Rules and Requirements for B.C.’s Cannabis Retail Store License Holders

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As promised earlier today when we brought you the highlights of British Columbia’s new cannabis regulations,  we now bring you a more detailed discussion of the rules and requirements that are imposed on B.C.’s cannabis retail store license holders pursuant to the Cannabis Licensing Regulation which will take effect on October 17, 2018.

The Cannabis Licensing Regulation is the last shoe to drop in the B.C. retail licensing scheme.  Nearly two months ago the B.C. government opened the application process for people who were interested in obtaining retail cannabis sales licenses and shortly thereafter British Columbia’s Liquor and Cannabis Regulation Branch published a Cannabis Retail Store License Terms and Conditions Handbook which outlined the requirements of the Cannabis Control and Licensing Act, regulations and terms and conditions that relate to owners and operators of non-medical cannabis retail stores within the province.

The Cannabis Licensing Regulation sets out an extensive list of rules and requirements that apply to retail store license holders and applicants in the province, which are generally summarized as follows:

Items That Can Be Sold

Cannabis retailers are only permitted to sell cannabis, cannabis accessories, bags (of a class or type approved by the government) and prepaid purchase cards which can be used in the retail store for the future supply of cannabis, accessories or bags.

Licensees are further permitted to sell cannabis accessories, bags (again of a class or type approved by the government) and prepaid purchase cards for use in the retail store for the future supply of cannabis, accessories and bags.

How Business Must Be Conducted

The only business that is permitted to take place within the store is the sale of the abovementioned items.  All payment for cannabis purchased by a customer must take place within the retail store, as must the transfer of personal possession of the cannabis from the licensee to the customer.

Retailers are prohibited from selling cannabis to a person who intends to deliver the cannabis to someone else for compensation (i.e. a delivery service) and the maximum amount that can be sold to a customer in a transaction (i.e. each visit to the store) is 30 g of dried cannabis or an equivalent amount.

Packaging

All cannabis sold under a retail store license must be sold in its original packaging that has never been opened.  Licensees are only permitted to open original packaging if it is for the purpose of allowing customers to smell the cannabis or for another purpose approved by the government.  In any instance where the licensee opens the original packaging, the cannabis from that package is no longer permitted to be sold.  Retailers are also prohibited from altering cannabis in smell jars or cannabis in its original packaging or adding a substance to either cannabis in smell jars or in its original packaging.

Not only are customers prohibited from consuming cannabis within the retail store, they are also prohibited from opening the packaging of the cannabis which they have just purchased until they leave the store.

Hours and Physical Requirements

Subject to any further limitation imposed by the government, the sale of cannabis must not take place earlier than 9 a.m. or later than 11 p.m.

Stores must be located in a permanent building or structure and be enclosed by floor-to-ceiling walls that are not transparent.  The entrances and exits of the store must not be shared with any other store or business and there are further rules pertaining structuring the location of entrances and exits vis-a-vis the entrances and exits of other businesses.

The store must not, in the government’s opinion, appear to be associated, through signs, the use of trademarks or any other means, with another business other than another retail store.

Entertainment and games are not allowed within stores.

Restrictions on Number of Licenses That May Be Held

There are a number of restrictions relating to ownership of a retail store license.

An applicant for a retail store license or “group of related persons” must not hold more than 8 retail store licenses.

“Group of related persons” is defined to mean:

(a) a corporation and any affiliate, within the meaning of section 2 of the Business Corporations Act, of the corporation,

(b) an individual and any corporation that is controlled, within the meaning of section 2 of the Business Corporations Act, by the individual,

(c) a person who is a partner in a general partnership and each of the partners,

(d) a person who is a general manager in a limited partnership and each of the general partners, or

(e) a person who is a partner in a limited liability partnership and each of the partners.

Additionally, one or more corporations as the license-holding corporations, must not hold more than 8 retail store licenses in any of the following situations:

(a) the same person is a significant shareholder in each of the license-holding corporations,

(b) the same person is a significant shareholder in one or more corporations that are significant shareholders in each of the license-holding corporations, or

(c) the same person is a significant shareholder in one or more, but not all, of the license-holding corporations, and each of the remaining license-holding corporations has one or more significant shareholders that are corporations in which that person is a significant shareholder.

“Significant shareholder” is defined to mean a person who holds or beneficially owns, other than by way of security only, 20% or more of any class of shares of the corporation that confer the right to vote for the election of directors.

Lastly, a person must not, in the government’s opinion, through an association, financial interest or family or other connection:

(a) likely have direct or indirect influence over licensees who hold more than 8 retail store licenses,

(b) likely to be able to affect, directly or indirectly, the activities carried out under more than 8 retail store licenses, or

(c) have the influence referred to in paragraph (a) or the ability to affect activities referred to in paragraph (b) with respect to more than 8 retail store licenses.

 

Stay tuned this week when we will be bringing you further analysis regarding the rules surrounding consumption in the province of British Columbia.

 

Photo courtesy of the B.C. Liquor Distribution Branch

 

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