What’s Up in Weed

No More Games of Chance: Ontario abolishes cannabis retail store lottery, opens applications to all

• Barely 48 hours after the Globe published an article about aspiring cannabis retail store operators left mired in “leases, lawyers, and limbo”, and nearly four months after the second cannabis retail store lottery unfolded to criticism, the Ontario government has announced that it will be taking steps to move to an open market for retail cannabis stores beginning in January 2020.
• The Alcohol and Gaming Commission of Ontario, which administers the licensing process, has confirmed that:
  • On January 6, 2020, the AGCO will begin accepting Retail Operator Licence applications from any interested applicant (including licensed producers, who were previously barred from participating in the lotteries). A Retail Operator Licence confirms that the holder meets the eligibility criteria set out in the Cannabis Licence Act, 2018 and its regulations.
  • As of March 2, 2020, the AGCO will begin accepting applications for Retail Store Authorizations from all interested applicants. This is the process of a proposed physical store site, layout, and design being approved by the regulator.
  • The AGCO expects to issue up to 20 Retail Store Authorizations per month as stores become ready. RSAs will be issued on a first-come, first-served basis.
• The AGCO has published detailed information about timelines and dates on its website, along with a helpful infographic. The Ontario government estimates that there will be about 250 stores open by the end of the year, up from the 24 stores currently in operation across the province.
• Other regulatory changes being implemented include:
  • an increase to ownership caps of stakes in retail stores by licensed producers to 25%, from 9.9%;
  • a new ability for licensed producers to open a retail store at one of their facilities (often called “farm-gate sales”);
  • a shifting cap on the number of stores a single retail operator may own, from 10 initially to 30 in September 2020 and increasing to the originally-contemplated 75 stores each by September 2021; and
  • stores may also begin selling items directly related to cannabis or its use, such as cannabis magazines and cookbooks (previously, stores were only allowed to sell cannabis and shopping bags).

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