On Jan. 11, the provincial government is holding the lottery selection for the 25 retail cannabis locations expected to open in the spring.
Guelph is situated in the West Region, which includes 13 other eligible municipalities, like Hamilton, Niagara and Kitchener. Seven stores will be granted licenses within those 14 municipalities.
Cannabis Supply Company, which operates 12 clinics across Ontario, will be among the companies vying for a license, said Guelph store manager Ryan Clark.
“I believe between Burlington and Guelph, those are the two stores that are the best contenders for us getting the license,” said Clark.
Cannabis Supply Company, which has its head office in Brantford, is not a dispensary and does not currently sell cannabis from its clinics, noted Clark.
“Right now our main service is helping people get a prescription so they can legally obtain medical marijuana via licensed producers,” he said.
So far, five municipalities in the West Region have formally told the provincial government they are opting in to the selling of legal recreational cannabis, including Guelph, Chatam-Kent, London, Sarnia and Windsor.
Hamilton will decide whether to opt in on Jan. 14, while Kitchener, Waterloo and Cambridge are still officially undecided. Municipalities have until Jan. 22 to decide whether to opt in or out of the program.
Companies who decide to enter the cannabis retail store lottery are working on a tight deadline. They must submit an expression of interest application between Jan. 7 and 9, with the draw occurring Jan. 11.
If selected, the companies must present a $50,000 note of credit to the provincial government. If their store does not open April 1, they face a penalty of $12,500, with a second $12,500 penalty incurred on April 15. If the store is not open by the end of April, the final $25,000 is drawn as a penalty.
Despite the tight deadlines, Clark said he expects most if not all of the applicants already have a store location lease in place. He said Cannabis Supply Company intends to apply for its current clinic location on Speedvale Avenue W. as a new retail outlet.
“It has to say outside 150 metre perimeter of playgrounds, school yards and public parks,” said Clark. “I think we are in a good position here to meet that criteria, because we are in a bit of an industrial area in the north part of the city.”
Clark said he expects the formerly-announced retail store on Stone Road, which was going to be operated under the since-quashed LCBO model, will become a distribution centre for legal cannabis in the area.
Even once a company is selected in the lottery and has spent the money to open a retail store, there may not be a supply of cannabis to meet the demand. Prime Minister Justin Trudeau recently said he expects the current recreational cannabis supply issue to last about a year.
Clark said he would like to see more cannabis producers allowed into the game.
“There is a genuine shortage for legal cannabis from legally licensed producers, but I don’t think there is a shortage of cannabis from other sources. The licensed producers shouldn’t have a monopoly on this,” said Clark.
He believes the market will soon be opened up to small batch producers, not just the big producers.
“I predict there will be a craft cannabis industry in the future so these large corporations don’t have to be the exclusive supplier of cannabis,” he said.
The lottery process is being monitored by KPMG to ensure fairness. The software that will select licensees has been created in-house at the The Alcohol and Gaming Commission of Ontario.
“We just hope that we get a fair chance,” said Clark.
