The infamous Ontario cannabis lottery is back, this time adding another 42 stores – almost twice as many as the previous lottery. These accounted for only a fraction of the applicants, which this time consisted of 4,864 eligible “expressions of interest,” according to Marijuana Business Daily.

This sudden bump is welcome news for many municipalities, who no doubt yearned for the convenience and direct interaction that the Ontario Cannabis Store simply cannot provide.

If anything, this proves that Canada’s supply issues are leveling out – something that many experts speculated would take several years.

Recreational marijuana users definitely stand to gain a lot from these additional locations, but some critics point out that we should not be too quick to celebrate.

More Stringent Requirements

Due to the somewhat lax prerequisites for eligibility in the initial lottery, the Ford administration changed its rules. In order to even enter the lottery businesses had their work cut out for them.

As before, aspiring dispensaries needed to provide a $50,000 letter of credit. Additionally, they need proof that they either have or can procure $250,000 in cash.

But what really cements things is that these potential establishments had to prove that they possessed had “secured a suitable retail space,” according to Marijuana Business Daily.

No doubt, this will help prevent the disastrous start for Ontario’s first 25 dispensaries – only a fraction of whom opened on time for the initial April 1^st deadline. On the other hand, it meant owners had to have a storefront ready that they may never get a chance to use. In a way, this gamble actually feels more like a conventional lottery.

Unlike the previous lottery, this one required a specific number of licenses – eight in total – to be distributed among the 133 First Nations communities.

Huge Potential for Revenue

Despite not even having 25 stores in April, cannabis sales in Ontario effectively doubled compared to the revenues generated by the OCS alone. If this handful of establishments brought in such a notable amount of sales, we can only imagine how much to expect once all 75 are up and running.

Still Not Enough

Despite increasing the total number of stores to 75, experts warn that even these may not be enough to do the trick.

 David Phillips of Navigator, a Toronto communications firm, says:

“I don’t think there’s any question that the (Ontario) market can bear a significantly larger number of stores. It’s simply a question as to whether the province will move to an open allocation or if will continue with this more incremental, staggered process in the next round.”

Potentially the Last Lottery

The Ontario government cites supply concerns as the reason for this potentially being the final cannabis lottery. But analysts say this alarmist stance is unfounded and needlessly limits access to legal cannabis.

Although the government will be doing away with lotteries, this does not mean that new dispensaries will not open. Instead, these will trickle in incrementally, with some proposing that Ontario move to a “merit-based system” when awarding new licenses. Rod Elliot, senior vice president of Global Public Affairs is one of these proponents. He explains:

“At this point, with the supply chain situation considered to be vastly improved, it’s time for the government to return to the policy objectives set out in the legislation and move on from the lottery system.”

WeedAdvisor’s Support for Progress in Licensing

The Ontario cannabis lottery was not well-received – and for good reason. The first round did not have strong enough prerequisites to ensure businesses would open on time, resulting in catastrophic penalties and delays.

But with another 42 dispensaries opening up in the province and more to come in the foreseeable future, WeedAdvisor anticipates being a leader in critical business solutions for dispensaries.

Our platforms make it easy to handle reward systems, POS, inventory, compliance, reporting and much more.

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