Ontario draws its future cannabis vendors

While cannabis stores opened their doors on October 17 in other Canadian provinces, Ontario has still not implemented its legal cannabis distribution system, except through its online platform, the Ontario Cannabis Store. The province had announced a six-month delay and projected sales for April. Today, it is about to grant licenses to distributors through a process that is, to say the least, unusual: it plans to select them by lottery.

The Lottery

The delays in Ontario are due to a change in government—and, by extension, in policy—that occurred just before legalization. The previous Ontario government had opted for a public distribution system similar to Quebec’s, but it was defeated in the provincial election. New Premier Doug Ford, for his part, decided to open the market to private operators, but the government lacked the time to review applications and establish the legal framework for sales.

The process has been entrusted to the Gaming and Alcohol Commission. The lottery began this morning, and 25 licenses are up for grabs. Interested parties have until tomorrow to register by paying the $75 fee. Applications will be reviewed after the lottery drawing. Once selected, applicants have five days to submit their application materials and pay the 6,000$ license fee. The lottery results will be published on January 12, and municipalities have until January 22 to opt out of the program.

Tweets by Ont_AGCO

Challenges and Concerns Regarding This Model

With the issuance of these 25 licenses, Ontario is finally catching up, but questions remain about the effectiveness of its model. First, regarding the number of licenses. Originally, The new government had no intention of limiting the number of licenses However, given the cannabis shortages Given the situation the country is facing, the governor decided it would be best to authorize only 25: «We assessed how many stores we could possibly supply with cannabis, and that number was 25.» explains Finance Minister Vic Fideli. However, this number seems low, given that Ontario is Canada’s most populous province and one of the largest in terms of area.

According to CBC News, only seven retail licenses will be available for the Western Ontario region, an area roughly the size of the province of Nova Scotia (50,000 km²). Applicants who are awarded one of these seven licenses will then be able to set up shop wherever they choose within a region that includes 12 counties and five metropolitan areas (Windsor, London, Guelph, Hamilton, and St. Catharines). For obvious reasons, retailers will tend to set up shop in cities, which means rural areas won’t have any cannabis stores nearby. Some consumers may even have to travel an entire day to purchase cannabis in person. That said, they can always order online.