Ontario puts no limit on pot store licences

TORONTO • Ontario will not cap the number of retail licences issued to businesses that want to sell weed in the province, as long as applicants obtain the right approvals from the Alcohol and Gaming Commission of Ontario, the provincial regulator that is being authorized to grant store licences.

The moves are part of legislation revealed by the Ontario government Wednesday afternoon detailing the province’s plans for incorporating private cannabis retail into the existing public framework.

The “two-phase” regulatory approach will require that businesses obtain a retail operating licence and a retail store authorization from the AGCO, according to Ontario Attorney General Caroline Mulroney. “This licensing will not be capped, and will be driven by the AGCO,” Mulroney told reporters at Queen’s Park.

Although the number of licences overall will not be capped, a single licensed producer will only be allowed to hold a single retail licence at one production site, Finance Minister Vic Fedeli said. “This is an opportunity for small business to get involved so we want to allow for as many participants across Ontario.”

The minister also said that there will be limits on the number of licences a single corporation can be issued.

The legislation also proposes an overhaul to the governance structure of the Ontario Cannabis Store, which is currently lined up to be the exclusive online retailer for recreational weed. The OCS will cease to operate as a subsidiary of the LCBO, and will be shifted under the jurisdiction of the Ministry of Finance. It will also undergo a name change, and be known as the Ontario Cannabis Retail Corporation.

“It will serve as the exclusive wholesaler to private retailers,” Fedeli confirmed.

When recreational weed becomes legal on Oct. 17, Ontarians will first be able to purchase it online, through the OCS. The private retail model, however will only be in place by April 2019.

“The idea of not capping the number of retail licenses makes a lot of sense,” said Mark Goliger, CEO of National Access Cannabis, which has a deal with Second Cup to convert some of its coffee shops into cannabis stores. “Setting a cap is somewhat artificial because of the number of markets across rural Ontario that need to be served.” Goliger said that NAC has secured leases to open cannabis stores “all across Ontario,” though he wouldn’t reveal specifics.

A number of other licensed producers contacted by the Financial Post declined to comment on the proposed new bill until it is officially introduced Thursday.

Both Mulroney and Fedeli reiterated the Ford government’s “tough on crime” approach to cannabis retail, emphasizing that businesses that continue to sell weed illegally post-legalization will not be able to ever obtain a licence from the AGCO. “Zero tolerance means just that. Zero tolerance,” Fedeli said.