Ontario Officially Open For Cannabis Retail

The Ontario Government dropped a cannabis bombshell on the province and the Canadian cannabis industry yesterday when it announced that dramatic and sweeping changes to the provincial retail system would be implemented beginning in January, 2020.

While the announcement contained a number of significant and important changes to the existing retail framework within the province, the most notable is the removal of the temporary cap on the number of private cannabis stores within the province and the elimination of the pre-qualification requirements for prospective retailers.  Starting January 6, 2020 the Alcohol and Gaming Commission of Ontario (“AGCO”) will begin accepting Retail Operator License applications from any interested parties.  Starting March 2, 2020 the restriction on the total number of store authorizations permitted, and the existing regional distribution system, will be revoked and the AGCO will begin accepting applications for Retail Store Authorizations from all interested applicants.  The government indicated that it expects the first wave of stores under the new open regime to begin opening in April, 2020 starting at a rate of about 20 new stores per month.

In addition to the removal of the temporary cap and the elimination of the pre-qualification requirements, licensed producers of cannabis will, effective immediately, be able to own up to 25% of a corporation holding a cannabis Retail Operator License. Currently, licensed producers are only able to own up to 9.9%. Furthermore, and more notably, licensed producers will, beginning in 2020, be permitted to apply for a license to open a single store in the province which must be located at the producers production site.

In order to maintain fairness in the market, the Ontario Government will be imposing limits on the number of authorized stores one licensed holder can have. Licensed operators will be permitted to have up to 10 stores until September 2020, up to 30 stores until September 2021 and up to 75 stores thereafter. Retailers will be required to post a public notice at their proposed retail location and the AGCO will accept public comments with respect to the proposed location for 15 days.

The amendments will also allow retail cannabis stores to sell other cannabis-related items such as magazines and cookbooks. Retailers will also be permitted to offer “click and collect” services, allowing customers to order products and pay online to pick up in-store.

The Torkin Manes Cannabis Law Group has extensive experience in obtaining retail sales licences across Canada and specifically in Ontario where we have assisted in the licensing and branding of over 30% of the stores that are authorized, or in the process of becoming authorized, to operate within the province.