Ontario pauses new cannabis store authorizations, eases regulations

Ontario’s cannabis store regulator has hit pause on new store authorizations, as the province’s existing retailers scramble to offer temporary curbside pickups and delivery.

“The (Alcohol and Gaming Commission of Ontario) will not issue new store authorizations until the government’s Emergency Order has been lifted,” said the regulator in a bulletin.

However, the AGCO will still issue Retail Operator Licenses and Manager Licenses for cannabis stores, “and will process store authorization applications and conduct eligibility assessments to the extent possible, so that businesses will be prepared to move forward once restrictions are lifted.”

So far this year, the AGCO has approved or issued:

• 401 Cannabis Retail Operator Licences (ROLs).
• 39 Cannabis Retail Store Authorizations (RSAs).

Prospective store operators who received or applied for an ROL are allowed to submit up to 10 RSA applications.

Toronto cannabis lawyer Matt Maurer, who co-chairs the cannabis practice at Torkin Manes, suspects the AGCO might be delaying store authorizations because it is hard for them to do physical store inspections during COVID-19, or because the regulator is already busy trying to keep on top of the new emergency pickup and delivery options for existing stores.

“I would think it’s more an issue of, ‘Look, it’s only two weeks for now. We’re still processing the paperwork, really all we’re doing is (not putting) the stamp on at the end, because it’s an additional task we need to deal with in an already crazy time,'” said Maurer.

Once the emergency order for Ontario cannabis stores is lifted, Maurer expects the AGCO will quickly return to issuing final store authorizations.

“I think they’ll come out in rapid succession,” he said.

“You’ve seen how many (store applications) have gone into public notice — it’s a lot. They’re moving through them, all things considered, very quickly, and there’s a lot of stores that are very close to the end.”

The AGCO is also easing certain regulatory requirements and standards for Ontario cannabis retailers during the COVID-19 crisis, including:

• Temporarily allowing retail licensees to get employee criminal background checks “as soon as is practicable” in light of police service reductions.
• Temporarily allowing full cannabis inventory counts on a monthly basis, rather than a weekly basis.
• Softening regulatory reporting requirements surrounding management changes or terminations.
• Lengthening timeframes for giving notice on changes of officers, directors or partners and submitting organizational charts, as well as providing notice of changes to store layout.
• Updating requirements for periodic regulatory reports like inventory count discrepancies, product destruction reports and product transfers between stores.

“During the COVID-19 pandemic, should you no longer wish to pursue a licence application currently in process, you have the option to cancel your application and receive a refund upon request,” the AGCO’s information bulletin states.

Ontario was Canada’s top adult-use cannabis market in January with 37 million Canadian dollars ($26 million) in sales, according to the latest sales figures from Statistics Canada.