If any of the 25 Ontario cannabis retail lottery winners are striking any sort of deals with other entities, the regulator needs to know.
More than a dozen types of potential third-party involvement – such as management services, franchising or revenue-sharing – must be disclosed to the Alcohol and Gaming Commission of Ontario in detail, according to an AGCO questionnaire sent to lottery winners earlier this week; a copy of which can be found here. As Cannabis Professional has reported, most of the retail lottery winners are first-time business owners with no background in heavily regulated industries such as cannabis and many of them have sought multimillion-dollar deals with established legal pot sellers, potentially in violation of AGCO rules.
Despite some reports suggesting the questionnaire was sent specifically in response to concerns over that deal-making activity, the AGCO says it is in fact standard operating procedure.
“Actually, questionnaires are a normal part of the AGCO licensing process in all lines of businesses we regulate,” AGCO spokesperson Ray Kahnert said via email (emphasis his), noting that applies to “liquor, gaming, horse racing and now retail cannabis stores.”
“It is a method to clearly identify to applicants any outstanding materials or documentation we require for due diligence, eligibility and licensing assessments,” Mr. Kahnert said. “Certainly we’re aware of what is being discussed in the news about applications entering into agreements with others [but the] rules are very clear about application requirements and that those selected in the lottery must maintain control of the business.”