Potential dispensary owners asked to enter a lottery for a license to sell cannabis

Published Mar 14, 2019 09:06 a.m. ET

When pot became legal in Canada on October 17, 2018, one of the few things that Ontario did differently was to refuse any private opening of dispensaries until 2019. While you may see the occasional dispensary scattered across Ontario, not a single one is currently legal. At first, it appeared that the government was going to be evenly distributing licenses just as they would for any new retail establishment with the only caveat being that if you wanted a license to sell marijuana, you couldn't be illegally running any cannabis retail stores after October 17.

A change in government from Liberal to Conservative changed the plan to something they claim to be more suitable for Ontarians. Now, the Ministry of Finance is holding a lottery instead. Anyone hoping for the opportunity to open shop legally to sell cannabis products in Ontario will have to enter a draw. An entry will only secure a chance at being drawn as one recipient of only 25 available cannabis retail licenses in total that will be granted. A granted license means permission for the chosen individuals to open a retails store somewhere in the province. The government has said that its firm cap on the total number of stores allowed to open is needed due to cannabis supply issues citing other provinces difficulties in maintaining a reliable flow of products.

Submissions

When to Apply: Admission to enter the lottery officially opened on Monday, January 6, 2019

Fee to Enter: $75 per submission

Those who make a bid and areselected will have five days to submit a complete application for their business along with a non-refundable $6000 fee and a letter of credit worth at least $50 000.

When the draw will take place

The draw for names of those who will be obtaining a license will be done on Friday, January 11, 2019, and the results will be made available to the public within 24 hours.

The risk

The AGCO has announced that it can charge thousands of dollars in fines to any application who receive a license but fail to open their stores by April 1, 2019.

Oversight

The lottery itself is being overseen by Finance Minister Vic Fedeli who works for the Ministry of Finance Ontario.

Many advocates are saying that these rules and the entire lottery itself is unfair since no other businesses currently face this sort of strenuous timeline or regulation. Unfortunately, many who are not so well off are hesitant to even apply due to the incredibly high financial liability, on top of those risk related to running any kind of retail store. Low availability of cannabis retail licenses brings the question of whether 25 randomly drawn names could have planned to be spaced out enough to provide fair and equal access to marijuana for those who live in Ontario. Only time will tell. One thing is for sure, and that is that the world eagerly awaits the results of this peculiar strategy.

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