Ontario cannabis lottery - Success or failure?

When the Cannabis Act came into effect, there were several different regions left out in the cold with no storefronts to visit come legalization day. Ontario was one of these provinces, that is until the Ontario government announced that dispensaries would soon be able to get a proper license to sell cannabis products. The Ford government revealed their plans for a formal expression of interest lottery, which translates to a random draw from a hat type lottery system that is open to anyone to enter. Ontarians rejoiced at the idea of having accessible storefronts within the year, but it all came with a catch and a huge risk for anyone who chose to take the leap towards obtaining a cannabis retail license in Ontario.

The Plan

On December 21, 2018, the provincial government of Ontario promised that it remained committed to opening 25 stores by April 1 of 2019, just as the liberal government had initially planned, only they decided to make a few tweaks to the roll-out. Caps were said to be necessary to lessen the chances of another product shortage as we saw during the early days of legalization. A maximum of 25 licenses was set and the Ontario Cannabis Lottery would begin taking submissions on January 1, 2019. The Alcohol and Gaming Commission of Ontario were tasked with holding the lottery, and anyone was welcome to apply, but if your name was one of the 25 drawn, then you would have a new responsibility and list of obligations that go far beyond simply opening a successful dispensary.

Restrictions

-Those who were drawn from the lottery would need to use the same legal name they used to apply on their Retail Operator license. If they were to need to change the name on their business license, they would be forfeiting their current permit and must apply again in the future.

• Selected applicants would have 72 hours from the time of the draw to provide a bank draft of $6000.
• Winners would also have 72 hours to provide proof of a line of credit.
• Chosen applicants would have 72 hours to provide a completed business proposal.
• Lottery winners would have 7 days to have the location for their establishment secured.
• Anyone granted a cannabis retail license in Ontario would have to successfully open their doors on April 1, 2019, or face fines and penalties ranging from $10000- $30000 and potential loss of license.

Winners of cannabis lottery announced

The winners of the Ontario Cannabis lottery were announced on January 11, 2019, with many of those chosen being private individuals who submitted a formal application to the draw. This has led to some concerns across the province over the current set limits and the way this lottery system might end up playing out.

Results

Within 72 hours the official winners or the Ontario Cannabis Lottery were posted for the public to view with three of the 25 license winners appeared to have names that are associatedwith the Niagara Falls area making it likelythat they will all end up in or around the falls. Another quick look at the winners list reveals that four more appear to be slated for the Toronto area leaving only 18 potential sites left to divide amongst the rest of the province.

Conclusion

Many industry experts are warning the conditions the winners will be facing are harsh at best. It seems almost impossible that any single individual with no significant financial backing has a very good chance at pulling off a fully functioning store by April 1st, which is only two months from the date of the draw. Thisleaves license holders only 60 days to locate a store, set up shop, contract suppliers, and hire personnel. Store locations were already in short supply considering the fact there are hundreds of population dense cities and towns across Ontario that all could benefit from a legal cannabis store. Most people had expected stores to be scattered with a fair amount of distance between each one which would make the most sense for Ontario residents to have the best shot at fair and equal access to a legal product.

Unfortunately, it seems like many of the big cities that are already full of illegal dispensaries will likely be waiting another year or two before they have a storefront within a fair traveling distance. Ontario appears to be headed in the same direction as California and Colorado. With most customers forced to either purchase from the black market or wait days for their marijuana that they must order without ever getting to see or smell it, while also being limited to whatever stock OCS (Ontario Cannabis Store) has managed to carry. Which absolutely pales in comparison to what can be found inside of most black market dispensaries. While we will need a little more time to see how this all plays out, Ford’s government appears to be stalling the success of marijuana legalization for the entire province.