Pricing Guide was last updated on: March 27, 2023
The Pricing Guide is intended to provide current and prospective Suppliers with details on how:
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The OCS establishes Wholesale Prices and OCS.ca prices, including wholesale fixed markup rates by product subcategory
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Suppliers may determine costing for products sold to the OCS
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Suppliers or the OCS may initiate price changes
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Minimum Wholesale Prices are established in select product subcategories
Click on the tabs below for more information.
Purpose
The Ontario Cannabis Retail Corporation, doing business as the Ontario Cannabis Store (“OCS”), is the exclusive wholesaler of recreational cannabis to private retail stores authorized by the Alcohol and Gaming Commission of Ontario (AGCO). The OCS also operates the provincial online store for recreational cannabis, OCS.ca, which provides legal access to adults located across Ontario.
The OCS is authorized under the Ontario Cannabis Retail Corporation Act, 2017 to buy cannabis produced by a person or entity that is authorized under the Cannabis Act (Canada) to produce cannabis for commercial purposes (“Licensed Producer”), as well as cannabis-related products, such as cannabis accessories. The OCS sources cannabis products and cannabis accessories from Licensed Producers and Accessories Suppliers (collectively “Suppliers”), respectively, through a Product Call process. For more information, please visit our Product Call page.
The OCS establishes Wholesale Prices for cannabis sold to Authorized Retailers. These Wholesale Prices also inform end-consumer pricing on OCS.ca. In Ontario, Authorized Retailers have the discretion to determine retail pricing for products they sell in-store, over the phone or online.
DEFINITIONS
AUTHORIZED RETAILER – The holder of a Retail Store Authorization issued by the AGCO that has entered into an agreement with the OCS to purchase cannabis products or cannabis-related items.
CURRENCY – All references to currency and monetary amounts in this guide refer to Canadian dollars.
LANDED COST – The amount paid to a Supplier (the seller) by the OCS (the purchaser) for goods rendered. This amount includes the federal excise duty.
WHOLESALE PRICE – The amount paid to the OCS (the seller) by an Authorized Retailer (the purchaser) for goods rendered.
CANNABIS CLASS – Refers to the classes of cannabis that an authorized person may sell: Dried Cannabis, Cannabis Extracts, Cannabis Seeds, Edible Cannabis and Cannabis Topicals.
PRODUCT SUBCATEGORY – Refers to secondary categories within the primary product category. Please refer to the chart below to find the cannabis class and corresponding subcategory.
FIXED MARKUP – The difference between the Landed Cost and the Wholesale Price, expressed as a percentage of the Landed Cost. This percentage is set based on the product subcategory.
Wholesale Pricing Overview
The OCS establishes Wholesale Prices under a cost-plus framework, using a fixed markup rate for each product subcategory.
LANDED COST
The OCS uses the Landed Cost as the base calculation of a product’s Wholesale Price. Landed Cost (also known as the OCS’s Duty Paid Purchase Price) is the amount each Supplier provides to the OCS as this base. The Landed Cost consists of the Supplier’s production costs, federal excise duty, transportation costs to the OCS Distribution Centre and additional Supplier costs. This is the amount paid to the Supplier for goods rendered.
Determining the Landed Cost
Suppliers submit a Landed Cost to the OCS for each stock keeping unit (SKU) accepted during the Product Call process. Costing is submitted when a product is onboarded by the OCS. The OCS reviews and maintains the right to reject or negotiate any submitted Landed Cost.
WHOLESALE PRICE
Using the Landed Cost, the OCS applies a fixed wholesale markup to arrive at a Wholesale Price for each SKU. This is the amount for which Authorized Retailers may purchase products from the OCS. For clarity, the fixed wholesale markup is applied as a percentage above the Landed Cost. Fixed wholesale markup rates differ by product subcategory, as outlined in the Fixed Wholesale Markup Rates section.
Note: Fixed wholesale markups are standard for all Suppliers, regardless of volume or past performance.
OCS.CA PRICE
The OCS uses the Wholesale Price as the base calculation of a product’s retail price on OCS.ca. Using the Wholesale Price, the OCS applies a fixed 39% e-commerce markup, followed by the harmonized sales tax (HST). The final retail price is rounded up to the nearest $0.05.
For accessories, the OCS applies a fixed 90% e-commerce markup above the Wholesale Price, followed by the harmonized sales tax (HST). The final retail price is rounded up to the nearest $0.05.
Note: The fixed e-commerce markup is standard across all cannabis products sold on OCS.ca. The OCS retains the right to adjust this fixed e-commerce markup at its discretion.
Wholesale Price Changes
Suppliers may submit changes to the Landed Cost for each SKU actively listed with the OCS, which will result in a change to the SKU’s Wholesale Price. All requests are subject to OCS approval.
SUBMITTING PRICE CHANGES TO THE OCS
The OCS accepts price changes on a weekly basis. To submit a change, the Supplier must complete and email the Weekly Price Change Submission Form to pricingsubmissions@ocs.ca by end of business day (5 pm EST) on Wednesday in each given week. If approved, the Supplier will receive a Cost Change Form. This form must be signed and returned to the OCS via email by end of business day (5 pm EST) on the following Tuesday in each given week. The Supplier is responsible for fully funding cost reductions for inventory that is in stock at the OCS Wholesale Distribution Centre and items on order. For more information, see the Weekly Price Change Submission Form section.
Effective Date
The OCS issues a Price Change Bulletin to Authorized Retailers each week to provide notice of changes to Wholesale Prices for affected SKUs. These bulletins are issued three to four weeks prior to the price change taking effect.
Frequency
Following the initial listing with the OCS, price change requests from Suppliers will take effect 60 days after the product is made available for sale. Subsequent price changes may be submitted every 90 days. This period is intended to provide Authorized Retailers with sufficient lead time to plan for impact related to changes to Wholesale Prices for products that they may hold in inventory.
Price changes are permanent. For clarity, the OCS will not accept time-limited price change requests. All price changes must follow the procedure outlined in this guide.
MINIMUM WHOLESALE PRICE
The OCS has established a Minimum Wholesale Price (also referred to as a “Price Floor”) for Dried Flower, Pre-rolls, Infused Pre-rolls and Vapes. These categories each have a different Minimum Wholesale Price, as they all have different Fixed Wholesale Markup rates. Minimum Wholesale Prices support the OCS’s social responsibility objectives while providing the industry with price assurance.
As the OCS uses the Landed Cost as the base calculation of a product’s Wholesale Price, the Minimum Wholesale Price results in a minimum Landed Cost (or “Cost Floor”) in these categories. For clarity, this is the lowest Landed Cost that the OCS will accept from a Supplier for products purchased in these categories.
Similarly, as the OCS uses the Wholesale Price as the base calculation of a product’s retail price on OCS.ca, the Minimum Wholesale Price results in a minimum retail price on OCS.ca for products sold in these categories (not including HST).
The chart outlines the minimum Wholesale Price and corresponding Cost Floor (all values are based on the Minimum Wholesale Price per gram):
Procedural Changes
The OCS will provide notice to its Suppliers should it make any changes to the procedures or information outlined in this guide by updating the time stamp at the top of the page.
Pricing Calculator
The Pricing Calculator is a tool that is available to support Suppliers in calculating their product pricing. Suppliers can input their product cost and size into the calculator. The fixed markup rate of the corresponding product subcategory will be applied to calculate the Wholesale and OCS.ca price.
You can download the Pricing Calculator here.
Sample:
Note: The Pricing Calculator will flag any inputted costs resulting in a price below the Minimum Wholesale Price.
Fixed Wholesale Markup Rates
In this table, you will find our Fixed Wholesale Markup rates by product subcategory. Fixed Markup rates are applied as a percentage (%) above Landed Cost to arrive at the Wholesale Price.
Weekly Price Change Submission Form
The Weekly Price Change Submission Form is to be completed for any Wholesale price change submitted to the OCS. Once complete, forms are to be submitted via email to pricingsubmissions@ocs.ca by end of business day (5 pm EST) on Wednesday in each given week.
Note: Incomplete or incorrect forms will be removed and re-submitted the week following when the corrections are made.
You can access the Weekly Price Change Submission Form here.
Example of Weekly Price Change Submission Form:
