Shopify has scored a major win in the cannabis space.
The e-commerce platform has been chosen by the Ontario government to operate all its online sales when recreational cannabis officially becomes legal later this year.
The provincial government, through the Liquor Control Board of Ontario (LCBO), will be the sole distributor of legal weed in Ontario, a move that has sparked both cheers and fury from opposing sides of the cannabis market respectively — licensed producers, and dispensary owners.
“Our top priority is fulfilling the province’s framework for the safe and sensible retailing of recreational cannabis for when it is legalized by the federal government,” said George Soleas, president and CEO of the LCBO in a statement to the Canadian Press.
In the lead up to legalization, the LCBO has already identified up to 15 Ontario municipalities that will have brick-and-mortar stores — there will be 40 stores in total by the time recreational weed becomes legal this year. Shopify’s technology will also be used in all LCBO stores when payments are processed on iPads, and when product and health information is displayed on in-store screens.
“Bringing this differentiator to the LCBO on this historic project to consumers of legal age across Ontario, is a great example of a made-in-Canada innovation, which we are proud to be a part of,” Loren Padelford, vice-president of Shopify Plus told the Canadian Press.
According to the Canadian Press, the LCBO, through the Ontario Cannabis Retail Corporation (OCRC) will also use Shopify’s platform to “manage inventory, accounting and human resources operations”.
Most provinces have announced a distribution model for weed post-legalization. In Alberta and B.C. for instance, the government will not have a monopoly on distribution — private businesses will be allowed to sell weed.
“The main takeaway for us on this deal is expect to see more announcement from governments imminently on LCBO suppliers, SAQ suppliers, Manitoba retail RFP winners etc.,” said Beacon Securities analyst Vahan Ajamian in a morning note.