Cannabis Retail Regulation in Ontario

Overview of Cannabis Legislation in Ontario

This chapter provides a summary of your cannabis retail requirements under the relevant provincial legislation, including the Cannabis Control Act and the Cannabis Licence Act and the regulations. This is meant to be a guide. It is not a complete list of all rules and is not legal advice. In addition, you may be subject to federal requirements pursuant to the Cannabis Act.

General

To open a retail store and sell recreational cannabis, there are may be two licences and an authorization that are required from the AGCO. These are:

  • Retail Operator Licence
  • Retail Store Authorization
  • Cannabis Retail Manager Licence

All applicants must meet all of the eligibility criteria set out in the Cannabis Licence Act, 2018 and its regulations.

Sole proprietorships or partnerships between individuals may not require a retail manager licence. You should consider the duties performed by individuals to determine if they require a retail manager licence. Please note that the educational requirements must be met.

A cannabis retail store may not sell cannabis unless licensed and authorized by the AGCO, and the retailer must have a supply purchase contract with the Ontario Cannabis Retail Store (OCS). The retailer may only sell cannabis obtained through the OCS..

 

Retail Operator Licence

To be eligible to open a retail store and sell recreational cannabis, you must have a Retail Operator Licence.

You are not eligible for a Retail Operator Licence if:

  • you are under 19 years of age. This includes directors, officers and shareholders of corporations.
  • you have been convicted or charged with certain offences:
    • any offence under the Cannabis Licence Act
    • certain offences under the Cannabis Control Act (CCA) and Cannabis Act (CA)
  • you have, or previously had, certain roles or connections with a criminal organization as defined in subsection 467.1(1) of the Criminal Code (Canada):
    • you are, or have been a member of the criminal organization
    • you are, or have been involved in the criminal organization
    • you contribute, or have contributed to, the activities of the organization.
  • you are carrying on activities that are not in compliance with certain laws.
    • certain offences under the Cannabis Control Act (CCA) and Cannabis Act (CA)
  • you have made a false statement or provided false information in your application.
  • you are in default of filing a tax return under a tax statute administered and enforced by the government of Ontario, or have any outstanding amounts owing and past due of tax, penalty or interest under those laws and have not made payment arrangements;
  • you have a business number with the Canada Revenue Agency and have not filed a tax return under certain Federal or provincial legislation; 
  • the application will be made by a corporation and more than 25 percent of the corporation is owned or controlled, either directly or indirectly, by one or more licensed producers or their affiliates.
  • you will not be financially responsible in operating your cannabis business.
  • you will not operate your cannabis retail business in compliance with the law, or with integrity, honesty or in the public interest.
  • you will not have sufficient control over the cannabis retail business
  • you had a Retail Store Authorization in the past but the authorization was revoked

Generally, you must wait two years to apply again for a Retail Operator Licence if you:

  • applied for a new licence or renewal licence in the past but were refused, or
  • you had a Retail Operator Licence in the past but the licence was revoked.

You may have conditions put on your Retail Operator Licence to address any specific risks or concerns.  There are also conditions in the Cannabis Licence Act, 2018 that apply to all Retail Operator Licences.

You cannot transfer your Retail Operator Licence to another person or business.

Retail Store Authorization

To open a retail store and sell recreational cannabis, you must have a Retail Store Authorization. 

There are some places where you cannot open a cannabis retail store. More information about that is in the next section on Retail Store Location.

Generally, you must wait two years to apply again for a Retail Store Authorization if you:

  • applied for a new Retail Store Authorization or renewal of a Retail Store Authorization in the past but were refused, or
  • you had a Retail Store Authorization in the past but the authorization was revoked.

You are not eligible for a Retail Store Authorization for a store if:

  • you do not have a Retail Operator Licence now, or would not have a Retail Operator Licence at the time when the Retail Store Authorization would be issued.
  • you have a Retail Operator Licence that has conditions that do not allow you to apply for or receive a Retail Store Authorization for that store.
  • you have been convicted of or charged with certain offences:
    • any offence under the Cannabis Licence Act
    • certain offences under the Cannabis Control Act, 2017 and Cannabis Act (Canada) or their regulations
  • you have, or previously had, certain roles or connections with a criminal organization as defined in subsection 467.1(1) of the Criminal Code (Canada):
    • you are, or have been a member of the criminal organization
    • you are, or have been involved in the criminal organization
    • you contribute, or have contributed to, the activities of the organization.
  • you are carrying on activities that are not in compliance with certain with certain laws.
    • Certain offences under the Cannabis Control Act (CCA) and Cannabis Act (CA)
  • you hire or plan to hire someone who does not have a Cannabis Retail Manager Licence, but should have that Licence because of the work they do
  • it is not in the public interest, based on the needs and wishes of the people who live in the municipality where the proposed store would be located.
    • After you apply for a Retail Store Authorization, the Registrar will inform local residents and the municipality about the application by having a notice posted at the proposed store and on the AGCO’s website.
    • The municipality or local residents submit written submissions to the Registrar about whether the proposed store is in the public interest, as set out in regulation. The submissions must be sent within 15 calendar days after the notice is posted.
    • Relevant submissions are limited to the following matters of public interest:
      • protecting public health & safety;
      • protecting youth and restricting their access to cannabis;
      • preventing illicit activities in relation to cannabis.
  • the store, equipment and facilities do not comply with the Cannabis Licence Act, 2018, regulations, the Registrar’s Standards or requirements
  • you do not have sufficient control over the store, equipment and facilities
  • you have made a false statement or provided false information in your application

A Licensed Producer and its affiliates are eligible to apply for a single RSA. The proposed cannabis retail store must be located on or within the site set out in the federally issued production licence.

You may have conditions put on your Retail Store Authorization to address any specific risks or concerns.  There are also conditions in the Cannabis Licence Act, 2018 and regulation that apply to all Retail Store Authorizations.

You cannot transfer your Retail Store Authorization to another person or business.

Retail Manager Licence

Every cannabis retail store must have a licensed retail manager. People who perform certain duties within the cannabis retail store must get a Cannabis Retail Manager Licence.  This includes people who: 

  • supervise, manage or hire employees of the store
  • manage the sale of cannabis
  • manage compliance issues relating to the sale of cannabis
  • buy cannabis for the store
  • enter into contracts for the store. 

The only people that can perform the duties listed above are people with a Cannabis Retail Manager Licence or a Retail Operator Licence. 

You are not eligible for a Cannabis Retail Manager Licence if: 

  • you are under 19 years of age 
  • as a licensed retail manager, you will not act in compliance with the law, or with integrity, honesty or in the public interest
  • you have been convicted or charged with certain offences: 
    • any offence under the Cannabis Licence Act 
    • certain offences under the Cannabis Control Act (CCA) and Cannabis Act (CA)
  • you have, or previously had, certain roles or connections with a criminal organization as defined in subsection 467.1(1) of the Criminal Code (Canada): 
    • you are, or have been a member of the criminal organization
    • you are, or have been involved in the criminal organization
    • you contribute, or have contributed to, the activities of the organization. 
  • you are carrying on activities that are not in compliance with certain laws. 
    • certain offences under the Cannabis Control Act (CCA) and Cannabis Act (CA)
  • you have made a false statement or provided false information in your application

Generally,  you must wait 2 years to apply again for a Cannabis Retail Manager Licence if you:

  • applied for a new Cannabis Retail Manager Licence or renewal Cannabis Retail Manager Licence in the past but were refused, or
  • you had a Cannabis Retail Manager Licence in the past but the licence was revoked.

You may have conditions put on your Cannabis Retail Manager Licence to address any specific risks or concerns. There are also conditions in the Cannabis Licence Act that apply to all Cannabis Retail Manager Licences. 

You cannot transfer your Cannabis Retail Manager Licence to another individual. 

Retail Store Location

Municipalities:    

Ontario municipalities had a one-time option to opt out of having cannabis retail stores in their communities. They had until January 22, 2019 to notify the AGCO that their council had passed a resolution to opt out of having cannabis retail stores. Municipalities that choose to opt out can opt back in at any time—but once they have opted in, they may not reverse their decision. 

Cannabis retail stores cannot be located in a municipality that has passed a resolution prohibiting cannabis retail stores from being located in the municipality. 

  • The AGCO’s website has a list of municipalities that have decided not to allow cannabis retail stores.  
  • Municipalities that have opted-in may not create a licensing system respecting the sale of cannabis nor pass a bylaw that distinguishes land or building use for cannabis from any other kinds of use. 

Near Schools:  

Things to Know Before You Begin:

As an applicant, it is your responsibility to ensure your proposed retail store location meets school proximity requirements at all times throughout the  entire application process. 

The use of iAGCO to check the eligibility of a potential retail location is not advice and does not function as a substitute for an applicant’s continued due diligence. 

The submission of your application does not guarantee approval. The determination that an RSA application satisfies all retail location requirements is made based on information available at the time of issuance of the RSA and not at the time of submission of the application through iAGCO.

Please note that changes to an applicant’s proposed location requires submission of a new application. Application fees are non-refundable.

The Registrar cannot issue an RSA to a proposed cannabis retail store located less than 150 metres from a school or private school, as defined in the Education Act. This will be determined as follows:  

  • When the school or private school is the primary or only occupant of a building, 150 metres shall be measured from the property line of the property on which the school or private school is located.  
  • When the school or private school is not the primary or only occupant of a building, 150 meters shall be measured from the boundary of any space occupied by the school or private school within the building. 

The distance between a proposed retail store and a school or private school is measured by a straight line from the closest point of the school property or boundary as described above to the closest point of the proposed retail store.

If either the store and/or the school is located on a floor other than the ground floor or main level in its respective building, the measure of the 150 metre distance may take into vertical distance in assessing compliance with this requirement.

The above rules do not apply if the private school is located on a reserve or if the private school only offers classes through the Internet.

Online submission of the application is not a guarantee or confirmation that the proposed location is compliant with the school proximity restriction. The proposed retail location must be in compliance with the school proximity requirement at the time the RSA is issued.

Retail Store Requirements

There must be separation between your cannabis business and other businesses. If an existing retail space is renovated to create two or more spaces, the space that is intended to be a cannabis retail store must adhere to the listed criteria below and all the eligibility requirements set out in the Cannabis Licence Act, 2018 and regulation. 

The retail space where you will sell cannabis: 

  • must be enclosed by walls separating it from any other commercial establishment or activity
  • does not include an outdoor area
  • cannot be entered from or passed through in order to access any other commercial establishment or activity, other than a common area of an enclosed shopping mall.

In addition, the area where cannabis will be received or stored cannot be accessible by any other business or by the public. This does not mean that an establishment is required to have a separate door for product receipt. For example, if a premises has only one door, product could be received through this door outside of business hours, or access to the door could be restricted by security personnel at the time of product delivery.

Background Checks

As part of its review of your application for a new licence or authorization, or renewal licence or authorization, the AGCO may do background checks and investigations on applicants, and any affiliated or interested parties in the business, as needed. The AGCO may look at the character, financial history and competence of persons applying for a licence or authorization.  You may be required to pay some of the costs of the background checks or investigations.

Training

In Ontario, anyone who works in a cannabis retail store must successfully complete an AGCO Board approved cannabis retail employee training program before their first day of work to support the safe sale and consumption of cannabis. This includes:

  • holders of a Retail Store Authorization
  • holders of a Cannabis Retail Manager Licence
  • employees of a cannabis retail store

Operating a Store

There are rules you must follow when operating your store. 

You must: 

  • begin selling cannabis at your authorized store within one year of getting your Retail Store Authorization, and continue to sell cannabis
  • open only during permissible hours: between 9:00 a.m. and 11:00 p.m. on any day
  • display the official cannabis retail seal. You must post the seal in a place where people can easily see it from outside the entrance to the store. The seal must be at least 17 centimetres wide and 20 centimetres long. You can chose to post the French version of the seal, or the English version, or both. 
  • remove the seal as soon as possible if your Retail Store Authorization is revoked or not renewed
  • post your Retail Store Authorization in the store in a place where people can easily see it
  • only sell cannabis that has been made by someone who is authorized under the Cannabis Act (Canada) to make cannabis for commercial purposes
  • keep records of specified information and activities
  • have measures in place to reduce the risk that your cannabis will be redirected to the illegal market or illegal activities
  • record all sales
  • make information about the responsible use of cannabis available to patrons
  • ensure that all licensed managers and other employees working in your store successfully complete the required Board approved training program prior to their first day of work at the store. 
  • request identification of anyone who looks under 25 years old and be satisfied the person is at least 19 years of age prior to allowing them to enter the store. 

You must not: 

  • sell cannabis or cannabis accessories to anyone who is under 19 years old
  • allow anyone who looks under 25 years old to enter the store, unless you first request identification and are satisfied the person is at least 19 years of age
  • sell cannabis to anyone who is intoxicated or looks intoxicated
  • sell more than 30 grams of dried cannabis (or equivalent amount of another kind) to a person in a single visit
  • hire anyone who is under 19 years of age. 

You cannot sell cannabis or cannabis accessories from a display that allows self-service, or from a vending machine. 

You must display your cannabis and accessories in a way that they cannot be seen by a young person, even from outside the store.

Renewing your Licence or Authorization

You must apply to renew your licence or authorization before the current term expires. 

Your licence or authorization will be renewed if you have met the application requirements and paid the required fee. However it will not be renewed if: 

  • you have failed to comply with the legislation or regulations
  • you no longer meet the eligibility requirements for the licence or authorization. 

If your Retail Store Authorization is not renewed, you must follow any rules set by the Registrar regarding the disposal of cannabis that has not been sold or distributed. 

Cannabis Retail - Conditions

As part of the AGCO’s risk-based licensing approach, one or more conditions may be attached to a Cannabis Retail Operator Licence, Retail Manager Licence and/or Retail Store Authorization by the Registrar to help the licensee minimize risks identified during the assessment process. Below is a complete list of the conditions the Registrar may impose, as approved by the AGCO Board of Directors:

#

Condition

Honesty, Integrity and Financial Responsibility

1

The holder of the licence and/or authorization shall notify the Registrar in writing within five (5) business days of entering into any agreement with respect to changes in ownership, control or affiliations of the licence holder or authorized store and provide proof that the agreement complies with all regulatory requirements and/or the lottery rules.

2

A licensed retail manager or the licensed operator must be onsite at the authorized store at all times while the authorized store is open.

3

The holder of the licence and/or authorization shall have a written code of conduct for employees and provide proof that employees have read and understand the requirements.

4

The holder of the licence and/or authorization must notify the Registrar in writing within five (5) business days of any new source of funds used to support operations of the holder of the licence and/or the authorization or operations of the authorized store.

5

A licensed retail manager must perform the following duties at the store: (DUTIES)

Minors

6

The holder of the licence and/or authorization shall ensure that the identification of every individual who appears to be under the age of 25 years is inspected at entrance(s) to the authorized store and at the point(s) of sale.

Safety and Security

7

The holder of the licence and/or authorization shall maintain a log confirming the security camera equipment is functioning at all times. The logs shall be made available for inspection and review upon request by the AGCO.

8

The holder of the licence and/or authorization shall retain all surveillance recordings for at least XXX day(s).

9

The holder of the licence and/or authorization shall ensure that there is a sufficient number of licensed and visibly identifiable security personnel at all times while the authorized store is open.

10

The authorized store shall be staffed with at least XX (number of) licensed and visibly identifiable security guard(s) from XX:XX (am/pm) until closing.

11

The authorized store must be equipped with a working monitored alarm system to detect and log attempted unauthorized access to and unauthorized movement within the authorized store premises.

12

The holder of the licence and/or retail store authorization shall ensure that measures are in place to prevent and address disorderly conduct on the authorized store premises, property adjacent to and in the vicinity of the premises by persons either waiting to enter or persons exiting the premises.

Prohibited Person(s)

13

The holder of the licence and/or authorization shall ensure that the following individual(s) is/are not permitted to enter or be at the authorized store: (NAMES)

14

The holder of the licence and/or authorization shall ensure the following persons have no involvement in the business operations of the authorized store, including as an officer, director, shareholder or owner and/or have no involvement or beneficial or financial interest in the business or ongoing operations of the licence: (NAME(S)

15

The holder of the licence and/or authorization shall ensure that the following individual(s) is/are not permitted in the authorized store except to perform duties arising from his/her position as landlord or sub-landlord in accordance with the following terms:

(NAME(S)

(TERM (S)

16

The holder of the licence and/or authorization shall ensure that the following individual(s) is/are not involved directly or indirectly in the operation and financing of the business:

17

The holder of the licence and/or authorization shall not employ the following individual (s) in any capacity: (NAME(S)

Product Security and Record-Keeping

18

The holder of the licence and/or authorization must ensure that physical inventory counts are carried out on a daily basis for each day that the authorized store is open, that a log is kept, and any discrepancies are reported in writing to the AGCO within 24 hours.

19

The holder of the licence and/or authorization must submit in writing a report to the AGCO on a biweekly/weekly basis of all inventory movements of cannabis products.

20

The holder of the licence and/or authorization shall ensure that all employees are subject to screening for stolen product before exiting the authorized store.

21

The holder of the licence may not transport cannabis between their authorized store locations.

22

The holder of the licence and/or authorization must notify the AGCO in writing within 72 hours in advance of destroying any cannabis.

23

The holder of the licence and/or authorization must ensure that after operating hours, all cannabis is locked in a secure storage room accessible only by authorized staff.

24

The holder of the licence and/or authorization must maintain a list of employees that are authorized to access the secure cannabis storage room.

25

The secure cannabis storage room may not be used for any other purpose other than the storage of cannabis.

26

The holder of the licence and/or authorization must ensure that sensory display containers are physically tethered or affixed to a secure surface.

27

The holder of the licence and/or authorization may not use sensory display containers in the authorized store.

28

The holder of the licence and/or authorization must ensure that patrons do not handle any cannabis until it is purchased.

Compliance Plans

29

The holder of the licence and/or authorization (applicant) shall submit by (DATE) a proposed compliance plan to the Registrar for review and filing that addresses the objectives identified by the Registrar, including but not limited to the following issues: (ISSUE TYPES)

30

The holder of the licence and/or authorization (applicant) shall submit by (DATE) a proposed compliance plan to the Registrar for review and approval that addresses the objectives identified by the Registrar, including but not limited to the following issues: (ISSUE TYPES)

31

The holder of the licence and/or authorization (applicant) shall comply with the compliance plan filed with the Registrar.

32

The holder of the licence and/or authorization (applicant) shall comply with the compliance plan approved by the Registrar.

33

The holder of the licence and/or authorization shall keep the compliance plan onsite at their authorized store(s) and make it available to AGCO upon request.

Cannabis Retail - Plans

As part of the AGCO’s risk-based licensing approach, the Registrar may require that a licensee prepare one or more plans to address areas of risk identified during the assessment process. Below is the type of plan the Registrar may require, as approved by the AGCO Board of Directors:

Compliance Plan

A plan designed to ensure that the authorized store is operating in compliance with the overall cannabis retail regulatory regime in place in Ontario, helping to protect the public-at-large, as well as the licensee, from potential harm caused when regulations are not followed. The plan must identify best practices, policies and other requirements that the licensee will adopt in order to achieve specific and general compliance goals, with a primary focus on the regulatory requirements that are specific to retail cannabis licensees.

This includes reasonably addressing issues such as record-keeping and inventory management, safety and security, management structure and policies, preventing access by minors, preventing illicit activity, the type of products available for sale, staff training, store policies, internal control issues, and other general compliance issues.

Cannabis Retail - Modifications to Existing Licences/Authorizations

Removing a Condition on a Cannabis Licence/Authorization

If you have a condition(s) on your cannabis Retail Operator Licence, Retail Manager Licence and/or Retail Store Authorization, and circumstances have changed, you may apply to have a condition removed. Depending on the manner in which the condition was added to your licence and/or authorization you will be required to apply to either the AGCO or the Licence Appeal Tribunal (LAT).

You may apply to the AGCO’s Registrar to have a condition on your licence and/or authorization removed if:

  • The condition was imposed on a licence/authorization by the Registrar with your consent pursuant to the Cannabis Licence Act.
  • The condition was imposed on the licence/authorization by the Registrar as part of the AGCO’s risk-based licensing process. Risk-based licensing conditions can only be removed if the Registrar determines that the risk designation is no longer necessary. 

Please note that the Registrar will only consider removing a condition if the circumstances that required it have changed and it is deemed to no longer be necessary.

You may apply to the LAT to have a condition on your licence and/or authorization removed if:

  • The condition was imposed by a panel of the LAT after a hearing

In this case, you must consult the LAT website for the applicable forms and process.

Changing Legal Entity Type

If you are a Retail Operator Licence holder and would like to change your applicant type, ownership and /or corporate structure, you must submit a new Retail Operator Licence and Retail Store Authorization application along with their associated application fees.

Cannabis Retail Operator Licence, Retail Store Authorization and Cannabis Retail Manager Licence - Risk-Based Licensing

The AGCO employs a risk-based approach when issuing and regulating Cannabis Retail Operator Licences, Cannabis Retail Manager Licences, and Cannabis Retail Store Authorizations. Risk-based licensing allows the AGCO to encourage good business practices throughout the industry and to focus its own regulatory resources where they will make the most difference.

Although there is always some risk attached to the sale of recreational cannabis, the AGCO recognizes that due to variables (such as location, past history and experience), some establishments and individuals pose a greater risk to the public interest and/or to non-compliance with the law. Risk-based licensing is one of several initiatives the AGCO has implemented in the other sectors it regulates.  This approach to licensing allows AGCO to base its decisions on risk assessments and its approach to regulation on encouraging compliance rather than relying solely on enforcement following any violations.

Risk-based licensing assists Cannabis Retail Operator licensees, Cannabis Retail Manager licensees and Cannabis Retail Store Authorization holders in operating their establishments in a safe, responsible, and compliant way.

The authority to carry out a risk-based licensing regime is given to the AGCO under Section 6 (5) of the Cannabis Licence Act, 2018.

How Risk-Based Licensing Works

There are four key principles behind risk-based licensing:

  1. To identify persons or places that pose specific risks to the public interest;
  2. To lessen risks and ensure compliance with the Cannabis Licence Act, 2018, and its regulations, and the Registrar’s Standards for Cannabis Retail Stores through the entire lifecycle of a licence;
  3. To reduce the administrative burden for those who pose a lower risk, where possible; and
  4. To focus more AGCO resources on those cannabis retail stores that pose enhanced risks.

The application of risk-based licensing can occur at any point in the lifecycle of a Cannabis Retail Operator licence, Cannabis Retail Manager licence, and Cannabis Retail Store Authorizations.

New applicants proceed through a three step process:

  1. After an application, for a licence or authorization, is received, an eligibility assessment process takes place. During the initial application or authorization review, the Registrar uses specific criteria to assess the risk(s) posed to the public interest, and of non-compliance with the law.
  2. After reviewing all the available information on the licensee/applicant, the Registrar assesses the risks and determines if the licence should proceed to an enhanced review.
    • If the Registrar believes that no conditions need to be placed on a licence, or if a licensee has taken steps on their own to recognize and manage any risks, then these establishments will see no change in the way that their licences are administered.
  1. If the Registrar believes that a licensee may need more assistance and support to remain compliant with the Cannabis Licence Act, 2018, following the eligibility assessment review, then conditions may be placed on the licence, and/or more AGCO resources will be focused on the licensee in order to mitigate any risks.

Applicants renewing their licence or authorization, or having a condition on their licence, would only proceed through steps 2 and 3.

During the lifetime of a licence or authorization, the Registrar can reassess the risk posed by the licensee. This reassessment can occur either because the licensee requests a reassessment, or because the Registrar becomes aware that there has been a change in circumstances and there should be a reassessment. At each of these times the Registrar may add, remove or amend one or more conditions.

Suspension or Revocation of Licences & Authorizations

All owners/operators of cannabis retail stores along with store managers are subject to the provincial Cannabis Licence Act, 2018, its regulations and the Registrar’s Standards.

If you do not comply with legislation and regulations or are no longer eligible for your licence or authorization, your licence or authorization may be suspended or revoked.  You will be advised of the licence or authorization being suspended or revoked and can request a hearing before the Licence Appeal Tribunal.

In some cases, depending on the reasons, the licence or authorization may be suspended or revoked immediately.

If your Retail Store Authorization is suspended, you must post a sign about the suspension in a place where people can easily see it from outside the store.

If your Retail Store Authorization is revoked, suspended or cancelled, you must comply with any rules set by the Registrar regarding the disposal of cannabis that has not been sold or distributed.

Compliance Officials

AGCO compliance officials may visit the retail store location to confirm compliance with the Cannabis Licence Act, 2018 and regulations. You must allow the inspection, and you must not interfere with the compliance official, refuse to answer questions related to the inspection, or provide false information.  

 When doing an inspection, an AGCO compliance official may: 

  • ask you for and look at certain records that are relevant to the inspection
  • take certain records away from the store to review, examine, test or copy. In this case, the compliance official will give you a receipt confirming which records have been taken. 
    • After the compliance official has taken the records, you can request that the records be made available to you. 
    • The records will be returned to you in a reasonable time, unless the records cannot be returned because of the testing done. 
  • take photographs or other recordings
  • ask about financial transactions, records or other matters relevant to the inspection. 

If an compliance official asks you for a record, you must provide it.  You must also must help the official understand the record or provide it in a readable form.

Inducements

If you have a Retail Operator Licence, a Retail Store Authorization and/or a Cannabis Retail Manager Licence, no one is allowed to offer you, or your employees, a material inducement or benefit. 

You are not allowed to give or offer to give away cannabis or cannabis accessories to someone without charge.  You cannot offer things or services to induce a person to purchase cannabis. 

Advertising and Promotion

Under the Cannabis Licence Act, 2018 (CLA) and Regulation 468/18, the Registrar has the authority to establish standards and requirements with respect to a number of areas, including advertising and promotional activities.

Information about the standards and requirements for advertising and promoting cannabis, cannabis accessories or the sale of cannabis can be found in section 6 of the Registrar’s Standards for Cannabis Retail Stores.

Please note cannabis retail store operators are subject to the federal Cannabis Act and its regulations, which outline permissible and prohibited advertising and promotional activities.

July 1, 2020 amendments to the Smoke Free Ontario Act exempt cannabis retail stores from the ban on the display of vapour products and clarify that cannabis retail stores may sell flavoured cannabis vape products.  

In general, advertising and promotion includes any public notices, representations or activities that aim to attract attention to cannabis, cannabis accessories or the sale of cannabis.

Monetary Penalties - Cannabis

Monetary penalties are one of the compliance tools the AGCO may use when licensed operators, retail store managers or authorized stores are found to have acted out of compliance with the Cannabis Licence Act, 2018 (CLA), its regulation or the Registrar’s Standards for Cannabis Retail Stores.

A monetary penalty is a financial consequence that a licensee or authorized retailer is required to pay as a result of a contravention of the CLA, regulations or standards. Monetary penalties are a step towards ensuring compliance that allows the AGCO to take appropriate regulatory action that is greater than a warning but not as severe as a licence or authorization suspension or revocation. The use of monetary penalties  aligns Ontario with the majority of other Canadian jurisdictions, which have some form of monetary penalty system.

Schedule of Monetary Penalties: Cannabis Licence Act, 2018 and Regulation 468/18

For more information, see the Monetary Penalties page.

Objectives of Cannabis Legislation and Regulations

The federal government of Canada has legalized recreational cannabis in Canada. The Cannabis Act is the legal and regulatory framework for controlling the production, distribution, sale and possession of recreational cannabis in Canada and was put in place by the federal government with the purpose of keeping cannabis out of the hands of youth, keeping profits out of the pockets of criminals and protecting public health and safety by allowing adults access to legal cannabis.  

Under the Cannabis Act, each province and territory is responsible for setting its own rules for how cannabis can be sold, where stores can be located, and how stores must be operated. Provinces and territories may also set additional restrictions they feel are necessary. As a result, the Government of Ontario has worked to implement a safe, legal system for cannabis retail that is intended to protect youth, protect roads and combat the illegal market for cannabis.  

Under Ontario’s regulatory model, the AGCO has been given the responsibility of licensing eligible retail store operators, authorizing cannabis retail stores and regulating the sale of cannabis. The AGCO’s focus is on the safe, responsible and lawful sale of cannabis, consistent with the legislation enacted by the provincial government. Its regulatory objectives are to ensure that the retail sale of cannabis in Ontario is carried out with honesty, integrity and in the public interest as set out in the Cannabis Licence Act, its regulations and the Registrar’s Standards for Cannabis Retail Stores.

Ontario's Cannabis Retail Regulation Landscape

Legal Cannabis Supply Chain

1_0.pngHealth Canada regulates the cultivation and processing of cannabis and licenses producers, called “Licensed Producers”.

 

2_0.pngLicensed Producers are the only legal growers/producers of cannabis products in Ontario.

 

3_0.pngThe Ontario Cannabis Store is a Crown agency of the Government of Ontario and is the only legal supplier (wholesaler) of cannabis for private retail stores in Ontario. The OCS operates the only legal online store for recreational cannabis sales in Ontario. The AGCO does not regulate the OCS.

 

The Licences and Authorizations you need from the AGCO

4_1.png

Retail Operator Licence 

To be able to legally open a retail store to sell recreational cannabis, you must get a Retail Operator Licence. To get this licence, you must meet all of the eligibility criteria set out in the Cannabis Licence Act and its regulations.
A Retail Operator Licence allows you to operate one retail store in Ontario. 

Retail Store Authorization  

You must have a Retail Store Authorization for your store. The Cannabis Licence Act and its regulations require that each store meet certain requirements. Requirements relate to such matters as the store layout and location. The regulations also give residents of the municipality in which the proposed store would be located the opportunity to provide their input. 

Cannabis Retail Manager Licence   

In order to ensure the responsible sale of cannabis, there must be at least one licensed manager for each authorized store location. The Cannabis Licence Act and its regulations set out eligibility criteria for the person who will have management responsibilities in authorized stores. This includes having responsibility for the cannabis inventory, for hiring and managing employees, and for ensuring the store operates with honesty and integrity at all times.
If you are a sole proprietor, or in a partnership between two or more individuals, and will be both the licensed operator and performing the duties of the retail store manager for a particular store, you do not need to get a Cannabis Retail Manager Licence for your store.

 

The Local Community

Municipalities

Ontario municipalities had a one-time option to opt out of having cannabis retail stores in their communities. Municipalities had until January 22, 2019 to inform the AGCO if they wish to opt out. Municipalities that choose to opt out can opt back in at any time—but once they are in, they may no longer opt out. 

Residents

Residents in the municipality of a proposed cannabis store location have an opportunity to share their views with the AGCO before a retail store is authorized. The Registrar must refuse to authorize the store if it is in the public interest to do so. 
The only areas of public interest the Registrar can consider, as defined by the regulations, are related to public health and safety, protecting youth and restricting their access to cannabis, and preventing illegal activities in relation to cannabis. 

Note: this page is also available as a pdf infographic.

Cannabis Licence Act, 2018

The full text of the Cannabis Licence Act, 2018 can be viewed on the government of Ontario’s website.

Ontario Regulation 468/18 made under the Cannabis Licence Act, 2018

The Full Text of Ontario Regulation 468/18 made under the Cannabis Licence Act, 2018 can be viewed on the Ontario government website.

 

Registrar's Standards for Cannabis Retail Stores

(Last Update: June 2021)

Introduction

The Cannabis Licence Act, 2018 (CLA) and Regulation 468/18 provide the Registrar with authority to establish standards and requirements in the following areas:

  • store premises, equipment and facilities, including surveillance and security
  • the prevention of unlawful activities
  • advertising and promotional activities
  • training related to the responsible use and sale of cannabis
  • the protection of assets
  • record-keeping and measures to maintain confidentiality and security of records
  • compliance with the federal cannabis tracking system.

These Standards are outlined in the Registrar’s Standards for Cannabis Retail Stores. Licensees are required to comply with the Registrar’s Standards for Cannabis Retail Stores, as well as all applicable laws and regulations, including the Cannabis Control Act, 2017 (CCA), the Cannabis Licence Act, 2018 (CLA), and Ontario Regulation 468/18.

The objective of a standards-based regulatory model is to shift the focus from requiring licensees to comply with a specific set of rules or processes, toward the broader regulatory outcome or objectives they are expected to achieve. Since there may be many ways for a licensee to meet the Standards, licensees have the flexibility to determine what works best for their business, thereby strengthening regulatory outcomes without needlessly burdening regulated entities.

Holders of a Retail Operator Licence are responsible for meeting all Standards. Where not specified otherwise, Standards also apply to holders of a Retail Manager Licence.

The Registrar’s Standards for Cannabis Retail Stores will be reviewed and revised on a regular basis to ensure that they are effective in mitigating risks as the cannabis retail sector matures.

1.0 General Standards

1.1 Licensees must ensure that all employees act in accordance with the law and demonstrate honesty and integrity.

Requirements - At a minimum:

  1. licensees must obtain criminal background checks from employees as part of the hiring process
  2. licensees must ensure that all employees understand their obligations with respect to applicable laws, regulations, standards, and policies
  3. licensees must ensure that all employees have completed any required training, including Board-approved training, prior to their first scheduled shift.
  4. licensees must ensure that all current employees complete any required training, including Board-approved training, within 60 days of it being approved and available.

1.2 Licensed Retail Operators must exercise oversight of their retail operations. 

1.3 Licensed Retail Operators (if also performing the duties of a Retail Manager) or licensed Retail Managers may only be accountable for up to 5 authorized stores. [Amended: March, 2021]

1.4 A copy of the Retail Manager Licence must be kept at the store, and made available to AGCO inspectors or investigators upon request.

1.5 The retail store’s operating name must be the same as the name set out on the retail store authorization.

1.6 Licensees must notify the Registrar in accordance with the Notification Requirements. [Amended: March, 2019]

1.7 A Licensed Retail Operator must submit the following changes to the Registrar within a reasonable time:

  1. if a person ceases to be a director or officer of a Licensed Retail Operator that is a corporation or a corporation that effectively controls the business
  2. if a person ceases to be a partner of a partnership in which the Licensed Retail Operator is also a partner.

1.8 A Licensed Retail Operator must submit, within a reasonable time, the following changes to the Registrar for approval:

  1. a person becomes a director or officer of a Licensed Retail Operator that is a corporation or a corporation that effectively controls the business
  2. a person becomes a partner of a partnership in which the Licensed Retail Operator is also a partner
  3. a person or partnership acquires a beneficial interest in the Licensed Retail Operator’s business, including holding or controlling shares of a holder that is a corporation or in a corporation that effectively controls the business
  4. a person or a partnership other than the Licensed Retail Operator becomes entitled to any of the profits from the sale of cannabis or cannabis accessories, or liable for any obligations incurred from the sale of cannabis or cannabis accessories, at any cannabis retail store for which the Licensed Retail Operator holds a retail store authorization.

1.9 Licensees must comply with the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020

2.0 Physical Store Requirements

2.1 A secure, high-resolution surveillance system must be in place at all times.

Requirements - At a minimum:

  1. cameras and lighting must be positioned to clearly capture 24 hour coverage of the interior of the premises and immediately outside the premises, including the:
    1. Entrances and exits, including where IDs are checked
    2. Pick up area(s) for cannabis purchased online or by telephone
    3. Point of sale area(s)
    4. Receiving area(s)
    5. Sales floor area(s)
    6. Cannabis storage area(s).
  2. video recordings must be made and retained for a minimum of 30 days and be made available to the AGCO upon request
  3. the Licensee must ensure that the surveillance system is functioning properly at all times.

2.2  All cannabis must be stored securely at all times and be accessible only by staff from receipt of product to point of sale, destruction, or return to the Ontario Cannabis Retail Corporation (OCRC) or the Licensed Producer.

2.3  Any cannabis that is outdated, recalled, damaged, deteriorated, misbranded, adulterated, returned, or otherwise ineligible to be sold must be kept separate from other cannabis.

2.4  All points of access to the premises must be secure and protected against unauthorized access.

2.5  Licensees must ensure that cannabis and accessories are not visible from the exterior of the premises.

2.6  Licensees may use sensory display containers to allow patrons to see and smell cannabis.  Sensory display containers must be locked and tamper-proof to prevent patrons from touching the cannabis, and must not be able to be removed from the premises.

2.7  The cannabis used in the sensory display containers must be purchased by the Licensed Retail Operator from the retail store’s inventory through the point-of-sale system.

3.0 Destruction of Cannabis

3.1 Cannabis that is ineligible to be sold and ineligible for return to the OCRC must be destroyed or rendered unusable through a method that :

  1. complies with all applicable federal, provincial and municipal laws and regulations, including environmental protection legislation applicable to the location where it is being destroyed
  2. does not result in any individual being exposed to cannabis smoke or cannabis vapour.

3.2 If carried out by the Licensee, the entire cannabis destruction process must be captured on the premises’ surveillance system, and must be overseen by a Licensed Manager or Licensed Retail Operator.

3.3 Destruction of cannabis that is ineligible for sale, except cannabis that is contained within a vapour product, must be performed on a monthly basis, at a minimum.

3.4 Licensees must inform the AGCO of any destroyed cannabis in accordance with the Notification Requirements. [New: May, 2019]

3.5 Destruction of cannabis that is ineligible for sale and is contained within a vapour product must be performed as soon as it is practicable to do so.

4.0 Secure Transportation

4.1 In the event of a product recall, Licensees must work with the OCRC to ensure that all unsold product subject to the recall is transported securely back to the OCRC, and must ensure that records are kept of all product returned. [AMENDED March 2019]

4.2 If a Licensed Retail Operator holds more than one Retail Store Authorization, cannabis may be transferred between their retail stores.  Licensees must ensure that the transportation of cannabis is secure, and must maintain records of all movements of cannabis between stores. At each store, the Licensed Retail Manager or Licensed Retail Operator must supervise and document the transfer process and inform the AGCO in accordance with the Notification Requirements. [Amended: May, 2019]

5.0 Minors and Prohibited Individuals

5.1 Licensees must take reasonable measures to ensure that patrons are not purchasing cannabis or cannabis accessories on behalf of individuals under the age of 19.

6.0 Advertising and Promotions

6.1 Licensees must have signage clearly identifying their business on the exterior of the authorized store.

6.2 Advertising may not:

  1. appeal to or target persons under 19 years of age
  2. promote cannabis or cannabis accessories in a way that is false, misleading, or deceptive
  3. suggest or imply, directly, indirectly, or by use of endorsements of testimonials, that consumption of cannabis is associated with success, enjoyment of an activity, fulfillment of a goal, or the resolution of a problem
  4. be associated with medicine, health, or pharmaceuticals
  5. depict or suggest the illegal sale of cannabis
  6. associate consumption of cannabis with driving a motorized vehicle, or with any activity that requires care and skill or has elements of danger [AMENDED March 2019]

6.3 Licensees may not provide cannabis or cannabis accessories free of charge or provide any other thing or benefit, as an inducement for the purchase of cannabis or a cannabis accessory. [AMENDED March 2019]

6.4 Licensees may not accept or request material inducements from Licensed Producers, their representatives, or suppliers of cannabis accessories.

7.0 Responsible Use

7.1 ​Licensees must ensure that information related to the responsible use of cannabis is made available to patrons.

Requirements - At a minimum:

  1. licensees must make the Health Canada Consumer Information – Cannabis document available to patrons

  2. any other information prescribed by the Registrar.

8.0 Record Keeping Requirements

8.1 Licensees must ensure that the following records are maintained, retained a minimum of  three (3) years, or longer as may be required by other laws and regulations, and made available to the AGCO in accordance with the Notification Requirements or upon request [Amended: Dec, 2019]:

  1. employee records, including names, addresses, primary job responsibilities, shift schedules, training records, CPIC records check results, and dates of employment
  2. records for all cannabis in the authorized store, including cannabis purchased directly from the OCRC and cannabis transferred from another authorized retail store operated by the Licensed Operator.  At a minimum, these records must contain information regarding:
    1. the cannabis purchased and received by the Licensee for sale in the authorized store
    2. any cannabis returned to the OCRC or Licensed Producers
    3. each sale transaction at the authorized store, online or by telephone, traceable to the employee level
    4. any cannabis that has been destroyed.  Records of any cannabis destroyed must include, at a minimum:
      1. the name and address of the authorized retail cannabis store
      2. the time and date of the destruction
      3. the name of the individual conducting the destruction, if being carried out by the licensee, or the company, if being contracted to a third party 
      4. a certificate of destruction, if destruction is carried out by a third party
      5. the product category and SKU
      6. the amount of product
      7. the reason for the destruction of the cannabis product
      8. the method of destruction.
  3. records required to enable the licensee to participate in any national cannabis tracking system established under section 81 of the federal Cannabis Act
  4. records that may be required to support a cannabis product recall
  5. records demonstrating that the Licensee is complying with sections 7 and 8 of the Cannabis Control Act, 2017, which prohibit sales to persons under 19 years of age and persons who are or appear to be intoxicated.
  6. licensees must maintain records of the cannabis used for display purposes.  These records must account for the product after it is no longer on display.
  7. Licensees must ensure that the Monthly Federal Report and Monthly Sales Report are complete and made available to the AGCO in accordance with the Notification Requirements. [Amended: Dec, 2019]
  8. Records of the name and address of purchaser and residential address where any cannabis is delivered pursuant to O. Reg. 128/20 created under the Emergency Management and Civil Protection Act, or pursuant to the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020

  9. Records of the specific authorized store(s) a licensed Retail Manager is accountable for. [New: March, 2021]

8.2 Licensees must complete full physical inventory counts of all cannabis on a monthly basis at a minimum or upon the request of AGCO.

A log of the inventory results must be maintained and all discrepancies must be reported to the AGCO in accordance with the Notification Matrix and made available to the AGCO upon request.

8.3 Licensees must ensure that there are reasonable safeguards around data security and protection of data integrity, including point of sales systems and e-commerce systems.

8.4 Point of Sales systems and e-commerce systems must be certified by a recognized industry certification body or organization (e.g. PCI, ISO) and have logging capability for the purposes of monitoring all system access and system changes.

9.0 Temporary Curbside Pick-Up and Delivery Requirements 

Standards applicable to all licensees.

9.1 Licensees must ensure that curbside pick-up of cannabis is clearly captured by the premises’ surveillance system. 

9.2 Licensees must ensure that, prior to the delivery or curbside pick-up of cannabis to any individual who appear to be under 25 years of age, the Licensee or employee of the Licensee has required the individual to provide a form of identification prescribed for the purposes of subsection 7 (2) of the Cannabis Control Act, 2017 and the Licensee or employee of the Licensee is satisfied that the individual is at least 19 years of age. 

9.3 The delivery of cannabis must be completed by the Licensee or employee of the Licensee between the hours of 9 a.m. and 11 p.m.   [Amended: June 2021]

  1. The cannabis must be delivered to the residential address or private place specified in the order.
  2. The cannabis must be delivered to a person present at the place of delivery and who is at least nineteen years of age.
  3. Any cannabis not delivered by 11 p.m. must be returned to the cannabis retail store for secure storage.  

9.4 Cannabis retailers must ensure that cannabis removed from an authorized store for delivery has been ordered by a customer. 

9.5 [Removed June 2021.]