ACGO’s New Cannabis Licencing Process: The Third Time is the Charm?

As of January 6, 2020, the Ontario government scrapped the rules that were in place for the two prior rounds of issuing cannabis retail store licences to individuals and companies hoping to open a brick and mortar store in the province.

Now, anyone who is interested can submit an application and assuming they meet all the requirements, obtain a licence to open a storefront. There is a two-stage application process in place:

First, interested applicants must apply for and successfully obtain a Retail Operator Licence, which requires satisfying a number of criteria in the Cannabis Licence Act and regulations;
Second, applicants must then obtain a Retail Store Authorization for each proposed physical store, which entails meeting a number of criteria regarding store location, layout, and other requirements.

Retail Operator Licences (open as of January 6, 2020)

Prior to making an application for a Retail Operator Licence, prospective applicants should be prepared to have the following information ready:

  • Information and constituting documents for the operating entity, including applicant type (e.g. sole proprietor, partnership, corporation, etc.), legal name, and legal structure;
  • Tax compliance verification: applicants must be able to verify that their business is in good standing with all tax obligations, including a completed tax return for the last fiscal year;
  • Personal history: detailed information about employment, unemployment, and education matters may be required. The AGCO may conduct background checks and investigations on applicants and any affiliated parties in the business, as needed;
  • Details regarding all classes and series of shares in the entity, and names of shareholders who hold 10% or more of each class of shares;
  • Disclosure of any third-party agreements (e.g. agreements with respect to another party’s interests in the applicant or the operations of the applicant, such as franchise agreements, service contracts, consulting agreements, partnership agreements, leasing agreements, trusts, shareholder agreements, etc.); and
  • Financial statements for the last fiscal year.

Retail Store Authorizations (opening on March 2, 2020)

Prior to applying for a Retail Store Authorization, it is recommended that prospective applicants have completed the following:

  • Confirmed with the municipality in which the proposed retail store is located that cannabis retail stores are permitted and that all applicable municipal zoning requirements are met. In municipalities where retail stores are permitted, the proposed retail store must also not be less than 150 metres from a school or private school;
  • Confirmed the applicant and its affiliates do not hold more than 75 cannabis retail stores together;
  • Ensured the applicant has obtained a Retail Operator Licence or has applied for same;
  • Ensured the operating name of the proposed store complies with all applicable legislation relating to advertising and promotion;
  • Ensured the proposed retail store meets the Registrar’s Standards for Cannabis Retail Stores (as set out here: https://www.agco.ca/cannabis/registrars-standards-cannabis-retail-stores); and
  • Considered who will have management responsibilities once the store is operational – anyone who has management responsibilities and is not a sole proprietor acting as both owner and manager for a particular store will need to also apply for a Cannabis Retail Manager Licence.

It is expected that the AGCO will begin issuing Retail Store Authorizations starting in April at an initial rate of roughly 20 authorizations per month. Until August 31, 2020, retail operators are capped at owning a maximum of 10 cannabis stores, which cap will be increased to 30 in September 2020 and 75 in September 2021. Prospective retailers must display a public notice at their proposed retail location once a store authorization is applied for; comments may be submitted to the AGCO from local community members for 15 days. If the AGCO receives relevant submissions related to public health & safety, access to cannabis by youth, or cannabis-related illicit activities, the AGCO may determine it is not in the public interest to permit the opening of the proposed retail store. 


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