Heavy interest in cannabis stores causing confusion

Municipalities wondering how many pot shops might try to pack into their downtown cores

KITCHENER — In the last six months, it’s become one of the most common questions fielded by the City of Kitchener’s licensing office — how do I open up a cannabis retail store?

“We’re getting them daily,” said Helen Fylactou, manager of licensing for the city.

“We’ve never seen anything quite like this. It’s new for most municipalities.”

As Ontario moves toward legal storefront cannabis sales starting April 1, a rush of entrepreneurs have been approaching municipalities expressing interest. Many seem confused that it will be the province’s Alcohol and Gaming Commission, and not cities, issuing licences.

This week, the province outlined new regulations for these privately run cannabis stores — and confirmed there will be no cap on the number of licences issued.

That’s left municipalities wondering how many pot shops might try to pack into their downtown cores. Cities, if they opt-in to allowing retail storefronts, won’t be able to restrict these

stores with zoning or bylaw changes, Fylactou said.

“We don’t have the ability to pass anything under our zoning or to zone them as anything but retail,” she said. “We’re not permitted to do any licensing bylaws on these.”

The province says it won’t issue a retail licence to any corporation if more than 9.9 per cent of it is owned or controlled by a licensed marijuana producers or their affiliates.

That deals a blow to licensed marijuana producers such as Kitchener’s James E. Wagner Cultivation, who had hoped to partner with another company to launch a chain of retail pot shops across the province.

Most of the people contacting the City of Kitchener are private individuals, not corporations, Fylactou said. And many want to know how crowded the potential market might be.

“They want to know how many inquiries we’re getting, and they want to know how competitive it’s going to be,” she said.

Many prospective store owners are already signing leases in anticipation they’ll be able to get licences.

Under the new rules, cannabis stores can be open any day between 9 a.m. and 11 p.m., but they must be at least 150 metres away from schools and bar entry to anyone under 19 years old.

No company will be allowed to operate more than 75 stores across the province. Until April, cannabis can only be legally purchased from the online Ontario Cannabis Store.

Applications for licences will begin on Dec. 17 and illegal cannabis retailers who were operating after legalization on Oct. 17 will not be eligible to receive cannabis sales licences.

Licences won’t be issued to any person or organization who has an association with organized crime. Applicants must also demonstrate their tax compliance status to show they are in good standing with the government.

“The purpose of these regulations is to keep kids safe and to ensure all people operating in this tightly regulated retail system behave with integrity, honesty, and in the public interest,” Ontario Attorney General Caroline Mulroney said in a statement.

Retail managers and employees must complete approved training in the responsible sale of cannabis.

The government says it will provide $40 million over two years to help municipalities with the implementation costs of recreational cannabis legalization.

— With files from The Canadian Press