Ontario has announced the results of its much-anticipated cannabis retail lottery, naming 25 companies that are now eligible to begin applying for a licence to operate a brick-and-mortar pot shop in the province.
Absent from the list of 25 were any known cannabis retail brands such as The Friendly Stranger and National Access Cannabis — the latter already operates a number of cannabis retail shops across the country.
Among the companies randomly selected by the Alcohol and Gaming Commission of Ontario (AGCO) were Pure Alpha Holdings, Tripsetter Inc., CGS Foods Inc., and The Niagara Herbalist.
A majority of the25 lottery winnersappeared to be individuals, as opposed to corporations — sole proprietorships made up 64 per cent of the overall applications submitted, according to the AGCO, while on 33 per cent were registered corporations.
In the region of Toronto for instance, lottery winners were listed as Heather Conlon, Seyedarash Seyedameri, Colin Campbell, Dana Michele Kendal and Hunny Gawri.
Cannabis lawyer Trina Fraser, partner at Brazeau Seller Law, said it was “crazy” just how many sole proprietors applied and won. “To be expected I guess but a terrible way to operate,” she tweeted.
Fraser believes that given the number of individuals on the lottery list that have not yet incorporated themselves, there might only be “four to five stores” open by April 1 — the province is hoping to have 25 stores fully stocked and operational by that date.
Lottery winners will now have until Jan. 18 to submit a Retail Operator Licence Application with extensive detail on the timeline for getting a cannabis store up and running. They would then be subject to a background check, which will include scrutiny of tax records and financial statements. Additionally, the 25 winners will have to submit a $50,000 letter of credit and a non-refundable $6,000 fee payment to the AGCO.
If applicants don’t pass the AGCO background check, after they apply for the Retail Operator Licence, the AGCO will turn to a waitlist of applicants.
In an attempt to ensure that those who obtain retail licences open their stores on time, the AGCO has said that it will levy a $25,000 fine on applicants who fail to get their stores up and running by the end of April.
The province plans to increase the number of licences once more cannabis is available, Ontario’s Attorney General Caroline Mulroney said Friday. However, no timeline has been given. Premier Doug Ford’s government initially planned to offer an unlimited number of retail licenses to increase the accessibility of legal cannabis, but backtracked on that plan when supply shortage issues started to crop up.
A number of larger cannabis retail brands, such as Ohio-based Green Growth Brands declined from participating in the lottery, citing its random nature.
A former black market dispensary owner who has a lease on a downtown Toronto coffee shop in hopes that he would turn it into a legal cannabis store told the Financial Post recently that he too had declined from applying in the lottery because of the slim chance of winning — he instead hopes that lottery winners will approach him, given the lease he has on a prime location in Toronto.
The lottery received more than 17,000 applications, with the highest number of applicants coming from Toronto regions and the Greater Toronto Area. Eleven of the 25 licences were granted to those areas, with the remainder spread out across the Eastern, Western and Northern regions of the province.