The overwhelming success of individuals who won a chance at opening one of Ontario’s first cannabis dispensaries could mean that few of these aspiring retailers will be able to open by the April deadline, say marijuana industry insiders.

The Alcohol and Gaming Commission of Ontario (AGCO), the province’s pot regulator, on Friday provided a breakdown of the individuals and companies who applied to a lottery for a chance to get a cannabis retail licence.

Nearly two-thirds of the applicants were sole proprietorships – essentially individual entrepreneurs – while the remaining submissions came from corporations and partnerships.

Two of those are from Northern Ontario — Anton Lucic and Saturninus Partners — although little is known about them or where they are located. In all, 8,545 applications came from Northern Ontario.

With less than three months until successful applicants are expected to be up and running – those that aren’t open by April 1 face hefty fines – cannabis experts are doubtful that many of the winners have laid the necessary groundwork to pull it off.

“A lot of people may not have actually realized what the requirements will be after the winning ticket is pulled,” said Karina Lahnakoski of Cannabis Compliance, an industry consulting firm.

Experts warn that marijuana dispensaries shouldn’t be run through sole proprietorships because it exposes the owner to financial risks and limits their ability to secure capital.

“It’s very, very high risk for the individual that owns that business, and you can’t transfer ownership,” Lahnakoski said, referring to the AGCO’s rule that requires lottery winners to open the dispensary under the name they used to apply.

Trina Fraser, a lawyer who advises the cannabis industry, says operating a pot shop through a sole proprietorship is “limiting”.

“Any lawyer would have advised them strongly to incorporate a company for the purpose of applying, or would have explained what the limitations would they had applied as a sole proprietor and won,” Fraser said.

“Your house, your investments, your car, anything you own . . . is now subject to seizure by creditors of the business, because you are the business,” she said of individual operators.

The AGCO was flooded with more than 17,000 applications from aspiring retailers hoping to get first dibs at 25 retail licences that were divided among five regions.

By Friday, lottery winners must submit a retail operator licence application with extensive detail on the timeline for getting a cannabis store up and running. They’ll be subject to a background check, which includes scrutiny of tax records and financial statements. The 25 winners also have to submit a $50,000 letter of credit and a non-refundable $6,000 fee payment to the AGCO.

If applicants don’t pass the AGCO background check, the province will turn to a wait list. Retailers which fail to open by April 1 will be fined $12,500, while those still not in business at the end of the month get dinged $50,000.

Both Fraser and Lahnakoski are doubtful that many of the lottery winners will open their doors on April 1, predicting around five will be able to do so.

Aspiring retailers should have already signed leases, designed their spaces and obtained the necessary capital, Fraser noted.

“It would be very difficult to do all of this in two and a half months,” she said.

The province plans to increase the number of licences once more cannabis is available, Ontario’s Attorney General Caroline Mulroney said Friday. However, no timeline has been given. Premier Doug Ford’s government initially planned to offer an unlimited number of retail licenses to increase the accessibility of legal cannabis, but backtracked on that plan when supply shortage issues started to crop up.

A number of larger cannabis retail brands, such as Ohio-based Green Growth Brands declined from participating in the lottery, citing its random nature.

– with files from Canadian Press

The lottery by the numbers

17,320: Applications received

59,069: Total number of regional entries

Breakdown of applicants

Sole proprietorship: 64%

Corporation: 33%

Partnership: 3%

Limited partnership: 1%

Twenty applicants from each region were selected for the waitlist. The Northern region waitlist includes:

Arielle Grinberg 397964

Christopher Douglas Emmons 421016

Blanchart Arunasalam 416172

RuzHal Canna Corp. 415415

Christina Kelly 418879

Eden Ifergan 427410

2600207 Ontario Inc. 420297

Jayde McElroy 424348

Justin Femia 412039

Com3xprt Inc 420369

Makwa Resourcing Inc. 421295

Newman Rosenberg Inc. 421442

Lena Triebe 408949

11183362 Canada Inc. 412344

Kuljeet Kaur Kang 429133

Scott Sheehey 409050

Manan Shah 408473

Alexander Shorser 430101

Sabrina Brown 426854

Ishrat Muhammad 405423