All Seven Licence Applicants Connected with HighLife Violate AGCO Rules – LPC

AGCO disqualifies 12 licence applicants for retail cannabis stores, including all seven from HighLife Cannabis Co.Twelve licence applicants of Ontario’s 25 retail cannabis licence lottery winners have been disqualified. The Alcohol and Gaming Commission of Ontario (AGCO) announced on August 30 that new lottery winners will replace those bumped from the list.

AGCO spokesperson Raymond Kahnert said that the reason the 12 applicants were disqualified was straightforward.

“There was a violation of our rules,” Kahnert told the Financial Post. “The applicants who violated 14(a) did not submit the necessary information needed to proceed. There’s nothing more to it than that.”

Rule 14(a) of the AGCO’s Cannabis Retail Store Allocation Lottery Rules describes the next steps for  lottery winners. Within five days of the lottery draw and AGCO notification, they must:

  • submit a letter of credit from a financial institution for the amount of $50,000
  • confirmation that they have a retail space from October 1, 2019
  • pay fees of $10,000

Kahnert did not go into detail as to which documentation lottery winners failed submit. However, it’s a fair assumption that licence applicants failed to submit anything.

How Did Things Go So Wrong? – LPC

It’s also a fair assumption that things went so very wrong to have half of the licence applicants drop out. On the other hand, it might also be an indication that the system is working. For example, Health Canada changed its cannabis licensing process to include only those who have proven they are ready to operate. Perhaps Ontario learned from the example. Instead of investing time and money vetting all licence applicants, they only check the winners.

“Once they submit their licence application, the AGCO will then undertake a comprehensive eligibility review of the applicant and of any interested parties to the applicant,” Kahnert said.

However, things apparently went wrong for HighLife Cannabis Co. All seven of its licence applicants who won failed to submit their documents on time. HighLife made news with the revelation that it had multiple cannabis licence applications attached to its name. Over 100 people made 650 submissions for 14 retail locations.

“I think it’s obvious here that a number of landlords made arrangements with multiple applicants, and that’s why we ended up with many applications for a single address,” Kahnert said. It is totally within AGCO rules to have licence applicants listing the same address. But… “What we are concerned about and we will make sure of, is that every applicant controls their own store. So you can’t have a deal where another entity with a stake in the store will eventually end up controlling it. If that’s the case, we won’t grant them the licence to operate,” he said.

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