In Ontario, a licensed cannabis operator has been fined $200,000 for purportedly attempting to engage in illegal agreements with producers, granting them preferential advantages.
The Alcohol and Gaming Commission of Ontario (AGCO) revealed that Cannabis Xpress, which owns a chain of retail stores in the province, repeatedly sought to persuade over a dozen cannabis producers to enter into inducement agreements.
Inducement agreements involve an operator striking deals with producers to promote or boost sales of specific products, thereby providing them with preferential treatment. Such agreements contravene the provincial Cannabis Licence Act.
Over a span of 30 months, Cannabis Xpress allegedly attempted to forge agreements offering “data service” to producers. However, the AGCO determined that these purported agreements were actually attempts to disguise illegal payments under the guise of data sales for business intelligence purposes, which are permissible under the standards.
Following an extensive review of 82,000 relevant documents, the AGCO imposed a fine of $200,000 on the operator. The operator retains the right to appeal the decision to an independent tribunal.