Part of cannabis laws and regulations
Cannabis retailers in Ontario will be allowed to operate as many as 75 stores each, the province said in an update on its rules governing how marijuana will be sold in bricks-and-mortar outlets this spring.
But the industry is still waiting for clarity on whether companies owned in part by licensed growers can open more than one.
Ontario’s Ministry of the Attorney-General published a news release on Wednesday evening that spells out rules for how long stores can be open, where they can be built and when retailers can begin applying for licences.
However, the province did not clarify exactly how it will limit the reach of cannabis growers. Ontario’s cannabis law, which came into effect on Oct. 17, said producers and their affiliates “may not between them hold more than one retail store authorization,” but did not explain what is meant by “affiliate.” It is still unclear whether a grower could take a minority stake in a retailer as a way to have more than one store.
The government’s news release said the official regulations would be published online. It is possible the text will address the affiliate issue. At the time of publication, the rules had not been posted, and spokespeople for the government did not immediately respond to requests for comment.
James Burns, chief executive of Alcanna Inc., which operates five NOVA Cannabis stores in Alberta, said he is still waiting for clarity on whether his company can enter the Ontario market, because Alcanna is 25-per-cent owned by licensed producer Aurora Cannabis Inc.
“For us, what’s important is the definition of an affiliate,” he said. “We certainly intend to be full participants in the industry. … I don’t think I’ll be signing any leases tonight, because we still don’t know the rules.”
Growers are the most cash-flush players in the industry: They can afford to get into bidding wars and overpay for coveted space. Many of Canada’s largest legal producers of cannabis want to get into retail in what could be the country’s most-lucrative market to push their products and gain consumer insights.
Despite a lack of clarity from Ontario, would-be retailers have already been snapping up prime real estate despite not knowing whether they will qualify to open a cannabis store. Another wrinkle is that Ontario municipalities have until Jan. 22 to opt out of allowing cannabis shops, potentially putting in jeopardy store leases already signed in those markets.
Other regulations were spelled out more clearly on Wednesday. The province said it will start accepting retail applications on Dec. 17. Shops can be open daily from 9 a.m. to 11 p.m. once the new cannabis retailing regime is launched on April 1. Outlets across the province have to be at least 150 metres away from a school.
Until April, Ontarians can only buy legal recreational cannabis online. Physical stores have opened in other provinces, such as in Alberta and Quebec.
The launch of Ontario’s government-run digital store has been chaotic, with customers waiting weeks for their orders and the store blaming everything from the Canada Post strike to mislabelled packages. The shop – called the Ontario Cannabis Store – said Monday it has cleared its order backlog, processing 220,000 sales since legalization.
The regulations come nearly a month after the start of legal sales and three months since the Progressive Conservatives announced their plans to scrap the retail model planned by the Liberals. The previous government gave the Liquor Control Board of Ontario a monopoly on the sale of recreational cannabis, planning to open 40 shops in the first year. Instead, the province is turning to the private sector for in-store sales by April and plans to continue to run the online shop.
With a report from Marcy Nicholson in Calgary
Available now: Cannabis Professional, the authoritative e-mail newsletter tailored specifically for professionals in the rapidly evolving cannabis industry. Subscribe now.