On Wednesday, Aug. 21, Canada\u2019s province of Ontario announced the winners of their cannabis store lottery, selecting 43 names out of almost 5,000 entrants. Predictably, drama ensued.<\/p>\n
One of those lucky 43 lottery selections\u00a0is linked<\/a>\u00a0to an infamous illegal dispensary address. In fact, the lottery winner appears to be a part of the same dispensary chain where Toronto city crews\u00a0recently put up massive concrete barriers<\/a> in front of four store locations. If the address connection proves correct, then a \u201cbad actor\u201d (in the eyes of the government) is being awarded a coveted opportunity to apply for a dispensary license thanks to the sheer randomness of a lottery system.<\/p>\n But so goes the world of cannabis business permits. Here\u2019s a rundown of the pros and cons of the two most common processes \u2014 application processes and lottery systems \u2014 that people are going through to grow, manufacture and sell marijuana on the legal market. Then, we dive into the free-market alternative that Oklahoma is experimenting with, and what it could mean for a simpler permitting solution.<\/p>\n We reached out to one of the nation\u2019s leading authorities on cannabis licensing, Brian Vicente of\u00a0Vicente Sederberg LLP<\/a>, to explain why the merit-based application process is so prevalent in new cannabis markets. The law firm has helped people in 28 states and other countries get permitted to take part in the cannabis industry. Vicente leads the firm\u2019s licensing division personally.<\/p>\n \u201cI would say your most common form of licensing is probably your merit-based licensing,\u201d Vicente told Cannabis Now. \u201cWe just saw it in Missouri. They got 2,100 applicants on Monday for their limited licenses.\u201d<\/p>\n Vicente says one of the main pros of a merit-based system is you\u2019re going to end up with well-organized good actors.<\/p>\n \u201cYou\u2019re putting them through a very intensive screening to get those folks through the door,\u201d he said.<\/p>\n The cons are that it\u2019s getting increasingly difficult to win these contests. Vicente believes only really deep-pocketed folks have a shot anymore because every part of the process is so intensive \u2014 and expensive, from the fees most applicants have to pay to lawyers and consultants like him.<\/p>\n \u201cYou\u2019re going to spend a couple hundred thousand dollars to produce a winning application,\u201d Vicente said. \u201cIf you\u2019re not a rich person, especially if you\u2019re a person that\u2019s been disproportionately affected by the war on marijuana, you often don\u2019t have those resources.\u201d<\/p>\n NCIA Media Relations Director Morgan Fox told Cannabis Now that merit-based systems lead to success for bigger companies.<\/p>\n \u201cThe ranked selection system can theoretically result in a higher-quality local market, but tends to be weighted in favor of bigger and more established companies, even though they might not be the best fit for the community,\u201d Fox said.<\/p>\n Vicente went on to say lottery systems aren\u2019t as common, yet. He pointed to\u00a0Arizona\u2019s 2020 ballot language<\/a>\u00a0as evidence lottery systems are on an upward trend. The lottery will be for new licenses after existing medical facilities transition into the adult-use market. Vicente says one lottery system pro is the applicant pool can be more economically diverse.<\/p>\n \u201cIf you win the lottery, you win the lottery. It doesn\u2019t matter if you have $10 million or $100,\u201d Vicente said. \u201cThe other pro with the lottery system is there is going to be less lawsuits.\u201d<\/p>\n Vicente says with the 2,100 people applying in Missouri, \u201cbelieve me, some of those people that don\u2019t win are going to sue. They\u2019ll say that the merit system was rigged or wasn\u2019t fair. We\u2019ve seen that.\u201d<\/p>\n In almost every state that has used a statewide merit-based system, Vicente says he\u2019s seen lawsuits from applicants who lost. These lawsuits can cost the state money, and\u00a0potentially slow down overall implementation<\/a>.<\/p>\n \u201cYou just don\u2019t see that in litigation around lotteries because there is not as much subjectivity,\u201d Vicente said.<\/p>\n As for the cons, Vicente says with a lottery you can certainly end up with people that aren\u2019t going to be the best business operators.<\/p>\n We asked how often people winning lotteries are more likely to pull a bait-and-switch, selling the permits and cashing out?<\/p>\n \u201cI think it is more common for people to then flip the lottery licenses,\u201d Vicente replied, \u201calthough there hasn\u2019t been a ton of lottery systems across the country.\u201d<\/p>\n Fox told Cannabis Now that neither the merit-based application system or lottery system is great, because both impose an artificial cap on the number of licenses given out.<\/p>\n \u201cThe lottery system is fair in that as long as all applicants meet certain baseline requirements, they all have an equal shot at getting a license,\u201d Fox said, \u201cbut excellent applicants who worked really hard to put together the best possible submission might get beaten by someone else who submitted the bare minimum and won\u2019t necessarily be the best operator.\u201d<\/p>\n Vicente says the third kind of licensing system is just the \u201ccheck the box\u201d license. He pointed to\u00a0Oklahoma<\/a>\u00a0as an example where anyone with the fee, a clean record and a property could get a license. The marketplace will pick its winners.<\/p>\n \u201cThose are the three main types and it\u2019s yet to be determined which is the best. My rank preference would be \u2018check the box\u2019, then merit, then lottery. I think there are pros and cons on all of them,\u201d Vicente said.<\/p>\n Kris Krane, who has been involved with cannabis reform for 20 years and now serves as president of multistate operator 4Front<\/a>, says there are arguments to be made in favor of each system.<\/p>\n \u201cIn general, I think there is an argument to be made whether you want limited licenses or unlimited licenses and just let the market decide,\u201d Krane told Cannabis Now.<\/p>\n Krane thinks that\u2019s more of a question for states than municipalities. He thinks states can set a relatively high bar for competency. So he sees the argument that with the level of competency required from each operator, there isn\u2019t a need for limits on total permits.<\/p>\n Krane said it\u2019s more reasonable for municipalities to set limits as to not be overrun with cannabis businesses. He said once you decide on whether there is going to be a cap or not on the licenses, you can get into the merits of the processes to determine the winners.<\/p>\n Vicente, Fox and Krane all pointed to some kind of qualified lottery as the solution.<\/p>\n \u201cI think based on what we\u2019ve seen around the county, the best system is a heavily qualified lottery,\u201d Krane said. \u201cYou don\u2019t want a lottery where anyone can just fill out a form and potentially win a license.\u201d<\/p>\n Krane says what happens in those situations is you end up getting unqualified people winning licenses, people undercapitalized getting licenses, \u201cand so they get licenses but they don\u2019t end up getting open.\u201d<\/p>\n Krane says the problem with going in a more restrictive merit-based direction is you end up with the legal challenges cited by Vicente.<\/p>\n Fox agrees: \u201cThe ideal process would be to remove license caps altogether, grant licenses to every applicant who meets the criteria, and let the market sort out the rest.\u201d<\/p>\n Cody Bass \u2014 an NCIA board member and city council member in South Lake Tahoe, California \u2014 also weighed in on the debate. \u201cCities need to create zoning for cannabis which will limit the amount that can exist in a city,\u201d he said. \u201cThey can create language around saturation as well. Then the free market decides who, where, and when.\u201d<\/p>\n TELL US,<\/strong>\u00a0do you think there should be a limit on cannabis permits?<\/p>\n The post The Wild World of Getting a Pot Permit<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n
On Wednesday, Aug. 21, Canada\u2019s province of Ontario announced the winners of their cannabis store lottery, selecting 43 names out of almost 5,000 entrants. Predictably, drama ensued. One of those lucky 43 lottery selections\u00a0is linked\u00a0to an infamous illegal dispensary address. In fact, the lottery winner appears to be a partContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[34,50,11783,170,1005,284,11784,11785,286],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/37711"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=37711"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/37711\/revisions"}],"predecessor-version":[{"id":37712,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/37711\/revisions\/37712"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=37711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=37711"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=37711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Rigorous Cannabis Permit Application Process<\/h4>\n
The Risky Cannabis Permit Lottery System<\/h4>\n
The Unrestricted \u201cCheck the Box\u201d System<\/h4>\n
The \u201cQualified Lottery\u201d Solution?<\/h4>\n
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\nRead More: The Wild World of Getting a Pot Permit<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"