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Whitney Abrams posts "The market is open! Private cannabis retail store cap to be revoked as of March 2, 2020" on Canada Cannabis Legal

Dec 16, 2019

Cannabis and Business Law lawyer Whitney Abrams published "The market is open! Private cannabis retail store cap to be revoked as of March 2, 2020" on Canada Cannabis Legal on December 13, 2019.

The market is open! Private cannabis retail store cap to be revoked as of March 2, 2020

Image: Whitney Abrams, Cannabis Law LawyerYesterday, the Government of Ontario announced that it will be moving to an open market for retail cannabis stores beginning in January 2020.

The AGCO will modify its licensing process as soon as possible, with a stated goal of processing new applications as quickly as possible to increase the legal supply of cannabis across Ontario. The two-step process, first, requiring that operators obtain a Retail Operator Licence (“ROL”), and second, to obtain a Retail Store Authorization for the specific location, will still be in place.

The AGCO will begin to accept ROL applications on January 6, 2020, which includes Licensed Producers, who now will have the ability to participate in the retail market and open a store at their facility. That is the same day that the Cannabis retail lottery and First Nations allocation processes and rules will be revoked. The restriction on total number of stores will remain in place until March 2, 2020. If and when approved, new applicants who obtained ROLs after January 6 will be entitled to apply for an RSA after March 2. Applicants who were selected and notified to apply for a ROL prior to January 6 through the AGCO Expression of Interest Lottery, may apply for an RSA before the March date.

The AGCO has released a direction and hopes to issue up to 20 RSAs per month as stores become ready. This will make an enormous impact on the availability of legal cannabis for Ontarians.

Licensed operators will eventually be permitted to own up to 75 stores, but that ability will be rolled out in phases. Until September 2020, holders of a ROL may have up to 10 stores. This number will go up to 20 in September 2021, and up to 75 after that. It will be interesting to see what names dominate the market and who we will see across Ontario in many different locations. We expect that certain companies will be releasing business plans to make at least part of their business a major focus on the expanding Ontario retail market. It will also be interesting to see new names, brands, and companies develop and create a presence in retail.

This announcement and regulatory change is welcomed by many in the industry and many hopeful retailers who were unsuccessful in the two lottery processes previously held.

If you are a prospective retailer that needs assistance on your application to the AGCO, feel free to contact Whitney Abrams at 416-369-4148 or wabrams@mindengross.com