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Ontario Cannabis Shops Get the Go-Ahead to Reopen

By Eric Volkman – Apr 9, 2020 at 1:23PM

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In yet another reversal, the government of the Canadian province issued an emergency order letting dispensaries operate during the COVID-19 shutdown.

After marijuana companies sent a letter to Ontario Premier Doug Ford, the Canadian province is once again allowing cannabis dispensaries to operate. The provincial cabinet issued an emergency order giving them a green light, albeit with conditions.

The new order is set to remain in force for only 14 days, although it could be extended. The dispensaries may only sell products through either phone or online orders. The orders can either be picked up by the customer in person, or delivered. However, only dispensaries with workers how have undergone training in the CannSell program operated by the province's Alcohol and Gaming Commission will be allowed to make deliveries.

Generic marijuana dispensary sign.

Image source: Getty Images.

Ontario's attorney general told BNN Bloomberg that these restrictions were designed to prevent sales to underage users. Another factor behind the decision to allow the dispensaries to reopen -- the provincial government wants to curb illicit cannabis sales.

At the moment, Ontario has 52 dispensaries -- a small number relative to the province's size and population. (It's the most populous of Canada's provinces and territories.) Late last week, the province left dispensaries off its updated list of "essential" businesses that would be allowed to operate during the broad social-distancing closures meant to stem to the SARS-CoV-2 coronavirus pandemic

The province did, however, allow its monopoly online retailer, Ontario Cannabis Store, to remain in operation.

Despite the low market penetration of dispensaries in the province, many Canadian cannabis companies are active there, either in terms of direct involvement or through products retailed in dispensaries. Two of the more high-profile operators are Canopy Growth (CGC -1.80%) and Cronos Group (CRON -3.75%) -- Canopy Growth is headquartered in the town of Smiths Falls, while Cronos is based in Toronto.

On Wednesday, Canopy Growth shares rose by 2.3%, lagging behind the broader stock market, while Cronos' outpaced the S&P 500 by increasing 8%.  

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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