Ontario is Picking Up the Pace With Cannabis Retail Stores, But Staying in the Game is No Easy Task

Article by Sam Riches, Growth Op

NEWS Ontario is picking up the pace with cannabis retail stores, but staying in the game is no easy task Challenges retail operators face include timeline delays, mounting overhead costs, increasing competition and, oh, yeah, a global pandemic. By Sam Riches Earlier this month, the Alcohol and Gaming Commission of Ontario (AGCO) vowed to double its approval pace and authorize 40 stores a month, which is a welcomed change for the more than 500 stores that are currently marked as 'In Progress' on the AGCO website, a status that means they are in the queue but could still be months away from opening. File: (AP Photo/Brennan Linsley) Inside mihi’s Burlington store, which opened on Sept. 2. / Photo: mihi Instagram FILE: The Friendly Stranger, on Queen St. W. in Toronto, has been around since 1994. / Photo: Jack Boland/Toronto Sun/Postmedia Network Jack Boland/Toronto Sun/Postmedia Network FILE: People gather outside at the Fire and Flower pot store on Apr. 1, 2019 in Ottawa, Ontario. / Photo: MICHEL COMTE/AFP/Getty Images MICHEL COMTE/AFP/Getty Images

In December 2018, anticipating a cannabis retail boom in Ontario, aspiring retailer mihi held leases on 42 empty locations across the province.

Locked into contracts, the company was ready to be among the province’s first retail operators. That same month, however, citing a cannabis supply shortage, the Ontario government did something it had maintained it would not do. It capped the number of retail stores at 25, and introduced a much-maligned lottery system to allocate those licences.

While many businesses had already signed leases, completed market research and drawn up floor plans, none of that mattered in a lottery system. If an applicant had $75 and a passing interest in cannabis, they could apply for a licence.

Like many other aspiring cannabis retail operators, mihi was not selected and was left holding the bag on multiple leases with an uncertain view of the future.

“It was rough,” Steffen Schenk, president of mihi, tells The GrowthOp. “We were holding on to the leases for a long, long time.”

Read the full article here.

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