Despite the implausible odds some winners beat, the province’s lottery for cannabis retailers was fair, a report concludes
REGINA A fairness report that looked at the province’ s lottery to select the 51 recipients of licences for cannabis retail stores in Saskatchewan says the process “was fair.”
The report was released Friday by accounting firm KPMG LLG.
As part of its selection process to decide who would get permits to run cannabis retail stores, the province used a request for proposal (RFP) tendering process.
According to KPMG, “The RFP process was managed internally by SLGA, with SLGA making all decisions regarding the development of the RFP documents and process, the proposal evaluation criteria, the proposal evaluation process, and the lottery process. KPMG’s role was that of an observer, and we offered observations about the RFP and lottery documents and process.”
There were 1,484 proposals submitted by hopeful permit holders to the province, which were then evaluated through a two-step process.
The first step ensured applicants met the minimum eligibility requirements — notably that they had the financial capacity and processes in place to manage a cannabis retail store.
There were 92 proposals that did not meet these requirements and were disqualified.
Stage two, according to KPMG, looked in part at ensuring no single legal entity would be awarded more than one permit in the same jurisdiction. That step disqualified 63 proponents from moving forward.
The remaining 1,327 applicants then moved into a lottery process to select who would get the 51 cannabis retail permits up for grabs in 32 jurisdictions.
A lottery was held on May 24, with seven SLGA employees involved in the draw.
“KPMG did not develop either the RFP documents or the evaluation criteria, and we did not participate in the evaluation of submissions, the conduct of the lottery or determination of the winners or runners-up,” reads the fairness report.
The report concluded all potential proponents had the same opportunity made available to them to access information, that information was made sufficiently available, that all proponents had a reasonable access to the opportunity to win and evaluation criteria was “consistently applied to all submissions.”
Regina-based company Prairie Sky Cannabis was awarded four licences.
According to University of Regina statistics professor Andrei Volodin the probability of that happening was one in 1,319,760.
More than a few critics have questioned the legitimacy of the lottery, including Toronto applicant Greg Paul.
“The chances of (a few corporations) getting all of these licences out of how many applicants there were, in my opinion they’re very slim,” Paul said on Monday.
“Obviously the statistical chances of some of these companies appearing again and again and again for multiple licences is probably pretty low,” agreed Regina applicant Pat Warnecke.
Tweed Grasslands, a Yorktonbased subsidiary of Ontario-based company Canopy Growth, won five licences. The odds of that, according to Volodin, were one in 12,830,400.
Synergy Five Investments, a partnership of five First Nations-owned companies, had a one in 14,125 chance of winning its three licences in North Battleford, Warman and Yorkton.
A B.C. business, 1159711 BC Ltd., had a one in 10,764 chance of winning its three licences in Melfort, Outlook and the RM of Edenwold.
B.C.-based Aura Cannabis had a one in 519 chance of winning its two licences in La Ronge and Saskatoon.
In Regina, two individuals by the last name Anderson, both listing lawyer Glen Lekach as their application’s contact, won licences.
Postmedia News has been unable to confirm if Dwayne and Jill Anderson are related; but the odds of two related applicants winning licences in Regina is one in 1,460.
Request for proposal documents, and the fairness report, show it was against the rules for related proponents to apply in the same jurisdiction.
“If a proponent is found to hold an ownership interest in two or more proponents, all these proponents will be deemed to be noncompliant and disqualified from the RFP,” read the RFP documents.
There was no mention of this in the fairness report.
But according to a government statement, it would not matter if they were married or not.
“The reference to related proponents does not refer to a marital relationship. Rather, the language pertains to conditions related to business structure and control,” read an SLGA statement. “The RFP precluded the same legal entity, or different entities involving the same person, from entering the lottery for a cannabis retail permit multiple times in the same municipality. An individual person is a distinct legal entity. Two individuals that may be in a marital relationship are still considered to be separate legal entities.”