The Ontario government has announced that it will issue 50 new cannabis store licenses starting from October, tripling the size of its marijuana retail industry.
The announcement comes following the province's initial decision to allow 25 brick-and-mortar cannabis stores after recreational adult-use was federally legalised in October 2018. The province received a staggering 16,905 applications for the initial round of licenses, which were eventually decided by lottery.
Many of the original lottery winners subsequently partnered with large scale cannabis companies and commenced sales, however some have still failed to open.
The Alcohol and Gaming Commission of Ontario (AGCO) will hold an official lottery on August 20 for 42 retail store authorisations. A further eight store licenses will be issued to business located on First Nations reserves through a separate process.
"That's very much what's driving the number 50. We want to make sure that the stores are sustainable. We are waiting on the federal government to increase the supply chain before we can move beyond the next 50."
– Ontario Attorney General, Doug Downey
Applicants who are selected by the lottery will then be required to demonstrate that they have already secured the necessary retail space to begin trading, as well as proving they have enough financial capital to launch the business.
According to the Attorney General, Doug Downey, applying to the lottery will involve "a bit of a different process than last time."
"This time we will pre-qualify people, and then they will enter them into a lottery. We had about 16,000 applicants last time and then we had to sort through who could and who couldn't afterwards. This will make it a bit more smooth."
The province's 42 new lottery-distributed cannabis stores will be geographically distributed throughout the region, with 13 to be located in the city of Toronto. The Greater Toronto Area will receive an additional 6 licenses, while the western and eastern regions of the province will receive 11 and 7 licenses, respectively.
When it comes to Northern Ontario, the remaining licenses are set to be distributed between Kenora, North Bay, Sault Ste. Marie, Thunder Bay and Timmins.
The Mayor of Toronto, John Tory, has requested that the city be involved in the decision-making process for determining the geographical spread of the next round of licenses.
"I think the roll out went relatively smoothly for us as a city because we only had five stores," Tory said.
"You will remember that before even the first five rolled out we had indicated that the city have a role in helping determine the locations beyond what the regulations say so that they wouldn't be too closely together, they wouldn't be too close to schools or other kinds of community facilities."
"We still have that concern and of course that concern becomes heightened when you have 13 more stores happening in Toronto."
The new stores will be allowed to operate in any municipality of their choosing—regardless of the population—as long as the local government has not opted out of the program. The Ontario government have also confirmed that the application process for First Nation stores will begin in July, and is to be conducted on a first-come first-served basis.