Leases, lawyers and limbo: A year in the life of aspiring cannabis retailer

Published in the Globe and Mail on December 11th, 2019

A lot was going through my mind on the evening of Jan. 11, 2019, as I steadily refreshed the homepage of the Alcohol & Gaming Commission of Ontario (AGCO).

My partner Brooke and I had technically been working in the cannabis industry for several months — but hadn’t sold a single joint.

After jumping head first into the brave new world of legal cannabis retail, we were waiting to see if we’d become one of the lucky 25 to get the first licences in Ontario.

We were putting our life savings — and possibly our twenty-year relationship — on the line for a retail business dream, and any second we were going to know our fate.

It took us seven months to get here, waiting for a webpage to refresh.

Brooke and I had different relationships with cannabis. She was the advocate, consuming initially for medical reasons, then transitioning to a recreational user. I, on the other hand, had dabbled in my younger years, but wasn’t a regular consumer. I took note, however, when The Globe and Mail reported that Premier Doug Ford was abandoning the previous government’s commitment to a publicly run cannabis retail system in favour of a private model.

Soon after, the AGCO posted the ‘Free Market’ application criteria and processes, and Brooke and I were 100-per-cent eligible. Even better, the Progressive Conservative government said there would be no cap on the number of retail cannabis stores that could open after legalization.

Taking our backgrounds into consideration — mine in marketing, retail and sales, and Brooke’s in sociology and small-business ownership — we felt we had the requisite skills to create a cannabis retail business.

So, in early November, 2018, I found myself at a ‘How to Start a Cannabis Retail Business’ event at a downtown Toronto hotel. Looking around at 700 other aspiring cannabis entrepreneurs, we were reminded of the great careers and comfortable lives we were putting on the line. But Brooke and I define growth by change, and the uncomfortable feeling that comes with it. We wanted to be a part of something historic, to play a role in deconstructing stigma, and reshape the understanding around cannabis. We decided to name our business for the last year cannabis was legal in Canada: “1922” was born.

In the month before the original ‘Free Market’ application deadline of Dec. 17, 2018, it felt as if Brooke and I had accomplished the impossible: We incorporated; hired an accountant and lawyers (cannabis and corporate); generated a corporate structure; and started writing a 150-page business plan. The only significant obstacle was securing commercial retail space as a non-operating new business in a new industry. Committing to a multiyear lease in downtown Toronto would became our moment of truth, and we put our faith in the government’s system. I have to admit, I was worried about the risk. But Brooke’s unwavering optimism was a driving force, and we signed a five-year lease.

Then things got real.

Almost immediately after recreational cannabis became legal on Oct. 17, 2018, the market faced a supply shortage. Soon after, Ontario announced it would implement a lottery system to disperse the first 25 licences. The ‘Free Market’ model was dead. This was an enormous setback, and not the system we had signed up for.

On the evening of Jan. 11, 2019, we finally learned that we did not win. In fact, we were number 10,524 of approximately 16,000+ applicants. The following twenty-four hours were difficult, full of feelings of sadness, doubt, anger and, ultimately, embarrassment. But we regrouped and soldiered on, waiting patiently for the next seven-months only to relive the heartbreak again in August, when we learned that we were not among the lucky 42 winners of the second Ontario retail lottery.

This is where we stand: We have carried a lease in downtown Toronto for more than 365 days. We have paid $54,420 in rent and utilities, and that’s not including renovations and accompanying costs.

The Canadian cannabis industry is evolving daily, and we will continue to observe, learn and stay prepared. We’re determined and resilient, and have gone too far to give up now.

With our space renovated, Brooke and I are ready to open 1922. All we need now is the province to honour the pledge it made for a private market, and to support small-business owners like us who took them at their word. We are dedicated and optimistic.

All we ask is for a fair shot.

…..two days after this article was published in the Globe and Mail, Ontario announced the change to an open market system and 1922 was on BNN Bloomberg on December 13th, 2019 to discuss how 1922 will benefit from the Ontario government's decision to eliminate the cannabis lottery system in the province. Click here to view the interview.