Why winning the cannabis lottery is only ‘the first step’ for Ontario’s would-be pot shop owners

Why winning the cannabis lottery is only ‘the first step’ for Ontario’s would-be pot shop owners

Of 2,078 applications in Tuesday’s provincial lottery for the chance to apply for new pot shop licences in the GTA, five winners proposed the same Oshawa address for their intended stores. Two of these were selected outright and three are on a wait-list.

Another two proposed to open at the same address in Burlington. One of these is a winner and one is on the waiting list.

These quirks may be less meaningful than they seem; applicants selected in this week’s lottery, held by the Alcohol and Gaming Commission of Ontario (AGCO), are not guaranteed a licence to operate a cannabis retail store.

Winners simply have the opportunity to apply for a licence and will then be vetted by the provincial regulator.

And the curious cases of cannabis store addresses showing up more than once was not that surprising to Toronto lawyer Matt Maurer, vice-chair of the cannabis law group at firm Torkin Manes.

Maurer says nothing underhanded or shady is behind the apparent anomaly of the addresses, which had many shut-out entrants crying foul after results were made public Wednesday.

What likely happened is several cannabis brands first secured leases at the addresses and then approached other individuals and companies without sites to also apply for shops at those locations, he said.

An established brand with a good location might have applied themselves and also gone to others, saying: “OK, we will let you enter the lottery using our property on your lottery ticket on the understanding that if you win, you will brand it our brand,” Maurer said.


Alternately, he said, crafty landlords may have lured multiple applicants to increase their chances of establishing a profitable tenant.

Maurer says he’s heard of cannabis brands that used this strategy for the lottery, but said he didn’t know whether it was used in the Oshawa or Burlington cases.

To be entered in the lottery, applicants were required to show financial capability and that they had secured retail space.

AGCO spokesperson Raymond Kahnert said there is nothing that prevented a property owner from offering more than one applicant the chance to secure its retail space if the applicant were selected in the lottery.

Kahnert said applications were randomly selected in an automated software program developed by the AGCO’s Gaming Lab and the draw was supervised by accounting giant KPMG, which acted as a “fairness monitor.”


Winning applicants next have to apply to the AGCO for a licence. Then the regulator will “undertake a comprehensive eligibility review of the applicant and of any interested parties to the applicant” and could include police and background checks, he said.

“The main thing to remember is that a person’s selection in the lottery simply provides them with an opportunity to apply for a licence.

“It’s only the first step in the process,” Kahnert said.

“The AGCO will only licence applicants who meet all legal and regulatory requirements.”

Across the province, some 4,864 applications, all of which were required to meet stringent financial and real estate requirements, put their hats in the ring for a chance at 42 pot shops spread over five Ontario regions.

Another eight shop licences will be handed out for stores on First Nations reserves.

The full list of lottery applications to the Alcohol and Gaming Commission of Ontario, which regulates the sector, included dozens of addresses listed by multiple entries.

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A single North York address on Finch Ave. W., near Keele St., was proposed by 97 different applications, but was not drawn in the lottery.

Meanwhile, 213 Queen St. E. was proposed by 32 applications, one of which was selected.

All told, there were 1,240 entries in Toronto for the chance to apply for one of 13 new shop licences.

With files from Gilbert Ngabo

Joseph Hall

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