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Ontario Scales Up Privately Owned Cannabis Retail Store Locations

On October 17, 2018, Canada legalized recreational cannabis country-wide.  It wasn’t until November 27, 2018 that the Alcohol and Gaming Commission of Ontario (“AGCO”) issued its guidelines as to what is involved for private entities to obtain a retail store license to operate in Ontario.  In this article we provide a high level view of the some of the considerations at play in obtaining a retail store license in the cannabis space.  

The AGCO will commence accepting applications on December 17, 2018 and will grant those applications starting April 2019.  


What Licenses Are Required?
The AGCO will be the government authority responsible for issuing out licenses for private retailers looking to operate in Ontario.  In order to operate, there are several licenses that must be obtained:
 

  1. retail operator’s license; 
  2. retail store authorization; and 
  3. retailer manager license.

It is possible to apply for a retailer operator license and retail manager license concurrently.  However, a retail store authorization license can only be granted to a licensed retail operator.  

What Is Considered in the License Application Process?

Depending on the type of license required, various factors are considered including:

  • location and layout of store;
  • financial disclosure; 
  • background checks of applicants; 
  • business plan; 
  • training programs.

What are the Restrictions in Granting a License?

The AGCO laid out several non-starters, whereby a license would not be granted, including:

  • if the applicant has previously been convicted of a prior cannabis related offence; 
  • if the applicant is non-compliant with the Canada Revenue Agency; 
  • if the applicant is associated with organized crime.

What are Some Additional Considerations?

There are several additional parameters that must be considered, such as:

  • Licensed producers in Ontario can only operate 1 retail store in Ontario, which must be located on or within the licensed producers production site;
  • The retail store must be a standalone store, with significant requirements in respect of lay out;
  • Each municipality has the option of opting in or opting out of allowing private stores of operating in the municipality.  The deadline to opt out is January 22, 2019, which makes an application filed prior to that deadline questionable.