Canadian-based marijuana retailer Cannabis Xpress will pay a fine of 100,000 Canadian dollars (roughly $71,421) to Ontario regulators for violating the province’s anti-inducement law.
The Alcohol and Gaming Commission of Ontario (AGCO) initially fined Cannabis Xpress CA$200,000 in April for masking a banned “pay-to-play scheme” involving at least 61 licensed producers (LPs) as a “data services program.”
According to the AGCO, Cannabis Xpress, which operates 14 stores in Ontario, “repeatedly sought the participation of over a dozen LPs” in illegal inducement schemes over a span of at least 30 months.
The company “refused to stock an LP’s product unless they agreed to enter into prohibited inducement agreements and promoted the sale of cannabis products from producers who entered such inducement deals,” the AGCO said in April.
Toronto-based Cannabis Xpress initially appealed the ruling but has since withdrew its challenge and will pay the reduced penalty, AGCO said in a Nov. 19 news release.
“Based on an agreed statement of facts, a settlement was reached in which Cannabis Xpress agreed to withdraw its request for a hearing with the Licence Appeal Tribunal (LAT),” an AGCO spokesperson told MJBizDaily via email.
So-called pay-to-play schemes, where retailers charge “slotting fees” or otherwise solicit payments from product manufacturers for the right to appear in their stores, is purportedly a widespread practice that’s illegal in Canada.
This situation is the first instance of AGCO taking action against a retailer for violating Canada’s anti-inducement laws, MJBizDaily reported in April.
“Ontario’s anti-inducement rules exist to protect small businesses and consumers from predatory ‘pay to play’ schemes,” the agency’s CEO, Dr. Karin Schnarr, said in a statement.
“The AGCO will continue to monitor business arrangements between licensed retailers and producers and will take strong action against any licensee found to be engaging in illegal behaviour.”
H/T: mjbizdaily.com
