Edmonton's pot shop lottery pushing some out of permit bid

Those vying to sell pot in Edmonton when it's legalized this fall are starting to get pushed out of the ring. As of Monday, 67 companies and individuals who have paid the $5,600 application fee for a development permit were on a revised list of candidates.

City says the random selection process was fair and transparent

Local real estate broker Victor Lillo was bidding to open a cannabis retail store in the Lillo's Music location when his parents retire this year or next. (Scott Neufeld/CBC)

Some prospective retailers looking to sell cannabis in Edmonton this fall are starting to get pushed out of the ring.

The city used a random selection process to pick the cannabis retail store candidates and released an ordered list last month. 

As of Monday, 67 companies and individuals who paid the $5,600 application fee for a development permit were on a revised list of candidates. 

The city will continue to review the list of 242 candidates and accept the fees and paperwork until they've heard from all potential applicants — potentially another 160. 

But some, like Victor Lillo, are already planning to withdraw their bids.

Lillo, a real estate broker, submitted three expressions of interest this spring to open a shop on Whyte Avenue. He now believes he has a slim chance of getting a permit. 

"I believe that this other gentleman — Mark Fitton is his name, number eight publicly listed on the City of Edmonton's website — is going to get it for that location," Lillo told CBC news Monday. "He's ahead of me. He won the lottery." 
This building at 10806 82nd Avenue, now vacant, is among the top 10 locations drawn in the city's random selection process. (Scott Neufeld/CBC)

Lillo's proposed location on 82nd Avenue at 108th Street, now the home of Lillo's Music, is less than a block or about 90 metres from the site Fitton has applied for.

Under the amended zoning bylaws, marijuana stores must be at least 200 metres apart.

Lillo is among at least 13 on the initial list who are likely not to make a formal application. 

Christian Lee, a senior planner with development and zoning services, said an applicant may decide it's not worth their time or money if several competitors are ahead of them. 

He said some candidates have contacted the city, asking for their names to be taken off the list. They told him that it doesn't make sense "to pony up $5,600 for something that I am basically certain will be refused."

'Completely random'

In the random selection process, anyone looking to set up a shop in an approved zone was welcomed to submit their name in an initial expression of interest.

Lee believes the process was fair and transparent.

"It was random, completely random."

The city hired an independent, third-party consultant to run a kind of "old school" draw on June 20, Lee said. 

"You have a bunch of tickets drawn into a barrel and we spin it around and we draw each individual qualified applicant's number," he said. "That determines who would be able to have the right to apply first for any specific location."

The result is a mix of big and small businesses, he said. 

"You see a couple of mom-and-pop shops, some one-offs," he said. "That was to provide a fair opportunity for others to be able to get involved in this new market."

Established cannabis companies that appear several times on the application list include National Access Cannabis LP Holdings Corp., Canopy Growth Corporation, NAC Northern Alberta Partnership Limited and Fire and Flower.

Fire and Flower, with plans and investment in 16 retail locations in Edmonton, attended several city meetings this spring to oppose the lottery but council decided it was the fairest method. 

Lillo accepts the outcome of the random selection process.  

"That's the nature of a lottery, there's somebody that wins and somebody that doesn't win," he said. "Overall I'm pretty positive about the City of Edmonton — the way they managed and handled this, even though I wasn't the winner."

Lillo, a lifelong musician whose family has owned the business for more than 50 years, will consider opening a new live-music venue in the building when his parents retire. 
Victor Lillo, musician and real estate broker, plans to withdraw his application to open a cannabis store at the Lillo's Music building on Whyte Avenue. (Victor Lillo)

Lee expects the development permit office will begin announcing the successful applicants this week.

Once an applicant receives a permit, they must also get a business licence through the City of Edmonton and approval through the Alberta Gaming and Liquor Commission.

@natashariebe

About the Author

Natasha Riebe

Journalist

Natasha Riebe landed at CBC News in Edmonton after radio, TV and print journalism gigs in Halifax, Seoul, Yellowknife and on Vancouver Island. Please send tips in confidence to natasha.riebe@cbc.ca.