AGCO Webinar on Cannabis Retail Licensing: Expression of Interest and Lottery

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Today, the Alcohol and Gaming Commission of Ontario (the “AGCO”) hosted a webinar that focused on the upcoming cannabis retail store lottery and the process for participating in it. The Cannabis Law Group at Torkin Manes LLP attended the webinar, and while the majority of topics covered in the webinar have already been addressed, the webinar nonetheless revealed some useful takeaways.

The AGCO expressed an intention to fully open the application process once the current national cannabis supply shortage is remedied. In other words, the lottery is a temporary measure until supply stabilizes.

The AGCO informed us that there will be no requirements as to where stores are located in a municipality, other than the eligibility requirements for a retail store authorization under the Cannabis Licence Act, 2018 (the “Act”) and the regulations promulgated thereunder. Subject to public interest, there is no requirement that cannabis stores be spread out across a municipality.

The AGCO advised us that the holder of a retail store authorization must purchase cannabis from the Ontario Cannabis Store (the “OCS”) at a wholesale price yet to be established. It is expected that the OCS will set an initial supply order that each cannabis retail store must purchase. The OCS advised that it will be conscientious not to set the initial supply order too high so as to be a burden, while at the same time ensuring sufficient supply for all cannabis retail stores.

The Act states that if the regulations so provide, the holder of a retail store authorization shall not sell cannabis or a prescribed class of cannabis at a price that is lower than the prescribed price for the cannabis or class of cannabis.  To date, the regulations have not set a prescribed price.  At today’s webinar, we were advised that there is presently no intention to set a prescribed minimum or maximum price.  The reasoning provided was based upon the desire to ensure that retail cannabis prices are competitive and given the range of cannabis products and accessories that will be available to be sold, to provide each cannabis retail store with the flexibility and ability to set prices that it determines are appropriate in the circumstances.

Finally, the AGCO informed us that applicants are not subject to Canadian citizenship or residency requirements. Accordingly, provided that an applicant meets the eligibility requirements under the Act, the applicant is eligible to enter the lottery and if selected, apply for a retail store authorization and a retail operator license.

For more information on the lottery process, please see our earlier blog post dated January 3, 2019.

The Torkin Manes Cannabis Law Group would be pleased to answer questions that potential applicants may have and assist in the lottery and/or retail application process.

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