There's one point missing, I believe, from your argument for more retail stores. It has to do with the original language and process used in selecting applicants to move forward, the nature of the free market system and monopolies/oligopolies. When the LCB chose to use the word "lottery" it made a drastic error. Those selected to move forward started to feel like they actually won the lottery. Then they realized they had no competition in the area and producers were sitting on hundreds-of-thousands to millions of dollars worth of product that had to be moved in order to pay the high price of said production and the only outlet for that product is through those retailers (Talk about beholden!). Knowing producers have extreme costs, a lot of product, and nowhere else to distribute the product but through those Limited retailers, they began to offer to purchase that product at a steep discount. Producers could either not sell it and go bankrupt or sell it cheap and pay their bills. Retailers then place a 300%, 400%, or higher markup on the product and sit back raking in the profits. These retailers have ZERO risk and nearly all the reward. By the time they receive the product, there are no bugs, there is no mold, test results are done, and six-figure per month bills are paid. This is business at its worst! It is upside down and backwards.  The long-term impact of this business model will be to drive quality through the floor in  pursuit of running a viable business. If the idea here is to reduce cost and improve quality then let  producers open their own store and sell their own product. That's when you'll see innovation in technique and output coupled by lowered prices and the disappearance of the black market. 

Being a Medical Shop and soon a 502 shop, I totally agree with the idea of allowing growers to grow for their own store.

That is the only way we could survive as a medical shop...

What is the states reasoning behind this rule that one cannot grow and sell ?