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.
Inducements between licensed producers and retailers
The Registrar’s Standards for Cannabis Retail Stores generally prohibit licensees from entering into agreements for items, benefits, payments, or services with licensed producers (LPs) and their representatives with the purpose to promote or increase the sale of a particular product by the licensee or their employees. In other words, licensees are not allowed to ask for or accept material inducements.
There are several exemptions to this general prohibition, which are listed below, with some additional context.
Items, Benefits or Services of Nominal Value:
The standards under Section 6.0: Advertising and Promotions state that licensed retailers may accept or enter into agreements with an LP or their representative for items, benefits or services of nominal value. Nominal value items, benefits or services, unlike financial or material inducements, are those that are of inconsequential value.
The AGCO does not prescribe a specific monetary value for what constitutes an item, benefit or service of nominal value. The determination is contextual and considers a number of factors which may include:
The following is a list of examples of items, benefits or services that may be considered nominal. Note that this list is not exhaustive, and it is possible for these examples to be material inducements, depending on the contextual factors above.
Items, Benefits and Services Related to Education or Training:
Standard 6.5 also allows licensed retailers to accept items, benefits or services that are related to education or training. Examples of items, benefits and services related to education and training may include:
Sale of Business Data:
The sale or sharing of personal customer information continues to be prohibited by Canadian law, unless expressly consented to. Licensed retailers may enter into agreements with LPs for the sale of data for business intelligence purposes. The AGCO expects that the fee charged by the licensee and paid for by the LP should be at fair market value. Licensed retailers are expected to follow applicable privacy laws and regulations.
Ownership Interests and Franchise Agreements:
Financing and lease agreements, as well as franchise agreements between retailers and LPs or their affiliates, are permitted under Standard 6.5.
Store Brand Cannabis Products:
Agreements between retailers and LPs for store brand cannabis products (also known as white labels, private labels, private brands, and in-house/house brands) are permitted under Standard 6.5.
Nature of Permissible Activities
Standard 6.6 sets out constraints on agreements that are permissible under Standard 6.5, to ensure that they are not used as a method for material inducements.
Agreement between retail licensees and LPs must not:
Prohibited Activities
Aside from the exemptions set out in Standard 6.5, the Standards on inducements set out a general prohibition on agreements for items, benefits, or services between licensed retailers and LPs and their representatives.
Examples of prohibited activities include:
Recordkeeping
If you enter into an agreement pursuant to Standard 6.5, you must follow the additional record keeping requirements set out in Standard 8.1, requirement 10.
To meet cannabis regulatory requirements under Standard 8.1, requirement 10, you are required to:
As with any other records under Standard 8.1, these records must be made available to the AGCO upon request.