Two London outlets among dozen pot retailers penalized for missing deadline

Ontario’s pot regulator is penalizing the owners of a dozen cannabis retail stores, including two in London, for not opening by its April 1 deadline.

Ranjit Basra, the owner of J. London at 691 Richmond St., and the Ontario numbered company behind Tweed, located at 1025 Wellington St. S., must forfeit $12,500 apiece to the Alcohol and Gaming Commission of Ontario (AGCO), a spokesperson for the regulator confirmed Wednesday.

Tweed still is waiting for its retail store authorization from the AGCO – the second last step before it can start serving customers – while J. London officially opened on Wednesday.

The 25 individuals and companies selected through the AGCO’s lottery to apply for the first cannabis store retail licences were required to submit a $50,000 letter of credit to the regulator as part of the application process.

Stores not up and running by April 1 – the first day the brick-and-mortar businesses were allowed to open – will forfeit $12,500, the AGCO said.

In addition, stores not open by mid-month, Monday, April 15, must pay another $12,500. Outlets still not operating by the month-end will be penalized a further $25,000, bringing the maximum penalty to $50,000.

The AGCO required the $50,000 letter of credit to ensure that only applicants who were committed and prepared to open on time participated in the January lottery, spokesperson Raymond Kahnert said.

“Applicants were aware of this before they chose to participate in the lottery.  This is not a fine, it was a condition of participating in the lottery,” Kahnert said in an email.

The AGCO made a case-by-case decision on whether to penalize each store, Kahnert said, adding that exceptions were made if “exceptional circumstances” prevented them from meeting the deadline.

Just 10 of the first 25 stores managed to open by April 1, including Central Cannabis at 666 Wonderland Rd. in London.

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One lottery winner was disqualified from the process, prompting the AGCO to select someone from its wait list. That person is on a different timeline to open, Kahnert said.

Two of the remaining 14 stores to miss the deadline – one in Toronto, the other in Oshawa – won’t be penalized, the Kahnert said.

Cannabis lawyer Trina Fraser says she isn’t surprised the AGCO followed through with its warning.

“They’re being quite strict with their position on this,” Fraser, an Ottawa-based lawyer with law firm Brazeau Seller, said of the regulator.

The April 1 deadline was “incredibly aggressive,” said Fraser, who called the penalties imposed on the 12 stores the cost of doing business.

“It’s a relatively small portion of the overall cost to open,” Fraser said, noting one store made $50,000 in gross revenue on its first day.

“I was advising clients . . . that you should just consider that those funds that you posted under the letter of credit to essentially be part of the application fee,” she said.

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The penalized store owners

Heather Conlon (Nova Cannabis, Toronto)

Colin Campbell (Tokyo Smoke, Toronto)

Dana Michele Kendal (Canna Cabana Toronto, Toronto)

Guruveer Singh Sangha (Pioneer Cannabis, Burlington)

Alexander Altman (Smok, Ajax)

Lisa A Bigioni (Choom Cannabis, Niagara Falls)

Steven Fry (Canna Cabana Hamilton, Hamilton)

Ranjit Basra (J. London, London)

2674253 Ontario Inc. (Tweed, London)

Santino J Coppolino (Hello Cannabis Store, Hamilton)

Anton Lucic (Highlife, Sudbury)

Saturninus Partners (Canna Cabana Sudbury, Sudbury)