TL;DR:
- Ontario’s cannabis pricing combines a fixed wholesale markup by the OCS with retailers’ full discretion on shelf prices, leading to variability. While recent markup reductions aim to support legal market competitiveness, actual consumer savings depend on producer prices and retailer strategies. Consumers should compare prices across stores and authorized websites to ensure fair purchases and compliance.
Ontario cannabis pricing works through a split-authority model: the Ontario Cannabis Store (OCS) sets wholesale prices using a cost-plus framework, while authorised retailers retain full discretion to set their own retail prices under rules from the Alcohol and Gaming Commission of Ontario (AGCO). The federal Cannabis Act (Bill C-45) governs the national framework, and Ontario’s Cannabis Licence Act, 2018 and Cannabis Control Act layer on provincial rules for licensing and conduct.
Here’s what that means in practice:
- The OCS calculates a Wholesale Price by taking the supplier’s landed cost and applying a fixed wholesale markup rate by product subcategory.
- On OCS.ca, a further fixed e-commerce markup (39% for cannabis products, 90% for accessories) is applied to the Wholesale Price, then HST is added and the total is rounded up to the nearest $0.05.
- Authorised retailers buy from the OCS at the Wholesale Price and set their own shelf prices — the OCS will not recommend or impose retail pricing.
- Price floors (Minimum Wholesale Prices) exist for dried flower, pre-rolls, infused pre-rolls, and vapes.
- To check current rates: consult the OCS Pricing Guide and AGCO guidance directly.
Table of Contents
- How does the OCS calculate wholesale prices?
- What can authorised retailers actually charge?
- What makes up the final price you pay?
- What changed recently, and does it affect your price?
- What should consumers and retailers do right now?
- How does AGCO enforcement work?
- What do the policy debates look like?
- Key takeaways
- The pricing picture is more complicated than it looks
- Useful sources
- Same-day cannabis delivery in the Durham Region and GTA
- FAQ
How does the OCS calculate wholesale prices?
The OCS uses a cost-plus pricing framework built on two core inputs: the landed cost and a fixed wholesale markup rate applied by product subcategory.
Landed cost is what the licensed producer (LP) submits to the OCS as the base price for a product. It bundles together the producer’s production costs, federal excise duty, transportation to the OCS Distribution Centre, and any other applicable costs. The OCS pays the LP this amount for goods received. Critically, price changes are driven by the producer, not the OCS — the OCS applies its fixed markup on top of whatever landed cost the LP submits.
The fixed wholesale markup rate varies by product subcategory. All products within the same subcategory share the same markup rate, which is what makes the model predictable for retailers and producers alike. The resulting figure is the Wholesale Price — the cost authorised retailers pay when purchasing from the OCS.
OCS.ca pricing and e-commerce markup
For products sold directly to consumers on OCS.ca, the OCS applies an additional fixed e-commerce markup on top of the Wholesale Price: 39% for cannabis products and 90% for accessories. HST is then applied, and the final price is rounded up to the nearest $0.05. This means the OCS.ca price is structurally higher than the Wholesale Price retailers pay, which gives authorised stores room to price competitively against the OCS’s own website.
Price floors for key categories
The OCS has established Minimum Wholesale Prices (also called price floors or cost floors) for dried flower, pre-rolls, infused pre-rolls, and vapes. Each category carries a different floor, reflecting its different fixed markup rate. The floor sets the lowest landed cost the OCS will accept from a supplier in those categories, which in turn creates a minimum retail price on OCS.ca (before HST) for those products. The OCS frames these floors as supporting social responsibility objectives while giving the industry price assurance. Categories like concentrates, oils, edibles, beverages, capsules, topicals, and seeds do not have a fixed floor, though the OCS reserves the right to review pricing in those categories against average market minimums.
The pricing calendar
Suppliers may submit landed cost changes weekly, using a Weekly Price Change Submission Form sent to the OCS by 5:00 PM EST on Wednesday of each week. Once approved, the OCS issues Price Change Bulletins to authorised retailers several weeks before changes take effect, giving stores time to plan inventory and pricing. For Farmgate Exclusive SKUs, price changes typically take effect 8–10 business days after submission.
| Pricing component | Who controls it | Where to check |
|---|---|---|
| Landed cost | Licensed producer | OCS Pricing Guide / supplier submission |
| Fixed wholesale markup | OCS (by subcategory) | OCS Pricing Guide |
| Wholesale Price | OCS (calculated) | OCS Pricing Calculator |
| OCS.ca e-commerce markup | OCS (39% cannabis / 90% accessories) | OCS Pricing Guide |
| Minimum Wholesale Price (floor) | OCS (by category) | OCS Pricing Guide |
| Retail shelf price | Authorised retailer | Individual store |
Pro Tip: Use the OCS Pricing Calculator (available through the Doing Business with OCS portal) to model how a landed cost change will affect your Wholesale Price and OCS.ca price before you submit a change request.
What can authorised retailers actually charge?
Retail pricing discretion sits entirely with the store, similar to how Honest CBD Co offers high quality CBD products where retailers maintain pricing independence. The OCS explicitly states it will not recommend, suggest, or restrict retail pricing models — those decisions belong solely to the authorised retailer. That said, operating legally requires clearing several licensing and contractual hurdles before you even see wholesale pricing.
Here’s the compliance sequence every retailer must follow:
- Obtain a Retail Store Authorisation from the AGCO under the Cannabis Licence Act, 2018. Without this, you cannot legally sell recreational cannabis in Ontario.
- Enter into a Supply Agreement with the OCS. This is the commercial contract that allows you to purchase cannabis at Wholesale Prices.
- Sign the OCS Retailer Agreement and a Non-Disclosure Agreement (NDA). Wholesale pricing details are confidential. You only receive them after executing both agreements — this is why you won’t find specific markup rates published openly.
- Maintain your AGCO authorisation conditions. Breaching these (for example, by selling to minors or operating outside authorised hours) puts your licence at risk.
- Keep pricing decisions independent. Retailers are prohibited from discussing e-commerce pricing, volumes, or proprietary business strategies with other retailers. Anti-competitive coordination is an enforcement area the AGCO actively monitors.
Consumers wanting to verify a store’s authorisation can check the AGCO’s public registry of licensed cannabis retailers. The AGCO compliance guide is a practical starting point for understanding what a legitimate store looks like and what questions to ask.
Pro Tip: If you’re a retailer, keep your pricing decisions and procurement team communications clearly separated and documented. Even the appearance of coordinated pricing with a competitor can trigger an AGCO inquiry — clean records are your best protection.
What makes up the final price you pay?
The shelf price on a cannabis product in Ontario is not just the cost of the product. Several policy-driven and commercial layers stack on top of each other, and understanding them helps you see why legal cannabis prices sit where they do.
Federal excise duty is the first layer. Under the Cannabis Act, licensed producers pay a federal excise duty that is currently structured on a per-gram basis. This duty is baked into the landed cost the producer submits to the OCS, so it flows through to every price downstream.
Landed cost covers production costs, excise duty, and logistics to the OCS Distribution Centre. The OCS fixed wholesale markup (by subcategory) is then applied to arrive at the Wholesale Price. For OCS.ca sales, the 39% e-commerce markup goes on top of that. HST at 13% applies to the final consumer price, and the total is rounded up to the nearest $0.05.
Authorised retailers add their own margin on top of the Wholesale Price. That margin must cover their operating costs (rent, staff, compliance overhead) and their desired profit. Retailers with higher operating costs in premium locations will naturally price higher than a lower-overhead store in a suburban strip mall.
The tax and markup burden on legal cannabis is significant. According to Mondaq’s analysis of the September 2023 OCS changes, Ontario consumers pay an excise tax per gram, an average OCS wholesale markup, plus HST — with government taxes and provincial markups representing a substantial portion of the basket price of legal cannabis when purchasing in typical quantities.
The structure of the excise duty matters for public health, too. Research published in the International Journal of Alcohol and Drug Research argues that a flat per-gram tax can under-tax high-potency products on a per-milligram-of-THC basis, creating price signals that may not align with public health objectives. A gram of a 30% THC product carries the same excise burden as a gram of a 10% product, even though the former delivers three times the active compound. This is the core argument for a THC-based tax model.
Understanding how product format affects potency and price is useful context here — different product categories carry different markup rates and, in some cases, different floor prices.
What changed recently, and does it affect your price?
The most significant structural shift came on September 11, 2023, when the OCS moved from a variable wholesale markup to a fixed wholesale markup model across all products. The markup on dried flower dropped by 8 percentage points and on pre-rolls by 2 percentage points. The OCS also introduced a wholesale cost floor for dried flower and pre-rolls at that time, and locked in the 39% e-commerce markup for OCS.ca.
The OCS framed the change as an effort to “support a vibrant cannabis marketplace that helps to displace illegal operators.” David Lobo, President & CEO of the OCS, stated the lower markup was expected to contribute a significant amount annually to the marketplace.
Whether that money reaches consumers is a different question entirely.
Pass-through is not guaranteed. Industry analysts note that wholesale margin cuts may not reduce shelf prices if licensed producers raise their base landed costs, or if retailers choose to maintain their own margins rather than pass savings along. In the worst case, if producers raise prices to offset the lower OCS markup, retailers may actually need to raise their shelf prices to preserve margin — which would widen the price gap with the illicit market rather than close it.
Key timeline points:
- September 11, 2023: Fixed wholesale markup model takes effect; dried flower and pre-roll markups reduced; $2.28/gram cost floor introduced; 39% OCS.ca e-commerce markup locked in.
- Ongoing: Suppliers may submit weekly landed cost changes; OCS issues Price Change Bulletins several weeks ahead of effective dates.
- February 2026: Updated OCS Wholesale Authorised Cannabis Retailers Handbook published, confirming current framework.
The illicit market context matters here. Despite more than 1,500 cannabis stores operating in Ontario, the illegal market still accounted for more than 40% of cannabis sales in the province at the time of the 2023 changes. Legal price competitiveness is not just a commercial issue — it’s a public policy one.
What should consumers and retailers do right now?
Knowing the rules is one thing. Acting on them is another. Here’s how to put this knowledge to work.
For consumers:
The OCS.ca price is not the only price available to you. Because authorised retailers set their own shelf prices, the same product can vary meaningfully from store to store. Checking OCS.ca gives you a reliable ceiling price for most products (since the 39% e-commerce markup makes it structurally higher than what a competitive retailer charges), but local stores often beat it. Use the dispensary checklist to compare stores systematically before you buy.
Pro Tip: Sign up for OCS Price Change Bulletins (available through the OCS website) to get advance notice of wholesale price changes. When a product’s Wholesale Price drops, competitive retailers tend to pass some of that saving through within a few weeks.
On price matching: Most authorised cannabis retailers in Ontario do not formally advertise price-match programmes, partly because wholesale pricing is confidential and partly because retail pricing is entirely at the store’s discretion. Your best move is to compare prices directly across a few local stores and OCS.ca before purchasing.
For retailers:
When a supplier submits a landed cost reduction, your Wholesale Price drops on the effective date stated in the Price Change Bulletin. Revalue your existing inventory at the new cost for accounting purposes and decide whether to pass the saving to customers, hold margin, or use the difference to fund a short-term promotional price. Cannabis bundle pricing and loyalty programmes are two practical tools for communicating value without simply cutting the shelf price.
Communicate price changes to customers proactively. A brief in-store or digital notice that a product’s price has changed (without disclosing wholesale figures, which are confidential) builds trust and reduces confusion at the till.
How does AGCO enforcement work?
The AGCO is Ontario’s licensing and enforcement authority for authorised cannabis retailers under the Cannabis Licence Act, 2018. Its role covers both the initial grant of a Retail Store Authorisation and ongoing compliance monitoring once a store is operating.
Common compliance issues that trigger AGCO attention include:
- Selling cannabis to minors — the most serious category of breach, carrying significant penalties.
- Operating outside authorised conditions — selling products not covered by your authorisation, operating outside permitted hours, or failing to maintain required records.
- Misleading pricing displays — showing a price at the till that differs from the posted shelf price, or advertising discounts in ways that conflict with AGCO rules.
- Improper promotional practices — some discount and promotional structures are restricted; retailers must confirm any promotion complies with AGCO guidance before running it.
- Anti-competitive pricing conduct — coordinating pricing strategies with other retailers, as discussed above, is prohibited and monitored.
Penalties for breaches range from written warnings and corrective orders to fines and licence suspension or revocation, depending on severity and history. The AGCO takes a graduated approach for first-time, lower-severity issues, but repeat or serious breaches move quickly to harsher measures.
If you’re a consumer and you believe a store has breached its authorisation conditions (for example, by selling to someone underage or displaying misleading prices), you can file a complaint directly with the AGCO through its online complaint portal. Document what you observed, note the date, time, and store name, and submit with as much detail as possible. For suspected illegal (unlicensed) sales, contact local police or the OCS directly.
What do the policy debates look like?
Two debates dominate the policy conversation around Ontario cannabis pricing: how the excise duty is structured and whether price floors are set at the right level.
The per-gram vs THC-based tax debate
The current federal excise duty applies a flat rate per gram regardless of potency. Research in the International Journal of Alcohol and Drug Research argues this creates a disparity: a gram of high-potency cannabis carries the same tax as a gram of low-potency cannabis, even though the consumer receives far more active compound from the former. A THC-based tax would align the burden more closely with actual potency, which better serves public health objectives.
| Tax model | Basis | Public health alignment | Administrative complexity |
|---|---|---|---|
| Per-gram flat rate | Weight | Low (potency-blind) | Low |
| THC-based rate | Active compound | High (potency-sensitive) | High (requires testing infrastructure) |
The trade-off is real. Moving to a THC-based model requires reliable, standardised potency testing at scale, adds compliance costs for producers, and creates new enforcement challenges. Governments and producers would both need to invest in the infrastructure before a THC-based model could work fairly.
Price floor trade-offs
The OCS’s Minimum Wholesale Prices prevent a race to the bottom on product quality and support the social responsibility rationale for regulated cannabis. But floors also set a ceiling on how competitive legal prices can become relative to the illicit market. If the floor is set too high, legal products remain expensive enough that price-sensitive consumers stay with illegal sources.
Reform options discussed in policy and legal commentary include:
- Adjusting the federal excise structure (per-gram rate, or a shift to THC-based taxation).
- Redesigning OCS markup rates by subcategory to better reflect actual market conditions.
- Modifying Minimum Wholesale Prices periodically based on market data rather than leaving them static.
- Targeted offsets or credits for small producers to reduce their effective cost burden without lowering the floor for all.
Analysts at Cassels note that without transparency and monitoring of producer price-setting, even well-intentioned markup reductions carry the risk of widening the illicit market’s price advantage if legal prices remain high after producers adjust their landed costs upward.
Key takeaways
Ontario cannabis price regulation splits authority cleanly: the OCS controls wholesale prices through a fixed cost-plus framework with category-specific floors, while authorised retailers set their own retail prices under AGCO licensing rules, and federal excise duty flows through every transaction.
| Point | Details |
|---|---|
| OCS sets wholesale prices | The OCS applies a fixed markup by product subcategory to the supplier’s landed cost to calculate the Wholesale Price. |
| Retailers set retail prices | Authorised retailers have full discretion on shelf pricing; the OCS does not recommend or impose retail prices. |
| Price floors exist | Minimum Wholesale Prices apply to dried flower, pre-rolls, infused pre-rolls, and vapes, setting the lowest landed cost the OCS will accept. |
| Pass-through is uncertain | Wholesale markup reductions do not automatically lower consumer prices; savings may be absorbed by producers or retailers. |
| Where to check current rates | The OCS Pricing Guide and AGCO guidance pages carry the most current official rates and rules. |
| Montrosecannabis | Montrosecannabis operates as a compliant authorised retailer in the Durham Region and GTA, offering transparent pricing and same-day delivery. |
The pricing picture is more complicated than it looks
There’s a tendency to read an OCS markup reduction as a straightforward win for consumers. The September 2023 changes were genuinely positive for the industry’s structure — fixed markups create predictability, and lower markups in principle leave more room for competitive retail pricing. But the pass-through question is where the optimism needs to be tempered.
The illicit market’s persistence in Ontario is not purely a price story. Convenience, product variety, and trust all play roles. What the pricing framework can do is remove structural barriers to legal competitiveness. What it cannot do is guarantee that every dollar of wholesale savings reaches the consumer’s wallet. That depends on producer pricing decisions, retailer margin strategies, and the competitive dynamics of over 1,500 stores.
For consumers, the practical takeaway is simple: compare prices actively, use OCS.ca as a reference ceiling, and buy from authorised stores you can verify. For retailers, the framework rewards those who understand the cost stack clearly and communicate price changes honestly to their customers.
Useful sources
Stay current by checking these official and research sources directly — pricing rules and markup rates can change, and the OCS Pricing Guide and AGCO guidance pages are updated more frequently than any third-party summary.
- Cannabis Act (federal / Bill C-45) — the national legal framework governing cannabis production, distribution, and sale.
- OCS Pricing Guide (Doing Business with OCS) — the primary source for landed cost definitions, fixed markup rates, Minimum Wholesale Prices, and the pricing calendar. Check this page for the most current rates.
- OCS Wholesale Authorised Cannabis Retailers Handbook (February 2026) — covers retailer obligations, NDA requirements, anti-collusion rules, and supply agreement conditions.
- OCS Wholesale Authorised Cannabis Retailers Handbook (Abbreviated, September 2025) — useful quick-reference version of the above.
- OCS Pricing Updates (June 2023) — the original announcement of the fixed markup model and cost floor introduction.
- Mondaq — Ontario Lowers Wholesale Markup on Cannabis — legal commentary on the September 2023 changes and their market implications.
- Cassels — Ontario Lowers Wholesale Markup on Cannabis — analysis of pass-through uncertainty and producer pricing risk.
- International Journal of Alcohol and Drug Research — tax-base research — peer-reviewed analysis of per-gram vs THC-based excise taxation.
- AGCO guidance — search “cannabis retail” on the AGCO website (agco.ca) for current licensing requirements, authorisation conditions, and the public retailer registry.
Recommendation: Check the OCS Pricing Guide and AGCO guidance pages at least quarterly. Markup rates, price floors, and handbook versions are updated periodically, and the version you read six months ago may no longer reflect current rules.
Same-day cannabis delivery in the Durham Region and GTA
If you want to skip the comparison shopping and get premium cannabis delivered to your door in about an hour, Montrosecannabis is built for exactly that. Serving the Durham Region and GTA, Montrosecannabis operates as a fully compliant authorised retailer with a curated selection of craft cannabis from top-tier growers — so you’re not just getting speed, you’re getting quality you can count on.
Montrosecannabis holds a 4.9-star Google rating, and the team is genuinely invested in helping you understand what you’re buying, whether that’s a classic dried flower, a concentrate, or something from the cannabis seeds range. Pricing is transparent, the products are fresh, and same-day weed delivery in Clarington and surrounding areas means you’re never far from what you need. Browse the current selection and place your order today.
FAQ
Who sets wholesale cannabis prices in Ontario?
The OCS sets wholesale prices by applying a fixed markup rate (by product subcategory) to the landed cost submitted by the licensed producer. Retailers have no role in setting the Wholesale Price.
Do cannabis stores in Ontario price match?
Most authorised retailers do not offer formal price-match programmes. Retail pricing is entirely at each store’s discretion, so your best approach is to compare prices across a few local stores and OCS.ca before purchasing.
What is the Cannabis Act (Bill C-45)?
The Cannabis Act is Canada’s federal law that legalised and regulates recreational cannabis nationwide, covering production, distribution, sale, and possession. Ontario’s provincial rules (the Cannabis Licence Act, 2018 and Cannabis Control Act) operate within this federal framework.
How much cannabis can you possess at home in Ontario?
Under the federal Cannabis Act, adults may possess up to 30 grams of dried cannabis (or equivalent) in public. There is no statutory limit on home possession for adults, though the 30-gram public possession limit still applies when you leave your home.
How do you verify that an Ontario cannabis store is authorised?
Check the AGCO’s public registry of licensed cannabis retailers at agco.ca. Any store selling recreational cannabis in Ontario must hold a valid Retail Store Authorisation — if it’s not on the registry, it’s not operating legally.
