Ontario Rules Allow Same Address on Different Cannabis Licence Applications – LPC
A quick look Ontario’s cannabis licence applications in the latest lottery shows many individuals using the same storefront address. For example, HighLife Cannabis Co. of Sudbury, Ont. had over 650 applications with more than 100 people applying for 14 addresses. Seven of those cannabis licence applications won, which ultimately could lead to a multi-million dollar payout for the company.
It’s not even clear that HighLife already owns these locations.
“If we assume that HighLife owns these locations… it is possible that they created a service agreement,” said Harrison Jordan. The Toronto-based cannabis lawyer speculated that the company might provide the real estate to the winning applicants.
Unlike the first round of cannabis licence applications, applicants in the second round needed to have a location in place. That was because seven of the original 25 applicants were penalized for not opening a store within 30 days. One cannabis shop in Oshawa opened after four months of delays. One applicant never did.
“Location, Location, Location” Has a Twist Meaning in Ontario – LPC
Much like a real lottery, the more cannabis licence applications you have, the more likely you are to win. Of course, securing a location can be expensive. A company would require a lot of capital to rent 650 locations. Finding 100 applicants for 650 applications is a lot more economical. At $75 per application, that scenario still requires some capital. But considering that Ontario retail cannabis stores averaged $50,000 in sales the first day, it’s a good investment.
And it is all totally legal under Alcohol and Gaming Commission of Ontario (AGCO) rules.
“There is nothing that prevents a property from providing more than one applicant,” said AGCO spokesperson Ray Kahnert.
“If I was a landlord… I would have agreements with as many prospective tenants as possible,” Jordan said. Those real estate owners listed on cannabis licence applications stand to make “a mountain of money”, he added. “As long as you don’t control the applicants, there is nothing that says you cannot provide your locations to those who want to take part in the lottery.”
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