This update is intended for corporations and individuals seeking a licence to operate a cannabis retail store in Ontario.

Background and Introduction

On November 14, 2018, the Government of Ontario released its regulation (the Regulation) under the Cannabis Licence Act, 2018 (the Act). The Act and the Regulation came into force on November 16, 2018, approximately one month after adult use cannabis (recreational cannabis) was legalized by the federal government under the Cannabis Act (Canada) (the Federal Cannabis Act).

Together, the Act and the Regulation establish the rules for the province's private retail recreational cannabis store system that will come into effect on April 1, 2019 and be overseen by the Alcohol and Gaming Commission of Ontario (the AGCO). Until that time, recreational cannabis may only be purchased in Ontario online through the Ontario Cannabis Store.

This bulletin summarizes Ontario's current legislative framework for the licensing and operation of cannabis retail stores. In particular, Part II summarizes the licences required to operate a cannabis retail store and Part III summarizes certain of the limitations and restrictions set out in the Act and Regulation that apply to the operation of cannabis retail stores.

Licensing of Cannabis Retail Stores

In order to operate a cannabis retail store in Ontario, three licences are required:

  1. retail operator licence (an Operator Licence);
  2. retail store authorization (an Authorization); and
  3. cannabis retail manager licence (a Manager Licence).

Retail Operator Licence

In order to operate a cannabis retail store in Ontario, a person must hold an Operator Licence. The Act permits both individuals and corporations to apply for an Operator Licence, provided that certain age requirements are met. In particular, an individual applicant must be at least 19 years old, and, in the case of a corporate applicant, every director, officer and shareholder of the corporation must be at least 19 years old. The government has indicated that it is anticipated that the AGCO will begin accepting applications for Operator Licences on December 17, 2018. At this time, it does not appear that the form of application will be available in advance of this date.

The Act and the Regulation establish various circumstances in which an applicant will be ineligible for an Operator Licence, including where an applicant has been charged with or convicted of certain cannabis-related offences. Notably, illegal cannabis retailers operating after October 17, 2018 are ineligible for a an Operator Licence, as are those persons who are in default of filing a return, or of paying any tax, penalty or interest assessed under any Ontario tax statute or are in default of filing a return under a prescribed federal tax statute (e.g. Income Tax Act (Canada)).

Licensed producers and their affiliates

The Act contains restrictions on the operation of cannabis retail stores, including a limitation on licensed producers and their "affiliates" from holding more than one retail location between them, and requiring that such retail location be located on or within the premises licensed by the Federal Cannabis Act. 

Continue reading to learn more about the new licensing and operating requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.