On November 15, 2018, the Ontario government published Ontario Regulation 468/18 made under the Cannabis Licence Act, 2018 (the “Regulations”), which speaks to their new strict regulations concerning licensing and the operation of private retail cannabis stores in Ontario.
The Regulations sets out general criteria that prohibits certain people from obtaining any of the three licences and authorizations: retail operator licence (“RO licence”), retail store authorization (“RSA”), and cannabis retail manager licence (“CRM licence”). For more information on the different licences, see our article Proposed Ontario Cannabis Retail Licensing System.
Items preventing the issuance of an RO licence
Provincial and Federal Offences
We have summarized other Provincial and Federal Offences in Tables 1 and 2 below. Please note that the summaries are not meant to be completely comprehensive as there are exceptions to some offences and specific circumstances where offences may or may not apply.
Contravening the Regulations and committing Provincial Offences (after October 17, 2018) or Federal Offences set out above are grounds for the government to deny issuing the applicant an RO licence.
Furthermore, the applicant will not be granted an RO licence if:
- the applicant is in default of filing a tax return, or the applicant did not pay required taxes, penalties, or interest and have not paid arrangements to pay; or
- the applicant has a business number and the applicant failed to file a return under the Taxation Act, the Income Tax Act (Canada), the Excise Tax Act, or any other act that requires the applicant to pay taxes and is enforced by the CRA.
The Regulations also prevents a corporation from obtaining a licence if more than 9.9% of the corporation is owned or controlled by one or more licensed producers or their affiliates.
The Regulations further restricts licensing to individuals or organizations that do not have associations with criminal organizations defined under the Criminal Code.
Items preventing the issuance of an RSA
The government will not issue an RSA if:
- the retail space is not a stand-alone space. In other words, the retail space (1) does not have walls separating it from any other commercial establishment or activity and from any outdoor area, or (2) anyone can enter or pass through the retail space to access any other commercial establishment, other than a common area of an enclosed shopping mall;
- the retail space where the cannabis would be received or stored is accessible to any other commercial establishment or activity or to the public;
- the retail space is less than 150 metres from a school or a private school; or
- the applicant (by themselves or with affiliates) already holds 75 RSAs.
Once the applicant has acquired all the necessary licences and authorizations, the applicant must follow additional regulations regarding operations. A cannabis retail store:
- May be open from 9:00am to 11:00pm on any day.
- May sell cannabis accessories and shopping bags. Cannabis accessories refer to (1) things including rolling papers or wraps, holders, pipes, water pipes, bongs, and vaporizers that are for consuming cannabis; and (2) things commonly used for consuming cannabis, and deemed represented to be used for consuming cannabis if sold at the same point of sale.
- Must display the RSA in a conspicuous place, and not enter into contracts or agreements with anyone for cannabis distribution services. If the RSA is ever revoked or suspended, the applicant must display a sign indicating such at the retail space throughout the suspension.
- Must prominently display the cannabis retail seal in a conspicuous space and, among other things, be visible from outside the store.
- Must not allow people under 19 years old to enter the store. Anyone who appears to be less than 25 must be asked to show identification confirming they are 19 or older.
Anyone who holds an RSA, CRM licence, or works in a cannabis retail store, must complete any approved training regarding:
- the responsible sale of cannabis;
- record keeping requirements; and
- measures to reduce risk of cannabis being diverted to an illicit market or activity.
The holder of the RSA will be responsible for ensuring the CRMs or other employees at the retail store have completed the necessary training.
If you have any questions or comments on the private retail cannabis business in Ontario, feel free to contact us.
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