Nearly half of Ontario, Canada’s 42 cannabis license applicants have been disqualified from the second round lottery for breaching lottery rules and failing to submit all of the required documents, according to a Mondaq report. The disqualifications have sparked a legal action against the Alcohol and Gaming Commission of Ontario (AGCO) by 11 applicants.
The disqualifications are due, in part, to banks refusing to provide the companies with so-called “comfort letters” which prove to the government that the applicants have $300,000 in cash available.
According to the report, banks were “inundated” with requests, forcing them to stop providing the letters and 12 were rejected for failure to submit all required application documents. One winning firm withdrew its application.
The lawsuit against the AGCO by the rejected applicant claims the agency failed to follow its own rules for the lottery process; an Ontario court has issued a two-week stay of the lottery process and licensing results which prevents the AGCO from advancing the applications of the second-round winners.
The second lottery round opened on Aug. 7. During the first round in January, Ontario officials received 17,300 applications for just 25 licenses. Following the disqualifications, officials accepted just 23 applications.
Assuming this hiccup does not disrupt the industry roll-out, Ontario’s cannabis retailers are expected to open their doors on July 3, 2020.
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