On August 13, the new Ontario PC government announced its plans to revamp the province's approach to cannabis legalization and retail. Government-owned online distribution will be maintained and beginning October 17, consumers 19 and older will be able to purchase cannabis online through the Ontario Cannabis Store (OCS). However, in a major change from the previous Liberal plan, the new government also announced that the province would immediately begin consultations in advance of opening up a regulated market for private cannabis retail, slated to launch by April 1, 2019. There will be no provincial cap on the number of private retailers.
While the high-level legislative and regulatory framework will be established by the province, it will be up to individual municipalities to shape and implement a cannabis retail system tailored to their individual preferences and communities. The provincial government has indicated that it intends to release the municipal cannabis regulations shortly after Ontario's municipal elections on October 22. While much remains unknown until then, it's important for potential producers or retailers to consider the following:
- Areas of municipal concern: a number of gaps exist in the current legislation, which may or may not be addressed through regulation. These include planning and zoning, police enforcement, fee and tax issues, regulation of homegrown plants, and even how to properly dispose of residential and industrial cannabis plants.
- Planning and zoning: municipalities will have the greatest impact on producers and retailers through their planning instruments. Approaches are likely to vary widely, as municipalities regulate the locations, building performance standards of producers and retailers. Municipalities are already wrestling with issues, including whether producers are treated as merely agricultural operations, similar to any other commercial greenhouse, and whether retailers will be treated similarly to alcohol retailers, or as something altogether different.
- As municipalities make the location of production and distribution centres more difficult, we have creative and little known strategies to assist in dealing with zoning issues that may arise.
- 1 time opt-out: individual municipalities will be given until January 22, 2018 to decide on a one-time opportunity to opt out of having physical cannabis retail shops within their boundaries.
- Federal licenses and expansion: although producers will be licenced federally, the licenses are tied to individual municipal addresses. The licensing process is long, difficult, and costly. We have had success for our producer clients in providing creative solutions for expanding their businesses and licenced facilities while maintaining a single municipal address, even across roadways.
- Retail leasing: we have assisted clients with retail leasing across the country; we can provide helpful advice on creating and expanding retail distribution networks, including how to deal with the different approaches from province to province on the language of offers to lease and leases, and the conditions to insert in offers and leases in order to deal with the uncertainty of regulation in Ontario.