Over a dozen cannabis retailers in Ontario have been penalized for failing to open on time (April 1).
The Alcohol and Gaming Commission (AGCO), which held a lottery to determine who could apply for store licenses, had previously stated that it will escalate penalties for the province’s 25 pot shops if they failed to start serving customers by the beginning of this month.
According to GlobalNews, the AGCO has cut down credit from 12 retailers — by $12,500 on a $50,000 letter of credit — that missed the deadline. Furthermore, the retailers risk losing the entire amount if they still fail to open by the end of April.
Two retailers, however, have been exempted from penalties as the reasons for the delay in their cases was beyond their control.
Odds are high that Ontario’s 25th retail store, which was selected from a wait list after an initial lottery winner was disqualified, wouldn’t open this month.
So, at present, the status of 25 legal pot shops in Ontario is as follows:
- 10 are up and running.
- 14 have failed to open on time, out of which 12 have been penalized and 2 have been exempted.
- The final one, chosen as the ‘lucky loser’, may not open this month.
An official letter from the AGCO reads, “The Expression of Interest Lottery Rules were very clear about the objective of opening stores as of April 1, 2019. The Alcohol and Gaming Commission clearly stated that only those who were committed and in a realistic position to meet the timeline should participate in the lottery … This is not a fine, it was a criterion of participating.”
The retail stores will be further penalized by $12,500 draw down on their letter of credit if they don’t put the “We are open” board by April 15.
The remaining $25,000 will be drawn down if stores aren’t up and running by April 30. Last chance!
Initially, when pot first became legal in Canada in October of 2018, it was proposed that initial sales would go through a government-run online retailer known as the Ontario Cannabis Store. However, a month later the government, citing supply problems, said it was issuing licenses for 25 stores that it planned to have open by April 1.
The lottery to select the 25 ‘lucky winners’ that could apply to open physical shops took place earlier this year. Winners then had to send in their applications along with a $6,000 non-refundable fee and the $50,000 letter of credit.
Canadian retail cannabis store licences have been divided regionally:
- Eastern Ontario: 5
- Western Ontario: 7
- Northern Ontario: 2
- Greater Toronto Area: 6
- Toronto: 5