On March 6, 2018, the Alberta Gaming and Liquor Commission (“AGLC”) began accepting applications for retail cannabis licences. Under provincial legislation, the AGLC is tasked with overseeing the licensing and compliance of private cannabis retailers. The application process has opened in anticipation of the federal government legalizing the sale of cannabis for recreational purposes across Canada in summer of 2018. The legalization of retail cannabis sales presents business opportunities for Alberta First Nations and Metis Settlements interested in entering this growing market.

Federal Legislation

Bill C-45 – Cannabis Act, An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts was passed in the House of Commons on November 27, 2017 and is currently before the Senate. It is expected Bill C-45 will comes into force in late summer of 2018. It will legalize the production and sale of cannabis for recreational use in Canada.

The federal government will control the production, distribution, sale, and possession of cannabis across Canada.

Alberta Legislation

Provincial governments will be responsible for legislating with respect to: controlling wholesale distribution of cannabis and regulating retail sales and public consumption, amongst other things.

The Government of Alberta created the Alberta Cannabis Framework and legislation to “set the stage for legal and responsible use of cannabis by Albertans”.

The Alberta Legislature recently passed Bill 26: An Act to Control and Regulate Cannabis (the “Act”), that comes into force following the federal cannabis legislation. The Act provides for government-run online sales of cannabis and a private marketplace of licensed retailers who receive their product from the AGLC.

The Gaming and Liquor Amendment Regulation (the “Regulations”) governs who can own cannabis retail outlets, where the outlets can be located, rules and training requirements for employees, safety and security requirements, hours of operation, maximum amount of sale, minimum price, and other operational details for private retailers.

Specific rules related to licenced retail cannabis sales set out in the Regulations include:

  • Mandatory background checks for retail licence applicants:
  • Cannabis licences will be for 1 or 2 years and will be renewable but not transferrable;
  • Mandatory training and background checks for all retail employees, who must be at least 18 years of age and must complete the SellSafe program;
  • A 100-metre buffer for stores from schools and provincial health-care facilities;
  • Store hours set between 10 a.m. and 2 a.m., with municipalities able to adjust the hours;
  • Retail locations must be in a permanent facility that is either freestanding or separated from other businesses with a separate exit and entrance, shipping and receiving area access restrictions, and signage posting the retail licence and prohibiting minors;
  • Mandatory security measures in stores will include: secured perimeters that prevent unauthorized access, camera systems, a monitored alarm system, locked showcases and storerooms;
  • Co-location of cannabis sales with alcohol, pharmaceuticals and tobacco will be prohibited; and
  • Use of cannabis will be prohibited in licenced retail facilities.

Retail Cannabis Licence Applications

As is to be expected, the application requirements are fairly rigorous and include:

  • Non-refundable application fee of $400 and licence fee of $700 per store;
  • Background checks on the applicant, its associates and key employees;
  • $3,000 deposit for background checks, with additional amounts due as required and surplus amounts to be refunded;
  • Floor plan of premises;
  • Site plan of surrounding businesses;
  • Proof that the business is incorporated and is separate from any other business and will only operate for the purpose of a retail cannabis store;
  • If an application is deemed eligible, further requirements include:
    • Municipal approval (or band council approval, as applicable);
    • A signed lease or certificate of title; and
    • Fire approval.

First Nation and Metis Settlement Business Opportunities

Municipal approval and business licences will be required for retail cannabis outlets, and municipalities will have the ability to regulate the location and hours of cannabis outlets through land use and zoning bylaws.

However, municipal bylaws do not apply on-reserve or within the boundaries of a Metis Settlement established under Alberta’s Metis Settlements Act. First Nations will be able to determine their own rules and regulations for the location of cannabis retail outlets on-reserve, subject to applicable legislation. Similarly, Metis Settlements can exercise their bylaw-making authority under that Act for the purposes of regulating certain aspects of retail cannabis businesses, such as permitted land uses and locations of retail stores.

The Regulations provide that a cannabis store licence may only be issued for premises located on an Indian reserve in accordance with an applicable band council bylaw or the band council’s approval. Likewise, the Regulations state that a store may only be located on lands within a Metis Settlement in accordance with a Settlement Council bylaw or with the approval of a Settlement Council.