Luck of the draw could leave Ottawa with zero pot shops
Would-be cannabis retailers can begin entering licence lottery today
It's the first day cannabis retailers can throw their names in a lottery for one of 25 licences to open a pot shop in the province, but the pull-from-the-hat approach could leave Ottawa without a single storefront.
Cannabis has been legal since Oct. 17, but so far, Ontario consumers have only been able to buy the product online.
Only 25 licences will be issued by Apr. 1 to the first wave of private retailers, with a lottery system determining the winners.
According to a local public affairs consultant, that's not the best way to combat black market cannabis sales — especially if Ottawa ends up without any legal outlets.
"A lottery system means there are winners and losers based on an arbitrary draw," said Ivan Ross Vrána of Hill+Knowlton Strategies, who works with several cannabis companies.
Applications should instead be evaluated based on their merit, Vrána said, and where demand is highest.
Only 5 shops in all of Eastern Ontario
The Alcohol and Gaming Commission of Ontario will hold the lottery Jan. 11 and publish the results within 24 hours.
The 25 licences will be split up among these regions of the province:
- Eastern Ontario, including Ottawa, will have five stores.
- Toronto will have six stores.
- The Greater Toronto Area will have five stores.
- The rest of southern Ontario, outside Toronto and the GTA, will have seven stores.
- Northern Ontario will have two stores.
Ottawa could end up with all or none of the five stores in eastern Ontario. Leaving it up to chance isn't the way to make sure the stores are successful, Vrána said.
"Even if Ottawa gets one of the stores, it's not going to satisfy demand," he said, comparing the five licences for all of eastern Ontario to the dozens of LCBO stores in Ottawa alone.
No stores in Gatineau, either
Caroline Mulroney, Ontario's attorney general, and Finance Minister Vic Fedeli both cited "national supply shortages" as the reason for restricting the number of licences last month.
Vrána acknowledged the government wants to move quickly, but said the lottery system isn't the best way to suppress the booming black market.
"The best way to do that is to allow consumers to easily access this product," he said.
If Ottawa ends up a pot desert, local cannabis consumers won't be able to hop across the river to buy the drug, either.
The Crown corporation in charge of selling recreational cannabis in Quebec has put a hold on any new cannabis stores while the provincial government revisits its cannabis legislation.