Retailer eyes Market location
Company reaches licensing deal, aims to open York Street location by April 1
Fire & Flower, an Alberta-based chain of marijuana stores, will have its name on a proposed shop on York Street in the ByWard Market this spring.
The chain has reached a licensing deal with two of the Ontario pot-shop lottery winners who are opening stores in Eastern Ontario, said Fire & Flower CEO Trevor Fencott. The other proposed Fire & Flower is on Brock Street in downtown Kingston, he said.
Notices allowing for 15 days of public comment are expected to be posted on both storefronts and the website of the Alcohol and Gaming Commission of Ontario (AGCO) website by Wednesday, he said.
The province will allow only 25 stores to open this spring because of a shortage of cannabis for the recreational market. The right to apply for that coveted first wave of licences was determined in a lottery.
Eastern Ontario has been allotted five stores. Lottery winners can decide to open a store in either Ottawa or Kingston, Belleville, Barrie, Peterborough or Kawartha Lakes.
So far, two of the five Eastern Ontario stores have been proposed for Ottawa, with the possibility of a third. Here’s the breakdown:
One lottery winner has proposed
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opening a store called Superette on Wellington Street West. That proposal has been posted for public comment by the Alcohol and Gaming Commission of Ontario.
Fire & Flower says it has two
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licensing deals with Eastern Ontario lottery winners to open shops in Ottawa and Kingston.
Winner Daniel Telio plans to
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open a Spiritleaf store in Kingston.
That leaves one of the five locations in Eastern Ontario unknown.
Fire & Flower was lucky to acquire the prime location at 129 York St., between Cumberland and Dalhousie streets, said Fencott. The area is bustling with restaurants and bars and is a popular tourist destination. It’s not far from Parliament Hill, either.
“It’s a chance for the politicians to see a living, breathing example of the system they created,” said Fencott.
“I’m sure the lottery winner would welcome visits from parliamentarians.”
Fire & Flower had already rented the York Street storefront, formerly the site of the SmoqueShack barbecue restaurant, as part of its plans to expand into Ontario.
The chain has seven cannabis shops and three stores selling accessories in Alberta — where there has been a temporary freeze on issuing more store licences because of the cannabis shortage — and two stores and a distribution facility in Saskatchewan.
The plan is to eventually open 75 Fire & Flower stores in Ontario, the maximum allowed for any one company, said Fencott.
Under the deal with the two lottery winners, Fire & Flower licenses the brand name and charges consulting fees for other support as required, including a digital platform to track and sell cannabis, operating procedures and staff training programs.
Fire & Flower also has an option to purchase the stores after the lottery period is over on Dec. 13, subject to AGCO approval.
But for now, the lottery winners own and operate the stores, said Fencott.
He declined to identify the two winners until their names are posted by the AGCO.
Fire & Flower is just one of several cannabis retail chains with plans to open stores across Ontario.
None of the chains won the lottery. However, several have reached agreements with lottery winners. If the AGCO approves the deals, at least six of the 25 stores will carry the names of store brands that are already well known in Western Canada: Fire & Flower, Spiritleaf, Canna Cabana and Nova Cannabis.
The province wants the stores open by April 1. Fencott said that will be a challenge, but Fire & Flower is aiming to hit that deadline.
Store owners must renovate storefronts, including the installation of a high-resolution video surveillance system, hire and train staff and install a system to track and sell merchandise.
The marijuana must be ordered from the Ontario Cannabis Store, the online outlet that is now the only legal place to purchase recreational marijuana in the province. The OCS also acts as a wholesaler.
The province decided a lottery was the fairest way to award the right to apply for the first 25 licences.
The stores are expected to be lucrative because they’ll have a head start in selling to the residents of Canada’s most populous province.
Provincial politicians have said they want small businesses to have a fair shot at running a store.
There were nearly 17,000 entrants in the lottery. Most of the winners were individuals, and they were flooded with offers to help them finance and set up their stores.
But the deal-making has been a laborious process because the lottery rules were set up to prevent winners from simply selling their golden ticket to the highest bidder.
Winners cannot change their name or organizational structure — individual, corporation or partnership — when they apply for a licence.
One lottery winner has been disqualified for breaking the rules.
Winners are also supposed to maintain both control and majority ownership of their stores.