TORONTO — Ontario has chosen 42 operators who can apply to run the following wave of cannabis retailers within the province. However some analysts say the brand new pot shops nonetheless received’t be sufficient to fight pot bought on the black market.

AGCO regulates the shops

The Alcohol and Gaming Fee of Ontario — which regulates the sector — held the province’s second cannabis retailer lottery Tuesday. And the outcomes have been introduced on Wednesday. The brand new pot shops, when accepted, will greater than double the variety of marijuana shops within the province.

“The AGCO will solely licence candidates and authorize pot shops that meet all authorized and regulatory necessities,” the company mentioned in a press release, noting that the intention was to have new shops open in October.

Not like the primary lottery for 25 shops, candidates within the newest draw needed to present they’d secured retail house. And the retail house could possibly be used as a pot retailer in the event that they have been chosen. Additionally, the candidates had sufficient capital — $250,000 on-hand — to open it.

These chosen now have till Aug. 28 to pay licensing charges, and supply a letter of credit score for an extra $50,000 to the regulator.

One other eight pot shops might be positioned on First Nations reserves. They’re being accepted by means of a separate course of. Candidates for these licences have been chosen final month and are at present being greenlit, the AGCO mentioned.

The newest lottery and the on-reserve shops imply the variety of pot retailers in Ontario will finally rise to 75. However some observers mentioned that also it wasn’t sufficient.

Omar Khan, a vp at technique agency Hill+Knowlton who advises cannabis sector purchasers mentioned:

“Fifty extra licences is an effective step, nevertheless it’s nowhere close to what they should do to truly cope with the illicit market.” Omar additional mentioned,”What meaning is that the small enterprise individual whose taken out a line of credit score and put cash down for the lease is going through some stiff competitors from those that aren’t essentially following the authorized framework. To me, that’s fairly unfair.”

David a principal at consulting agency Navigator who’s a former govt on the Ontario Hashish Retail Company, additionally mentioned the black market continued to be a difficulty.

“Each further retailer in Ontario will assist in the direction of eliminating the illicit market, however the province nonetheless has an extended approach to go,” he mentioned.

The newest lottery winners seem like a mixture of sole proprietors and numbered firms. The businesses may transform a part of bigger entities, Phillips famous. Small enterprise homeowners who have been chosen will seemingly need to associate with firms who’ve expertise within the discipline, he mentioned.

“That implies we’re seemingly setting ourselves up for one more feeding frenzy. The place these lottery winners might be out looking for partnerships with well-known business enterprises. And basically auctioning off their golden ticket to the best bidder,” he mentioned.

AGCO guidelines forestall a lottery winner from really promoting their retailer outright. Nevertheless it don’t forestall restricted possession stakes and consulting contracts with bigger firms, Khan mentioned.

Ontario’s new shops:

The 42 new shops might be distributed regionally, with:

  • 13 within the metropolis of Toronto
  • Six going to the Higher Toronto Space
  • Eleven within the west area
  • Seven going to the east area
  •  One every in Kenora, North Bay, Sault Ste. Marie, Thunder Bay and Timmins, within the north.

Phillips mentioned the random nature of the lottery might create issues for communities in relation to the situation of their pot retailers. For instance, three candidates received licences to use to find shops on the identical avenue in Innisfil, Ont.

In Toronto, 5 of the lottery winners have leased store house on Queen Road, the place two pot retailers already function, he mentioned.

“That implies that Queen Road in Toronto goes to shortly flip into cannabis row,” he mentioned. “That’s a consequence of them organising a system the place basically the candidates may determine the place the shop location was going to be after which as a result of its topic to a draw you’re basically leaving it to likelihood.”

Shawn Jeffords, The Canadian Press

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