Following the completion of industry-wide consultations, the Alcohol and Gaming Commission of Ontario (AGCO) has finalized updates to the inducement rules in the Registrar’s Standards for Cannabis Retail Stores (the ‘Standards’). The new rules will take effect on June 30, 2022.
The Standards have always prohibited licensed cannabis retailers from accepting or requesting material inducements from licensed producers. The updated Standards set out additional detail related to inducement activity between federally licensed producers and retailers to support consumer choice and a level playing field in the legal cannabis industry. The AGCO has built a strong regulatory framework to support a well-regulated and competitive cannabis market for the benefit of Ontarians. These inducements standards are an integral step in continuing the success of the regulated cannabis market.
With the evolving growth of Ontario’s retail cannabis market, the AGCO heard from licensees that they needed additional clarity in the Standards related to inducement activity. To this end, the AGCO updated the Standards to provide clarity, and the companion Guidance Document to include clear examples of acceptable and prohibited agreements between licensed producers and retailers.
The AGCO would like to thank all retailers for their commitment to following the Standards, and to operating with honesty and integrity in Ontario’s cannabis market.
If you have questions or need guidance on complying with the updated Standards by June 30, 2022, your local Compliance Officials are here to help and support you with additional information and education. For more information, including examples of what is permissible and what is not, please view the Guidance Document.
The updates to the Standards are consistent with and further clarify the prohibition on inducements in the Cannabis Licence Act, 2018. Please refer to the table below for the updated inducement-related Standards:
Standard 6.4 - Licensees may not accept or request material inducements from licensed producers, their representatives, or suppliers of cannabis accessories.
Guidance: inducements are items, benefits, payments, or services that are offered or given with the purpose to promote or increase the sale of a particular brand or product by the licensee or their employees.
Standard 6.5 - Licensees and their representatives may not, either directly or indirectly, accept or enter into any agreements for any item, benefit or service with a licensed producer or their representatives. The following exemptions apply:
Standard 6.6 - Licensees and their representatives may not enter into any agreement pursuant to Standard 6.5 that:
Standard 8.1.10 - When entering into any agreement or accepting any item, benefit or service pursuant to Standard 6.5, a licensee shall maintain the following records: