Ontario government to add 50 new cannabis stores across the province

Jul 3 2019, 3:03 pm

There will soon be more cannabis retail storefronts for Ontarians to shop from, as the Alcohol and Gaming Commission of Ontario (AGCO) will be holding a second lottery for 42 private cannabis retail store authorizations.

Up to eight additional stores will also be allocated on First Nations reserves through a separate process on a first-come, first-served basis, according to the finance minister, Rod Phillips, and attorney general, Doug Downey.

Interested parties will be able to submit an expression of interest form online to the AGCO in summer 2019.

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“Our government is continuing to take a responsible approach to opening cannabis stores across Ontario, allowing private sector businesses to build a safe and convenient retail system to combat the illegal market,” said Minister Phillips on Wednesday in a statement.

“With marginal improvements in national supply, we are proceeding to issue up to 50 new cannabis store licences.”

“Despite the ongoing federal cannabis supply shortages, Ontario is taking further action to protect young people, keep our roads and communities safe and combat the illegal market in response to the federal government’s decision to legalize cannabis,” said Minister Downey.

“While the federal supply issues persist, we cannot in good conscience issue an unlimited number of licences to businesses. A phased-in approach remains necessary.”

For this lottery, the government says there will be new pre-qualification requirements that will streamline the licensing process with the AGCO and help ensure the readiness of applicants.

Prospective retailers must demonstrate they have $250,000 in cash, or cash equivalents, a letter of credit for $50,000, and a secured retail space.

However, David Clement, Toronto based North American Affairs Manager of the Consumer Choice Center (CCC), said Wednesday’s news missed the mark.

“Today’s announcement is both good and bad. It is great that the Government is moving to increase the number of storefronts, but the existing cap, and the prequalification criteria, miss the mark.”

“Additional stores are definitely appreciated and will help curb the black market. That said, we don’t see any justification for the cap to continue to exist when the province has stated that it is committed to uncapping the retail market in the long run,” said Clement.

“The stress testing the province is putting applicants through acts as a huge barrier to entry, and significantly increases costs for retail operators. Those costs will ultimately end up being passed on to consumers, which is problematic,” said Clement.

“It is also important to note that the province doesn’t stress test other businesses that sell age-restricted goods in this way. Bars, clubs, restaurants, corner stores, and grocery stores all sell age-restricted products, but don’t face these heavy burdens,” said Clement.

He added a simple solution would be to approve all applicants who already have retail space acquired, and do so without a cap on the number of stores that can be approved.

“This would ensure that applicants are serious, without the heavy handed financial requirements. Doing so would drastically improve Ontario’s retail market for cannabis, which would significantly increase the likelihood of Ontario consumers purchasing cannabis legally, instead of in the black market,” said Clement.