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​​Why there is a Hole in Lollipop stick?

It's because if you simply place the candy on top of the stick, the extremely low amount of friction between the stick and the candy, could sometimes cause the candy to fall off if you're, err, too vigorous with your licks.
The hole behaves just like a hook. A small portion of the candy is actually inserted into the little space in there so that it holds on until the candy is sufficiently consumed. This allows the candy to stay in place until you're done with consuming the sugary goodness.