Cannabis Retail is Coming to Toronto

Up until a week before Christmas, every retail space for lease was a target and many people had gone and signed leases before getting their retail licenses. Landlords have been asking for up to one-year non-refundable rent being prepaid. Other landlords have been asking for personal covenants from the owners of the businesses. Smart landlords are pretty much doing all they can to ensure these unlicensed lessors don’t skip out on their leases.

And then everything changed. The government decided to put the breaks on all of this and just permit 25 retail licenses to be granted in Ontario and only 5 in Toronto. Many would-be cannabis stores which are now open are not going to get licenses, at least not in the short term. I have a feeling that a lot of landlords are going to get stiffed. Those who thought that were smart by getting there first are going to get killed. Major players from out west, Shoppers Drug Mart, Second Cup and may others have put a lot of money into getting ready for this and will come up empty.

The government (through the AGCO) has put a lottery in place that will select the lucky 25 would-be pot retailers. Things get rolling this week with Expressions of Interest that must be submitted prior to retail store applications. I am very interested in how this unfolds and have been watching all this this very closely, so I will likely be back in touch this year as more of this starts to take shape.