Today, the Government of Ontario announced the much-anticipated next steps for retail cannabis in the province of Ontario.
You might remember back in December 2018, Ontario announced (much to the shock of the cannabis community) that rather than moving forward with a fully open retail regime, they would be choosing cannabis retailers based on a lottery system. This decision was made largely because of a cross-country lack of legal cannabis supply. In theory, the lottery system seemed like a fair arrangement- everyone gets an equal shot. Though in practice those who have deep roots in the cannabis industry, who have been waiting years for cannabis legalization, and who have real experience in retail were left behind.
Fast forward to today. There are currently less than 25 retail cannabis stores open in Ontario. According to Statistics Canada, in the first three months of 2019 around 38 per cent of Canadians purchased cannabis through the black market. In order to fully eliminate the black market, it is imperative that Ontario increase the amount of legal retail cannabis stores. As supply is beginning to increase, Ontario has begun moving closer to an open retail regime.
Let’s get to the good stuff, Eh! On August 20, 2019 Ontario will be holding a second lottery. This time, however, there are a few more rules in place- this is to ensure that the winners are ready to open their doors in October 2019.
The cost to enter the lottery is $75 per application. Licensed producers, unfortunately, are still unable to apply for a spot in the lottery. Further restrictions are in place for those who currently hold a cannabis retail license and those who are affiliated with a current cannabis retail location in Ontario.
In order to apply, applicants must prove that they have access to a retail location- either through prove of lease or a conditional lease from a landlord. Further, applicants must prove good financial standing- that they will be able to take out a $50,000 line of credit and a potential $250,000 loan.
In total, the province intends on issuing another 50 licenses across Ontario – this includes:
- First Nations Reserves: 8 stores
- The licensing and store authorization process for stores on-reserve will take place through a separate process from the lottery, on a first come, first served basis, and begin in July 2019.
- East Region: 7 stores
- GTA Regiin: 6 Stores
- Toronto Region: 13 Stores
- West Region: 11 Stores
- North Region: One store in each of the following cities: Kenora, North Bay, Sault Ste. Marie, Thunder Bay and Timmins
At this point, it is still unclear when retail licenses will open to the public completely, but this is a move in the right direction. As supply continues to increase across the country, Ontario will respond in a measured manner. The government understands that the only way to eliminate the black market is to increase store fronts, and if they have made anything clear in their current mandate, they want to give people choice.