Ontario’s 50 new pot shops must meet stricter criteria

Ontario is set to get 50 more cannabis stores starting in October, and applicants will have to first show they have their finances and retail space ready to go.

The announcement Wednesday comes as some of the first 25 of the province’s legal pot shops that were supposed to open April 1 are still not up and running.

Those initial retailers were chosen through a lottery to open Ontario’s first brick-and-mortar cannabis shops — when the drug became legal recreationally last October it was only available in the province through an online government-run store — and that system has faced criticism for not including a merit component. The Alcohol and Gaming Commission of Ontario will hold a new lottery on Aug. 20 for the next 42 retail store authorizations. Another eight stores will be located on First Nations reserves through a separate process.

For this lottery, applicants will have to prove that if they are selected, they have secured retail space that could be used as a store and that they have enough capital to open it, the AGCO said, noting that a bank letter confirming access to $250,000 cash and another confirming the ability to get a $50,000 standby letter of credit would be needed.

One licensed cannabis producer said the latest initiative will position the industry for significant sales growth in Canada’s largest province. “After the first 25 stores began to open in Ontario, the industry saw overall sales of cannabis basically double,” Avtar Dhillon, executive chairman and president of Emerald Health Therapeutics said in a statement.

“Adult-use consumers are showing a preference for going into a physical location where they can interact with educated, savvy budtenders and we anticipate that the further expansion of physical stores in Ontario and Canada will strongly serve the growth of legal cannabis sales.”

Ontario had decided on an initial round of just 25 stores, citing national supply issues, but that appears to be easing.