Home Cannabis AGCO Announces Winners of Ontario Cannabis Retail Lottery

AGCO Announces Winners of Ontario Cannabis Retail Lottery

The announcement

On January 11, the Alcohol and Gaming Commission of Ontario (or AGCO) announced the names of the 25 winners of its retail cannabis lottery that can now apply for a license to retail cannabis products in the province of Ontario. The licenses were divided regionally. Five of the licenses were allocated to the city of Toronto, six went to the Greater Toronto area, five went to Ontario East, two went to Northern Ontario, and seven went to Western Ontario.

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AGCO received ~17,000 applications. Nearly 64% of the license came from sole proprietorships, and registered companies constituted only 33%. Pure Alpha Holdings, Tripsetter, CGS Foods, and the Niagara Herbalist were some of the corporations that were selected. The winners of the lottery will now have to pay $6,000 for the retail operator license and also submit a $50,000 letter of credit that is valid until December 13, 2019, within five days of the announcement of lottery results.

The government wants all the winners of the lottery to start their operations on April 1. So, it has levied hefty fines on any delays. If the retailers fail to start their operations by April 1, they will be fined $12,500, and the penalties can rise to $50,000 if retailers fail to start their business by April 30.

Stock performance

Cannabis stocks have started 2019 on a strong note. YTD, Acreage Holdings (ACRGF), MedMen Enterprises (MMNFF), Planet 13 Holdings (PLNHF), and Curaleaf Holdings (CURLF) have returned 13.6%, 17.0%, 14.3%, and 26.9%, respectively. Also, the broader comparative index, the ETFMG Alternative Harvest ETF (MJ), returned 23.4% during the same period.

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