Just for clarity. The LCBO already has privatization. Go to many small towns and you find licensed private distributors. Who do you think gets the profit?
Really most of the money to govt comes from the taxes anyway. Now I actually like the LCBO. Being the largest buyer in the world does mean the ability to have great variety. At a local level and not just a few superstore like in the USA. Its also good for quality control, distribution to businesses(no bathtub gin) and yes generates money.
But the argument for corner stores is really this. If some one is stocking up for a business, a party, a weekend away at the cottage, gifts for workplace, etc they can go the LCBO for volume, variety, and in fact convenience. It would be my go to for that.
But if I'm heading to the park, am walking home with take out, heading down on TTC for an event, at said street event like the Jazz fest, a foodie thing, then being able to grab a margarita, a ceaser, or a single king can in the moment also makes sense. And that is where the majority of business will come from. Sure a few late nights drunks will partake. But not to the level the doom and gloom will claim.
We are adults. If you can walk down the street smoking a joint and buy at that convenience level then you can do the same with alcohol. It's just common sense.
License the sellers, let them pay a premium to sell. Mark up get passed to the consumer, money still goes in govt coffers.