'There Are No Price Wars,' Highland Cannabis Launches Cancel Kickbacks Campaign Demanding From Ontario Government To Start Enforcing The Rules

Highland Cannabis and independent cannabis retailers in Ontario are banding together in an effort to level the playing field in the kickback-fraught cannabis industry, starting a ‘Cancel Kickbacks’ campaign that highlights the rampant improper circumvention of anti-inducement regulations in the Ontario cannabis market.

From the outset of cannabis legalization, the Alcohol and Gaming Commission of Ontario (AGCO) has expressly prohibited inducements between licensed cannabis producers and licensed cannabis retailers. The AGCO defines inducements as payments that are "given with the purpose to promote or increase the sale of a particular brand or product by the licensee or their employees."

The Cancel Kickbacks campaign is demanding that the Ontario government properly enforce its own anti-inducement regulations being circumvented by retailers and producers that are falsely and illegally characterizing inducement transactions as payments for the sale of "data for business intelligence purposes."

These payments favor larger, well-funded, licensed cannabis producers who have the funds to pay kickbacks as a sales incentive to gain market share, and larger retail chains which have the leverage to demand the kickbacks and then use them to fund predatory pricing that small independent retailers cannot possibly match.

"The AGCO, by failing to enforce the inducement prohibition is tacitly permitting the cannabis producers to pay prohibited kickbacks to the retail cannabis chains. Several of the large retail chains are using the prohibited inducement money to fund predatory pricing, controlling the market and thereby driving the small independent retailers out of business," stated Owen Allerton, owner of Highland Cannabis Inc.

“People talk about the price wars in the cannabis retail market. There are no price wars. There are just big chains and their ultra-discount models that are subsidized by prohibited kickbacks. Producers are paying these prohibited kickbacks for shelf space in big chains, meanwhile they are undermining the 1,000+ independent retailers - driving them out of business. In the end, only the chains will be left," concluded Allerton.

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