1. Licensing and Regulation of Recreational Cannabis

The Ontario Legislative Assembly passed the Cannabis Statute Law Amendment Act on October 17, 2018, setting out the legal structure for private cannabis retail in Ontario and providing the AGCO with the authority to license, regulate and enforce the sale of recreational cannabis through privately run stores in Ontario. 

The Cannabis Licence Act, 2018 and its regulations came into force on November 16, 2018.

On December 13, 2018, the Government of Ontario imposed a temporary cap of 25 Retail Store Authorizations across five regions, and as set out in Ontario Regulation 468/18, gave the AGCO the mandate to hold an Expression of Interest Lottery to determine who may apply for a Retail Operator Licence, tied to one of the 25 Retail Store Authorizations. The lottery covered the period of time from January 2, 2019, when the Lottery Rules were published, to December 13, 2019, when Ontario Regulation 468/18 is scheduled to be amended.

The AGCO’s internationally accredited in-house Gaming Laboratory developed a lottery software program for the selection of the lottery applicants. Using state-of-the-art equipment to test and analyze the integrity of all lottery, casino and internet gaming systems used in Ontario, the Laboratory was well positioned to develop this program. It also submitted its software program for independent testing and certification from accredited, independent testing laboratory Gaming Laboratories International.

The AGCO retained the services of KPMG to act as a fairness monitor to oversee the lottery and ensure it was conducted fairly and according to the established Lottery Rules. On January 11, 2019, the AGCO held the lottery. There were approximately 17,000 entries. On February 21, 2019, KPMG issued its report regarding the first phase of the lottery, concluding that the process during that phase was fair to applicants and potential applicants. 

On February 7, 2019, the AGCO Board of Directors approved CannSell as the authorized cannabis retail employee training program for all employees of cannabis retail stores in Ontario.

The AGCO developed a regulatory framework, compliance and audit processes and Registrar’s Standards for Cannabis Retail Stores to ensure that stores operated in the public interest. In addition, the AGCO prepared its iAGCO online portal to process all applications for cannabis-related licences and authorizations.

Ten cannabis retail stores were licensed and scheduled to open on April 1, 2019, in support of the Government of Ontario’s objective of having licensed cannabis retail stores beginning to operate on that date. The AGCO continues to work with, and support the Government of Ontario on the regulation of cannabis, including the opening of additional licensed stores.