On December 13, 2018, the Government of Ontario announced changes to the retail licensing scheme of cannabis. The government will issue 25 licenses to retail outlets. The changes come three days before the portal for applications was set to be open.  The government based its decision on a national shortage in the supply of cannabis.

In addition, only six licenses will be available in the GTA and five license for Toronto, according to Ontario Regulation 497/18 made under the Cannabis License Act, 2018. Initial license holders will be able to open their stores on April 1, 2019.

The demand for the licenses will greatly outweigh the number of applicants. To distribute the licenses, the AGCO will conduct a lottery. Expression of interests may be submitted to the AGCO from January 7 to January 9, 2019. The province and AGCO will use a third-party monitor to oversee the lottery process.

The lottery process aims to ensure fairness and transparency in the treatment of the expressions of interest, as well as an appropriate distribution of stores in each region of the province. Eventually, the AGCO will publish more details on the lottery process.

For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004 or Ray Luckiram at (416) 601-4651.

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