On Dec. 14, 2018, following its last minute decision to allow the initial 25 cannabis retail store operator licence applications by way of a lottery, the government of Ontario published a regulatory amendment that alters the rules regarding the application process for cannabis retail operator licences and retail store authorizations. The new regulations set out the requirements for the issuance of the first 25 cannabis retail store authorizations in Ontario.
The regulations provide the legal basis for the upcoming cannabis retail operator licence lottery, which will be conducted on January 11, 2019. Potential applicants are to submit an expression of interest (“EOI”) online between January 7 and 9, 2019. Winners of the lottery will be permitted to apply for a cannabis retail operator licence and a single retail store authorization.
Under the new regulations, no more than 25 retail cannabis store authorizations will be issued at one time, and a specific number of those authorizations will be allocated to each of five regions across the province:
- A maximum of five retail store authorizations to be located in the Toronto Region.
- A maximum of six retail store authorizations to be located in the GTA Region (Durham; York; Peel; Halton).
- A maximum of five retail store authorizations to be located in the East Region (Stormont, Dundas and Glengarry; Prescott and Russell; Ottawa; Leeds and Grenville; Lanark; Frontenac; Lennox and Addington; Hastings; Prince Edward; Northumberland; Peterborough; Kawartha Lakes; Simcoe; Muskoka; Haliburton; Renfrew).
- A maximum of two retail store authorizations to be located in the North Region (Nipissing; Parry Sound; Sudbury; Greater Sudbury; Timiskaming; Cochrane; Algoma; Thunder Bay; Rainy River; Kenora).
- A maximum of seven retail store authorizations to be located in the West Region (Dufferin; Wellington; Hamilton; Niagara; Haldimand-Norfolk; Brant; Waterloo; Perth; Oxford; Elgin; Chatham-Kent; Essex; Lambton; Middlesex; Huron; Bruce; Grey; Manitoulin).
Notably, federally licensed cannabis producers, and their affiliates, will not be permitted to operate any of the 25 initial cannabis retail store locations, and no cannabis retail store authorizations will be issued in a municipality of less than 50,000 people. As drafted, the regulations surrounding the initial allotment of retail operator licences and retail store authorizations will be revoked on December 13, 2019; however, the regulations provide no clarity on the subsequent application process.
While the AGCO has not yet published information about the format of the EOI that applicants are to submit, nor the manner in which the lottery will be conducted, the regulations make clear that an applicant must specify, in its EOI, the region in which it intends to operate a cannabis retail store. Furthermore, only one EOI may be submitted by a potential applicant, or its affiliates, for a given region, although an applicant and/or its affiliates are permitted to submit an EOI for any and all regions. An applicant and its affiliates can only be selected by lottery for a single region, and will be prohibited from applying for a retail operator licence if it submits, individually or collectively, multiple EOIs for the same region.
A successful applicant will be granted a retail authorization for a single retail location, and will be, according to information published by the Ontario government, authorized to begin sales on April 1, 2019.
Gowling WLG's Cannabis Group continues to monitor these developments closely. For more information about these changes, please contact any member of our team.