Toronto

Court dismisses legal challenge to Ontario's pot shop lottery

An Ontario court has dismissed a legal challenge filed by 11 people who were disqualified from applying to open a cannabis retail store in the province.

Judicial stay on licensing process now lifted

An Ontario court has tossed out a challenge from 11 people who say they were unfairly axed from the cannabis store licensing process. (Ben Nelms/CBC)

An Ontario court has dismissed a legal challenge filed by 11 people who were disqualified from applying to open a cannabis retail store in the province.

The divisional court also on Friday lifted a stay on the licensing process for the latest round of pot shops, which it had imposed while the case was being heard.

The three-judge panel did not release the reasons for its ruling, however, saying it expects to issue them in the next 10 days.

The 11 had contested their rejection and disputed the fairness of the procedures involved in the lottery used to grant the licences.

The Alcohol and Gaming Commission of Ontario, which administers the system, said the applicants were disqualified for failing to file a key document within the established five-day deadline.

But the group's lawyers argued an email alerting their clients of the lottery's outcome did not go through, and the deadline should have been recalculated based on when the message was actually delivered.

Lawyers for the group declined to comment Friday.

Licensing process will now proceed

The commission said in a statement that it will now proceed with assessing the applications of 11 other people chosen to replace those who were eliminated.

"We will be communicating revised deadlines to the applicants who were brought forward from the wait list to replace those who had been disqualified," the agency said on its website.

"Our focus remains on moving through the lottery and licensing process as quickly as possible while continuing to apply our rigorous licensing approach in order to allow for the opening of more safe and responsible cannabis retail stores."

Lawyers representing the commission had argued the group was to blame for the notification email bouncing because it provided the addresses. They also told the court the agency took several other steps to reach the group.

The newly selected applicants are "very happy" with the court's decision, said lawyer Robin Linley, who represents some of them.

"We have been working under very tight timelines to ensure that the rights of the newly selected were not jeopardized," he said in an email.

"Our clients were completely innocent and put in a lot of time and money in order to comply with the AGCO process. They are obviously pleased with the outcome and are eager to get on with the opportunity to obtain a licence."

So far, there have been two rounds of the government lottery to determine who can apply to open cannabis stores.

Lottery winners have five business days to turn in their application, along with a $6,000 non-refundable fee and a $50,000 letter of credit.

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