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“Our biggest intention in striking these deals is to help the winner successfully navigate the retail business. We just want to help,” Grover said. He would not elaborate on whether FSD Pharma or Aurora have had any say in the deals being struck between High Tide and the lottery winners.

I have a challenge understanding why some arrangements are acceptable to the AGCO, and why some aren’t Eric Foster, Partner at law firm Dentons

Under AGCO rules, licensed producers are barred from participating in the retail system — Ontario Premier Doug Ford has repeatedly said that he wants to see small businesses benefit from cannabis legalization, which was presumably the rationale behind conducting a lottery in order to select retail operators.

“I have honestly never seen anything so silly in my entire legal career,” said Eric Foster, Partner at law firm Dentons LLP, who is currently involved in helping a number of lottery winners enter into agreements with outside entities.

“I have a challenge understanding why some arrangements are acceptable to the AGCO, and why some aren’t. I know that a number of winners have received very nasty letters from the AGCO threatening to disqualify them because of the retail structures they have proposed,” Foster said.

So far, the AGCO has officially disqualified one lottery winner — Gary Hatt — under rule 2(b) of the lottery regulations, which states that winners are “not permitted to change their applicant type, ownership and/or corporate structure in such a way that would result in a change of control.”

According to the AGCO, eight out of the 25 winners have been approved for public notice, meaning that their retail licence applications have passed the provincial body’s first round, and they have 15 days to display a notice on their storefront to inform residents of a proposed cannabis store in the area.