Ontario cannabis company faces $200K fine over suspected unlawful agreements

In Ontario, a licensed cannabis operator faces a hefty $200,000 fine for allegedly seeking unlawful agreements with producers, aiming to secure preferential advantages.

The Alcohol and Gaming Commission of Ontario (AGCO) reported that Cannabis Xpress, proprietor of a chain of retail outlets in the province, persistently pursued inducement agreements with over a dozen cannabis producers. These agreements involve operators striking deals with producers to promote or boost sales of specific products, granting them preferential treatment—a practice prohibited under the provincial Cannabis Licence Act.

Over a span of 30 months, Cannabis Xpress allegedly attempted to negotiate agreements offering ‘data services’ to producers. The AGCO revealed that these payments were camouflaged as legitimate agreements for the sale of data for business intelligence purposes, permissible under regulations.

Following a meticulous review of 82,000 pertinent documents, the AGCO imposed the $200,000 fine on the operator. The decision is subject to appeal before an independent tribunal.