3:16 p.m. EST. That was apparently the exact time on Friday the Alcohol and Gaming Commission of Ontario selected 25 lucky applicants across the province through an Expression of Interest selection lottery, as well as a further set of waiting lists for the East, West, GTA, Toronto, and North regions of the province that applicants could apply for.
Applicants wouldn’t know this, as they were left in the dark as to when the lottery was being held. Front-line workers answering the organization’s phone lines likely did not know either: I called at 4 p.m. to see if they could give some insight into when the draw was being held, and the representative didn’t know what to tell me.
But then just a few hours later, at exactly 7 p.m., the AGCO tweeted out a link to the results of the lottery.
And the results were fascinating: there were 16,905 valid applications, which at $75 a pop appears to have grossed the AGCO just over $1.25 million dollars in application fees. Many of the applicants submitted for more than 1 of the 5 permitted Ontario regions. According to the agency, a whole 64% of applicants were sole proprietorships. A further 33% of the applicants were corporations, 3% were partnerships, and 1% applied as a limited partnership (we know, we know, that adds up to 101%)
Not surprisingly, a large majority of the selected applicants were sole proprietorships. A handful of the selected applicants appeared to be registered corporations, and at least 2 appear to be partnerships.
Lawyer Trina Fraser pointed out in a tweet Friday night some of the risks that the many sole proprietorships will face going forward. That includes personal assets being exposed, higher potential tax bills and limited ability to issue funds.
Not an ideal way to operate. And AGCO rules say you can’t now apply as a corporation if you won as a sole proprietor. Personal assets exposed, limited ability to raise funds, not tax efficient, etc.
— Trina Fraser (@trinafraser) January 12, 2019
Applicants who are on the selected list for each of the regions must now face a tight deadline to apply for and are expected open their stores by April 1, 2019. If they don’t, they risk having a $50,000 line of credit getting drawn from them. And that line of credit, as well as a $6,000 cheque and a completed Retail Operator License, must be submitted within 5 business days of Friday.
If applicants are disqualified or otherwise can’t meet the requirements, the AGCO can then start selecting applicants who made it on to the consolation waiting list for each of the 5 regions, and invite them to apply to become one the 25 stores that can sell recreational cannabis legally in the province.
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