Last updated, January 2, 2020.
Like many provinces in Canada, Ontario was slow to roll out their cannabis retail program, opting initially for a lottery system to release a limited number of retail licenses. The first round authorized 25 stores to open in April of 2019. The second, in the fall of 2019, added an additional 50 licenses across the province, including 8 designated for First Nations land.
In mid-December, the Alcohol and Gaming Commission of Ontario (AGCO) announced it would end the controversial lottery system and remove the cap on retail licenses in favour of an open market for private cannabis retail in 2020.
AGCO will implement the new 2-step application process beginning January 6, 2020.
Here we answer some of the most common questions about the application process, and existing rules and regulations around cannabis retail in the province of Ontario. This page will be updated frequently as more information becomes available. Be sure to check out our Canada dispensary laws page for information about regulations in other provinces.
The Alcohol and Gaming Commission of Ontario is the only licensing authority for retail cannabis stores in Ontario. Producer licenses will be granted through Health Canada.
For 2020, the AGCO has implemented a 2-step open application process to replace the previously used retail lottery system, eliminating the cap on potential license approvals.
Step 1: Apply for a Retail Operator License – Beginning January 6, 2020, all qualifying candidates can apply. You can find the full list of criteria for obtaining a Retail Operator License here.
Step 2: Apply for a Retail Store Authorization – Beginning March 2, 2020, all candidates who have successfully applied for a Retail Operator License will be able to move forward to this step.
Note: Only applicants from the previous system who have been notified prior to January 6 can apply for a Retail Store Authorization before March 2.
Read this article for more information on how to open a cannabis retail store in Ontario, including links to additional requirements and the list of municipalities that do not allow stores.
There are three in total:
1) Retail Operator Licence: For people or entities that will be operating a cannabis retail store.
2) Retail Store Authorization: Authorizes you to operate a physical storefront. You’ll need a different authorization for every location.
3) Cannabis Retail Manager Licence: Required for anyone with management responsibilities to ensure the responsible sale of cannabis. In this case, “management responsibilities” are defined as:
Supervising or managing employees
Overseeing or coordinating the sale of cannabis
Managing compliance issues in relation to the sale of cannabis
Generally speaking, all license holders must be at least 19 years old, financially responsible, have no convictions or charges under the Cannabis Licence Act of 2018, have no current or previous ties to criminal organizations and have not lied in their application.
In almost all cases, yes. The first step is applying for a Retail Operator Licence, followed by a Retail Store Authorization and a Cannabis Retail Manager Licence. You cannot apply for the Retail Store Authorization without first submitting the Retail Operator Licence application.
The only exception is if you are a sole proprietor acting as both the owner and manager for a particular store. If so, you will not need the Cannabis Retail Manager Licence.
1) Retail Operator Licence: $6,000 for a 2-year term, with a $2,000 renewal fee or $4,000 renewal fee for a 4-year term.
2) Retail Store Authorization: $4,000 for a 2-year term, with a $3,500 renewal fee or a $7,000 renewal fee for a 4-year term.
3) Cannabis Retail Manager Licence: $750 for a 2-year term, with a $500 renewal or a $1,000 renewal for a 4-year term.
Licence applications are accepted online through
Applicants may be required to include:
Details of Shareholders
Tax Return and Tax Assessment
While these aren’t technically required upon initial application submission, it can slow down the licensing process if they aren’t provided up front.
After submitting a Retail Operator Licence application or successfully receiving one, you can move into the Retail Store Authorization process. You will need your Business Name Registration and Proof of Ownership/Tenancy (if applicable).
While not required, the AGCO strongly recommends completing the following steps before submitting a Retail Store Authorization application:
Confirm that the location you are interested in opening your store in is zoned for commercial or retail use.
If your intended location is on a reserve, obtain a Resolution of the Council of the Board showing approval.
Have your Retail Operator Licence application file number or licence number ready.
Make sure your proposed store location meets all requirements (more on that later).
Double check that your business or store name complies with all Federal and Provincial laws regarding advertising and promotion.
To apply for this licence, you’ll need a completed Personal History form (provided in
You can find detailed information in the AGCO’s Cannabis Retail Regulation Guide.
All individuals employed in a cannabis retail store must complete an employee training designed and approved by the AGCO Board. These education requirements have to be completed before the first day of work at any retail cannabis location. The program includes lessons on:
Basic cannabis knowledge
The socially responsible sale of cannabis
Rules related to the sale of cannabis
Legal and compliance responsibilities for cannabis retailers
According to the Cannabis Licence Act of 2018, a retail cannabis location must abide by these requirements:
Must be located in a municipality or reserve that has opted into the retail cannabis program.
Is not within 150 metres of a public or private school.
Only operates between the hours of 9:00 am and 11:00 pm (Monday-Sunday) and municipalities can set different hours of operation.
Must be the only business operating in the store and can only sell approved cannabis products and certain cannabis accessories like pipes and rolling papers.
The minimum age for purchasing non-medical cannabis is 19, one year older than the federal minimum age required for tobacco or alcohol.
Any other items, like bags or cannabis accessories, must comply with advertising rules and be approved by the AGCO.
If proposed legislation passes, adults over the age of 19 years old will be able to have a maximum of 30 grams (about one ounce) of dried cannabis in public at any time.
Proposed legislation says purchase limits cannot exceed the 30 gram possession allowance, but could be limited to a lesser amount. We will update this answer when purchase limits are finalized.
Yes; the AGCO will operate the Ontario Cannabis Store, an online marketplace and delivery system. Online cannabis sales in Ontario will begin on October 17, 2018.
Retailers are required to purchase all wholesale inventory exclusively from the publicly-owned Ontario Cannabis Retail Corporation. This is the same entity that will run the online Ontario Cannabis Store.
Right now, retail cannabis stores can only sell cannabis flower, tinctures, topicals and concentrates.
As of now, retail cannabis stores cannot sell edibles. The Federal government is taking a phased approach to product releases and edibles are expected to hit the market in early 2019, with the first draft of edibles regulations possibly available as early as December 2018.
Retailers will be responsible for tracking cannabis as it moves in and out of their store, according to Section 81 of the federal Cannabis Act. That means each sale must be traceable back to the employee that conducted the transaction and all cannabis moving in or out of your store must be tracked in a way that allows for product recalls and limits diversion to the black market. A licensee’s records must account for cannabis products used for display purposes too, accounting for the product after it is no longer used in a display.
Yes, Cova’s Point of Sale system is made with the cannabis industry in mind and meets all tracking requirements in Ontario. Ontario requires that any POS systems used by a licensee must be certified by a recognized industry certification organization like the PCI Security Standards Council or the International Organization for Standardization. A POS must also monitor all system access and changes.
Cova’s POS meets all of this criteria and more, taking the hassle out of tracking and reporting. See the cannabis industry’s most loveable POS in action with a live demo.
Once you have a temporary or annual retail operator license, have created your account in Metrc and completed the required training, you may begin working with Metrc.
No, temporary licensees are not required to report in Metrc. However, temporary licensees are required to keep records of all track and trace information from the time they begin retail operations. Once an annual license has been approved, you must backlog all the track and trace information that you’ve recorded and begin daily reporting in Metrc.
Once you’ve set up your account in
The first way is manual reporting. This method requires logging in to your
The second way is to utilize a retail-specific cannabis dispensary software that can integrate with
In the event that you lose connectivity to
The state mandates that retailers maintain accurate inventory records. Physical inventory must be reconciled with records at least once every 14 days. You must also reconcile physical inventory with the counts you’ve reported in
Canada's federal cannabis law (The Cannabis Act) includes strict marketing and advertising restrictions. It outlines five main restrictions on advertising cannabis, including:
No testimonials or personal endorsements (from clients, customers, employees, or celebrities);
Cannot appeal to children or be located anywhere with a minor audience;
Cannot include any pricing information except for at the point of sale;
Cannot use the depiction of a person, character, or animal (whether real or fiction);
Cannot make cannabis look cool, glamorous, or exciting.
The Cannabis Act says clear that no cannabis, cannabis accessory, or cannabis service can be advertised in any publication or broadcast that originates outside of Canada or has an audience that includes minors. These restrictions can really limit your paid placements online, but it isn't impossible with research and due diligence.
For paid ads on advertising networks like Google Adwords, a cannabis brand could possibly use hyper targetting to limit the age range to adults and only target users in Canada to work around federal marketing laws. Unfortunately, Google still has a strict no-cannabis policy even in legal countries like Canada.
When crafting your online marketing strategy, be sure to talk with a lawyer to make sure you are compliant with federal and provincial cannabis advertising laws.
No, the federal law is very clear that no free product can be given out.
Ontario relies on the federal guidelines for cannabis advertising. The province does reiterate that no free product may be given away by a cannabis brand.
Cannabis Business Lawyer & Founding Partner, Segev LLP
Ron Segev is the founding partner of Segev LLP. A practical-minded business lawyer with expertise in the cannabis industry, he represents cultivators, dispensaries, CBD extractors, oil extractors, food processors, media and marketing companies, consultancies, and other businesses in the legal cannabis market.