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Ontario establishes strict regulations for licensing and operation of private cannabis stores

Municipalities to receive $40 million over two years to help with implementation costs of recreational cannabis legalization
Powered By Canadian LawyerBusiness & Legal Issues||Written By Jennifer Brown
Ontario establishes strict regulations for licensing and operation of private cannabis stores
Sara Zborovski, a partner at Norton Rose Fulbright LLP, says the regulations from the province of Ontario 'provides good clarity' around where a cannabis retail location can be established.

Ontario has implemented the latest phase of its response to the federal government's legalization of cannabis by passing new regulations around retail stores.

The regulations aim to provide clarity for a private recreational cannabis store system that will begin April 1, 2019 under the oversight of the Alcohol and Gaming Commission of Ontario. 

The regulations establish a minimum distance of 150 m (approximately 500 feet) between cannabis retail stores and schools, including private and federally-funded First Nation schools off-reserve.

“The purpose of these regulations is to keep kids safe and to ensure all people operating in this tightly-regulated retail system behave with integrity, honesty, and in the public interest,” said Attorney General Caroline Mulroney in a press release. “The application process for private cannabis retail store licences will begin on December 17, 2018, and we will be ready with laws and regulations to protect Ontario’s youth and to combat the criminal market in response to the federal government's legalization of cannabis.”

Other regulations established by the Ontario Government include:

  • • Retailers will not be permitted to allow anyone under the age of 19 to enter their stores.
  • • Specific instances in which applicants will be denied a licence, including cannabis-related criminal offences. Notably, illegal cannabis retailers who were operating after October 17, 2018 are not eligible for Ontario cannabis sales licenses.
  • • A prohibition on the issuance of a licence to any individual or organization who has an association with organized crime.
  • • Requirement that individuals or entities applying for an operator licence demonstrate their tax compliance status to show that they are in good standing with the government.
  • • A requirement for all private recreational cannabis retail storefronts to be stand-alone stores only.
  • • Individuals with a store authorization, cannabis retail managers and all retail employees will be required to complete the approved training to ensure that any individual who works in the cannabis retail market is trained in the responsible sale of cannabis.

The government consulted with municipalities, Indigenous communities, law enforcement, public health advocates, businesses and consumer groups, as well as representatives from other provinces to create these new regulations.

The government has committed to providing $40 million over two years to help municipalities with the implementation costs of recreational cannabis legalization.

Private retail recreational cannabis stores will be permitted to open between 9 a.m. and 11 p.m. on any day. These operating hours are consistent with on-site retail stores for alcohol and will provide retailers with the flexibility to respond to local market conditions and consumer demands.

A market concentration limit of 75 stores per operator has been set to prevent a high degree of market consolidation, promote opportunities for small businesses and promote investment in the cannabis retail sector.