the sidewalk, but they might not feel comfortable too.
• 6:30
  Speaker 2: So this is just acting consumers to play regulatory roulette
• 6:34
  Speaker 2: right now with their drivers' licenses. And that's why we
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  Speaker 2: should have these third spaces where people can go to
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  Speaker 2: spend the allocated amount of time that they feel necessary
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  Speaker 2: to be able to then move on to the next
• 6:44
  Speaker 2: thing that they want to do during the day.
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  Speaker 1: Yeah. Now, I'm old enough to remember going out for
• 6:48
  Speaker 1: dinner in the seventies and eighties, and you know, you
• 6:52
  Speaker 1: could smoke in restaurants, and the thing that would drive
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  Speaker 1: me crazy is, you know, the waiter would come over
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  Speaker 1: and put our dinners down, and then somebody a table
• 7:01
  Speaker 1: away or two tables away would light up a player's
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  Speaker 1: light or an export a and the smoke would drift
• 7:08
  Speaker 1: towards mean while I'm eating. Yeah, I don't know if
• 7:10
  Speaker 1: I want to go back to smokey bars like that,
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  Speaker 1: But so how do you address that problem if you
• 7:17
  Speaker 1: want lounges.
• 7:19
  Speaker 2: Well, I would say first right off the bat is
• 7:21
  Speaker 2: that it should not be allowed for every restaurant. This
• 7:24
  Speaker 2: should be an opt in apply for a license. So
• 7:26
  Speaker 2: if you're looking to go to this specific restaurant gene,
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  Speaker 2: you would know that this restaurant allows that to be
• 7:32
  Speaker 2: happening within its premises. So just as you know, as
• 7:35
  Speaker 2: I'm getting older, I don't like going to loud bars,
• 7:37
  Speaker 2: club music and stuff. I avoid those, I would imagine
• 7:40
  Speaker 2: that patrons would do the same thing, just as those
• 7:43
  Speaker 2: would want to seek these spaces out would be able to.
• 7:46
  Speaker 2: But let's just assume that nobody wants to have that
• 7:48
  Speaker 2: smoky experience like that you're saying. We can use medically
• 7:52
  Speaker 2: validated vaporization technology available today and pioneered in Canada, where
• 7:57
  Speaker 2: we can stop the research lounge theater exists where people
• 8:00
  Speaker 2: have to pretend they're actually medical scientific subjects to be
• 8:04
  Speaker 2: able to operate medical devices for research purposes. For example,
• 8:08
  Speaker 2: Club Lit in Toronto allowed for that, so we could
• 8:12
  Speaker 2: have vaporizers where it didn't have that smoke, where everyone
• 8:15
  Speaker 2: could have an enjoyable experience within an enclosed space. The
• 8:18
  Speaker 2: technology exists, we just have to have the political will
• 8:21
  Speaker 2: and understand the economic reality.
• 8:23
  Speaker 1: Yeah, I don't have much time, but I do want
• 8:26
  Speaker 1: to get this one question in very quickly. I remember
• 8:29
  Speaker 1: as a little kid going to the LCBO with my dad.
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  Speaker 1: You know, he was getting a bottle of wine for
• 8:34
  Speaker 1: dinner for his wife, and he had to fill out
• 8:39
  Speaker 1: this little form and then take it to the cash
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  Speaker 1: register and pay, and then take the form to a
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  Speaker 1: guy at a counter, and then they would go into
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  Speaker 1: this mysterious dark back room, and that they would come
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  Speaker 1: out with the bag all wrapped up, and it was
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  Speaker 1: wrapped up in paper, and then they would put it
• 8:53
  Speaker 1: in a plow, a brown plane bag. Well, of course
• 8:57
  Speaker 1: we have self serve now. I was in an s
• 8:59
  Speaker 1: SO gas station this morning and they had beer and wine.
• 9:02
  Speaker 1: But they don't sell marijuana at gas stores or cornered stores.
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  Speaker 1: It's as if they're trying to recreate that hidden, mysterious
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  Speaker 1: LCBO of the sixties and seventies.
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  Speaker 2: We took all the institutional knowledge that we knew from
• 9:17
  Speaker 2: ending prohibition and getting to where we're at today, and
• 9:19
  Speaker 2: through it all in the trash can. It's obscene, Gene,
• 9:23
  Speaker 2: I agree with you. From having to hide the product
• 9:26
  Speaker 2: until the purchase is finalized to just making it an
• 9:30
  Speaker 2: onerous experience. I think that we could get to a
• 9:33
  Speaker 2: point where adults are treated like adults, let them walk
• 9:36
  Speaker 2: into a store, make a purchase, and then leave. We
• 9:38
  Speaker 2: don't need to have this security theater that the government
• 9:42
  Speaker 2: continually puts into place. But if that's what makes people
• 9:44
  Speaker 2: feel comfortable, I'm fine with it right now, for the
• 9:47
  Speaker 2: point being to be honest.
• 9:48
  Speaker 1: All Right, a great article and a great chat this morning,
• 9:50
  Speaker 1: and thank you for this.
• 9:51
  Speaker 2: Thank you, Jane.
• 9:52
  Speaker 1: All Right, there we go. Iss John led Key among
• 9:54
  Speaker 1: his many hats, as I said, he is a reporter
• 9:56
  Speaker 1: for the Cannabis legal cannabis industry in Canada.