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Ontario judge grants pot shop licensing stay, rejected applicants seek review


September 13, 2019
By Paola Loriggio, The Canadian Press

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TORONTO – An Ontario judge has paused the licensing process for the province’s latest round of cannabis retail stores.

Superior Court Justice David Corbett granted a two-week stay, which was requested by a group of 11 people who won the government’s licence lottery but were later disqualified.

The 11 applicants are requesting a judicial review of their rejection, as well as the procedures involved in the lottery that has been used to grant all Ontario’s cannabis retail licences.

The Alcohol and Gaming Commission of Ontario said last month the group had failed to meet a deadline to file documents required for their applications to proceed. The group disputes that finding.

Corbett’s stay takes effect Thursday. Arguments are to be heard on Sept. 25.

During the hearing lawyers for the commission said putting licensing on hold would “impact the integrity of the process” and be unfair to the others seeking to apply.

Lawyer Judie Im said that after the group was disqualified, 11 others were selected from a waiting list and given the chance to apply. She noted a stay would affect those applicants.

“This whole thing is interconnected,” she said.

Robin Linley, who represents some of the newly chosen applicants, said his clients have already taken steps to meet the application criteria and deadlines.

But lawyers for the 11 eliminated applicants argued the decisions of the new applicants should have no bearing on their clients and their challenge.

Also at issue is whether the province’s cannabis law would allow the rejected applicants to sue the Crown for damages.

Lawrence Gridin, who represents the group, said the legislation precludes such action, which means his clients have no other recourse. Im, however, said that’s not the case.

The judge said that issue affected his findings as to whether the group risks irreparable harm if a stay isn’t granted.

The Ontario government has so far held two rounds of the lottery to determine who can apply to open cannabis stores – the first with 25 spots and the second with 42.

Lottery winners have five business days to turn in their application along with a $6,000 non-refundable fee and a $50,000 letter of credit.

The latest lottery means the number of pot shops allowed in Ontario will rise to 75 later this year, though the challenge filed by the 11 may affect the allocation of licences.

Another eight stores will be situated on First Nation reserves and are being approved through a separate process.