Ontario Moving Forward with Next Round Adding 50 New Cannabis Stores

The Ontario Government is taking the next step to combat the illegal market and protect our youth and communities by moving to the next phase of its plan to license private cannabis retail stores. This is in response to the federal government’s legalization of cannabis and marginal improvements in the federally licensed supply of cannabis.

Rod Phillips, Minister of Finance, and Doug Downey, Attorney General, announced today that the Alcohol and Gaming Commission of Ontario (AGCO), the provincial regulator for cannabis retail storefronts, has been given regulatory authority to conduct a second lottery for 42 private cannabis retail store authorizations. Interested parties will be able to submit an expression of interest form online to the AGCO in summer 2019.

The Ontario Government has heard from First Nation communities interested in operating safe and secure retail outlets in their communities. That is why the government is moving forward with allocation of up to eight stores located on First Nations reserves, which will take place through a separate process on a first come, first served basis. The government continues to engage with First Nations interested in developing their own approaches to cannabis to identify how the government can best support efforts by these communities to promote public safety and legal access to cannabis.

“Our government is continuing to take a responsible approach to opening cannabis stores across Ontario, allowing private sector businesses to build a safe and convenient retail system to combat the illegal market,” said Minister Phillips. “With marginal improvements in national supply, we are proceeding to issue up to 50 new cannabis store licences.”

For this next phase, the government has established new pre-qualification requirements that will streamline the licensing process with the AGCO and help ensure the readiness of cannabis retail operator licence applicants. Prospective retailers must demonstrate that they have secured appropriate retail space that could be used as a cannabis retail store and that they have access to enough capital required to open a cannabis retail store. Licensed retail stores may now be opened in any municipality regardless of population size, granted the municipality did not opt-out of the retail cannabis market.

Detailed pre-qualification requirements and all application process and lottery timelines are available on the AGCO website.

“Despite the ongoing federal cannabis supply shortages, Ontario is taking further action to protect young people, keep our roads and communities safe and combat the illegal market in response to the federal government’s decision to legalize cannabis. While the federal supply issues persist, we cannot in good conscience issue an unlimited number of licences to businesses. A phased-in approach remains necessary.” – Doug Downey, Attorney General

It is the federal government’s responsibility to oversee cannabis production and to provide a viable alternative to the illegal market by ensuring there is enough supply from federally licensed producers to meet consumer demand. The Ontario Government has continued to urge the federal government to take steps to rapidly increase the volume of supply available to the legitimate recreational cannabis market in response to the supply shortage of cannabis across the country. Going forward, the province will continue to monitor the national supply issue and its impact on the legal retail market.

QUICK FACTS

Of the 50 new private cannabis retail stores being licensed, the government is allocating eight stores to retailers who wish to operate on a First Nations reserve, and the remaining 42 stores allocated as follows:

• East Region: seven stores
• GTA Region: six stores
• Toronto Region: 13 stores
• West Region: 11 stores
• North Region: One store in each of the following cities: Kenora, North Bay, Sault Ste. Marie, Thunder Bay and Timmins

The licensing and store authorization process for stores on-reserve will take place through a separate process from the lottery, on a first come, first served basis, and begin in July 2019. Details regarding this process are available on the AGCO website.

The 50 new private cannabis retail stores will be authorized upon meeting all requirements and approved to open on a rolling basis, beginning in October 2019, as they conclude their supply agreements with the Ontario Cannabis Store.

To ensure the lottery and allocation process are conducted fairly, the AGCO will again employ a third-party fairness monitor.

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Ontario Helping With Recreational Cannabis Costs

Municipalities to Receive Second Payment after Opt-Out Deadline

The Ontario Government says it is assisting municipalities with the cost of legalizing cannabis and combatting the illegal market by providing a second payment of $15 million by the end of February to help safeguard communities.

“The deadline for municipalities to opt out of having cannabis retail stores within their boundaries has now passed. The private retail model will combat the illegal market, helping to make our communities safer.” – Vic Fedeli, Minister of Finance

Ontario is assisting municipalities with the costs related to the legalization of recreational cannabis by providing $40 million over two years through the Ontario Cannabis Legalization Implementation Fund. Earlier this month, a first payment of $15 million was provided to municipalities on a per-household basis, adjusted so that at least $5,000 was provided to each municipality.

With passage of the opt-out deadline, a second payment of $15 million will be distributed. The 77 municipalities that have opted out will receive $5,000 each. Those municipalities that have not opted out will receive funding on a per-household basis, adjusted so that at least $5,000 is provided to each municipality.

In addition, Ontario will provide municipalities that have not opted out with 50 per cent of the surplus of the province’s portion of the federal excise duty on recreational cannabis, if that amount exceeds $100 million over the first two years of legalization.

“Ontario is committed to continuing to work with all municipalities to keep our youth and our neighbourhoods safe,” said Fedeli.

Ontario is allowing the opening of 25 private retail cannabis stores as of April 1, 2019 as a temporary measure due to the national supply shortage of cannabis. When Ontario has determined that the federal government has provided for enough reliable supply, Ontario will issue further retail store licences.

QUICK FACTS

• Municipalities were provided a one-time opportunity to opt out of permitting cannabis retail stores within their boundaries. The deadline to opt out was January 22, 2019.
• Ontario has set aside $10 million of the $40 million in funding to help address costs from unforeseen circumstances related to the legalization of recreational cannabis. Priority for this funding will be given to municipalities that have not opted out.
• Municipalities must use the funding to pay for costs directly related to the legalization of recreational cannabis.
• A total of 25 cannabis retail stores will be able to open in April 2019 in communities across Ontario.

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Ontario Takes a Phased Approach to Cannabis Retail Licensing Due to National Supply Shortages

Today, the Honourable Caroline Mulroney, Attorney General and the Honourable Vic Fedeli, Minister of Finance, released the following statement on changes being made to the licensing process for recreational cannabis retail stores in Ontario:

“It is the federal government’s responsibility to oversee cannabis production and to provide a viable alternative to the illegal market by ensuring there is sufficient supply to meet consumer demand. Yet, we continue to see severe supply shortages across the country in legal, licensed recreational cannabis stores.

For example, Alberta stopped issuing any new retail cannabis licences after only receiving 20 per cent of the stock it ordered from federally licensed producers, and in Quebec retail operating hours have been reduced to four days a week. In addition, the shortage of supply has restricted online sales in many jurisdictions.

This is a national issue that demands an immediate response from Justin Trudeau and the federal government. The Government of Ontario has brought this to the federal government’s attention repeatedly. At a recent meeting of federal, provincial and territorial Finance Ministers in Ottawa, Minister Fedeli, along with Finance Ministers from several other provinces and territories, raised the issue of a severe shortage of supply across the country with Federal Finance Minister Bill Morneau.

Taking into consideration the required investments for a prospective Ontario private legal retailer, we cannot in good conscience issue an unlimited number of licences to businesses in the face of such shortages and the federal government’s failure to provide certainty around future supply.

That is why today we are announcing that Ontario will be taking steps to ensure that private cannabis retail stores open in phases. In the initial phase up to 25 licences will be issued so operators can open for business on April 1, 2019 and stay open.

To ensure a fair and transparent process, the Alcohol and Gaming Commission of Ontario (AGCO) will implement a lottery system to determine who is eligible for the initial licences to legally operate a store in Ontario. All interested parties will be able to submit an expression of interest form online to the AGCO from January 7 to January 9, 2019. The expressions of interest will be put into a lottery pool for a draw. The draw will be conducted on January 11, 2019, with the results to be posted on the AGCO’s website within 24 hours.

The lottery process will be overseen by a third-party fairness monitor to ensure equality and transparency in the treatment of the expressions of interest, as well as an appropriate distribution of stores in each region of the province, which is set out in the regulation. Further details on the lottery system will be available on the AGCO website.

The OCS continues to work closely with federally licensed producers to monitor the availability of supply and to secure supply for Ontario, including through regular product calls and frequent visits to producer facilities. The lottery is going to be a temporary model for issuing private retail licences. When Ontario has determined that the federal government has provided for enough reliable supply, Ontario will communicate next steps for additional private retail stores.

Our government refuses to compromise the viability of Ontario businesses. Private retailers need certainty from the federal government that there will be a reliable supply of cannabis to support their business and combat the illegal market.

We will continue to urge the federal government to take immediate action to ensure licensed producers ramp up production in order to meet the anticipated market demand for recreational cannabis.”

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City of Windsor Restarts Storefront Cannabis Survey

The City of Windsor is restarting the Storefront Cannabis survey following new funding information supplied by the province.

In the original survey, released on Friday, the opt out information indicated funding would be capped at $10,000 dollars. 

New information from the province is that Windsor will receive a first payment from the Ontario Cannabis Legalization Implementation Fund (the “Fund”) in January 2019 in the amount of $253,279 regardless of whether we opt-in or opt-out.  This funding is based on 2018 MPAC household numbers. 

If the City of Windsor opts out by January 22, 2019, however, the second payment from the Fund will be capped at $5,000.  If Windsor residents don’t opt-out the second payment will be based on household numbers and will not be capped at $5,000. 

Please take the New Storefront Cannabis Sales Survey

Previous results of the storefront cannabis survey will be deleted and the new results will be compiled between now and January 4, 2019.  The information will be shared with Windsor City Council to aid in their decision ahead of the province’s January 22, 2019 “opt out” deadline.

Background:

• On October 17, 2018 Cannabis was legalized in Canada by the federal government, thereby allowing consumers 19 years of age or older to purchase recreational cannabis through an online retail platform.  In Ontario, the Ontario Cannabis store operates the online platform.
• On April 1, 2019, Ontario will allow licensed private sector retailers to sell recreational cannabis from storefronts in communities across the province. Municipalities have two options: to opt out of allowing retail storefront sales entirely or to allow retail storefront sales

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Have Your Say on Windsor Storefront Cannabis Sales

The City of Windsor wants to know whether you support storefront cannabis sales locally.

On October 17, 2018 Cannabis was legalized in Canada by the federal government, thereby allowing consumers 19 years of age or older to purchase recreational cannabis through an online retail platform.  In Ontario, the Ontario Cannabis store operates the online platform.

On April 1, 2019, Ontario will allow private sector retailers to sell recreational cannabis from storefronts in communities across the province. Municipalities have two options: to opt out of allowing retail storefront sales entirely or to allow retail storefront sales.

The City of Windsor would like you to take 5 minutes to read more details and provide your feedback in their online survey:

Storefront Cannabis Sales Survey

This survey will be open until January 4, 2019 and the information will be shared with Windsor City Council to aid in their decision ahead of the province’s January 22, 2019 “opt out” deadline.

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