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Medical/Recreational

Cannabis in Ontario is legal for both medical and recreational use.

Timeline of marijuana legalization in Ontario

2001: Medical cannabis became legal. However, the production and sale of medical cannabis is regulated exclusively by the federal government.

2018: On October 17th, recreational cannabis was approved when the federal Cannabis Act came into effect.

Cannabis laws

No dispensary owner wants to face penalties, police investigations, or license suspension. To avoid all of these and stay compliant with the law, you need to know the main rules and regulations. This way, you will be able to manage a thriving business and focus on boosting your sales instead of constantly worrying about possible lawsuits or fines.

In Ontario, the Alcohol and Gaming Commission of Ontario (AGCO) manages non-medical cannabis regulations. 

License

There are three types of licenses you must apply for to operate a cannabis dispensary in Ontario: 

  • Retail Operator License (required for operating a cannabis retail store)
  • Retail Store Authorization (required for operating a physical storefront; note that you must get a Retail Store Authorization for each retail location you intend to operate)
  • Cannabis Retail Manager License (required for people with management responsibilities who will be controlling the sale of cannabis); you don’t need this license if you are a sole proprietor who is both the owner and manager

Types of licenses and their cost:

  • Retail Operator License ($6,000 for a 2-year term, with a $2,000 renewal fee or a $4,000 renewal fee for a 4-year term)
  • Retail Store Authorization ($4,000 for a 2-year term, with a $3,500 renewal fee or a $7,000 renewal fee for a 4-year term)
  • Cannabis Retail Manager License ($750 for a 2-year term, with a $500 renewal fee or a $1,000 renewal fee for a 4-year term)

In Ontario, the AGCO (Alcohol and Gaming Commission of Ontario) is responsible for issuing these licenses. To get them, you must create an account and complete your application on the iAGCO online application portal. You can also use this portal to renew or modify your license in the future.

Keep in mind that producer licenses are issued by Health Ontario.

Eligibility requirements:

  • You must be 19 years old or older
  • You must be financially responsible
  • You must not have any convictions or charges under the Cannabis License Act of 2018
  • You must not have any current or previous ties to criminal organizations 
  • You must not lie in your application

To get a retail operator license, you need to provide the following:

  • Constituting documents
  • Schematic diagram
  • Details of shareholders
  • Financial statements
  • Tax return
  • Tax assessment 
  • Personal history 

To get a retail store authorization, you need to provide the following:

  • Business name registration
  • Proof of ownership/tenancy

Note that before submitting a retail store authorization application, you should prepare properly by doing the following:

  • Ensure that the location where you are planning to open your store is used for commercial or retail use
  • Ascertain that your retail operator license application file number or license number is ready
  • Confirm that your proposed store location meets all requirements
  • Make sure that your store or business name is compliant with all Federal and Provincial laws regarding promotion and advertising
  • In case your intended location is on a reserve, don’t forget to obtain a Resolution of the Council of the Board indicating approval

To get a retail store authorization, you need to provide the following:

  • Completed personal history form with your full employment and unemployment history
  • Tax returns or tax assessment

Dispensary design requirements

Licensed cannabis dispensaries cannot be located in municipalities that prohibit cannabis retail stores from being located on their premises. Any dispensary must be at least 150 meters away from schools or private schools. Note that:

  • If a school or private school is the primary or only occupant of a building, you shall measure 150 meters from the property line of the property on which the school or private school is located
  • If a school or private school is not the primary or only occupant of a building, you shall measure 150 metres from the boundary of any space occupied by the school or private school within the building
  • To meet this requirement, you need to measure a straight line from the closest point of the school property or boundary to the closest point of your dispensary. 
  • The measure of the 150 meter distance can take into the vertical distance if the store and/or school is not located on the ground floor or main level in its respective building
  • These requirements do not apply if the private school only offers classes through the Internet or it is located on a reserve
  • The proposed retail location must comply with the school proximity requirement at the time the RSA is issued

These are the main retail store requirements you need to take into account:

  • There must be a separation between your cannabis retail store and other businesses
  • Your cannabis retail space must be enclosed by walls separating it from any other commercial establishment or activity
  • Your cannabis retail space must not include an outdoor area
  • Your cannabis retail space cannot be entered from or passed through so as to access any other commercial activity or establishment other than a common area of an enclosed shopping mall
  • The area where cannabis is received or stored cannot be accessible by any other business or by the public
  • If there is only one door in the establishment, you can receive product through this door outside of business hours, or security personnel can restrict access to the door when the product is delivered 

Security measures are the following:

  • You must have a secure, high-resolution surveillance system. It must be positioned to capture 24-hour coverage of both the interior and immediate exterior of the premises (including entrances and exits, where ID is checked, sales areas, receiving areas, and storage areas)
  • You must retain recordings for a minimum of 30 days and make them available to the AGCO upon request
  • You must store all cannabis securely at all times 
  • All cannabis must be accessible only by staff 
  • Cannabis and cannabis accessories must not be visible from the exterior of the store
  • Transportation of cannabis between retail operator’s stores must be secure, and the transfer process must be supervised and proper;y documented

Operational requirements

You must start selling cannabis at your retail store within one year of getting your retail store authorization. You are allowed to sell cannabis between the hours of 9 a.m. and 11 p.m.

You are not allowed to sell cannabis unless your retail store is licensed and authorized by the AGCO. Also, note that retailers must have a supply purchase contract with the Ontario Cannabis Retail Store (OCS) and sell only cannabis obtained through the OCS.

Note that you also must:

  • Display the official cannabis retail seal. Ensure it is posted in a place where people can easily see it from outside the entrance to the store. The seal must be at least 17 cm wide and 20 cm long. You can post either the French or English version of the seal. If you want, you can post both
  • Display cannabis and cannabis accessories in a way that they cannot be seen by a young person, even from outside the store
  • If your retail store authorization is revoked or not renewed, remove the seal as soon as possible
  • Post your retail store authorization where people can easily see it (inside your store)
  • Sell only the cannabis made by someone who is authorized under the Cannabis Act (Canada) in order to produce cannabis for commercial purposes 
  • Keep records of activities and specified information
  • Ensure you have measures to reduce the risk of your cannabis being redirected to the illegal activities or illegal market
  • Record all sales
  • Make information about the responsible use of cannabis available to patrons
  • Ensure that all managers and employees working in your store successfully complete the required Board-approved training program before they start working at the store
  • Ask for identification of anyone who looks under 25 years old and make sure the person is at least 19 years old prior to allowing them to enter the store

Keep in mind that you must not:

  • Sell cannabis or cannabis accessories to anyone who is under 19 years of age
  • Permit anyone who looks under 25 years of age to enter the store, unless your first ask for identification and are satisfied the person is at least 19 years old
  • Sell cannabis to anyone who is intoxicated or looks intoxicated 
  • Sell more than 30 grams of dried cannabis (or equivalent amount of another kind) to a person in a single visit
  • Hire anyone who is under 19 years old
  • Sell cannabis or cannabis accessories from a display that allows self-service or from a vending machine

The Registrar may attach some more conditions to a cannabis retail operator license, retail manager license, and/or retail store authorization. It’s part of AGCO’s risk-based licensing approach and can be done to help the licensee minimize risks identified during the assessment process.

Transaction requirements

To purchase, possess, or use cannabis in Ontario, you must be 19 years old or older. You can purchase cannabis online through the only legal Ontario Cannabis Store or in person at a privately run authorized retailer. 

To buy cannabis online, you need to provide your name, address, email, and credit card number. There is no need to create an online account.

Purchase limits

One customer can buy up to 30 grams of dried recreational marijuana at one time. Keep in mind that one gram of dried cannabis is equivalent to:

  • 5 grams of the fresh cannabis
  • 15 grams of edible product
  • 70 grams of liquid product
  • 0.25 grams of concentrates (liquid or solid)
  • 1 cannabis plant seed

Delivery

General requirements:

  • You must comply with all laws, including the Registrar’s Standards for Cannabis Retail Stores (for example, ensure that cannabis is not sold or delivered to anyone under 19 or who appears to be intoxicated, as well as that it is securely stored)
  • You may sell any item permitted for sale in your retail store for delivery; no other items can be sold
  • There is a maximum purchase amount of 30 grams of dried cannabis per person
  • Delivery is allowed from Monday to Sunday, between 9 a.m. and 11 p.m.
  • You must return all items not delivered before 11 p.m. back to your store 
  • You must provide cannabis in its original packaging
  • You must ensure that the contents of cannabis packaging are not visible to minors
  • Payments may be made by using any method acceptable to the cannabis retailer
  • Payments must be completed at the time of the order 

Requirements for delivery:

  • Only cannabis retailers or their direct employees can deliver cannabis
  • You must hold a certification from CannSell
  • You can use a third party for transportation if the cannabis is in the secure possession of the licensee or direct employee at all times
  • Cannabis retailers must ensure that cannabis removed from an authorized store for delivery has been ordered by a customer
  • You must deliver the cannabis to the residential address or private place specified in the order 
  • You must deliver cannabis to a person present at the place of delivery who is at least 19 years of age
  • You must ask for and inspect identification if you suspect the individual to who the delivery is made is under 25 years of age
  • Cannabis retailers are allowed to charge for delivery
  • You must keep cannabis and cannabis accessories secure up until they are delivered to the customer or returned to the store
  • Cannabis retailers must record and keep the name and address of the customer who purchased cannabis, as well as the residential address or private place where any cannabis is delivered

Note that there can be some extra restrictions or requirements added in any province.

Reporting Requirements

In Ontario, license holders don’t submit their reports directly to the federal Cannabis Tracking system. They send all the needed reports to their cannabis regulatory agency, which then passes this data to Health Canada. These reports must include the following data from every retail licensee:

  • Opening inventory
  • Inventory additions, including returns, purchases, and transfers
  • Inventory reductions, including shipments, destructions, and losses
  • Closing inventory in weight and value
  • All cannabis sales

All licensed retailers must prepare and submit three different compliance reports:

  • The Federal Report provides the AGCO with the data to submit to Health Canada. It lists each product and shows the overall inventory movement during the month for each item
  • The Sales Report reveals how each item was sold throughout the month and includes the starting and closing inventory amount for each item
  • The Periodic Report that retailers must submit each week to report all inventory adjustments and product destructions done during the week

If you want to read additional reporting requirements, please review Cannabis Retail Regulation Guide.