Traditional brick and mortar stores for recreational cannabis are finally opening across the province this month after much anticipation.
But many are wondering why there’s so few stores opening in Toronto — and what’s taking so long for them to be fully operational.
The first store opened in the Queen Street West neighbourhood on Monday. The Hunny Pot Cannabis Co. passed its final inspection after a lengthy process for licensing and proposals for securing retail space.
Out of more than 17,000 applications, 25 pot shops were selected to open across the province, with five of them located here in Toronto.
The provincial government held a lottery back in January to pick companies eligible to apply for a cannabis retail licence.
But the Hunny Pot is one of only two stores that has opened so far. Ameri in Yorkville opened this past weekend.
Two other stores within close proximity to Ryerson — Canna Cabana at 435 Yonge Street and Tokyo Smoke at 333 Yonge Street — are still under public consultation or awaiting final approval.
“If you look at it overall, the coverage is just awful,” said Brad Poulos, a cannabis and entrepreneurship instructor at Ryerson.
Poulos teaches the Business of Cannabis course at the Ted Rogers School of Management, which aims to help aspiring business owners enter the growing cannabis industry.
“If you look at the western part of the province, there are no stores in Kitchener, there are no stores in Windsor, but there are two in London, and then there’s going to be two in Kingston and three in Ottawa,” said Poulos. “So Kingston and Ottawa will have as many stores together as all of Toronto.”
Poulos said that the way the application process is arranged for brick-and-mortar shops is difficult because the first thing entrepreneurs must do is to win the retail lottery.
“If you’re not one of the 25 out of the 17,000 that won the lottery, there’s nothing for you to do, you can’t even apply for a licence,” said Poulos.
Poulos said that he does not expect the store openings to make a huge impact on the illicit market.
“As we’ve got this cap on the number of stores, there really won’t be that much demand getting satisfied by Ontario’s 25 stores, and where there are [legal] stores, there are also illegal dispensaries operating.”
The Alcohol and Gaming Commission of Ontario (AGCO) regulates the sale of recreational cannabis in privately-run stores in the province and has the authority to issue licences.
“They [the entrepreneurs] didn’t win anything, they didn’t win a licence, they had the opportunity to apply for a Retailer Operator Licence and then a Retail Store Authorization,” said Raymond Kahnert, a spokesman for the AGCO.
According to the AGCO website, operators “will determine their own opening day and operating hours as permitted in the regulation,” following April 1.
“A number of social media commentators talked about these people ‘winning a golden ticket,’ so if I may borrow on that theme, this was not about selling the Wonka factory, this was about operating it,” said Kahnert.
The lottery process is ongoing until December 13 this year, while applicants on the waitlist are in line for the next draw.
Nick Kuzyk, the chief strategy officer for High Tide Inc., believes that the application process is appropriate for how the Ontario government wants to start things off in the province.
The Alberta-based cannabis company owns the Canna Cabana brand, and plays an assistant role for the lottery winner, Dana Kendal, who is in control of the Toronto store.
“I think it’s a good start, you have to start somewhere and that number will grow over time. The Ontario government and the AGCO is taking a measured approach and we’ll see what happens next,” said Kuzyk.
Since October last year, Ontarians have only been able to purchase recreational cannabis legally online through the Ontario Cannabis Store website.
The AGCO posted the guidelines on how cannabis retail stores should operate on their website.
For Kahnert, the process gives operators the responsibility of complying to the AGCO and the provincial government’s standards for the legal sale of cannabis.
“Simply put it’s about ensuring that the retailing of recreational cannabis happens fairly and in the public interest, that the operator is going to act with honesty and integrity, and that’s right from the location of the store, the product that’s being sold, and the training of the staff,” said Kahnert.