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:
- To identify persons or places that pose specific risks to the public interest;
- 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;
- To reduce the administrative burden for those who pose a lower risk, where possible; and
- 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:
- 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.
- 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.
- 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.