Cannabis Law Blog

Commentary on the business and legality of cannabis

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Retail cannabis stores in Ontario

With the good fortune of a provincial government that is helping people get into the cannabis industry, many now want to open and operate a cannabis store in Ontario. We receive requests every day for information on the Ontario Cannabis Retail Licence Application and process. Here are the basics to help you begin.

As of November 21, 2018, the Ontario government has not yet given the rules or information about the following items, which are coming soon:

  • Registrar's Standards, which will govern the operation of retail stores
  • application process and fees
  • which municipalities will prohibit cannabis stores from operating in their jurisdiction
  • the public notice process related to the authorization of retail stores
  • AGCO pre-licence inspections to ensure store readiness
  • mandatory training for cannabis store employees
  • allowable advertising and promotional activities - although the federal law is found in the Cannabis Act

However, we do know that the following items will be required for an application, and we do know the overall regulatory landscape (please see the chart) of the Cannabis Licence Act, 2018:

Retail Operator Licence. Ontario will be accepting applications online only starting on December 17, 2018. To get this licence, you must meet all of the eligibility criteria set out in the Cannabis Licence Act and its regulations. A Retail Operator Licence allows you to operate one or more retail stores in Ontario. However, you must have a separate Retail Store Authorization for every store you wish to operate.

Here are the existing eligibility criteria:

1. Provide all income tax returns for Ontario and for Canada, including personal, corporate and HST returns, which must be filed, to demonstrate tax compliance and being in good standing.

2. A corporation for a retail sale licence must not have more than 9.9% ownership by a federal Licensed Producer.

3. A person must not have been a member of a "criminal organization" as defined under the Criminal Code.

4. No one entity or its affiliates may hold more than 75 retail store licences.

5. Private retail recreational cannabis stores will be permitted to open between 9:00 a.m. and 11:00 p.m. on any day.

5. All cannabis must be purchased by a retail store from the Ontario Cannabis Retail Corporation (OCRC). Online sales are only permitted to the Ontario Cannabis Store (OCS).

6. The store must be "standalone", with no access to it from adjacent stores or the outside area.

7. The retail store must be located at least 150 metres from public or private schools.

8. No one under the age of 19 years of age will be permitted in the store.

9. A secured site (leased or owned) is required.

10. Approval of the local government (municipality or township)

11. Provide a demonstrated personal and financial ability to operate a cannabis retail store - we recommend creating a Business Plan - and providing evidence of your existing ability to operate a business, including corporate income tax assessments and financial statements, and personal finance evidence (income tax assessments).

12. We recommended to provide drawings of a floor plan, which include the location of display counters, cash registers, security cameras, entrance security for age restrictions, storage of cannabis products, delivery area, office, etc.

13. A store must display both the Retail Store Authorization inside the store and the Cannabis Retail Seal outside of the store.

14. Training requirements for the holders of a Retail Store Authorization, a Cannabis Retail Manager Licence, and employees will include

(a) the responsible sale of cannabis;

(b) record keeping requirements under the Act; and

(c) measures required to be taken under the Act to reduce the risk of cannabis being diverted to an illicit market or activity.

Retail Store Authorization - You must have a Retail Store Authorization for each one of your stores because the Cannabis Licence Act and its regulations require that each store meet certain requirements. Requirements relate to such matters as the store layout and location. The regulations also give residents of the municipality in which the proposed store would be located the opportunity to provide their input.

Cannabis Retail Manager Licence - In order to ensure the responsible sale of cannabis, there must be at least one licensed manager for each authorized store location. The Cannabis Licence Act and its regulations set out eligibility criteria for the person who will have management responsibilities in authorized stores. This includes having responsibility for the cannabis inventory, for hiring and managing employees, and for ensuring the store operates with honesty and integrity at all times.If you are a sole proprietor, and will be both the licensed operator and performing the duties of the retail store manager for a particular store, you do not need to get a Cannabis Retail Manager Licence for your store.

Of course, you may not need a lawyer to help you apply, but having someone at least look at your application before you submit it, to notice any errors or omissions you have made, would increase your chances of being approved. If you have any questions or would like to begin an application, our team would be happy to assist you: email Russell at rbennett@cannabislaw.ca.

Senate approves marijuana legalization bill

By The Canadian Press

June 7, 2018

OTTAWA—The Senate has approved Trudeau’s government landmark legislation to end Canada’s 95-year-old prohibition on recreational cannabis with nearly four dozen amendments.

Bill C-45 has passed in the upper house by a vote of 56-30 with one abstention, over the objections of Conservative senators who remain resolutely opposed.

The Bill returns to the House of Commons, where the government can approve, reject or alter the Senate’s amendments, some major and some minor. Apparently 29 have already been approved. The Bill must then return to the Senate for yet another vote.

Once passed, Health Minister Ginette Petitpas Taylor has said that provinces and territories will need two to three months to prepare before retail sales of legal cannabis are actually available.

Is your cannabis business an SME?

SME = Small to Medium-sized Enterprise.

In Canada, Industry Canada defines SME as a business with less than 500 employees. A “large” business is one with 500 or more employees.

Industry Canada defines a small business as one with less than 100 employees, if the business is a goods-producing business, or less than 50 employees, if the business is a service-based business.

A medium-sized business is one that has more than 100 employees for goods, and more than 50 employees for services, but fewer than 500 employees.

micro-business is defined as a business with fewer than five employees.

Statistics Canada defines an SME as any business with 0 to 499 employees and less than $50 million in gross revenues.

If your cannabis business is an SME, then you are in the right place: Cannabis Law’s mission is to protect cannabis SMEs and help them grow into Large Businesses, if they so desire.

Photo by Chanvre Québec on Unsplash

WARNING!

If you haven’t already seen this logo, this is Health Canada’s proposed warning label that will appear on all Canadian packaging that contains products containing THC, mostly cannabis itself until the government legalizes edibles and oils.

What is amusing about this label is that it is in the shape of a stop sign, with the colour scheme of our national flag.

I can’t help but wonder, is this label supposed to stop someone, who has already purchased their weed from a licenced government pot store, from consuming it? No, it is obviously for those folks at home, when they would be confused with other brown paper packaging, tied up with string, to remember that these are a few of my favourite things.

Would this include cannabis that only has trace amounts of THC, and only contains CBD? No, Health Canada does not have a CBD warning label.

I also can’t help but wonder why Health Canada hasn’t put this kind of warning label on bottles of alcohol. After all, alcohol can kill you. Yes, alcohol kills 2.5 million people each year, worthy of some kind of warning label.

But you should be warned, if your kids see a package with this warning label on it, they may not stop in the name of the law.

Neighbourhood Character

The real issue is control.

April 30, 2018

This morning I was listening to Metro Morning on CBC radio when Matt Galloway interviewed Tracey Cook, Director of Municpal Licencing and Standards for the City of Toronto.

Matt asked her, “What is the trouble with having marijuana dispensaries in Toronto?”

After some stumbling, Tracey said, “The character of the neighbourhood.”

My reaction was WHAT???

The CHARACTER of the neighbourhood?

What kind of double talk double standard double think baloney is that?

In less than six months we will have the rollout of massive marijuana dispensaries run by the Ontario government. Won’t they negatively affect the character of a neighbourhood, Ms. Cook?

Of course not! And neither will mom and pop pot stores or giant retail stores of the Licenced Producers.

Who should be allowed to sell cannabis?

It is paternalistic and controlling for a provincial government to legislate that it is the only one capable. And the City of Toronto is not helping the situation by vilifying stores that have valuable products and services for Torontonians

The solution is not to tear down existing businesses that are paying their taxes and offering customers a wide variety of products, but to regulate them as the city does with any quality control for restaurants, bars, children daycare spaces. It’s all the same - it’s a quality issue, not a quasi criminal or criminal issue, especially because the plant will be legal to grow, buy and consume, finally, after 95 years of prohibition.

We do not need the City of Toronto to spend money shutting these cannabis stores down. But we do need the city to ensure that the products they sell are safe. And guess what, the products are mostly safe - because it’s marijuana! It’s not crack. It’s not glue. It’s not gasoline. It’s a plant that cannot kill you, that has been consumed for thousands of years without a single fatality.

Many other products on the market are deadly. Alcohol, anyone? Cigarettes? But not marijuana.

Even a cost benefit analysis would show that it would cost Torontonians less to regulate than it would to attempt to obliterate. Just look at Vancouver and Victoria as examples of major cities that have embraced the current reality of their dispensaries and regulated them instead of waging a war on them.

The character of a neighbourhood is defined greatly by the quality of its stores, cannabis or otherwise. Just look at the LCBO store in the Beach neighbourhood - it is state of the art retail with its high-vaulted ceilings, modern lighting and beautiful shelving. When cannabis stores look like that, Ms. Cook’s opinion may change.

April 21, 2018 - by Russell Bennett

I’m sitting in the LCBO parking lot in my car, waiting for my wife to buy a couple of bottles of wine and a six pack of beer.

Right across the street is a giant BEER STORE, and I’m thinking, “It’s hard to believe, but one day soon I’ll be sitting in the parking lot of an OCS - the most unsexy name for a cannabis store on the planet: Ontario Cannabis Store.”

It’s about as unsexy as the name of this law firm.

The thought of being able to buy weed legally from a STORE gives me a big smile. Because for my whole adult life, I have lived in the shadows, buying pot from some guy at an undisclosed location, or delivered to me by a courier, sneaking around in the alley ways just so I could smoke a joint every once in a while. The whole process made me feel like a “criminal.” And I guess I was.

My wife comes out of the LCBO with some wine and beer and says, “There was a robbery [aka theft], that’s why it took so long. A woman hid some bottles under her jacket and just walked out, yelling, ‘No, I don’t have anything to declare!’ The woman got into a white van, which took off, while an LCBO employee wrote down the licence plate number.”

I am disappointed by the Ontario government’s decision to control the distribution of cannabis as a monopoly. I do not think it is the government’s job to sell marijuana; it’s the government’s job to regulate the sale of marijuana.

The LCBO model does not protect the public from the harms of alcohol any more than the Milk Board protects consumers from bad milk. The government role should be focused on ensuring the quality of the products and the safety of the public, not on making money from sales.

I may be a dreamer, but I would like to see alcohol sold in Ontario by regulated private retailers of different sizes from Mom and Pop stores to big box chains like Loblaws and it’s subsidiary No Frills are doing now. There needs to be competition in the marketplace, overseen by the government, as Alberta does.

And I’d like to see cannabis sold the same way, by private retailers who are regulated by the government.

I don’t know if the LCBO thief was ever caught, but thankfully it wasn’t at gunpoint. Theft is an unfortunate fact of life of retailing, but the government itself should not be robbing the public’s freedom to sell plants or stunting the industry’s ability to grow safely, it should just regulate.

Russell Bennett

Happy 420, Earth!

April 20, 2018 - by Russell Bennett

Today is the day to celebrate the freedom of the most feared plant in history:

cannabis, marijuana, weed, grass, pot, chamba, bukowski and the many other names to describe a flower with amazing powers of healing, couch surfing and appetite stimulation.

While Canada slides into “legalization” in the coming months, introducing the Cannabis Act as the new law after 95 years of prohibition - the longest ban of a substance in human history - please do not be fooled: the punishment for offences under this proposed law are more harsh than the current Controlled Drugs and Substances Act.

Stay tuned for all the things you need to know to keep your mellow, and stay out of jail - unless you are a freedom fighter, of course.

For now, enjoy the knowledge that at least to some extent in the near future, Canadians will no longer face jail time and a criminal record for growing, buying and consuming cannabis.