Cannabis Ontario - The New Licensing Regime

The Alcohol and Gaming Commission (“AGCO”) recently announced it will be accepting on-line applications for cannabis licences, including retail operator licences, retail store authorizations and retail manager licences.  The licensing process and the application will be made available to the public on or before December 17, 2018, although the AGCO has advised that a general list of requirements and webinars for informational use will be made available in advance.  

It is important for those interested in obtaining cannabis related licences, including those for a retail cannabis store application, that they are ready and able to complete the application fully on December 17, 2018.  It will also be incumbent on potential licensees to ensure that their application meets the suggested criteria and requirements expressed by the Cannabis Licence Act and Ontario Regulation 468/18.  

Cannabis retail licences and their applications will be held to a much higher and stricter standard that other types of business licences, including licences for liquor currently administered by the AGCO.  The cannabis industry is highly regulated and business owners, investors and employees will all need to satisfy stringent requirements when it comes to residency and criminal background checks, in additional to ongoing compliance.

ONTARIO REGULATION 468/18

The government of Ontario recently published O. Reg. 468/18 under the Cannabis Licence Act.  The regulation provides potential applicants with an overview of the licensing regime and the basic criteria that applicants will need to satisfy in order to obtain their licences and operate their retail location.  

The regulation is limited in scope but still offers insight and helpful assistance in the licensing process.  In conjunction with and ancillary to O. Reg. 468/18 will be the AGCO’s Registrar’s Standards which will provide additional guidance to those seeking to obtain a retail operator licence and/or a retail store authorization.
 
Location, Location, Location

For those considering owning and operating a private retail store in a specific municipality, O. Reg. 468/18 allows for any municipality to opt-out of the licensing regime on or before January 22, 2019.  While a municipality can opt-out and then later opt-in, a municipality cannot opt-in and then choose to opt-out.  This is an important consideration for those entering municipalities where there is a possibility of opting out.  

Those considering locations where there may be a mixed reception from the public and area residents will also want to consider and review the public interest objection portion of O. Reg. 468/18 which spells out what will be considered “not in the public interest, having regard to the needs and wishes” of the municipalities’ residents, to include public health and safety, restricting youth access to cannabis, and preventing illegal activities.  The issuance of licences in April 2019 and the AGCO’s consideration of the public interest will also see a rise in public interest hearings before the Licence Appeal Tribunal, where public interest principles exercised by the AGCO will be tested.

Other considerations for those considering opening a private retail store will be proximity to a school or private school. Specifically, stores will not be able to be located less than 150 metres from a school or private school.   

Additionally, a cannabis retail store authorization will not be issued if the retail space is either not enclosed by walls separating the store from others, or can be entered or passed through to access another commercial establishment (other than a common area without a shopping mall).  Furthermore, if the space and the point of sales is accessible by another commercial establishment or activity, or the public, an authorization will be refused.

Eligible or Ineligible  

O. Reg. 468/18 has made clear that holders of a retail store authorization, cannabis retail manager licence, and any individuals will, in addition to satisfying the requirement under the Cannabis Act and O. Reg. 468/18, need to undertake and successfully complete training courses or programs approved by the AGCO.  This may be akin to the Smart Serve Responsible Alcohol Beverage Service Training Program that has been approved by the AGCO and required for the service of alcohol.

Individuals who have been convicted of an offence under the Cannabis Licence Act, the Cannabis Control Act, or the Cannabis Act will be presumptively ineligible for licensing.  It is also the case that individuals who have been convicted of offences under the Controlled Drugs and Substances Act will also be considered ineligible for licensing.  Individuals who have been members of a criminal organization as defined by the Criminal Code or have failed to meet their obligations under the Income Tax Act will also be presumptively ineligible.   

ABOUT CHAND SNIDER 
  
Chand Snider LLP is a boutique law firm in Ontario which has been at the forefront of the licensing and regulatory field.  With offices in both the financial district in Toronto and Ottawa, Chand Snider LLP has a dedicated Cannabis Law Group which is committed to serving clients throughout Ontario.  Whether you are a start-up, established business, licensed producer, investor, or someone looking into entering this growing market, call us today at 416.583.2377 and let our expertise work for you.  Let us ensure your application stands out.


The foregoing should not be relied upon as legal advice and is a general overview of the recent legislative and legal developments.  

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