The Current Landscape in Ontario
October 17th, 2018 marked a historic moment for Canada as the federal Cannabis Act came into effect, legalizing recreational cannabis across the nation. However, until at least April 2019, Ontarians will only be able to purchase recreational cannabis online from the provincial government’s Ontario Cannabis Storewebsite. Under the previous Wynne government, the province intended to own and operate cannabis retail stores, however, this plan changed in mid-August 2018 when the Ford government announced that Ontario would not be in the business of “running physical cannabis stores” and instead would offer licences to private retailers. The new government intends for privately-owned retail stores to be up and running by April 1st, 2019.
On October 17th, 2018, the Ontario government’s provincial cannabis legislation also came into effect, as Bill 36 (Cannabis Statute Law Amendment Act, 2018) passed its third and final reading and received Royal Assent. Among other things, Bill 36 amends the Ontario Cannabis Act, 2017 and enacts the Cannabis Licence Act, 2018 (the “Retail Licence Act”), which sets out a statutory framework for obtaining a licence to own, operate and manage a retail cannabis store in Ontario.
Required Licences and Authorizations
Under the Retail Licence Act, the Alcohol and Gaming Commission of Ontario (the “AGCO”) has been designated as the regulator for the privately-run retail cannabis stores. Within the coming months, the AGCO will open the application process for those interested in owning, operating and managing retail cannabis stores in Ontario. Potential applicants will be able to apply for a retail operator licence, cannabis retail manager licence and a retail store authorization. To own and operate a retail cannabis store in Ontario, potential applicants are required to obtain a retail operator licence and a retail store authorization. As described in greater detail below, a cannabis retail manager licence is not required unless certain circumstances apply.
For each licence and authorization, individual applicants must be at least 19 years of age, or in the case of a corporate applicant, all of the corporation’s directors, officers and shareholders must be at least 19 years old. In issuing a licence or a retail store authorization, the AGCO may specify that any conditions which have been consented to by the applicant will be attached to the licence or authorization. Therefore, the conditions governing each licence and authorization may differ among applicants.
Retail Operator Licence and Retail Store Authorization
To operate retail stores potential store owners will be required to apply for and obtain a retail operator licence and a retail store authorization for each location that they plan to operate. There is no prescribed limit on the number of retail store authorizations that will be available for issuance in Ontario. The Retail Licence Act sets out a number of eligibility requirements for a retail operator licence and a retail store authorization to be issued to an applicant. In addition, it is expected that the regulations, when released, may set out further eligibility requirements to be considered. In particular, for a retail operator licence to be issued, the AGCO must be satisfied that the applicant will exercise “sufficient” direct or indirect control over the retail business.
Interested parties may be able to apply for a retail operator licence and a retail store authorization concurrently, however, a retail store authorization will only be issued to a holder of a retail operator licence. To be eligible for a retail store authorization, the AGCO must be satisfied that the applicant does not employ or intend to employ a person to perform certain tasks, described below, unless he or she also holds a cannabis retail manager licence.