The legal cannabis industry in Ontario is currently facing a significant challenge as regulators remain tethered to a “prohibition mindset” established in 2018. Industry expert Jon Liedtke joined Gene Valaitis on 610 CKTB to discuss his latest article, Life after flower: Rise of the edible | StratCann, and highlights that the 10mg THC limit per package serves as a “safety theater” regulation that inadvertently subsidizes the black market. Frequent users, often referred to as “heavy hitters,” are driven toward unregulated websites to avoid the high taxes and administrative hurdles associated with buying multiple low-dose legal packs. This discrepancy not only hands valuable taxpayers back to organized crime but also ignores the evolving consumer shift toward discrete, predictable edibles and infused beverages.
Beyond dosage limits, the industry is suffocating under a “regulatory red wedding” of administrative inefficiencies. Producers must navigate a nightmare of provincial excise stamps, where moving stock between provinces requires physically stopping production to swap stickers manually. Further, the misclassification of fast-acting cannabis beverages as “edibles” creates a category error that maintains outdated social stigmas. As Ontario’s cannabis market hits the $1 billion mark, experts argue it is time to treat adult consumers with the same common sense applied to the alcohol industry, replacing “political theater” with practical, reality-based regulations.
Transcript (Gemini Generated):
Host (Gene Valaitis): Right now though we are joined by another great storyteller here on the show, Jon Liedtke is joining us. Um, among the many hats that Jon wears is he is involved in the legal cannabis industry in Ontario. So far this year, the market has hit one billion with a B dollars in Ontario. Good morning, Jon.
Jon Liedtke: Good morning, Gene.
Host (Gene): Your, your, latest article you’re publishing is called Life After Flower: The Rise of the Edible. And according to you, um, the day of the joint is fading out, the day of the edible is coming around. But you’re saying we’re almost handing organized crime back the industry because of safety theater. Explain.
Jon Liedtke: Yeah, well, we’ve moved into the CPG era of consumer packaged goods Gene. The baggie of weed is a historical relic for museums and time capsules from millennials, Gen Z, Zed and the sober curious. The social ritual isn’t passing a joint in a back alley. It’s actually just cracking a can of cannabis infused, infused beverage or sharing a gourmet caramel or two. Smoking is actually itself becoming a niche. Data shows edibles and extracts are commanding 50% of the market because it’s discrete, predictable, and it doesn’t make your living room smell like it’s a, you know, reggae concert quite frankly. But with the consumer mindset evolving into the 21st century, regulators are still stuck in the prohibition mindset of 2018 when we legalized it. And yeah, we are handing a subsidy to the black market because of the 10 milligram THC limit per pack, per unit.
Host (Gene): Okay. Um, the ten market black market subsidy. There’s a catch right though?
Jon Liedtke: Yeah, and so that is the catch there. It’s just when by having a small amount that is legally allowed per unit. So you can buy a package of edibles that let’s say has 100 milligrams in it overall, but it comes with 10 pieces of 10 milligrams per piece. I spoke with one store owner in Windsor who’s on the front lines here and he spends half of his day apologizing to American customers who are used to far higher milligram counts in their edibles. So if you’re a frequent user, for example, the heavy hitters who account for the lion’s share of industry spending, 10 milligrams per unit is a rounding error. They’re not going to buy 10 legal packs and pay 10 sets of taxes, potentially having to walk in and out of the store multiple times to be able to not go over the legal limit. They’re just going to go to an unregulated website and buy a 500 milligram bar for half of the price. So yeah, we’re handing, hand delivering our most valuable taxpayers back to organized crime because of safety theater regulations that really don’t reflect the reality on the ground.
Host (Gene): Hmm. Safety theater. What, what do you mean by that?
Jon Liedtke: Well, it’s just, it’s the appearance that we’re actually doing something to make the people who are opposed to weed and the legalization thereof feel more comfortable with it. We see this throughout government all the time. I couldn’t give you an example right now off the top of my head, but when you start to look for it, it’s, is government spending money, are they creating regulations that don’t achieve what the overall goal is, that create more pain and more hassle than is necessary to placate a minority voice, primarily because they’re more interested in not losing votes. There you go. That’s the definition of safety theater, political theater.
Host (Gene): Mm-hmm. Now, what’s, I know when you go into these stores, beverages versus edibles. You’re also saying, and I didn’t know this, that beverages that contain THC are also called an edible. So why so much regulatory label stuff?
Jon Liedtke: Yeah, this is the problem. I mean it matters a lot because it’s a category error with massive consequences. You don’t call a glass of a Cabernet that is grown from local grapes up in Niagara an edible do you? So why would we treat a nano…
Host (Gene): No.
Jon Liedtke: Yeah, no, not at all. So why would we treat a nanoemulsion beverage like it’s a gummy bear? Beverages hit the system fast, just like a beer or an alcoholic beverage, but right now we actually have big tobacco and big pharma lobbying to keep these drinks, um, in a, you know, getting it to be more accessible in certain expansions and investments into some of the largest players. So we know that the sober curious movement is real. People want to swap the hangover for a cannabis beverage, but the government is still treating a refreshing beverage like it’s a bottle of a prescription cough syrup or something of the like. This is an administrative siege on common sense and so long as we’re still classifying something that it’s not, you’re going to have that stigma whereas someone hears edibles they might think, “Oh, you know, I remember the 1970s and there was that tray of brownies and I don’t want to relive that experience,” and it could still turn people off and it just, it’s not the reality on the ground and we need to treat adults like they’re adults and right now at the most baseline that means by having a definition list and vocabulary list that we can all agree upon.
Host (Gene): Mm-hmm. Is, I’m wondering, is the LCBO involved in any of this pressure?
Jon Liedtke: Uh, I mean to a certain extent in that they continually lobby to… they want… the LCBO doesn’t have a direct involvement. When I, when I was thinking of that it’s the OCS and then the AGCO of course has involvement as well. What comes into play here is just an administrative mindset that is still built in the pre-2018 prohibitionary mindset here. And of course living in Ontario specifically but Canada more broadly, we’re used to strong government control and in absence of that, there is a strong concern that we will take our freedoms too far. So there is, you know, consistent lobbying to ensure that the OCS remains the wholesaler, that’s the Ontario Cannabis Store. I don’t know if the LCBO would like to ever see cannabis expanded into their purview. We know that under Kathleen Wynne and the Liberals there was an idea of having public cannabis stores, that was shelved under Doug Ford. But you know, at the end of the day it just, it comes down to we need to get past this idea of treating cannabis as if it’s anything other than, you know, a coffee. Coffee has psychoactive effects as well, but we don’t treat it under lock and key. You can walk into an LCBO and buy unlimited amounts of alcohol with no questions asked, but if you ask to buy more than 28 grams of cannabis, you’re sent out of the store to go put it into your car to walk back in in an administrative roundabout. I mean it’s nonsense.
Host (Gene): She said, I didn’t even know that that existed. Oh well, well. So how, you know, when cannabis became legal, I remember, I was in Vancouver, I moved back to be close to my family and man, there was a cannabis store on like every single block. Since that time, a lot of these stores have closed and now the numbers are fewer. So how do these legal guys even stay in business with all this red tape? Because it is a legal product.
Jon Liedtke: Yeah, this is, this is a big problem. I mean they’re suffocating underneath a regulatory red wedding here and I use that phrase often when I chat with you and one of the examples of it is the excise stamp nightmare that they’re dealing with. Um, like cigarettes, there needs to be an excise stamp applied to each cannabis product that’s sold which identifies it from seed to sale. But we don’t have one excise stamp for the country, we have 13 different provincial stickers. So I found out through my investigating here for this piece if a Windsor factory wants to move their stock from British Columbia to let’s say Manitoba, they have to physically stop the machines, peel off the stickers, put on new stickers for a different process. This is a preventable crisis of inefficiency. But the silver lining though is that the legal market is winning out on trust. The reporting that I had shows that illegal edibles are still often a toxic gamble. They have pesticides in them and they don’t always contain what the amount of THC that is claimed to be, sometimes as low as maybe 20%. People are moving towards premium confectionery goods because they want a clean verified experience. The chase for the highest edibles is over, people want quality goods. I can say this, not anecdotally, but just from myself personally, I don’t like very high THC edibles. The highest amount that I typically tend to go towards is between a 30 to 50 milligram. When I had my lounge in Windsor, my cannabis lounge, I had people who would offer 500 to 1000 milligram edibles from the black market so you take it with a grain of salt and I would refuse it every single time because I would never want to go that high whatsoever even if it was only 50% or 20% of that. So people want to have a standard dosed amount just like people want to be able to say, “Oh, I’ll try one beer or I’ll have one shot and if I like how it feels, I’ll have a second one.” They don’t want to go and drink a two-four all at once for the first time.
Host (Gene): You know, I, I still don’t understand all the regulations. You know I had to, I had to stop at a gas station this morning. You know I shouldn’t have got gas but you know I waited and waited and waited so I got just enough to make it here and back. And you know, it’s like ten after six in the morning, you know the beer’s on display, the wine’s on display, other coolers are on display. And this is a gas station. And you know the guy working behind the counter is very, very nice. Um, I, I, I wonder why we don’t see cannabis products in gas stations like we do beer and wine.
Jon Liedtke: This is what the most frustrating thing for me is, Gene, having been involved in the industry, covered the industry, and having reported on the alcohol industry for a number of years. We know that from the introduction, the end of prohibition of alcohol in Canada through to the expansion under COVID to being able to purchase and have alcohol delivered from bars and restaurants, oh my god, to extended patios, to corner stores, the sky didn’t fall. We have the institutional knowledge, we know what works, but when it came to cannabis and putting it as a retail sale, we decided to throw that rulebook out and start fresh 100 years ago, putting it all away. I don’t get it, maybe it’s what made certain voters feel more comfortable, but you would think that since 2018, eight years later, the sky hasn’t fallen. It hasn’t been the Chicken Little scenario here. It’s time to start treating consumers like adults that they are and that means, you know, of course make sure that it’s safe, make sure that the sale is regulated, don’t sell to minors, but treat adults like adults. Come on.
Host (Gene): Interesting chat this morning. I appreciated it and your expertise here. I know we’re going to talk to you tomorrow morning too.
Jon Liedtke: Oh, I’m looking forward to it always Gene.
Host (Gene): Okay. Thanks for this Jon, sure do appreciate it.
Jon Liedtke: Cheers Gene.
Host (Gene): Jon Liedtke on the legal cannabis business in Ontario. I didn’t realize it was that regulated to death.
This aired on 610 CKTB
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