Fines for cannabis retail stores in Ontario
12 Ontario’s marijuana stores are being penalized for not opening right on time. The retailers which are failing to open the doors of their stores at the beginning of April are financially punished.
The Alcohol and Gaming Commission had held a lottery in order to establish the marijuana shops that could apply for a store license. But previously the Commission warned them about a system according to which they would be given a penalty in case they weren’t able to open by April 1.
However, a dozen retailers among the province’s cannabis shops were financially punished for not being able to start operating on time. Those that failed would see the commission draw down $12,500 on a $50,000 letter of credit and they could lose the whole amount in case they don’t start operating by the end of April.
Bad news for the 15 pot shops operating in Ontario that weren’t ready to start working on last week’s launch date. The retail stores were chosen from a wait list but, if they cannot accomplish what they agreed, what else can the state do?
The Lottery Rules were very clear about the subject. The objective was the opening of the stores in April 1, 2019. The AGCO declared that only the stores that were compromised in a realistic way to meet the timeline could take part in the lottery. Therefore, the punishment cannot be considered a fine; it was a condition to participate.
When cannabis became legal in Canada, Ontario decided to allow sales through a government-run online retailer that cannabis users know as the Ontario Cannabis Store. However, finally the government decided issuing licenses for 25 stores, which were supposed to open in April 1.
In order to decide the stores that could apply for opening stores, a lottery took place earlier this year. The winners had to pay a $6,000 non-refundable fee and the $50,000 letter of credit.
The AGCO decided that the stores that aren’t open by April 15, will see draw down $12,500 on their credits. In addition, the remaining $25,000 would be drawn down in case the stores were not open in April 30.
So far, the situation of the 25 legal cannabis stores in Ontario is:
10 are open and operating
14 were not able to open on the right time; 12 of them have been punished and 2 have been exempted.
The last one may open this month.
Finally, the retail stores have been divided regionally as it follows:
Eastern Ontario: 5
Western Ontario: 7
Northern Ontario: 2
Greater Toronto Area: 6