To be eligible to open a retail store and sell recreational cannabis, you must have a CROL. 

You are not eligible for a CROL if:

• you are under 19 years of age. This includes directors, officers and shareholders of corporations.
• you have been convicted or charged with certain offences:
  • any offence under the Cannabis Licence Act, 2018 or its regulation
  • certain offences under the Cannabis Control Act , 2017 and Cannabis Act or their regulations
• you have, or previously had, certain roles or connections with a criminal organization as defined in subsection 467.1(1) of the Criminal Code (Canada):
  • you are, or have been, a member of the criminal organization
  • you are, or have been, involved in the criminal organization
  • you contribute to, or have contributed to, the activities of the organization.
• you are carrying on activities that are not in compliance with certain laws.
  • certain offences under the Cannabis Control Act, 2017 and Cannabis Act 
• you have made a false statement or provided false information in your application.
• you are in default of filing a tax return under a tax statute administered and enforced by the Government of Ontario, or have any outstanding amounts owing and past due of tax, penalty or interest under those laws and have not made payment arrangements;
• you have a business number with the Canada Revenue Agency and have not filed a tax return under certain federal or provincial legislation.
• the application will be made by a corporation and more than 25 percent of the corporation is owned or controlled, either directly or indirectly, by one or more licensed producers (LPs)or their affiliates.
• you will not be financially responsible in operating your cannabis business.
• you will not operate your cannabis retail business in compliance with the law, or with integrity, honesty or in the public interest.
• you will not have sufficient control over the cannabis retail business
• you had a CRSA in the past but the authorization was revoked

Generally, you must wait two years to apply again for a CROL if you:

• applied for a new licence or renewal licence in the past but were refused, or
• you had a CROL in the past but the licence was revoked.

You may have conditions put on your CROL to address any specific risks or concerns.  There are also conditions in the Cannabis Licence Act, 2018 that apply to all CROLS. 

You cannot transfer your CROL to another person or business.

To open a retail store and sell recreational cannabis, you must have a CRSA.

There are some places where you cannot open a cannabis retail store. More information about that is in the section of this Guide called 'Retail Store Location'.

Generally, you must wait two years to apply again for a CRSA if you:

• applied for a new CRSA or renewal of a CRSA in the past but were refused, or
• you had a CRSA in the past but the authorization was revoked.

You are not eligible for a CRSA for a store if:

• you do not have a CROL now, or would not have a CROL at the time when the CRSA would be issued.
• you have a CROL that has conditions that do not allow you to apply for or receive a CRSA for that store.
• you have been convicted of or charged with certain offences:
  • any offence under the Cannabis Licence Act, 2018 or its regulation
  • certain offences under the Cannabis Control Act, 2017 and Cannabis Act (Canada) or their regulations
• you have, or previously had, certain roles or connections with a criminal organization as defined in subsection 467.1(1) of the Criminal Code (Canada):
  • you are, or have been a member of the criminal organization
  • you are, or have been involved in the criminal organization
  • you contribute, or have contributed to, the activities of the organization.
• you are carrying on activities that are not in compliance with certain with certain laws.
  • Certain offences under the Cannabis Control Act, 2017 and Cannabis Act 
• you hire or plan to hire someone who does not have a CRML, but should have that Licence because of the work they do.
• it is not in the public interest, based on the needs and wishes of the people who live in the municipality where the proposed store would be located.After you apply for a CRSA, the Registrar will inform local residents and the municipality about the application by having a notice posted at the proposed store and on the AGCO’s website.  
  • The municipality or local residents have an opportunity to submit written submissions to the Registrar about whether the proposed store is in the public interest. The submissions must be sent within 15 calendar days after the notice is posted.
  • Relevant submissions are limited to the following matters of public interest:
    •  protecting public health and safety; 
    •  protecting youth and restricting their access to cannabis; and 
    • preventing illicit activities in relation to cannabis.
• the store, equipment and facilities do not comply with the Cannabis Licence Act, 2018 and its regulation, the Registrar’s Standards for Cannabis Retail Stores or requirements.
• you do not have sufficient control over the store, equipment and facilities
• you have made a false statement or provided false information in your application 
• you already hold, or you and your affiliates between you already hold, 150 cannabis retail store authorizations 
• the proposed cannabis retail store would be located less than 150 metres from a school or private school, as defined by the Education Act, 1990.
• the proposed cannabis store would not be enclosed by walls separating it from any other commercial establishment or activity 
• the proposed cannabis retail store would include an outdoor area 
• the proposed cannabis retail store could be entered from or passed through in order to access any other commercial establishment or activity, other than a common area of an enclosed shopping mall (note: this does not apply to spaces shared with other commercial establishments that are only accessible to employees of either business or other non-customers permitted by either business, as long as the entryway to the cannabis store is secured to prevent unauthorized access).

A licensed producer and its affiliates are eligible to apply for a single CRSA. The proposed cannabis retail store must be located on or within the site set out in the federally issued production licence.

You may have conditions put on your CRSA to address any specific risks or concerns.  There are also conditions in the Cannabis Licence Act, 2018 and its regulation that apply to CRSAs. 

You cannot transfer your CRSA to another person or business.

Every cannabis retail store must have a licensed retail manager who performs certain duties within the cannabis retail store and holds a CRML. This includes people who: 

• supervise, manage or hire employees of the store
• manage the sale of cannabis
• manage compliance issues relating to the sale of cannabis
• buy cannabis for the store
• enter into contracts for the store

The only people that can perform the duties listed above are people with a CRML or a CROL. If the holder of the CROL is a corporation, an individual must hold a CRML. 

You are not eligible for a CRML if: 

• you are under 19 years of age 
• as a licensed retail manager, you will not act in compliance with the law, or with integrity, honesty or in the public interest
• you have been convicted or charged with certain offences: 
  • any offence under the Cannabis Licence Act, 2018 or its regulation
  • certain offences under the Cannabis Control Act, 2017 and Cannabis Act or their regulations
• you have, or previously had, certain roles or connections with a criminal organization as defined in subsection 467.1(1) of the Criminal Code (Canada): 
  • you are, or have been a member of the criminal organization
  • you are, or have been involved in the criminal organization
  • you contribute, or have contributed to, the activities of the organization
• you are carrying on activities that are not in compliance with certain laws. 
  • certain offences under the Cannabis Control Act, 2017  and Cannabis Act 
• you have made a false statement or provided false information in your application

Generally,  you must wait 2 years to apply again for a CRML if you:

• applied for a new CRML or renewal of a CRML in the past but were refused, or
• you had a CRML in the past but the licence was revoked.

You may have conditions put on your CRML to address any specific risks or concerns. There are also conditions in the Cannabis Licence Act, 2018 that apply to CRMLs. 

You cannot transfer your CRML to another individual. 

Municipalities:    

Ontario municipalities had a one-time option to opt out of having cannabis retail stores in their communities. They had until January 22, 2019 to notify the AGCO that their council had passed a resolution to opt out of having cannabis retail stores. Municipalities that choose to opt out can opt in at any time—however once they have opted in, they may not reverse their decision. 

• The AGCO's website has a list of municipalities that have decided not to allow cannabis retail stores.  
• Municipalities that have opted-in may not create a licensing system respecting the sale of cannabis nor pass a bylaw that distinguishes land or building use for cannabis from any other kinds of use. 

Proximity to Schools:  

The Registrar cannot issue an CRSA to a proposed cannabis retail store located less than 150 metres from a school or private school, as defined in the Education Act, 1990. This will be determined as follows:  

• When the school or private school is the primary or only occupant of a building, 150 metres shall be measured from the property line of the property on which the school or private school is located.  
• When the school or private school is not the primary or only occupant of a building, 150 meters shall be measured from the boundary of any space occupied by the school or private school within the building. 

The distance between a proposed retail store and a school or private school is measured by a straight line from the closest point of the school property or boundary as described above to the closest point of the proposed retail store.

If either the store and/or the school is located on a floor other than the ground floor or main level in its respective building, the measure of the 150 metre distance may take into account vertical distance in assessing compliance with this requirement.

The above rules do not apply if the private school is located on a reserve or if the private school only offers classes through the internet.

There must be separation between your cannabis store and other businesses. If an existing retail space is renovated to create two or more spaces, the space that is intended to be a cannabis retail store must adhere to the listed criteria below and all the eligibility requirements set out in the Cannabis Licence Act, 2018 and its regulation. 

The retail space where you will sell cannabis: 

• must be enclosed by walls separating it from any other commercial establishment or activity
• does not include an outdoor area
• cannot be entered from or passed through in order to access any other commercial establishment or activity, other than a common area of an enclosed shopping mall (note: this does not apply to spaces shared with other commercial establishments that are only accessible to employees of either business or other non-customers permitted by either business, as long as the entryway to the cannabis store is secured to prevent unauthorized access).

In addition, the area where cannabis will be received or stored cannot be accessible by any other business or by the public. This does not mean that an establishment is required to have a separate door for product receipt. For example, if a premises has only one door, product could be received through this door outside of business hours, or access to the door could be restricted by security personnel at the time of product delivery.

As part of its review of your application for a new licence or authorization, or renewal licence or authorization, the AGCO may do background checks and investigations on applicants, or interested parties. You may be required to pay some of the costs of the background checks or investigations.

In Ontario, anyone who works in a cannabis retail store must successfully complete an AGCO Board approved cannabis retail employee training program before their first day of work to support the safe sale of cannabis including the following people: 

• holders of a CRSA 
• holders of a CRML 
• employees of a cannabis retail store including those who complete deliveries
• individuals providing security services for a cannabis retail store

There are rules you must follow when operating your store. 

You must: 

• begin selling cannabis at your authorized store within one year of getting your CRSA, and continue to sell cannabis
• open only during permissible hours: between 9:00 a.m. and 11:00 p.m. on any day
• display the official cannabis retail seal. You must post the seal in a place where people can easily see it from outside the entrance to the store. The seal must be at least 17 centimetres wide and 20 centimetres long. You can choose to post the French version of the seal, or the English version, or both. 
• remove the seal as soon as possible if your CRSA is revoked or not renewed
• post your CRSA in the store in a place where people can easily see it
• only sell cannabis that has been made by a producer licensed under the Cannabis Act (Canada) to make cannabis for commercial purposes and which is sold through the OCS
• keep records of specified information and activities
• record all sales
• make information about the responsible use of cannabis available to patrons
• ensure that all licensed managers and other employees working in your store successfully complete an AGCO Board approved cannabis retail employee training program prior to their first day of work.
• request identification of anyone who looks under 25 years old and be satisfied the person is at least 19 years of age prior to allowing them to enter the store. 

You must not: 

• sell cannabis or cannabis accessories to anyone who is under 19 years old
• allow anyone who looks under 25 years old to enter the store, unless you first request identification and are satisfied the person is at least 19 years of age
• sell cannabis to anyone who is intoxicated or appears to be intoxicated
• sell more than 30 grams of dried cannabis (or equivalent amount of another kind) to a person in a single visit
• hire anyone who is under 19 years of age. 

You cannot sell cannabis or cannabis accessories from a display that allows self-service, or from a vending machine. 

You must display your cannabis and cannabis accessories in a way that they cannot be seen by a young person, even from outside the store.

Authorized cannabis retail stores are permitted to offer delivery and curbside pick-up services.

Note: Cannabis retail stores are not permitted to operate entirely or predominantly as delivery businesses.

Requirements for Delivery 

• Delivery can only be done by the CRSA holder or their employees. Third-party delivery is not permitted.
• Deliveries can only be made to a residence or private place in Ontario (for instance, a hotel room would be considered a private place).
• Deliveries can only be made to a person who is at least 19 years old. If the person appears to be under 25 years of age, the authorization holder or employee completing the delivery must require the person to provide identification and must be satisfied that the person is at least 19 years old.
• Delivery must be at the address specified in the order.
• Records of deliveries must be maintained.
• Delivery orders must be placed with a specific store location.
• Delivery orders must originate and be fulfilled from that same store with products that are stored on-premises.
• Cannabis cannot be removed from the store for delivery unless an order has been received.
• If cannabis is removed from the store for delivery but the delivery is not completed, the cannabis must be returned to the same store from which the delivery originated on the same day, and it must remain there until the next day on which delivery is attempted.
• Cannabis may only be delivered at a time when the physical cannabis retail store is open to the public.
• If the store is in a premises whose owner or landlord requires it to be closed to the public during the permitted hours of operation, the store may still complete deliveries between 9:00 a.m. and 11:00 p.m. Examples of such a scenario include retail stores located within malls. However, a store cannot deliver if the landlord or owner requires it to be closed and is an interested person in the holder of the CRSA.

Requirements for Curbside Pick-Up 

• Curbside pick-up transactions can only be completed by a CRSA holder or employee and must be completed in an area adjacent to the store that is captured by the store’s surveillance system.

Delivery Requirements to First Nations Communities

• Delivery to First Nations communities is permitted unless the community has requested delivery be restricted.
• First Nations band councils wishing to restrict delivery to their community can submit a band council resolution to the AGCO. The AGCO will notify all authorized retail stores when a band council resolution is received and the restriction would come into effect 30 days after such notice is provided, after which point any delivery to the First Nations community would not be permitted.

Requirements for Store Websites, Apps or other Similar Online Platforms

• For websites, apps or other similar online platforms used for the purposes of the cannabis retail store, licensees must take reasonable measures to ensure that customers accessing them are at least 19 years of age.
• Licensees must display the official Ontario cannabis retail seal and make available the applicable CRSA information (the authorization number, the holder’s name, the store’s operating name and the store address) on websites, apps or other similar online platforms.

You must apply to renew your licence or authorization before the current term expires. 

As a courtesy, the AGCO will send a renewal reminder sixty (60) days prior to the expiration date of a licence or authorization. Additional reminders will be sent seven (7) and two (2) days prior to expiration if the renewal application has not yet been submitted.

If your renewal application and applicable fee(s) are submitted on or before the expiry date, your licence and/or authorization will be deemed to continue until your licence and/or authorization is renewed.

If your renewal application and applicable fee(s) are not submitted before the expiry date on your licence and/or authorization, it will expire and cannot be renewed.

How to submit a renewal application:

To begin your renewal application, log into your iAGCO account and click the "Renew" button next to the applicable licence/authorization.

Please note: The “Renewal In Progress” status on your iAGCO account is not confirmation that the renewal application has been submitted; it could mean that someone started a draft renewal but has not paid the fees nor submitted the application. You are encouraged to use measures to confirm that renewal applications are submitted, such as keeping iAGCO Application Confirmation emails or Application Summaries. If you have shared your access code with others and/or have previously permitted others to submit applications on your behalf, notify the AGCO in writing when that permission is revoked.

Effect of non-renewal of Cannabis Retail Manager Licences

If your CRML expires, you cannot perform any of the functions under subsection 5(1) of the Cannabis Licence Act, 2018.

Holders of CROLs are responsible for ensuring that anyone performing the functions under subsection 5(1) of the Cannabis Licence Act, 2018 hold an active CRML. 

• The status of AGCO-issued licences can be searched online via iAGCO
• QR codes on the licence can be scanned to confirm authenticity and/or to confirm the licence status

Effect of non-renewal of Cannabis Retail Operator Licences

Subsection 12(1) of the Cannabis Licence Act, 2018  indicates that if a holder’s CROL is revoked or fails to be renewed, any CRSA held by the holder are revoked from the time of the CROL revocation or non-renewal.

Effect of non-renewal of Cannabis Retail Store Authorizations

Subsection 12(3) of the Cannabis Licence Act, 2018 indicates that if a CRSA is revoked or fails to be renewed and the Registrar considers it appropriate in the circumstances to do so, the Registrar may, without issuing a proposal, revoke or suspend:

• Any other CRSA held by the same holder;
• The holder’s CROL; or
• Both.

You must cease operation of any retail stores where a CRSA has expired or has been suspended or revoked. You are prohibited under the Cannabis Control Act, 2017 from selling or distributing cannabis.

There are penalties for offences related to unauthorized sale or distribution, false representation as an authorized cannabis retailer, etc. under the Cannabis Act, Cannabis Control Act, 2017, and/or the Cannabis Licence Act, 2018. You are reminded of your obligations to comply with all laws and regulations and of your responsibility to renew on time.

If you no longer require your cannabis licence(s) and/or authorization(s), more information on requests to cancel can be found at: Cannabis Retail Regulation Guide: Modifications to Existing Licences / Authorizations

As part of the AGCO’s risk-based licensing approach, one or more conditions may be attached to a CROL, CRML and/or CRSA  by the Registrar to help the licensee minimize risks identified during the assessment process. Below is a complete list of the conditions approved by the AGCO Board of Directors, which the Registrar may impose:

Cannabis Retail - Plans

As part of the AGCO’s risk-based licensing approach, the Registrar may require that a licensee prepare one or more plans to address areas of risk identified during the assessment process. Below is the type of plan the Registrar may require: 

Compliance Plan

A compliance plan is designed to ensure that the retailer is operating in compliance with the overall cannabis retail regulatory regime in place in Ontario, helping to protect the public-at-large, as well as the licensee, from potential harm caused when regulatory requirements are not followed. The plan must support the licensee in getting back into compliance by identifying best practices, policies and other requirements that the licensee will adopt in order to achieve specific and general compliance goals, with a primary focus on the regulatory requirements that are specific to retail cannabis licensees.

This includes reasonably addressing issues such as record-keeping and inventory management, safety and security, management structure and policies, preventing access by minors, preventing illicit activity, the type of products available for sale, staff training, store policies, internal control issues, and other general compliance issues.

Removing a Condition on a Cannabis Licence/Authorization

If you have a condition(s) on your CROL, CRML, and/or CRSA, and circumstances have changed, you may apply to have a condition removed. Depending on the manner in which the condition was added to your licence and/or authorization you will be required to apply to either the Registrar of the AGCO or the Licence Appeal Tribunal.

You may apply to the Registrar to have a condition on your licence and/or authorization removed if:

• The condition was imposed on a licence/authorization by the Registrar with your consent pursuant to the Cannabis Licence Act, 2018.
• The condition was imposed on the licence/authorization by the Registrar as part of the AGCO’s risk-based licensing process. Risk-based licensing conditions can only be removed if the Registrar determines that the risk designation is no longer necessary. 

Please note that the Registrar will only consider removing a condition if the circumstances that required it have changed and it is deemed to no longer be necessary. To request a removal of conditions, you must log into iAGCO, select "Request a Change", select the appropriate licence and/or authorization and select "Removal of Condition(s) on Consent" to submit all relevant information and supporting documentation.

You may apply to the LAT to have a condition on your licence and/or authorization removed if:

• The condition was imposed by a panel of the LAT after a hearing

In this case, you must consult the LAT website for the applicable forms and process.

Changing Legal Entity Type

Cannabis licences and/or authorizations are non-transferable. If you are the holder of a CROL and/or CRSA and would like to change your legal entity type (for example, sole proprietor to a corporation) you must submit a new application and applicable fees.

Change Operator at Existing Authorized Store

Cannabis licences and/or authorizations are non-transferable. If a new operator intends to take over an existing authorized store from the existing licensee, a new CRSA application and applicable fees must be submitted.

If there is cannabis inventory already onsite at the authorized retail store, the existing licensee and the applicant must reach an agreement regarding the inventory. If the applicant does not wish to take on the cannabis inventory the licensee must determine what to do with inventory (as outlined in Standard 2.2, All cannabis must be stored securely until it is sold, destroyed, or returned to the OCS or the Licensed Producer).

Corporate Structure Changes

To notify the AGCO of corporate structure changes as outlined in the Registrar’s Standards for Cannabis Retail Stores, you must log into iAGCO, select “Request a Change”, select the appropriate CROL and select “Corporate Structure Update” to submit all relevant information and supporting documentation, including disclosure.

New Sources of Funding and/or Agreements

The holder of a CROL is required to notify the Registrar within five (5) business days of entering into any agreements or of any new sources of funds used to support the operations of their cannabis business.

To disclose third party agreements or new sources of funds, you must log into iAGCO, select "Request a Change", select the appropriate CROL and select "New and/or Changes to Agreements or Sources of Funds" to submit all relevant information and supporting documentation.

Adding and/or Changing Names

Licensees are reminded that their store’s operating name must match what is set out on the CRSA per the Registrar’s Standards for Cannabis Retail Stores.

If the licensee is a corporation, partnership or sole proprietorship, its business trade (operating) name may have to be registered under the Business Names Act. For information and forms, please see the Ontario.ca Central Forms Repository. Forms must be forwarded to the Companies and Personal Property Security Branch for processing.

Note:

• CRML holders changing their legal name should submit this change in relation to their CRML.
• CROL holders changing the name of the legal entity should submit this change in relation to their CROL and any CRSA they hold.
• CROL holders changing the operating name of their store must submit this change in relation to their CRSA. 

To request name change, you must log into iAGCO, select "Request a Change", select the appropriate licence and/or authorization and select "Adding and/or Changing Names" to submit all relevant information and supporting documentation.

Request to Cancel a Licence and/or Authorization

The Registrar may cancel a licence or authorization if the holder makes a request to the Registrar in writing and surrenders the licence or authorization.

If you are a licensed operator permanently closing an authorized store, in addition to notifying the AGCO of the permanent closure through the notification matrix, you must also submit a separate request to cancel your authorization.

To request a cancellation of your licence and/or authorization, you must log into iAGCO, select "Request a Change", select the appropriate licence or authorization and select "Request to Cancel" to submit the request and to provide the required documentation.

Note:

• If the holder of both a CROL and CRSA wants to cancel their CROL, they must submit a request to cancel and surrender each CRSA to the Registrar together with the CROL.
• Operators must comply with the requirements specified by the Registrar respecting any cannabis left unsold or undistributed as a result of the cancellation and ensure that final reporting obligations are completed.
• If the licensee is a corporation, a board resolution confirming the decision to cancel may be required.

The AGCO employs a risk-based approach when issuing and regulating CROLs, CRMLs, and CRSAs. Risk-based licensing allows the AGCO to encourage good business practices throughout the industry and to focus its own regulatory resources where they will make the most difference.

Although there is always some risk attached to the sale of recreational cannabis, the AGCO recognizes that due to certain variables (such as location, past history and experience), some establishments and individuals pose a greater risk to the public interest and/or of non-compliance with the law. Using risk-based licensing allows the AGCO to base its decisions on risk assessments and its approach to regulation on encouraging compliance rather than relying solely on enforcement following any instances of non-compliance.

Risk-based licensing assists CROL, CRML and CRSA holders in operating their establishments in a safe, responsible, and compliant way, and ensures licence/authorization holders continue to meet all eligibility criteria.

The authority to carry out a risk-based licensing regime is given to the AGCO under Section 6 (5) of the Cannabis Licence Act, 2018.

How Risk-Based Licensing Works

There are four key principles behind risk-based licensing:

1. To identify persons or places that pose specific risks to the public interest;
2. To lessen risks and ensure compliance with the Cannabis Licence Act, 2018, and its regulation, and the Registrar’s Standards for Cannabis Retail Stores through the entire lifecycle of a licence;
3. To reduce the administrative burden for those who pose a lower risk, where possible; and
4. To focus more AGCO resources on those cannabis retail stores that pose enhanced risks.

The application of risk-based licensing can occur at any point in the lifecycle of a CROL, CRML, and CRSA.
 

New applicants proceed through a three-step process:

1. After an application for a licence or authorization, is received, an eligibility assessment process takes place. During the initial application or authorization review, the Registrar uses specific criteria to assess the risk(s) posed to the public interest, and of non-compliance with the law.
2. After reviewing all the available information on the applicant, the Registrar assesses the risks and determines if the licence should proceed to an enhanced review.
   • If the Registrar believes that no conditions need to be placed on a licence, or if a licensee has taken steps on their own to recognize and manage any risks, then these establishments will see no change in the way that their licences are administered.
3. If the Registrar believes that a licensee may need more assistance and support to remain compliant with their regulatory obligations, following the eligibility assessment review, then conditions may be placed on the licence or authorization, and/or more AGCO resources will be focused on the licensee in order to mitigate any risks.

Applicants renewing their licence or authorization, or having a condition on their licence, would only proceed through steps 2 and 3.

During the lifetime of a licence or authorization, the Registrar can reassess the risk posed by the licensee. This reassessment can occur either because the licensee requests a reassessment, or because the Registrar becomes aware that there has been a change in circumstances and there should be a reassessment. At each of these times the Registrar may add, remove or amend one or more conditions.

Please note that risk-based licensing does not replace or negate all eligibility criteria, and licensees are required to comply with the Registrar’s Standards for Cannabis Retail Stores, as well as all applicable laws and regulations, including the Cannabis Control Act, 2017, the Cannabis Licence Act, 2018, and Ontario Regulation 468/18.

All owners/operators of cannabis retail stores along with store managers are subject to the provincial Cannabis Licence Act, 2018, its regulations and the Registrar's Standards for Cannabis Retail Stores.

If you do not comply with your regulatory obligations or are no longer eligible for your licence or authorization, your licence or authorization may be suspended or revoked.  You will be advised of the licence or authorization being suspended or revoked and can request a hearing before the LAT. 

In some cases, depending on the reasons, the licence or authorization may be suspended or revoked immediately.

If your CRSA is suspended, you must post a sign about the suspension in a place where people can easily see it from outside the store.

If your CRSA is revoked, suspended or cancelled, you must comply with any  requirements the Registrar provides to you regarding the disposal of cannabis that has not been sold or distributed.

AGCO Inspectors may visit the retail store location to assess your compliance with your regulatory obligations. You must allow the inspection, and you must not interfere with the Inspector, refuse to answer questions related to the inspection, or provide false information.  

 When doing an inspection, an AGCO Inspector may: 

• ask you for and look at certain records that are relevant to the inspection
• take certain records away from the store to review, examine, test or copy. In this case, the Inspector will give you a receipt confirming which records have been taken. 
  • After the inspector has taken the records, you can request that the records be made available to you. 
  • The records will be returned to you in a reasonable time, unless the records cannot be returned because of the testing done. 
• take photographs or other recordings
• ask about financial transactions, records or other matters relevant to the inspection. 

If an inspector asks you for a record, you must provide it. You must also help the Inspector understand the record or provide it in a readable form.

If you have a CROL, a CRSA and/or a CRML, you and your employees are not permitted to accept material inducements or benefits from LPs or their representatives. 

You are not allowed to give or offer to give away cannabis or cannabis accessories to someone without charge.  You cannot offer things or services to induce a person to purchase cannabis. 

Inducements between licensed producers and retailers

The Registrar’s Standards for Cannabis Retail Stores generally prohibit licensees from accepting or entering into agreements for items, benefits, payments, or services with LPs and their representatives with the purpose to promote or increase the sale of a particular product by the licensee or their employees. In other words, licensees are not allowed to ask for or accept material inducements.

There are several exemptions to this general prohibition, which are listed below, with some additional context.

Items, Benefits or Services of Nominal Value:

The standards under Section 6.0: Advertising and Promotions state that licensed retailers may accept or enter into agreements with an LP or their representative for items, benefits or services of nominal value. Nominal value items, benefits or services, unlike financial or material inducements, are those that are of inconsequential value.

The AGCO does not prescribe a specific monetary value for what constitutes an item, benefit or service of nominal value. The determination is contextual and considers a number of factors which may include:

• Are you likely to change your behaviour toward an LP or the LP’s product after receiving an item, benefit or service?
  • If yes, then this item, benefit or service would not be considered to be of nominal value
• Is the item, benefit or service valued at an amount that defrays your operational costs?
  • Nominal value would not be significant enough to defray operational costs
• How many items, benefits or services have been provided over a period of time?
  • Nominal value is associated with a low volume of benefits over a period of time (i.e., the benefits are provided infrequently, and do not add up to a substantial value over time)

The following is a list of examples of items, benefits or services that may be considered nominal. Note that this list is not exhaustive, and it is possible for these examples to be material inducements, depending on the contextual factors above.

• T-shirts
• Hats
• Lanyards
• Inexpensive cannabis accessories
• Gift bags of inexpensive items related to cannabis 

Items, Benefits and Services Related to Education or Training:

Standard 6.5 also allows licensed retailers to accept items, benefits or services that are related to education or training. Examples of items, benefits and services related to education and training may include:

• Education or training sessions or materials
  • Including education or training outside of the licensed retail store (e.g., participating in such a session as part of a tour of an LP’s facility)
• Modest meals and refreshments during the education or training
• Cannabis product samples directly related to education or training
  • The expectation is that sample sizes would be a small quantity of a particular strain of cannabis or product available in Ontario
  • Samples of a particular strain of cannabis or product should be received infrequently

Sale of Business Data:

The sale or sharing of personal customer information continues to be prohibited by Canadian law, unless expressly consented to. Licensed retailers may enter into agreements with LPs for the sale of data for business intelligence purposes. The AGCO expects that the fee charged by the licensee and paid for by the LP should be at fair market value. Licensed retailers are expected to follow applicable privacy laws and regulations.

Ownership Interests and Franchise Agreements:

Financing and lease agreements, as well as franchise agreements between retailers and LPs or their affiliates, are permitted under Standard 6.5.

Store Brand Cannabis Products:

Agreements between retailers and LPs for store brand cannabis products (also known as white labels, private labels, private brands, and in-house/house brands) are permitted under Standard 6.5.

Nature of Permissible Activities

Standard 6.6 sets out constraints on agreements that are permissible under Standard 6.5, to ensure that they are not used as a method for material inducements.

Agreement between retail licensees and LPs must not:

1. Define the amount of product from the LP or its affiliates that must be offered for sale at the retail store;
2. Require a defined amount of display space in the retail store to be dedicated to product from the LP or its affiliates;
3. Provide merchandising, marketing or promotional activities to the LP or its affiliates; or
4. Restrict the ability of the LP or its affiliates to sell its product at other retail stores, or the ability of the licensee to sell products from other LPs producers or their affiliates.

Prohibited Activities

Aside from the exemptions set out in Standard 6.5, the Standards on inducements set out a general prohibition on agreements for items, benefits, or services between licensed retailers and LPs and their representatives.

Examples of prohibited activities include but are not limited to:

• Sale of in-store or online advertising space
  • Licensed retailer requiring or receiving payments from an LP for advertising of the LP
  • Licensed retailer co-branding advertisements with LPs (i.e., sharing the cost of content development for the purposes of marketing and promotional activities)
• Product features in-store or online
  • Licensed retailers requiring or receiving payments from LPs for advertising space, preferred shelf placement of products, or promotional activities either in-store or online
• Cannabis for sensory display purposes
  • Licensed retailers receiving cannabis for sensory display purposes from LPs
• Fixtures or physical assets
  • Licensed retailers receiving physical assets (e.g., branded and non-branded refrigerators, televisions, computers, projectors, monitors for product listing boards, appliances such as rosin presses) from LPs
• Items essential to the operation of the business
  • Licensed retailers receiving things from an LP that could be considered essential to the operation of their business (e.g., staff uniforms, furniture, appliances, renovations, point of sale system or equipment, security equipment)
• Sale incentives
  • Licensed retailers or their employees receiving any benefits from an LP tied to the sales performance of any given product or brand (e.g., concert tickets, gaming consoles, luxury goods)
• Cash or rebates
  • Licensed retailers receiving cash or cash rebates, product or product rebates, or price discounts from LPs in exchange for listing particular products at below-market prices
• Travel or accommodation for education or training
  • Licensed retailers or their employees receiving travel or accommodation related to education or training, directly or indirectly from LPs
• Monetary compensation for education or training
  • Licensed retailers or their employees receiving monetary compensation for receiving education or training from LPs

Recordkeeping

If you enter into an agreement pursuant to Standard 6.5, you must follow the additional record keeping requirements set out in Standard 8.1, requirement 10.

To meet cannabis regulatory requirements under Standard 8.1, requirement 10, you are required to: 

Under the Cannabis Licence Act, 2018 the Registrar has the authority to establish standards and requirements with respect to a number of areas, including advertising and promotional activities.

Regulatory requirements for advertising and promoting cannabis, cannabis accessories or the sale of cannabis can be found in section 6 of the Registrar’s Standards for Cannabis Retail Stores.

Please note cannabis retail store operators are subject to the federal Cannabis Act and its regulations, which outline permissible and prohibited advertising and promotional activities.

July 1, 2020 a regulatory amendment to the Smoke Free Ontario Act, 2017 exempt cannabis retail stores from the ban on the display of vapour products and clarify that cannabis retail stores may sell flavoured cannabis vape products.  

In general, advertising and promotion includes any public notices, representations or activities that aim to attract attention to cannabis, cannabis accessories or the sale of cannabis.

Monetary penalties are one of the compliance tools the AGCO may use when licensed operators, retail store managers or authorized stores are found to have acted out of compliance with the Cannabis Licence Act, 2018, its regulation or the Registrar’s Standards for Cannabis Retail Stores.

A monetary penalty is a financial consequence that a licensee or authorized retailer is required to pay as a result of a contravention of the Cannabis Licence Act, 2018, its regulation or the Registrar’s Standards for Cannabis Retail Stores. Monetary penalties are a step towards ensuring compliance that allows the AGCO to take appropriate regulatory action that is greater than a warning but not as severe as a licence or authorization suspension or revocation. The use of monetary penalties aligns Ontario with the majority of other Canadian jurisdictions, which have some form of monetary penalty system.

Schedule of Monetary Penalties: Cannabis Licence Act, 2018 and Regulation 468/18

For more information, see the Monetary Penalties page.