Larger companies will have little trouble, but smaller, independent commercial tenants are another story
Ontario is slated to hold a lottery to determine the recipients of one of the province’s 25 available cannabis store licences this week.
Interested companies will be submitting their expressions of interest to the Alcohol & Gaming Commission of Ontario on Monday and Tuesday, with the lottery itself to take place on Friday.
This will place the fate of the nascent industry in the balance as said licences will compel tens of thousands of dollars in penalties – as much as $50,000 in the worst-case scenarios – should a recipient fail to begin operations by April.
“It’s not been ideal, obviously, but it’s difficult to criticize too strongly, either, because we do have a supply issue,” Brazeau Seller partner Trina Fraser told BNN Bloomberg in a phone interview.
“I understand that the provincial government has made a commitment to stores opening as of April 1… but really they’re doing so kind of ass-backwards, as far as I’m concerned, by threatening them with pretty onerous penalties if they don’t.”
Read more: Pot licence restrictions might affect Ontario’s commercial segment
While larger conglomerates won’t have too much trouble, it is the independent companies and retailers – which comprise a significant proportion of the province’s commercial property tenants – that will bear much of the risks and possible penalties.
“It’s definitely designed for larger operators who are prepared to go out on a limb and go ahead and spend significant amounts of money without knowing whether they’re one of the 25,” Fraser explained. “We’re not thinking through all the possible things that could go wrong here.”
