Licence Appeal Tribunal File Number: 17000/CLA
Appeal from a Notice of Proposal under the Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2 to Revoke a Licence
Between:
Thermodynamix Cannabis Inc. o/a Thermodynamix Cannabis
Appellant
and
Registrar, under the Alcohol and Gaming Commission of Ontario Act, 2019
Respondent
DECISION AND ORDER
ADJUDICATOR:
Jeffery Campbell, Vice Chair
APPEARANCES:
For the Appellant:
Regan Ashby, Owner Gawtam Tharmakumaran, Counsel
For the Respondent:
Rena Khan, Counsel Adam West, Counsel
Held by videoconference:
September 24, 25, 26 & October 1, 2025
OVERVIEW
1Thermodynamix Cannabis Inc. o/a Thermodynamix Cannabis (the “appellant”) appeals the Notice of Proposal dated April 2, 2025 (“NOP”) issued by the Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019 (the “Registrar” or “respondent”) to revoke the cannabis retail operator licence of the appellant under s. 11 of the Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2 (the “Act”).
2The NOP is generally based on the grounds that there are reasonable grounds to believe that the appellant will not act as a cannabis retail operator in accordance with the law, or with integrity, honesty or in the public interest, having regard to its past conduct. This past conduct is alleged to include that contrary to s. 37(1) of the Act, a person (namely, Regan Ashby) either hindered, obstructed or interfered with or attempted to hinder, obstruct or interfere with an inspector conducting an inspection under the Act and/or refused to answer questions relevant to the inspection and/or provided the inspector with false information relevant to the inspection. Pursuant to s. 11 of the Act, the respondent proposes to revoke the appellant’s retail operator licence.
3The appellant is a corporation which operates as a cannabis retail operator at 178 Davenport Road, Toronto, Ontario. That location (the “store”) has been in operation since early, 2021. Regan Ashby is the sole owner of the appellant and a holder of a licence with the Alcohol and Gaming Commission (“AGCO”) as a cannabis retail manager. The Registrar submits that, as the sole shareholder of the appellant, pursuant to s. 3(5)(c) of the Act, Mr. Ashby’s past conduct is determinative in whether the appellant will not act as a cannabis retailer in accordance with the law, or with integrity, honesty or in the public interest.
4The respondent submits that the NOP arises as a result of three inspections of the store on March 27, 2023, October 26, 2024 and October 31, 2024. The respondent submits that contrary to s. 37(1) of the Act, Regan Ashby hindered, obstructed and interfered with those inspections giving rise to the NOP.
Issues in Dispute
5The issues to be decided are:
(i) Whether or not there are reasonable grounds to believe that the appellant will not act as a cannabis retail operator in accordance with the law, or with integrity, honesty or in the public interest, having regard to its past conduct as set out in the NOP.
(ii) Whether the NOP should be confirmed or set aside, and/or whether the respondent should be directed to take any action specified by the Tribunal that it considers appropriate to give effect to the purposes of the Act, and/or should the Tribunal attach terms or conditions to its order or to the appellant’s licence or authorization.
Result
5For the reasons set out below and pursuant to sections 15(2) of the Act, I confirm the NOP and direct the Registrar to carry out the revocation of the licence of the appellant.
THE LAW
6Pursuant to s. 11(1)(b) of the Act, the Registrar may issue a proposal to revoke a licence issued under this Act on the basis of a ground under subsection 3(4) in the case of a retail operator licence. Pursuant to paragraph 2 of subsection 3(4) of the Act, an applicant is not eligible to be issued a cannabis retail operator licence where there are reasonable grounds to believe that the applicant will not carry on business in accordance with the law, or with integrity, honesty or in the public interest, having regard to the past or present conduct of the persons referred to in subsection 3(5). Clause 3(5)(c) of the Act states that, if the applicant for a licence is a corporation, paragraph 2 of subsection 3(4) applies to the directors, officers, or shareholders of the applicant and persons interested in those directors, officers or shareholders.
7Section 15 empowers this Tribunal to hold the hearing and may confirm or set aside the proposal of the Registrar or may direct the Registrar to carry out the NOP or substitute its opinion for that of the Registrar and attach any conditions to the licence.
Evidence and Analysis
A. Evidence of the respondent
Inspection of March 27, 2023
8Isabelle Dion, Inspector, Regulatory Compliance Branch, AGCO testified that she and Inspector Neil Merrigan conducted an inspection of the appellant on March 27, 2023. Inspector Dion testified that she found that Mr. Regan was unpleasant to deal with, describing his actions at the inspection as hostile and uncomfortable. She stated that Mr. Ashby voiced frustration with the illicit cannabis market and how it was affecting the finances of the appellant. It was Mr. Ashby’s understanding that the inspectors, rather than concentrating on registered cannabis operations, should focus on illicit cannabis operators. Inspector Dion described Mr. Ashby as being confrontational.
9Two violations were noted as a result of the inspection of March 27, 2023 which were promptly addressed by Mr. Ashby. The Register did not rely upon this inspection with respect to the NOP.
Inspection of October 26, 2024
10Inspector Dion returned to the store for an inspection on October 26, 2024 with Inspector Thomas Russo. Inspector Russo took the lead in the inspection and advised Mr. Ashby that they were conducting a compliance inspection. At that point, Inspector Russo described Mr. Ashby’s response as cordial. Inspector Russo then asked to see Mr. Ashby’s CannSell certification, which is required for anyone working in a cannabis retail store in Ontario. It was at that point, according to the testimony of both Inspectors, Mr. Ashby became irritated and aggressive, raising his voice and complaining about the illicit cannabis market.
11Inspector Dion testified that Mr. Ashby remarked to them, “You are the [expletive] Government”. Inspector Russo testified that Mr. Ashby yelled, “What gives you the [expletive] right to inspect me.” Both inspectors Dion and Russo testified that Mr. Ashby then yelled, “Get the [expletive] out of my store”, to which the inspectors exited the store and terminated their inspection. Mr. Ashby continued to shout the same phrase after they had left.
12Inspector Dion testified that she and Inspector Russo arrived at the store at 9:34 p.m. and left at 9:47. Because of being told to exit the store, they were unable to complete the inspection.
13The respondent submits that, due to Mr. Ashby’s actions, the inspectors were unable to verify his CannSell certification, view footage of any video, or verify if the HC (Health Canada) Information Sheet was available to the public.
Inspection of October 31, 2024
14At 12:11 p.m. on October 31, 2024, Inspectors Neil Merrigan and Arjun Krishnan (both Inspectors with the Regulatory Compliance Branch, AGCO) attended at the store for a follow-up inspection. The purpose of the inspection was to obtain CCTV footage of the inspection of October 26, 2024. The inspectors provided Mr. Ashby with a Written Demand letter dated October 31, 2024 requiring that the appellant produce “CCTV Video – All cameras on premises – October 26th 2024 – 2115hrs (9:15PM) to 2215 (10:15PM)”. The due date for the CCTVs to be produced was November 7, 2024.
15Inspector Krishnan testified that he presented the Written Demand to Mr. Ashby with reasons why he was serving the demand. He testified that, upon receiving the written demand, Mr. Ashby became verbally aggressive, telling them that the inspectors need to wake up and do their job. He again loudly complained about the illicit cannabis market. Inspector Krishnan further testified that the appellant told them that he was going to kill himself.
16Inspector Merrigan also testified that, at the inspection, Mr. Ashby became irritated, shouting that he was going to “commit suicide, create a big spectacle and maybe take someone with him”.
17After leaving the Written Demand, Inspectors Krishnan and Merrigan exited the store. They testified that, being concerned for Mr. Ashby’s well being, they contacted the Toronto Police Services who directed them to call 911. They also contacted their Acting Manager at the AGCO, Cheme Yakhla, who advised them to have no further contact with Mr. Ashby.
18The respondent presented a ‘Toronto Police Service Occurrence – Records Release’ dated October 31, 2024 which documents that police constables were dispatched to the store in response to a “Threatened Suicide” call which arose from the inspector’s 911 call. Constables Chadde and Astles attended at the store where Mr. Ashby “expressed his feelings about government regulations and how illegal cannabis shops were taking his business.” The constables noted that Mr. Ashby was “in an excited state, and visibly frustrated”. They also noted that “There was no violence, assaults or inability to care for himself”, and found no grounds for apprehending Mr. Ashby.
19Following the inspectors’ visit to the store, and the constables’ later attendance, the evidence indicates that Mr. Ashby contacted both Inspectors Merrigan and Krishnan with multiple voice and text messages. The respondent presented four recorded voice messages to Inspector Krishnan dated October 31, 2024. The first three messages contained Mr. Ashby’s request for Inspector Krishan to return his call. In the fourth, however, Mr. Ashby loudly screamed expletives at the inspector.
20The respondent also provided a voice message of the same date to Inspector Dion. In that voice message, Mr. Ashby shouted, referring to Inspector Dion as a “dumb [expletive]”, adding that “I am going to pray to the god I don’t even believe in that you die of [expletive] cancer…”.
21The respondent further provided text messages to Inspector Krishnan sent by Mr. Ashby on October 31, 2025 from 1:03 p.m. to 7:48 p.m. In those text messages, Mr. Ashby tells Inspector Krishnan to “eat [expletive] and die”. Also included in the messages are photos of what appears to be writing on a sidewalk made with chalk or paint reading “AGCO Eat [expletive] [expletive] Doug Ford OCS”. In his testimony, the appellant admitted that he had written that message on the sidewalk.
22Cheme Yakhla, Acting Manager, Regulatory Compliance Brance – AGCO, confirmed the testimony of Inspectors Krishnan and Merrigan in that he directed the inspectors to not contact Mr. Ashby any further. He testified that he was concerned for the inspectors due to Mr. Ashby’s aggressive behaviour. Mr. Yakhla testified that the AGCO has since been unable to return to the store as the inspectors have been subject to obstruction and threatening messages.
23Regarding the original demand from the Written Demand, the required video footage was later provided to the AGCO on November 8, 2024 by Mr. Ashby’s father.
B. Evidence of the appellant
24Guilliard Zimmeran testified that he has been working for the appellant for years as a budtender and considers Mr. Ashby a friend as well as a boss. He testified that Mr. Ashby is a “pillar of the community, super smart and patient”. Although Mr. Zimmerman was not present at either of the October 24th or October 31st inspections and was unaware of the voice and text messages, he has since become informed of them. He viewed the voice messages as “coming from a place of anger” and a “momentary lapse in judgement”.
25Thomas Lewis began working for the appellant in October, 2023. He describes Mr. Ashby as a “very good boss, smart, kind, enjoyable and knowledgeable”. He testified that Mr. Ashby is not overly emotional but is rational and logical. Although he was not present at any of the inspections, Mr. Lewis believes that Mr. Ashby was “taken aback by AGCO’s lack of commitment in dealing with illicit dispensaries” and Mr. Ashby’s behaviour during the inspections was out of character for him.
26Both Jerry Saldana and Steve Butch have been consistent customers of the appellant for about 5 years. Both describe Mr. Ashby as approachable, law abiding and easy-going. Neither were present for any of the inspections. Mr. Butch testified that the one bad incident (referring to one of the inspections) is not who Mr. Ashby is. Mr. Saldana believes that the incident (again referring to one of the inspections) is inconsistent with Mr. Ashby and is an isolated incident.
27Testifying on the appellant’s behalf, Mr. Ashby stated that he is passionate about the cannabis industry and loves his work operating the store. He describes himself as not overly emotional and views integrity as “the most important thing”. Through his testimony it was obvious from Mr. Ashby’s testimony as well as that of the inspectors that he is frustrated with the lack of policing of the illicit cannabis industry and stated that, largely if not primarily, the appellant is “hundreds of thousands in debt” because of the illicit cannabis market.
28Concerning the inspection of October 26, 2024, Mr. Ashby testified that when Inspectors Dion and Russo entered the store, Inspector Dion asked him if he remembered her from last year. He testified that the question from Inspector Dion “made me fell not good” and he “was not happy with that”. He described the inspectors’ demeanors as pushy, impolite and unprofessional.
29Mr. Ashby testified that he asked the inspectors why they are so concerned with legal cannabis shops when there are 150 illegal cannabis stores in the city, and why is it necessary to police him and not them. In his testimony Mr. Ashby admitted that he took his frustrations out on the front-line officers, he should not have done that, and he should have been more professional. He submits that his actions at the inspection of October 26th was an isolated lapse under strain but does not constitute dishonesty or ongoing defiance.
30Addressing the inspection of October 31, 2024, Mr. Ashby testified that the inspectors were pushy and seemed like they had an agenda. However, he further testified that he reacted incorrectly and is sorry. This is also reflected in an undated letter of apology to the AGCO in which he stated, “I understand that by obstructing your inspection on October 26, 2024, I interfered with the important regulatory work you are mandated to perform I also regret and take full responsibility for sending messages afterwards that were inappropriate in tone and content”.
31Mr. Ashby presented a “Thermodynamix Code of Conduct” which he said he authored in August or September 2025. He testified that he wrote it “because I need to change my ways and this will demonstrate that.”
32He further testified that he has applied for anger management services at the John Howard Society of Toronto and is, at this time, on the waiting list.
C. Position of the respondent
33The respondent submits that the interference of Mr. Ashby obstructed the inspections contrary to s. 37(1) of the Act which states:
“No person shall hinder, obstruct or interfere with or attempt to hinder, obstruct or interfere with an inspector conducting an inspection under this Act, refuse to answer questions on matters relevant to the inspection or provide the inspector with false information on matters relevant to the inspection.”
34The respondent submits that the three inspector visits reveal an escalating pattern of hostile and aggressive behaviour by Mr. Ashby. Regarding the text and voice messages from Mr. Ashby to the inspectors over a 7-hour period on October 31st, the respondent describes them as “abusive, harassing, racist and misogynistic”. The respondent added that the inspectors have not returned to the store due to Mr. Ashby’s behaviour out of concerns for their safety adding that this is not in the public interest.
35The respondent further submits that Mr. Ashby has acted without integrity and against the public interest by obstructing the inspections of October 26th and 31st, 2025.
36The respondent submits that no conditions are recommended as a resolution in the place of revocation. The suggested Thermodynamix Code of Conduct merely restates conduct which is already required by the Act. The respondent submits that, as the owner and operator of the store, Mr. Ashby would be the only one responsible for administering the code of conduct with respect to his own behaviour.
D. Position of the appellant
37Mr. Ashby recognises (as seen in his undated letter to the AGCO) that he has obstructed the inspections by the AGCO. He submits that he deeply regrets losing his temper and using profanity on the inspectors. He further submits that how he acted in October, 2024 is not who he is, expressing that since that time, he has been without incident. He also points out that his employees and customers view him as fair and supportive.
38Mr. Ashby submits that revocation of the appellant’s licence would not only punish himself but also his employees and their families. He offers that a proportionate outcome is for the appellant to continue as a cannabis retail operator with conditions which would be a balanced remedy that serves the public interest.
39I find, based on the evidence, including Mr. Ashby’s own admission, that he did obstruct the inspections of October 2024, contrary to s. 37(1) of the Act. This was not just a one-off event but occurred on two consecutive occasions. However, I find that the manner in which Mr. Ashby treated the inspectors, not only at the inspections, but after, was egregious, causing alarm to those inspectors and led to the reluctance of the AGCO to conduct further inspections, due to its safety concerns for their inspectors.
40I have no reason to believe that Mr. Ashby does not enjoy a positive relationship with his customers, with his employees or with his community. I also accept that he is passionate about the cannabis industry and his part in it. However, the appellant, by virtue of its licence as a cannabis retail operator, is answerable to the Act and its Regulations, which demands compliance and cooperation to the AGCO and its inspections. This is a necessary and crucial requirement for continued licensing in an industry with an inherent potential for misuse. The enforcement of s. 37(1) of the Act is paramount in the continued trust of the public with respect to the legal commerce of cannabis products.
41I find the evidence of obstruction of the inspections by Mr. Ashby, the sole owner and manager of the appellant, to be not only to be persuasive, but also disturbing. Primarily, I find the actions of Mr. Ashby in forcing the inspectors from the store to be a clear and obvious act of obstruction. I therefore conclude that the respondent has established that there are reasonable grounds to believe that, due to the actions of Regan Ashby as the sole owner and manager of the appellant, the appellant will not act as a cannabis retail operator in accordance with the law, or with integrity, honesty or in the public interest, having regard to its past conduct as set out in the NOP.
The Appropriate Remedy
42Subsections 15(2) – (4) of the Act states:
(2) After holding a hearing, the Tribunal may by order,
(a) confirm or set aside the proposal or decision of the Registrar; and
(b) direct the Registrar to take any action specified by the Tribunal that it considers appropriate to give effect to the purposes of this Act.
Discretion of Tribunal
(3) In setting aside a proposal or decision under clause (2)(a), the Tribunal may substitute its opinion for that of the Registrar.
Terms, conditions
(4) The Tribunal may attach such terms to its order, or such conditions to the licence or authorization that is the subject of the hearing, as it considers appropriate.
43In contemplating alternatives to revocation, I am not satisfied that the conditions suggested by the appellant in the Thermodynamix Code of Conduct would be of any affect in this situation. I agree with the respondent that the Code of Conduct is merely a refreshing of what is already required of the appellant as it relates to its relationship with the AGCO. Also of concern, the suggested Code of Conduct demands that Mr. Ashby is answerable to himself for compliance with that code. That, in no way, guarantees sufficient accountability or efficacy.
44I conclude that the only appropriate outcome in order to protect public safety and to preserve the public trust is revocation of the appellant’s licence as a cannabis retail operator.
ORDER
45The Tribunal confirms the Notice of Proposal dated April 2, 2025 to revoke the appellant’s retail operator licence.
LICENCE APPEAL TRIBUNAL
__________________________
Jeffery Campbell, Vice-Chair
Released: October 29, 2025