Cannabis Retail in Ontario
Canada legalized recreational cannabis use in October 2018 with the release of the Cannabis Act. This act allows each province and territory to set their own laws for recreational cannabis use, including legal age, home cultivation, and retail sales methods. In 2019, the Ontario government used a lottery system to issue 25 retail licences permitting the sale of cannabis. Shortly after the lottery system was removed, giving Ontarians the freedom to apply and receive a cannabis retail licence at any time.
The AGCO is responsible for issuing cannabis retail store licences and regulating the activities of licensed operators of Ontario dispensaries. Private retailers are only permitted to sell cannabis products and accessories approved by the Ontario Cannabis Store (OCS), which operates Ontario’s only legal recreational online cannabis store.
Required Licences
Opening a dispensary in Ontario requires a Retail Operator Licence (ROL) and a Retail Store Authorization (RSA) distributed by the Alcohol and Gaming Commission of Ontario (AGCO). You will also need an individual with a Retail Manager Licence (RML) in a managerial role.
Retail Operator Licence (ROL)
The first step in the process of opening a dispensary in Ontario is applying for an ROL. Getting a ROL requires a valid application submission through the AGCO’s online portal and the submission of various supporting documents. The primary function of the ROL application is to assess the financials and criminal histories of the individuals and businesses on the application.
Getting a Retail Operator Licence (ROL) makes you a licenced operator in Ontario. This means that you can open one or more cannabis dispensaries in Ontario.
Eligibility Requirements
An applicant cannot get a retail operator licence if:
- They are believed to be financially irresponsible based on their financial history.
- They are believed to not conduct business lawfully, honestly, or in the public interest based on their past or present behavior.
- They or their associates have been convicted of or charged with offenses under the relevant cannabis laws.
- They are believed to be conducting activities that would violate cannabis laws.
- The Registrar is not convinced they will have adequate control over their cannabis retail business.
- They or their employees/agents provide false information in the application.
- Any other prescribed circumstances apply.
Application Overview
Application Cost: $6,000
Renewal Fee: $2,000 every two years
Your ROL application will feature general information and supporting documents. The general information about all owners will be added to the application directly. This includes contact information, ownership percentage, voting rights, and more. Applicants will also need to provide specifics about their financial standing(s), and how the launch of the business will be funded. There will also be a series of disclosure questions.
You will also need to submit a series of supporting documents that serve a variety of different purposes in assessing whether you qualify for a ROL:
Tax Compliance Verification (TCV) Code: This is a code that displays whether your business or entity is in good standing with your tax obligations.
Constituting Documents: You must submit all applicable documents in regard to the incorporation of your business, by-laws, partnership agreements, and any other relevant constituting documents.
Schematic Diagram: If you are applying with an entity that has a multi-level corporate structure, you must submit a schematic diagram. This will include the relationship of all parent, controlling, subsidiary, affiliated and commonly controlled companies, making up 100% ownership of the entity.
Details of Shares: This document must have all information regarding shares in the entity. This includes the number of authorized and issued shares, shareholder names meeting percentage threshold requirements, and all rights, privileges, restrictions, and conditions for cannabis applicants.
Financial Statements: Applicants must provide and and all balance sheets, income statements, cash flow statements, and any other financial statements from the last fiscal year. This includes audited consolidated financial statements when possible.
Tax Return & Tax Assessment: Applicants need to submit a tax return and tax assessment from the last available fiscal year.
Personal History: This information includes employment and unemployment history. This includes education and parental leave.
The ROL can be applied for online using the iAGCO application portal.
ROL Next Steps
After applying for your ROL, you need to apply for your Retail Store Authorization (RSA). To do this, you will need to find a compliant location for your dispensary.
You must obtain a lease or ownership over a location that meets the following standards:
- Minimum of 150 meters away from a school.
- Location must be in a municipality that allows cannabis retail businesses to operate within them. The opted-in municipalities can be found here.
The AGCO will issue a ROL to any applicant that has met the application and eligibility requirements, and has paid the application fee.
Retail Store Authorization (RSA)
Application Fee: $6,000
Renewal Fee: $2,000 every two years
The Retail Store Authorization (RSA) Application can be submitted at the same time as the ROL application. However, the applicant must have a ROL before obtaining a RSA. To get a RSA, you must submit an application and complete your pre-authorization inspection.
To get your RSA, you must submit documents disclosing the following:
- Lease/proof of ownership over your dispensaries location.
- Business Name Registration Certificate.
- Any ownership agreements not disclosed on the ROL application.
- Any additional information that the AGCO may request.
Pre-Authorization Inspection Requirements
After submitting your RSA, notify the AGCO that your store is ready for inspection. The AGCO Inspector will contact you to schedule an appointment, and you must be present during the inspection.
During this inspection, the AGCO will determine whether your dispensary is ready to order, receive, and securely store cannabis and cannabis products. The AGCO will also provide further information about your obligations and responsibilities, and answer any questions.
The criteria for passing this inspection includes:
Public Notice Process: This is a mandatory 15 day period in which the applicant displays a public notice placard at their dispensary location.
Product Visibility: All cannabis and cannabis products that will be in the dispensary cannot be visible from the outside. This can be done by using tinted glass, frosted windows, or by other means that guarantee no cannabis or cannabis products can be seen from outside of the store.
Video Surveillance System: The dispensary must be outfitted with a video surveillance system that has cameras and lighting coverage of the interior and exterior of the dispensary. Areas that need to be covered include:
- Entrances and exits (where IDs are checked).
- Cannabis pick-up areas.
- Point of sale areas.
- Receiving areas.
- Sales floor areas.
- Cannabis storage areas
Storage and Record Keeping: The dispensary must have a secure storage area and process flow. This means that products must be securely stored at all times from the arrival of a product to the point of sale. Dispensaries must also keep detailed records for a minimum of three years. This includes information about employees, product sales, compliance, and more.
Physical Storefront: The dispensary must be enclosed by walls and separate from any other business or outdoor area. It cannot be used as a passage to other businesses, except for common areas in an enclosed shopping mall. There must also be measures to prevent unauthorized access at all entry points of the store. This includes doors and windows.
Store Management: Dispensary must be managed by a ROL holder or a cannabis Retail Manager Licence (RML) holder. Those holding ROLs or RMLs can be responsible for the oversight of up to five different dispensary locations at a time.
Prevented Entry of Minors: There must be plans established that prevent the entry of minors and verify that each individual who appears to be under 25 years-of-age is 19 or older.
Retail Manager Licence (RML)
Application Fee: $750
Renewal Fee: $500 every two years
A cannabis Retail Manager Licence (RML) is required by anyone who is managing an Ontario Dispensary. At least one ROL holder that is a part of a licenced entity must have an RML before operating a dispensary in Ontario. Any future managers will need an RML.
A cannabis Retail Manager Licence (RML) is required for managers or individuals who:
- Supervise or manage employees.
- Oversee or coordinate cannabis sales.
- Handle compliance issues related to cannabis sales.
- Have signing authority for purchasing cannabis, contracts, or hiring
Applying for an RML licence requires the submission of a personal history form and a tax return or tax assessment for the last fiscal year. The personal history form will include information detailing employment and unemployment history including education and parental leave.
All complete applications will be reviewed and considered by the AGCO. There is no limit to the number of RML’s that can be awarded.
Ontario Dispensary Operational Requirements
After receiving the ROL, RSA, and RML licenses, dispensary owners must ensure their store always meets certain standards to remain operational and pass on-going inspections. You can find the details about on-going inspections here.
Operational standards include but are not limited to the following:
Destruction of Cannabis: Cannabis that cannot be sold or returned to the Ontario Cannabis Retail Corporation (OCRC) must be destroyed or made unusable in a way that:
- Follows all relevant federal, provincial, and municipal laws, including environmental protection laws.
- Does not expose anyone to cannabis smoke or vapor.
Educational Material: Cannabis and cannabis products can only be sold by those with a Budtender Certification. Licensees must also provide information about the responsible use of cannabis, including:
- Health Canada Consumer Information – Cannabis.
- Any other information required by the Registrar.
Record Keeping and Point of Sales: All records must be maintained for at least three years. This includes employee records with names, addresses, main job duties, shift schedules, training records, background check results, and employment dates. Dispensaries also must maintain records of cannabis bought from the OCRC and transferred from another store run by the Licensed Operator. Find more information about recordkeeping requirements here.
Indoor & Outdoor Storefront Requirements
All Ontario Dispensaries must meet standards pertaining to their indoor and outdoor storefront. This includes the following:
Security and Surveillance: There must be a secure-high-resolution surveillance system monitoring your dispensary at all times. Cameras and lighting must cover entrances and exits, including ID check areas, cannabis pick-up areas, point of sale areas, receiving areas, sales floor areas, and cannabis storage areas.
Signage, Advertising, & Promotions: Dispensaries cannot advertise in a way that…
- Targets individuals under 19 years-of-age.
- Promotes cannabis or accessories in a false, misleading, or deceptive manner.
- Suggests that using cannabis leads to success, enjoyment, goal achievement, or problem-solving, directly or indirectly.
- Links cannabis to medicine, health, or pharmaceuticals.
- Depicts or implies the illegal sale of cannabis.
- Associates cannabis use with driving or any activity requiring care, skill, or involving danger.
Other provisions can be found here.
Getting a Budtender Licence in Ontario
Ontario’s cannabis laws require that everyone selling cannabis at Ontario dispensaries have their Budtender Certification. Currently, the only CannCell Standard Certification is the only budtender licence in Ontario that authorizes dispensary employees and managers to sell cannabis.
Individuals who are 19 years of age or older can complete their CannSell training on the CannSell website after paying the required fee.
Working with CannDelta
By choosing CannDelta, you’re partnering with a team of cannabis consultants with proven success in establishing Ontario dispensaries and federal cannabis businesses. Our extensive experience across North America gives us a unique perspective on the evolving cannabis landscape. Our experts are well-versed in Ontario’s regulatory environment and have all the tools you need to launch a successful cannabis business. Here’s how we can assist:
Cannabis License Applications:
Enter the cannabis market with confidence. Our team offers complete cannabis retail licence support. Our experts prepare, submit, and monitor your license application to ensure compliance and competitiveness.
Business Plan Development:
Build a strong foundation for your cannabis venture. We create business plans that meet regulatory requirements and foster long-term growth.
Security Plan:
Our specialists design comprehensive security plans that protect your assets, comply with state regulations, and provide peace of mind.
Site Audits and Inspections:
Stay proactive with our detailed site audits. We identify potential issues and offer practical solutions to maintain compliance and efficiency.
Standard Operating Procedures:
Enhance daily operations with a customized operating plan. We develop clear, compliant SOPs to facilitate smooth business operations.
Marketing Plan:
Make your brand stand out! We help build your brand and create outreach strategies to establish your presence in Ontario’s cannabis market.
Employee Staffing and Training Plan:
Our recruitment strategies and customized training programs ensure your employees have their budtender certification, and are prepared to excel in the cannabis industry.
Fill out the form below to connect with our cannabis consultants today!
Frequently Asked Questions
How do I get a Dispensary Licence in Ontario?
Opening a dispensary in Ontario requires a Retail Operator Licence (ROL), a Retail Store Authorization (RSA) from the AGCO, and a manager with a Retail Manager Licence (RML). A ROL will need a RSA for each they are opening. These licences can be applied for through the AGCO’s online portal.
How Much is a Cannabis Licence in Ontario?
Each cannabis retail licence in Ontario has an application fee and a renewal fee. The application fee for the ROL is $6,000 and the biennial renewal fee is $2,000. The application fee for a RSA is $4,000 and the biennial renewal fee is $3,500. The application fee for a RML is $750 and the biennial renewal fee is $500.
How do I Open a Cannabis Retail Store in Ontario?
You can open a cannabis retail store in Ontario by:
1. Obtaining your Retail Operator License (ROL)
2. Finding and securing a compliant location.
3. Obtaining an Retail Store Authorization (RSA) for every dispensary you’re opening and passing the inspection.
4. Ensuring that one individual managing your cannabis retail store(s) has a Retail Manager Licence (RML). At least one individual on the ROL application must get a RML.
How do I Become a Cannabis Licensed Retailer in Ontario?
You can become a cannabis licensed retailer in Ontario by applying your ROL, RSA, and RML licenses. You will also need a compliant location, and all of the other requirements for passing your pre-authorization inspection.
How do I get a Budtender Licence in Ontario?
You can get your Budtender licence in Ontario by completing the CannSell Standard Certification training. This training can be done online at the CannSell website.
How Much Money do I Need to Start a Cannabis Business in Ontario?
Starting a cannabis business in Ontario is a very capital intensive venture. There is no standard price requirement due to the number of varying expenses. With that being said, those interested in starting a cannabis business should be ready to invest anywhere between 200,000 to $2 million or more. This money is spent on licensing and consulting fees, securing and building out your location, security outfittings, initial product orders, staffing, and more.
