Article by Sam Riches, Growth Op
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.”