Magdalena Fish

Cannabis & Drone Law

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Major Changes Announced to Ontario’s Cannabis Retail Licensing System

At approximately 7:30 p.m. on the night of Thursday, December 13, 2018, the province of Ontario announced several big changes to its cannabis retail plan.  

Citing national supply shortages of legal cannabis, the province will now be licensing cannabis retail stores in phases. Previously, the province had not set a cap on the number of stores that could open. For the first phase, Ontario will licence only 25 stores in the province (population: 14,190,000).

The licensing structure and application fees have not changed, but a lottery process has been added as a preliminary step. Applications will no longer open on December 17, 2018. Instead, prospective retailers must submit expressions of interest (“EOIs”) on January 7-9, 2019. 25 applicants will be selected from the submitted EOIs and invited to apply for the necessary licences and authorizations. For more information about the three types of licences/authorizations required, please click here. The regulations to the Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2 have been amended to reflect this lottery system.

No fees have been established for submitting an EOI, but if you are selected to apply for the operator licence and retail store authorization, the application fees will be payable upon submission. In a webinar held this morning, the AGCO confirmed that application fees are not refundable if your application is denied.

The initial 25 stores will be geographically distributed as follows:

  • Toronto Region: 5 stores max

    • Includes the City of Toronto

  • GTA Region: 6 stores max

  • East Region: 5 stores max

    • Includes the following census divisions:

      • Stormont, Dundas and Glengarry

      • Prescott and Russell

      • Ottawa

      • Leeds and Grenville

      • Lanark

      • Frontenac

      • Lennox and Addington

      • Hastings

      • Prince Edward

      • Northumberland

      • Peterborough

      • Kawartha Lakes

      • Simcoe

      • Muskoka

      • Haliburton

      • Renfrew

  • North Region: 2 stores max

    • Includes the following census divisions:

      • Nipissing

      • Parry Sound

      • Sudbury

      • Greater Sudbury

      • Timiskaming

      • Cochrane

      • Algoma

      • Thunder Bay

      • Rainy River

      • Kenora

  • West Region: 7 stores max

    • Includes the following census divisions:

      • Dufferin

      • Wellington

      • Hamilton

      • Niagara

      • Haldimand-Norfolk

      • Brant

      • Waterloo

      • Perth

      • Oxford

      • Elgin

      • Chatham-Kent

      • Essex

      • Lambton

      • Middlesex

      • Huron

      • Bruce

      • Grey

      • Manitoulin

Additionally, the first 25 stores may not be located in municipalities with populations of less than 50,000. LPs may not own or operate any of the first 25 stores, and an operator can only operate one store out of the initial 25.

The AGCO will publish the lottery rules sometime before the EOI submission period opens on January 7, 2019. So far, we know that an operator and its affiliates may not submit more than one EOI for the same region. Operators may submit an EOI with respect to more than one region, but only one of those EOIs may be selected. For example, prospective retailers may not submit multiple EOIs for different locations in Toronto. They may submit an EOI for one Toronto location and a different location somewhere else in the GTA (as long as the municipality has not opted out), but if the applicant is selected for the GTA location, they will not also be selected for the Toronto location.

This disappointing news comes in the wake of resolutions by the City Councils of Toronto and Ottawa to opt in to cannabis retail. Several major GTA municipalities such as Mississauga, Markham, and Pickering have voted to opt out, however. The AGCO keeps a running list of municipalities that have informed them of their resolutions regarding cannabis retail here. Municipalities have until January 22, 2019 to opt out of having cannabis storefronts within their borders.

 

For legal assistance with any aspect of the licensing process, please contact cannabis lawyer Magdalena Fish at maggie@mfishlegal.com or by phone at (647) 720-2929.