Sudbury

AGCO starts financially penalizing unopened cannabis stores

It’s been almost two weeks since recreational cannabis stores were supposed to open in Ontario, but the two in Sudbury are still waiting to open their doors.

25 stores were supposed to open across Ontario on April 1

The owner of the Highlife cannabis store in Sudbury had hoped to open on April 1 but he still doesn't have the proper licence from the Alcohol and Gaming Commission. (Erik White/CBC)

It's been almost two weeks since recreational cannabis stores were supposed to open in Ontario, but the two in Sudbury are still waiting to open their doors.

The owner of Highlife, Anton Lucic, says he has been financially penalized for not getting the doors open on April 1.

The penalty is $12,500, which was drawn from his letter of credit. Lucic says he's not surprised.

"The delay is due to additional due diligence that AGCO is conducting due to my business arrangement with Highlife," he said.

"They're verifying that there's no criminal connections and money laundering. I'm confident that we will be granted the licence within several days."

Lucic says he's confident his licence will be approved soon.

"We're at the final stages of approval, after AGCO finishes the due diligence I will be able to order product," he said.

"Then, we'll have to pass one more pre-opening inspection by AGCO once the product arrives."

How the process works

To select who would operate the stores, the province set up a lottery system. As a condition of participating in the lottery, applicants were made award they had to submit a $50,000 letter of credit with their application.

Raymond Kahnert, a spokesperson with AGCO, says the rules were clearly stated before the application process began. He says all 25 applicants met the first deadline, which was an expression of interest.

"From that point, each moved through the process and submitted the required information at different times," he said.

"Some applicants provided all the necessary information in a timely way. For others, the information was incomplete, changing or slow to be provided. For others, highly involved business arrangements were entered into with third parties requiring in-depth analysis."

Kahnert adds that stores that are not open by April 15th will see another $12,500 from the letter of credit.

He adds the AGCO has a team of people working everyday to help stores open their doors.

With files from Jamie-Lee McKenzie

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