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Understand Cannabis Law in Ontario and Open Your Dispensary the Right Way

March 5, 2021

Since the update to cannabis laws in Ontario, there’s no longer an 80-per-month cap on the number of dispensaries that can receive licenses. With this change, Ontario now offers greater opportunity for new players to enter the market.

If you’re thinking of opening a dispensary, we’d like to guide you through the provincial rules and regulations so you can do so in a legally responsible fashion.

Here’s what you need to know.

Licenses for opening a dispensary in Ontario

The first step to opening your dispensary is applying to the Alcohol and Gaming Commission of Ontario. There are three license applications you’ll have to submit, one after the other.

  1. Retail operator license: for people or entities who will be operating a cannabis retail store. The fee for this license is $6,000 for a two-year term, with a $2,000 renewal fee or $4,000 for a four-year term.
  2. Retail store authorization: authorizes you to operate a physical storefront, and you’ll need to apply for a new one for each location you plan to operate. The fee is $4,000 for a two-year term, with a $3,500 renewal fee or $7,000 for a four-year term.
  3. Retail manager license: this license is for anyone with management responsibilities that relate to the sale of cannabis. These include supervising and managing employees, overseeing the sale of cannabis, and managing compliance issues. The fee is $750 for a two-year-term, with a $500 renewal fee or $1,000 for a four-year term.

You can only apply for the retail store license after you have been successfully granted the retail operator license. If you’re a sole proprietor who’ll be acting as both owner and manager of a store, you may be exempt from applying for the retail manager license.

Submitting applications for licenses

You can apply for each of the licenses through iAGCO, the AGCO’s online portal. After your license has been approved, this is also the portal you’ll be using to manage it, especially for modifications and renewals.

While the AGCO doesn’t technically require that you do so, there are documents that are advisable for you to attach to your applications. These include:

  • Constituting document
  • Financial statements
  • Shareholder details
  • Tax returns and assessments
  • Schematic diagram
  • Personal history

The absence of these documents can delay your application if they turn out to be necessary.

Educational requirements to open a dispensary

You and everyone you plan to work with in your dispensary have to pass a training course designed and approved by the AGCO board. This step needs to be completed before the first day of work at any cannabis retail location.

The training helps you to understand:

  • Basic cannabis knowledge
  • Information on the socially responsible sale of cannabis
  • Rules related to the sale of cannabis
  • Compliance responsibilities for cannabis retailers

Marketing your Ontario dispensary

Ontario relies on federal advertising standards laid out in the federal Cannabis Act, 2018.

One of the most crucial details is that cannabis accessories should not be visible from the exterior of your premises.

Additionally, your exterior signage cannot:

  • Appeal to young people
  • Contain endorsements and testimonials
  • Imply an association with medicine, health, or pharmaceuticals

Similarly, receiving your license does not enable you to launch an ecommerce platform or sell online. The only legal online cannabis store is the provincial government-run Ontario Cannabis Store.

Get advice from experts in cannabis law in Ontario

The various stages of opening a cannabis dispensary in Ontario require navigating numerous laws and regulations. The Atlas Law Group can help you stay legally compliant at each phase of opening yours, with guidance and counsel from an expert legal team. Contact us today.

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