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Licensing Requirements for Private Cannabis Retail Stores

On October 17, 2018, the Ontario government passed Bill 36 - the Cannabis Statute Law Amendment Act, 2018. Among other things, the new legislation enacted the Cannabis Licence Act, 2018, which regulates the licensing, operations, and oversight of private cannabis retailers in Ontario.

At this time, recreational cannabis can only be purchased online from the Ontario Cannabis Retail Corporation. However, as of April 1, 2019, recreational cannabis will be sold at physical stores in municipalities across Ontario (with the exception of municipalities which decide to opt out of permitting brick-and-mortar stores).

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The Cannabis Licence Act, 2018 sets out the licensing scheme for private cannabis retail stores. It will be administered by the Alcohol and Gaming Commission of Ontario (AGCO), which will issue retail licences and oversee licensed private cannabis retailers. There will be no cap on the number of retail licences issued in Ontario.

Anyone who would like to open a cannabis retail store would have to apply to the AGCO for the following three licences, none of which will be transferrable:

1. Retail operator licence

2. Retail store authorization (a separate authorization is required for each desired location of a store)

3. Retail manager licence for the managerial personnel of a licensed retailer

Once an application for a retail store authorization is made, the municipality and its residents will have 15 days, following notice of a proposed retail store being posted, to make written submissions in opposition to the particular store being granted a licence. The final decision, however, rests with the AGCO.

It should be noted that, while one licensed cannabis retailer may operate multiple stores, licensed producers may operate only one retail store and that store must be within the production site for which the producer is licensed.

Once the three licences are granted, the private retailer will only be authorized to sell cannabis purchased directly from the Ontario Cannabis Retail Corporation and other prescribed items.

The AGCO will be publishing online a Cannabis Retail Regulation Guide, which will include relevant information about cannabis regulation. This guide is expected to be published shortly and will provide information about, among other things, the Cannabis Licence Act, 2018 and its regulations; the Registrars Standards governing the operation of retail stores; licence and authorization types, the application process and fees; the one-time option municipalities have to prohibit cannabis stores from operating in their jurisdiction; the public notice process related to the authorization of retail stores; AGCO inspections to ensure store readiness; the mandatory training that all cannabis store employees will have to successfully complete; and the allowable advertising and promotional activities.

The AGCO is expected to begin accepting online applications for cannabis-related licences on December 17, 2018.

If you have any questions regarding licensing for a private cannabis retail store or the Cannabis Licence Act, 2018, please contact our Business Law Group or leave us a comment below.

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