1. Licensing and Regulation of Recreational Cannabis
The Ontario Legislative Assembly passed the Cannabis Statute Law Amendment Act on October 17, 2018, setting out the legal structure for private cannabis retail in Ontario and providing the AGCO with the authority to license, regulate and enforce the sale of recreational cannabis through privately run stores in Ontario.
The Cannabis Licence Act, 2018 and its regulations came into force on November 16, 2018.
On December 13, 2018, the Government of Ontario imposed a temporary cap of 25 Retail Store Authorizations across five regions, and as set out in Ontario Regulation 468/18, gave the AGCO the mandate to hold an Expression of Interest Lottery to determine who may apply for a Retail Operator Licence, tied to one of the 25 Retail Store Authorizations. The lottery covered the period of time from January 2, 2019, when the Lottery Rules were published, to December 13, 2019, when Ontario Regulation 468/18 is scheduled to be amended.
The AGCO’s internationally accredited in-house Gaming Laboratory developed a lottery software program for the selection of the lottery applicants. Using state-of-the-art equipment to test and analyze the integrity of all lottery, casino and internet gaming systems used in Ontario, the Laboratory was well positioned to develop this program. It also submitted its software program for independent testing and certification from accredited, independent testing laboratory Gaming Laboratories International.
The AGCO retained the services of KPMG to act as a fairness monitor to oversee the lottery and ensure it was conducted fairly and according to the established Lottery Rules. On January 11, 2019, the AGCO held the lottery. There were approximately 17,000 entries. On February 21, 2019, KPMG issued its report regarding the first phase of the lottery, concluding that the process during that phase was fair to applicants and potential applicants.
On February 7, 2019, the AGCO Board of Directors approved CannSell as the authorized cannabis retail employee training program for all employees of cannabis retail stores in Ontario.
The AGCO developed a regulatory framework, compliance and audit processes and Registrar’s Standards for Cannabis Retail Stores to ensure that stores operated in the public interest. In addition, the AGCO prepared its iAGCO online portal to process all applications for cannabis-related licences and authorizations.
Ten cannabis retail stores were licensed and scheduled to open on April 1, 2019, in support of the Government of Ontario’s objective of having licensed cannabis retail stores beginning to operate on that date. The AGCO continues to work with, and support the Government of Ontario on the regulation of cannabis, including the opening of additional licensed stores.
The AGCO’s Changing Public Profile
AGCO Website
Average monthly traffic to the agco.ca website increased considerably following the announcement of the AGCO’s role as the provincial regulator for retail cannabis. In the six months before the announcement, the AGCO had a total of 230,000 visitors on its site. In the six months after the announcement, the number of visitors more than doubled to 480,000.
During the peak months following the Expression of Interest Lottery (Dec 2018 – Feb 2019) the AGCO site experienced a 240% increase in average monthly visitors over the same period a year prior. Nearly half of those visitors were seeking information about cannabis.
Social Media
As a result of intense interest in cannabis regulation, the AGCO has significantly increased its outreach. For example, in just under three months between October 2018 and January 2019, the AGCO received 1,020 cannabis-related mentions on social media. In comparison, the AGCO received 400 social media mentions in the 2016-2017 fiscal year.
Email distribution list
In order to keep interested parties informed of developments in cannabis retail regulation, the AGCO invited people to subscribe to receive email alerts. From October 2018 to March 2019, the AGCO sent nearly 100 email messages in both official languages to its cannabis distribution list, which grew to over 11,000 subscribers by the end of the fiscal year. The average open rate of these emails was 59% - twice as high as the government benchmark average open rate of 26.5% (according to Mailchimp).
AGCO Media Requests
One of the AGCO’s objectives when taking on the regulation of private cannabis retail was to develop an accurate and common understanding of the key regulations and their objectives. Working with media outlets to share this information became a priority over the year. The AGCO saw a 311% increase in contacts with media outlets this year, with cannabis-related media requests spiking from December 2018 to February 2019.
Table 1 – Media Requests by Month
|
2017-2018 |
2018-2019 |
Percentage Increase |
|
|---|---|---|---|
|
September |
6 |
8 |
33% |
|
October |
10 |
11 |
10% |
|
November |
15 |
12 |
-20% |
|
December |
14 |
24 |
71% |
|
January |
16 |
115 |
619% |
|
February |
14 |
52 |
271% |
|
March |
6 |
96 |
1500% |
Outreach to Cannabis Stakeholders
AGCO Webinars
The AGCO hosted three cannabis-related webinars to support the April 1, 2019 roll out of private retail cannabis stores. These webinars provided an opportunity to educate potential licensees on what would be their regulatory responsibilities and also on AGCO’s approach to selecting cannabis licensees and the AGCO’s standards-based approach to regulation and compliance. The overall satisfaction rate from participants to these webinars was 88%.
TABLE 2 – Webinar Participants
|
|
Private Retail Part 1 |
Municipal Webinar |
Private Retail Part 2 |
Private Retail Part 3 |
Total Webinar Registrants |
|---|---|---|---|---|---|
|
Date |
Nov 27, 2018 |
Nov 27, 2018 |
Dec 14, 2018 |
Jan 4, 2019 |
|
|
Number of Registrants |
3,896 |
415 |
2,732 |
4,113 |
11,156 |
Information Onboarding
On March 4, 2019, the AGCO hosted an information onboarding session for the 25 selected Expression of Interest Lottery applicants to build relationships between the AGCO and cannabis retail store operators and managers, and to provide additional information on the AGCO’s reporting requirements and approach to compliance and regulatory assurance. In total 45 cannabis retailer participants attended the session with an overall satisfaction rate of 100% for this session.
Municipal Conferences
The AGCO also participated in several municipal conferences, including the Rural Ontario Municipal Association conference and the Ministry of Municipal Affairs Northern Clerks Forum, to provide information on the newly regulated cannabis retail industry. These were opportunities for the AGCO to answer questions from municipal stakeholders such as city councilors, local police forces, municipal licensing and bylaw officers.