Cannabis retail license lottery
On January 7, Ontario’s provincial government will begin accepting applications for 25 licenses to retail cannabis in the province. The winners will be selected through a lottery process, which will be held on January 11. The AGCO (Alcohol and Gaming Commission of Ontario) has developed a software program to select the winners from the entries.
Terms of the lottery
The companies are allowed to submit their expression of interest with an application fee of $75 to the AGCO from January 7–9 to win one of the 25 available retail licenses. The winners of the lottery will have to pay $6,000 for the retail operator license and another $4,000 for the retail store authorization fee. They also must provide a $50,000 letter of credit that is valid until December 13, 2019, within five days of the announcement of lottery results.
The government has set steep fines for a delay in the opening of stores. The government has set a late fine of $12,500 if retailers fail to start their operations by April 1, and the penalties can extend to $50,000 if retailers fail to start their business by April 30.
Cannabis stocks have started 2019 on a brighter note. As of January 4, the Horizons Marijuana Life Sciences Index ETF (HMMJ), which tracks the North American Medical Marijuana Index, has returned 7.0% YTD. During the same period, the ETFMG Alternative Harvest ETF (MJ), MedMen Enterprises (MMNFF), Planet 13 Holdings (PLNHF), and Curaleaf Holdings (CURLF) have returned 8.6%, 23.0%, 3.5%, and 18.3%, respectively.