In­diva buys way out of On­tario pot sales box

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Boxed in by a rule de­signed to help small re­tail­ers, a Lon­don pot pro­ducer has found a way to flex its mus­cle and triple its pres­ence in the lo­cal mar­ket months be­fore On­tario opens the in­dus­try to pri­vate sell­ers.

Lim­ited as a pro­ducer to a sin­gle store to sell cannabis, In­diva is part­ner­ing with a new com­pany to open 10 mar­i­juana dis­pen­saries across the prov­ince, in­clud­ing two more in Lon­don.

In­diva had an­nounced plans to open mul­ti­ple pot shops through­out On­tario, but the prov­ince scut­tled those plans last month af­ter re­leas­ing re­tail rules that limit pot pro­duc­ers to a sin­gle store at­tached to their pro­duc­tion site.

Now, In­diva has bought a 9.9 per cent stake in Re­tailgo Corp., which will op­er­ate a string of dis­pen­saries un­der the name Ouid when bricks-and-mor­tar stores open in April.

“It’s also a chance to be part of a brand new le­gal in­dus­try . . . There’s not too many op­por­tu­ni­ties in life where you can be part of some­thing right from the ground floor.” said In­diva’s chief oper­a­tor Koby Smutylo.

Ouid — pro­nounced “weed” — al­ready has se­cured a lease for a dis­pen­sary at 875 Welling­ton Rd., just south of South­dale Road, and is ey­ing a sec­ond lo­ca­tion down­town.

The com­pany’s team is meet­ing with mu­nic­i­pal of­fi­cials and lo­cal busi­ness as­so­ci­a­tions to an­swer any ques­tions they may have.

“We want to be good neigh­bours,” Smutylo said.

Un­der On­tario’s pri­vate cannabis re­tail frame­work, li­censed pro­duc­ers can own no more than 9.9 per cent of dis­pen­saries that aren’t at­tached to their pro­duc­tion sites, a move de­signed to cre­ate op­por­tu­ni­ties for smaller re­tail­ers.

The prov­ince isn’t cap­ping the num­ber of re­tail li­cences it will award — for which the ap­pli­ca­tion process opens Dec. 17 — but each oper­a­tor will be al­lowed to hold a max­i­mum of 75.

One lead­ing cannabis lawyer has con­cerns about lim­it­ing the in­volve­ment of li­censed pro­duc­ers in the re­tail land­scape.

“Many of these com­pa­nies, these li­censed pro­duc­ers, are well cap­i­tal­ized and cer­tainly have the abil­ity to weather the storms of sup­ply short­ages, for ex­am­ple, and be able to op­er­ate in a way that’s go­ing to en­sure their suc­cess,” said Trina Fraser, an Ot­tawa lawyer who ad­vises the cannabis in­dus­try.

Al­though Fraser says she doesn’t think On­tario’s rules will af­fect the num­ber of dis­pen­saries that set up shop, she cau­tioned that some small re­tail­ers many not have ac­cu­rately bud­geted to op­er­ate in an in­dus­try that’s shunned by banks.

“I think we could have had the best of both worlds,” she said of a re­tail land­scape that in­cludes li­censed pro­duc­ers and smaller en­trepreneurs.

Adults in On­tario can legally buy recre­ational pot only from the gov­ern­ment-run on­line de­liv­ery ser­vice, the On­tario Cannabis Store, un­til dis­pen­saries open in the spring. The stores will be al­lowed to open be­tween 9 a.m. and 11 p.m., seven days a week. The busi­nesses must be at least 150 me­tres from schools and bar en­try to any­one younger than age 19.

Ouid is work­ing with a Toronto-based ar­chi­tec­tural firm to de­sign its stores, which will carry cannabis prod­ucts from In­diva and other li­censed pro­duc­ers, Smutylo said.

“What we’re aim­ing for is a fairly clean aes­thetic, a lit­tle bit pre­mium, but it should be very wel­com­ing and ap­peal to a broad spec­trum of peo­ple,” he said.

In­diva also plans to open a re­tail op­er­a­tion at its 3,700-square-me­tre plant on Har­grieve Road in south Lon­don.

DEREK RUTTAN/POST­MEDIA NEWS

Egle Ado­maityte is di­rec­tor of cul­ti­va­tion at cannabis pro­ducer In­diva in Lon­don. The com­pany is in a new part­ner­ship with a re­tailer.

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