While recreational cannabis was legalized across Canada in October, the first brick-and-mortar cannabis retail stores in Ontario won’t launch until April 1, 2019. That means if you want to be among the first cannabis retailers in Ontario, you still have time. In 2017, Canadians spent $3 billion on cannabis, more than what we spend on tobacco and about the same as we spend on beer. Clearly, cannabis represents a significant and rare business opportunity for ambitious entrepreneurs.
However, cannabis sales are tightly regulated and to get started in this industry you will need to have the required government licences. Here are four challenges you may encounter as you apply for a cannabis retail licence.
1. Figuring Out How Many Cannabis Retail Licences You Need
All cannabis retail licences in Ontario are issued by the Alcohol and Gaming Commission of Ontario (AGCO). To get started as a cannabis retailer, you will need a minimum of two licences from the AGCO. First, you will need a Retail Operator Licence, which allows your company to operate one or more cannabis retail stores. Then, each individual store will need its own Retail Store Authorization licence.
2. Will Your Cannabis Store Need a Licensed Retail Manager?
To complete your cannabis retail application in Ontario, you may also need an employee at each store who has a Cannabis Retail Manager Licence. This licence permits an individual to hire and supervise employees, manage cannabis sales, purchase cannabis for inventory, and ensure the store is in compliance with the various laws relating to cannabis. However, if your business is a sole proprietorship or a partnership and you or your partner will be performing the duties of a licensed retail manager at a particular store, then you won’t not need a Cannabis Retail Manager Licence (although the other two licences described above will still be required).
3. You Can Only Apply for a Cannabis Retail Licence If Your Municipality Allows It
The provincial government has given municipalities until January 22, 2019 the ability to opt out of allowing cannabis retail stores in their jurisdictions. If a municipality opts out of cannabis retail sales, then the AGCO will not issue a Retail Store Authorization for any cannabis retail store trying to set up in those communities. However, if you are concerned that a community that has decided to opt in will later decide to opt out, don’t worry. While municipalities that have opted out can choose to opt in afterwards, any municipality that has opted in by the January 22 deadline cannot opt out later.
4. Make Sure Your Cannabis Store Is Far Enough Away from Schools
When you apply for a retail license, don’t make the mistake of assuming that just because you are in an opt-in community that you can set up a cannabis store anywhere within that community. Ontario law makes it illegal for cannabis retail stores to be located near a school or private school. Your retail store must be located at least 150 metres away from any school. This rule does not apply if the school only offers online courses. It also does not apply to schools on First Nations Reserves, which have their own rules for where cannabis stores can be located.
Are you interested in cannabis retail licensing in Ontario?
Contact the Academy of Applied Pharmaceutical Sciences (AAPS) to learn more about getting into this exciting new industry.