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Edmonton Awarding Licences by Lottery

For potential licensed cannabis retailers in Edmonton, the success in gaining a licence will not just be down to how quickly they submit their applications, or how diligent they are in ensuring they meet all the requirements. It seems that Lady Luck will ultimately decide their fate.

Edmonton council’s urban planning committee voted on May 22 to introduce a lottery system to award applications, instead of granting them on a first come, first serve basis.

As part of this system, applicants are required to submit an expression of interest, requiring no fee. The order in which their paperwork will be processed will be decided at random in late June.

It puts smaller companies on an equal footing with larger corporations.

Councillor Michael Waters, chair of the committee, explained that due to the surge of interest in applications, a luck-of-the-draw approach was a reasonable way to create a sense of fairness in creating a queue.

The city administration pointed out a number of factors that could prove to be advantageous, such as every application having an equal chance of being the first to be reviewed.

Certainly, it puts smaller companies on an equal footing with larger corporations with more resources. The council’s report also highlighted the fact that it would reduce wait times and lineups at the Edmonton Service Centre, as it was anticipated that employees could have been overwhelmed when the application process opened up.

Is it Fair?

On the other hand, it could prove to be a grueling process, with companies that have no current investment in the industry receiving a permit ahead of those that have already gone through the AGLC’s costly application process.

The decision has not gone down well with some businesses. As the system introduces a note of uncertainty, it could harm investment in the industry, and there have been calls that only applicants who have applied via the AGLC should have eligibility to enter the lottery, as this would reduce the risk for companies that have already invested time and money, and would also reduce the number of applications the city has to process.

Currently, provincial zoning laws require a distance of 100m from healthcare facilities and schools, and 200m between cannabis retail locations. Early in May, the urban planning committee voted to charge an $8,100 startup fee for shops as well as a $5,600 permit required for development and a $2,500 annual business licence fee that will be applicable to every retail location, processing facility, and cultivation site.

The AGLC applications themselves cost $4,100, and should list shareholders, directors, officers, managers and associated businesses as well as floor and site plans. All applications are listed by the AGLC for three weeks, and during this time other businesses that could be affected can lodge an objection.

All in all, a prospective cannabis business owner can expect to pay nearly $10,000 and not be approved. It’s a high risk for smaller shops.

An independent body will conduct the lottery to ensure fairness, at a cost of around $50,000.