The recent announcement from the Government of Ontario regarding the new system for retail cannabis store applications has massive positive implications for everyone in the industry and the general public. By removing the temporary cap on the number of private cannabis stores in the province and eliminating pre-qualification requirements for prospective retailers, the cannabis market will be much more accessible for both entrepreneurs and consumers. The Alcohol and Gaming Commission of Ontario (AGCO) will modify the application process for cannabis retail licensing. These updates will go into effect starting in early 2020 to align with the timelines established by the government.
Licensed producers will now be able to tap into a market that has been sorely underserved in the first year (2018) of legalized recreational cannabis. Cannabis advocates and entrepreneurs who were pushed to the sidelines due to the original lottery system will now be able to actively participate in the development of the retail market. The phased-in limit on the number of stores corporations and their entities can own (licensed operators may have up to 10 stores until Sept 2020, up to 30 until September 2021 and up to 75 thereafter) allows more room for more independent operators.
Moving into an open market framework means that cannabis businesses will have to cater to consumers who will now have more options available to stay competitive. This means the public can expect to see many innovative and diverse shopping experiences.
Now more than ever, it will be important for store owners to offer a superior retail experience and product offerings. We can expect to see the emergence of cannabis retailers focusing on certain types of offerings from traditional shops with a variety of product categories to retailers who narrow their focus to a particular type of cannabis products specializing in anything from edibles to topicals. Retailers will now also be able to support their cannabis offerings with not only accessories but items that support and educate the consumer from educational videos to cannabis-specific cookbooks.
The long-awaited “farm gate store” will now be an option for producers who want to have a shop at the site of their facility. This will support the much-needed reduction in the cost to the consumer as they will be able to purchase directly from their favourite growers directly from where the products are grown and made. This will connect producers to their consumers and pave the way for a craft cannabis industry similar to the thriving craft beer industry. Micro growers rejoice!
For those wanting to enter the cannabis space, now more than ever it is important to ensure that your plans and applications are compliant and wherever possible, surpass the AGCO requirements. The licensing process can be overwhelming without proper guidance, working with a passionate team of experts will ensure that you reach your goals as quickly and smoothly as possible.
Important Dates:
• As of January 6, 2020, the AGCO will begin accepting retail operator licence (ROL) applications from any interested applicant.
• The retail lottery and First Nations reserve allocation processes and rules will be revoked on January 6, 2020.
• The current restriction on the total number of stores and their regional distribution will be maintained until March 2, 2020.
• Until March 2, 2020, only applicants who were already selected and notified to apply for a ROL by the registrar prior to January 6, 2020, may apply for a retail store authorization.
• As of March 2, 2020, the restrictions on the total number of store authorizations permitted in the province, and their regional distribution, will be revoked.
• As of March 2, 2020, the AGCO will begin accepting applications for Retail Store Authorizations (RSA) from all interested parties.
• In accordance with the direction set by the government, the AGCO expects to issue up to 20 RSAs per month as stores become ready.
• Licensed operators may have up to 10 stores until September 2020, up to 30 until September 2021 and up to 75 thereafter.