Back in December 2019, the Ontario government announced its move to open the market for retail cannabis stores, beginning January 2020. After removing the temporary cap that restricted the number of private cannabis stores in the province, the cannabis retail space has been booming. So, if you’re looking to enter the cannabis retail market in Ontario, we’re here to tell you everything you need to know, from securing the necessary licences, to getting your store up and running!
Secure your Licences and Authorizations
To open and operate a cannabis retail store and sell recreational cannabis, there are two licences and an authorization that you are required to secure from the Alcohol and Gaming Commission of Ontario (AGCO).
1. Retail Operator Licence
The first licence you need to apply for is the Retail Operator Licence (ROL). You can apply for this licence as an individual/sole proprietor, a partnership or a corporation. The ROL will confirm that you meet the eligibility criteria set out in the Cannabis Licence Act and its regulations. For more information on ROLs, click here. To submit an application for a Retail Operator Licence, you must make the non-refundable $6,000 Retail Operator Licence fee payment.
Part of the ROL process includes police and background checks, which will be conducted on applicants, and persons interested in the applicant (such as third parties involved in the project), as needed, to determine eligibility for the issuance of the licence. Once approved, you will receive a Retail Operator Licence, which will contain your licence number, expiry date and any conditions on the licence (such as the requirement to notify the AGCO within 5 business days of any change in corporate structure or sources of funding).
Retail store operators will be required to enter into a wholesale supply agreement with the Ontario Cannabis Store (OCS) in order to begin purchasing cannabis for resale in their authorized stores. Once an ROL from the AGCO has been issued, you can contact the OCS to get started on the wholesale supply agreement.
After your ROL application has been submitted (or the ROL has been granted), your proposed physical store(s) must qualify for a Retail Store Authorization (see #2 below), which confirms the store meets the location, layout, security and other requirements set out in the regulations and standards.
2. Retail Store Authorization
The next step after submitting an ROL application is to apply for a Retail Store Authorization (RSA) for each retail location you intend to open. To apply for an RSA, you must either hold a valid ROL issued by the AGCO or have submitted an application for an ROL with the AGCO. Applications for both an RSA and ROL can be submitted at the same time, but the ROL will be issued before the RSA is granted.
To submit an application for a Retail Store Authorization, you must make the non-refundable $4,000 Retail Store Authorization fee payment.
To be eligible for a Retail Store Authorization, the following criteria should be met since there are some places where you cannot open a cannabis retail store:
- Ensure you have applied for, or hold, a Retail Operator Licence;
- Ensure the proposed location for your retail store is more than 150 metres away from the property line of a school or private school;
- Contact the municipality where the store will be located and confirm that the proposed retail store meets local municipal requirements for retail store siting;
- Review the Registrar’s Standards for Cannabis Retail Stores to ensure you understand the requirements for your store;
- Ensure that the operating name of the proposed retail store complies with all applicable Federal/Provincial legislation related to advertising and promotion.
If you are a Licensed Producer, or one of its affiliates, you are eligible to apply for a single RSA. In this case, the proposed cannabis retail store must be located on or within the site set out in the federally issued production licence.
After you have submitted an ROL and RSA, you can move on to apply for a Cannabis Retail Manager Licence (see #3 below).
3. Cannabis Retail Manager Licence
Every cannabis retail store in Ontario must have at least one Licensed Retail Manager, who is responsible for performing tasks such as:
- supervising, managing, or hiring employees of the store;
- managing the sale of cannabis;
- managing compliance issues relating to the sale of cannabis;
- buying cannabis for the store;
- entering into contracts for the store.
The only exception to this requirement is if the Licensed Retail Operator is a sole proprietor or is in a partnership between two or more individuals, and will be both the Licensed Operator and performing the duties of the retail store manager for a particular store – in which case a Cannabis Retail Manager Licence is not required.
To submit an application for a Cannabis Retail Manager Licence, you must make the non-refundable fee payment of $750/licence.
What Comes Next?
After your ROL and RSA(s) have been submitted, the next step is the Public Notice Process and store inspections by the AGCO.
Prior to a Retail Store Authorization being issued and your cannabis retail store opening for business, the store location will be inspected by an AGCO Compliance Official on two separate occasions to confirm that all eligibility and store-specific requirements are met.
The first inspection is called a Retail Store Pre-Authorization Inspection, which is conducted prior to a Retail Store Authorization being issued.
The second inspection is a Pre-Store Opening Inspection, which will be done prior to the opening of the store. More information on these inspections can be found here.
After your application for a Cannabis Retail Store Authorization is submitted, the AGCO will determine the dates of the posting period (15 calendar days) and will email the Public Notice placard (in PDF format) to you for posting visibly on the proposed store front. The placard period does not need to be completed before your first inspection can be scheduled (i.e. an inspection can be scheduled as soon as the placard has been posted, based on your readiness for your store to be inspected).
Successful completion of the Retail Store Pre-Authorization Inspection will result in issuance of an RSA, which may include certain terms and conditions the licensed Retail Operator must comply with before the store is open to the public. After that, successful completion of the Pre-Store Opening Inspection will allow your store to open for business!
Of course, once you’re up and running, AGCO Compliance Officials may visit your retail store location at any time to confirm compliance with the Cannabis Licence Act, 2018 and regulations and Registrar’s Standards.
Open for Business
After your cannabis retail store has secured all the necessary licences and authorizations, and passed the necessary inspections, you’ll be ready for opening. Keep in mind, there are rules you must follow when operating your store.
- begin selling cannabis at your authorized store within one year of getting your Retail Store Authorization, and continue to sell cannabis.
- open only during permissible hours: between 9:00 a.m. and 11:00 p.m. on any day of the week.
- display the official cannabis retail seal. The seal must be placed where people can easily see it from outside the store entrance. The seal must be at least 17 centimetres wide and 20 centimetres long. You can choose to post the French version of the seal, or the English version, or both.
- remove the seal as soon as possible if your Retail Store Authorization is revoked or not renewed.
- post your Retail Store Authorization in the store in a place where people can easily see it.
- only sell cannabis that has been made by someone who is authorized under the Cannabis Act (Canada) to make cannabis for commercial purposes. Private retailers can only purchase cannabis from the Ontario Cannabis Store (OCS).
- keep records of specified information and activities.
- have measures in place to reduce the risk that your cannabis will be redirected to the illegal market or illegal activities.
- record all sales.
- make information about the responsible use of cannabis available to patrons.
- obtain criminal background checks from employees as part of the hiring process.
- ensure all licensed managers and other employees working in your store successfully complete the required Board approved training program (CannSell) prior to their first day of work at the store.
- request identification of anyone who looks under 25 years old, and be satisfied the person is at least 19 years of age prior to allowing them to enter the store.
- display your cannabis and accessories in a way that they cannot be seen by a young person, even from outside the store.
You must not:
- sell cannabis or cannabis accessories to anyone who is under 19 years old.
- allow anyone who looks under 25 years old to enter the store, unless you first request identification and are satisfied the person is at least 19 years of age.
- sell cannabis to anyone who is intoxicated or appears intoxicated.
- sell more than 30 grams of dried cannabis (or equivalent amount of another kind) to a person in a single visit.
- hire anyone who is under 19 years of age.
- sell cannabis or cannabis accessories from a display that allows self-service, or from a vending machine.
There you have it! Everything you need to know about cannabis retail activities in Ontario.
We hope the information above gives you a solid understanding of all the steps involved in the application process, as well as the requirements that must be met once you’re up and running.
How we can help you
Cannabis License Experts is your solution to preparing, reviewing and submitting your cannabis retail licence application. We offer support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs and more.