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Green Growth Brands Ltd., a U.S.-based cannabis retailer with a large footprint in Nevada, was all geared up to enter the Ontario market until an unexpected announcement in mid-December by the province placed a drastic cap on the number of retail licences issued for pot shops.

Citing supply concerns, the provincial government changed its rules from handing out more than 1,000 promised licences to a mere 25, which are being be chosen using a lottery system.

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“We had hoped to have 25 stores in Toronto. But now, I don’t know if we’re even going to be in Ontario,” said Peter Horvath, chief executive of Columbus, Ohio-based Green Growth Brands. “We have the wherewithal to execute and generate tax revenues for the province. I’m not sure this was the best fiduciary move for them.”

It’s probably fair to say that Canadian operators are being hamstrung by policy George Allen, president of Acreage Holdings

But the changes to Ontario’s retail system are much in line with the federal government’s overall approach to legalizing cannabis, which exerts heavy control over the production and distribution of cannabis.