Provincial

Full Steam Ahead: Ontario Announces Second Allocation Expression of Interest Lottery for Cannabis Retail

By Whitney Abrams | July 3, 2019

The AGCO announced this morning that it will be holding a second Expression of Interest Lottery to allow pre-qualified prospective cannabis operators to apply for a Retail Operator Licence for one of 42 retail store authorizations in Ontario in any municipality that has not opted out of hosting cannabis retail stores. In the North Region, cannabis retail store locations must be in one of five cities: Kenora, North Bay, Sault Ste. Marie, Thunder Bay, and Timmins. As for the rest of the 42, the East Region will get 7 stores, GTA Region will get 6, 13 will be allocated to Toronto, and 11 will be allocated to the West region. Eight additional retail stores will be authorized to be licensed on First Nations reserves, with approval from Band Council.

The first lottery process conducted by the AGCO in January 2019 was interesting, to say the least, and not what many people expected. The outcome was partnerships between winners, many of whom did not have an interest in running the store, and well-developed players finding creative ways to work together. Many unsuccessful prospective lottery applicants were frustrated when winners were not ready and that many stores set to be open still have not. The AGCO has created a separate process different from the first lottery process. 

 

Applicants on the lottery wait list from the first round have been invited to participate, but they will be required to submit a new Expression of Interest Application (“EOI Application”) to participate in the process and will be subject to the same new Allocation Lottery Rules as every new applicant. 

 

The Allocation Lottery Rules

 

The Lottery is open to corporations, limited partnerships, partnership, trusts, and sole proprietors. Applicants must be at least 19 years of age, this includes every director, officer, shareholder, partner, and trustee. Applicants who are selected to apply for a Retail Operator Licence (“ROL”) must use the same legal name and Applicant type identified on the EOI Application and the ROL application.

 

Similar to the first lottery, certain entities may not submit an EOI Application, including holders of cultivation, processing, or nursery licenses issued by Health Canada (or affiliates of those licensees); Retail Store Authorization holders or affiliates of those licensees; persons on the selected list for the first cannabis lottery who have been selected to have a store on a First Nations reserve; Those not legally permitted to operate a business in Ontario; and AGCO, the OCRC, Gaming Laboratories International LLC, and/or KPMG partners, board members, owners, or employees.

 

The EOI Application Process

 

Applications will be accepted between 12:01 am EDT on August 7, 2019, and 8:00 pm EDT August 9, 2019 (the “Lottery Period”). During the Lottery period, an applicant may withdraw their application. After the Lottery Period has ended and before the AGCO publishes the results on its website, applications may not be withdrawn. After applicants are notified and results are published, applicants have certain abilities to withdraw. 

 

To apply, each EOI Application must include:

  1. An attestation with certain requirements set out by the AGCO/Allocation Lottery Rules;
  2. A Letter of Confirmation – Cash or Cash Equivalents Capacity from a bank, in the form set out by the AGCO. The Letter of Confirmation must confirm the applicant is in good standing and has the financial capacity necessary to obtain $250,000 in cash or cash equivalents. If an applicant submits an Application for multiple regions, the same Letter of Confirmation can be used for each;
  3. A Letter of Confirmation – Commitment to Provide Letter of Credit from a bank, in the form set out by the AGCO. The Letter of Confirmation must confirm the applicant has the financial capacity necessary to obtain a Standby Letter of Credit in the amount of $50,000 and that the Letter of Credit will be provided within five business days of the applicant being notified of their selection by the Registrar from the bank or credit union. You can also use the same Letter to apply for multiple EOI Applications; and, lastly
  4. Secured Retail Space, which will be demonstrated by identifying the street address, an attestation that it will be available to operate a cannabis store as of October 2019 and the name and contact information for a person with a legal interest in the retail space.

 

The application fee will stay at $75. 

 

For more information on the EOI Application or the second lottery process, contact Whitney Abrams 416-369-4148 or at Turn on Javascript! for assistance.


Whitney Abrams

Whitney Abrams

Whitney’s work focuses on providing regulatory advice and advocating on behalf of cannabis businesses in the North American market. She is a frequent contributor to Canada Cannabis Legal.
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Comments (3)

  1. Jules:
    Dec 29, 2018 at 12:53 AM

    Fascinating article. Very in depth. My one question is: from where would Canada import cannabis? Are there countries currently exporting cannabis legally? Uraguay seems like the most economical source, although shipping costs could be an issue.

  2. miss lena:
    Feb 24, 2019 at 01:52 PM


    All labels will need to be plain, not appealing to children, and make no health claims. For edibles, there may be no dietary claims, and for topicals, there may be no cosmetic claims. For all of the new product classes, packaging and labelling must not contain any elements that associate the product with an alcoholic beverage, alcohol, or an alcohol brand.

  3. miss lena:
    Feb 24, 2019 at 01:52 PM

    All labels will need to be plain, not appealing to children, and make no health claims. For edibles, there may be no dietary claims, and for topicals, there may be no cosmetic claims. For all of the new product classes, packaging and labelling must not contain any elements that associate the product with an alcoholic beverage, alcohol, or an alcohol brand.






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