Article by Vanmala Subramaniam, Financial Post
A host of applicants — from former grey market dealers to cannabis culture enthusiasts to established cannabis retailers with operations in other provinces — are hoping to get lucky this week as Ontario holds a lottery to determine who will be awarded the province’s highly coveted first tranche of 25 cannabis retail licences.
“I can tell you, for people like us who have been operating in the cannabis community for decades now, this lottery system is great. It doesn’t discriminate,” said one former Toronto-based dispensary owner, who declined to be named. “I’ve followed all the rules — I shut down my online dispensary on Oct. 16, and I’ve been talking to retailers in other sectors who are interested in partnering up with me if I get a licence.”
The lottery draw, which will take place on Jan. 11, does not necessarily guarantee that winners will be eligible to open a cannabis store come April. Rather, those picked will be able to apply for Retail Operator Licences, which will be awarded subject to a “full due diligence process” conducted by the Alcohol & Gaming Commission of Ontario to assess whether the applicant can “carry on business in accordance with the law.”
“We don’t yet know the nitty gritty details of what the AGCO wants to know in order to hand out a Retail Operator Licence. But they essentially want to be sure that those who win the lottery have the financial wherewithal to open a store come April 2019 and run it successfully,” said cannabis lawyer Trina Fraser, partner at Brazeau Seller Law.
Fraser added that those successful in the lottery will be subject to a thorough background check, including scrutiny of tax returns and financial statements associated with past businesses.