Another 42 cannabis stores coming to Ontario

Coffee Time partner Huge Shops, as well as the site of a former illicit dispensary, are among the winning applicants.
Medical Marijuana/ Cannabis And Accessories

Forty-two applicants have been selected in a second lottery for cannabis retail licenses by the Alcohol and Gaming Commission of Ontario (AGCO).

Announced this morning, most of the winning applicants appear to be private individuals, with a handful of the applications being made under numbered corporations. However, a few of the winners are notable.

One of the winners is Huge Shops, a retail company that previously established a partnership with Chairman’s Brands, parent company of QSR chain Coffee Time, to acquire ten of its retail locations and have them converted into recreational cannabis stores. As part of the deal, Huge Shops will brand and operate any locations it acquires independently of Coffee Time, but will receive access to Coffee Time’s “highly experienced retail management team,” according to an announcement late last year. The partnership was supported by a $1.3 million minority investment in Huge Shops by licensed producer FSD Pharma.

A Coffee Time store is currently located at the proposed address listed on Huge Shops’ winning application in the town of Kawartha Lakes.

One of the proposed locations is 104 Harbord St. in Toronto, which was previously a location of CAFE, an infamous dispensary that has reopened its multiple locations despite numerous raids by police looking to crack down on unlicensed cannabis stores (to the point that entrances have had cement blocks placed in front of them). The 104 Harbord St. location was most recently raided in late July, roughly two weeks before expressions of interest for the second round of license applications opened. The numbered corporation the application was made under has Robert Heydon listed as the principal, with its address listed as being located at a private residence in Hamilton.

Three winners also have listed locations in the same retail complex in Innisfil, Ont., located south of Barrie. The AGCO’s rules state that applicants must operate their store at the same address as provided on their application, though may submit a request to operate at a different address if there are “extenuating circumstances.”

The first AGCO lottery was criticized for terms such as tight deadlines for opening the locations and hefty fines that left many of the winners unprepared. This resulted in several of them establishing partnerships in different forms with cannabis retail companies, producers and even more traditional retailers to help them get the stores open in time (while several of the 25 winners were still unable to meet the April deadline for opening their doors). For the second round, the AGCO required applicants provide a bank letter demonstrating access to $250,000 cash and $50,000 in available credit, as well as proof that appropriate retail space had been acquired, in the hopes of avoiding some of the hurdles faced last time.

The winners now have until Aug. 28 to formally apply for their license. The AGCO will then award licenses, based on the conclusion of an eligibility and licensing review. The second round of stores are expected to open in October.

In total, seven stores are being allocated to Ontario’s east region, 11 to the west region, five to the north region, 13 to Toronto and six to rest of the GTA. In addition to the 42 lottery winners announced today, the AGCO will be awarding a further eight licenses to applicants looking to open stores on First Nations lands.