The great pot shop lottery shemozzle: part two

When Doug Ford won the provincial election a year and a half ago, he found himself in charge of rolling out legal pot shops in Ontario. I don’t think that was ever a professional aspiration of his. It was just a case of ironic timing: Trudeau was in the process of legalizing pot, leaving the implementation in the hands of premiers, and there was Ford, who had famously been accused of dealing hash back in high school, suddenly responsible for the marijuana strategy at Queen’s Park.

Asked about his approach to legalization, Doug Ford derided Kathleen Wynne’s plan for government-run pot shops and gave the standard conservative answer to any business-related question: “I don’t believe in the government sticking their hands in our lives all the time. I believe in letting the market dictate.” Caroline Mulroney, then attorney general, backed him up, saying that Ontario’s cannabis retail market would be uncapped.

So you could be forgiven for thinking that pot was going to start showing up in corner stores and fancy yoga studios across the city. I figured the illegal pot shops were going to tidy themselves up, adopt Queen’s Park–issued regulations and go from underground to mainstream.

Instead, the province created a byzantine, controlling, capricious lottery process to award licences to entrepreneurs that has resulted in chaos. It’s financially burdensome on the applicants, which seriously limits the pool, and the exact opposite of just letting the market decide.

The Alcohol and Gaming Commission of Ontario’s second lottery for new retail licences, which happened this past summer, was even messier than the first. About 5,000 applications were submitted and 42 won. Immediately, the results drew criticism: 650 of the applications were linked to a single Sudbury-based pot shop called HighLife, and three winners, mysteriously, all proposed locations steps away from each other on the same street in Innisfil.

Then the AGCO was hit with a whopping legal challenge. A group of 11 lottery winners who didn’t submit paperwork in time were disqualified and lost $10,000 each in submission fees. Ontario court dismissed their challenge, but they’re appealing. The only people happy with the lottery system are cannabis-fluent lawyers who are getting rich off a vast supply of new clients.

And while legal cannabis stores opened slowly and inefficiently, driving many users back to the black market, police forces cracked down on illegal shops, launching raids across the province at a steady clip, clogging up the courts on that front, too.

Even the lucky people who win cannabis licences are frustrated by the system. Steven Fry, who got a licence in the first lottery and opened a store in Hamilton earlier this year, is one of those people. In “Confessions of a Legal Pot Dealer,” on page 86 of this issue, he writes about the maddening process of trying to satisfy all the government requirements as well as meet the near-impossible deadlines the province set.

Meanwhile, the Ontario Cannabis Store lost over $40 million in its first six months of selling weed, despite being the only legal seller in the province at the time. Even Ontarians who believe the government shouldn’t earn money off the sale of booze or lottery tickets can appreciate that so-called sin taxes help fund schools and hospitals. What a colossal missed opportunity.