Ottawa

Scrapping Ontario's pot shop cap too late for would-be owner

An Ottawa woman who wanted to open a rural cannabis shop before a now-reversed rule change says she's been turned off the industry by the province's regulations.

Province to issue 20 licences a month starting in April

Rebecca Trueman was hoping to open a cannabis shop in Carp, but the provincial rules have put a damper on her aspirations. (Darren Major/CBC)

The Ontario government lifting the cap on the number of pot shops in the province came too late for one would-be owner, who says she won't be reapplying for a licence.

Rebecca Trueman had planned to open a store in in Carp, a community on Ottawa's western edge.

She had a business plan, a location and some investors. 

But that all went up in smoke when the government announced in December 2018 it would only be allowing 25 retail stores in the entire province and would be doling out licences using a lottery.

The government held another lottery in August, handing out an additional 42 licences, but Trueman had no luck with either draw.

She opened a cannabis accessory store in the space she had leased for a possible retail store, but shut the store down in the summer.

'It really looked hopeless'

"We were pretty fed up with the lottery system because we had applied for our licence numerous times. We had been way down the list of lottery applicants every single time and it really looked hopeless," she said, adding that she lost just under $20,000.

"That's not a large amount in the grand scheme of things but it's enough that it's a bit of a barrier to re-entry."

But Trueman said there are other issues with the way the government has rolled out the system — such as the quota on how much a store can order from producers — that have her not planning to apply again.

"You've got that voice in the back of your head that says 'What else is going to come down the pipe?'" she said.

Trina Fraser, a partner with the law firm Brazeau Sellers, said she is not surprised the "frustrating" lottery system rubbed some entrepreneurs out of the market.

She said it was harder for smaller "mom and pop" shops like Trueman's to weather the wait.

"When you have deep pockets and large cash reserves you can afford to take some of those hits like some thrown-away lease payments," she said.

Holding out hope

Like Trueman, Koby Smutylo also had plans to jump into the cannabis retail business but has been hampered by the lottery system.

Smutylo is the president of Retailgo Corp., a company that operates a proposed dispensary chain called Ouid (pronounced "weed").

The company had pre-lottery plans to open 11 stores across the province, including two in Ottawa where they already had lease agreements on two locations, but didn't win a licence.

Cannabis entrepreneur Koby Smutylo said he is excited that the government is lifting the cap on cannabis stores. (Radio-Canada)

"We were incredibly disappointed, disheartened and upset that the government would be unpredictable like that," Smultylo said.

Despite the setbacks, he said the company is still planning to open stores, including in Ottawa, but for now they are still playing the waiting game.

The government will be accepting applications on Jan. 6, but will be issuing 20 store authorizations a month in April.

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