TRUSTED ADVISOR AND ADVOCATE
TRUSTED ADVISOR AND ADVOCATE
The Alcohol Gaming Commission of Ontario (“AGCO”) regulates retail cannabis stores and their managers in Ontario under the Cannabis Licence Act, 2018 and Cannabis Control Act, 2017. The AGCO is a Crown corporation with a board of directors appointed by the Ontario Government. It employs an individual called a “Registrar” to make administrative decisions regarding applicants or licensees ability to enter or remain in the retail cannabis industry.
Burokas Law acts as a cannabis licence lawyer by providing retail cannabis store owners, operators, and employees with advice in applying for a licence or authorization, or advocacy against any type of administrative action by the AGCO. Some common examples include:
The AGCO administers a two tiered licensing and authorization regime under the Cannabis Licence Act, 2018. Together with the the Cannabis Control Act, 2017, and the Federal Cannabis Act, 2018, these laws constitute the law of legalized Cannabis in Ontario.
To operate a retail cannabis store, an individual, corporation, or partnership must obtain both a retail store licence and a retail store authorization. One can apply for a licence and then an authorization, or both at the same time. Applying for only an authorization without a licence is not permitted.
Retail Operator Licence
A licence is required to be eligible to open a retail cannabis store. A licence, or an application for a licence, is a pre-condition of applying for the retail store authorization allowing an individual, corporation, or partnership to operate a specific store and sell cannabis to the public.
An applicant for an must not meet any of the following criteria to remain eligible for a retail operator licence:
Retail Store Authorization
An authorization is specific to a store. In addition to a licence, an authorization is required to operate a store. A holder of a licence who plans to operate multiple stores must obtain separate authorizations for each store. To apply for an authorization, one must first have a licence or be applying for one.
The Government of Ontario Government has allowed each municipality the choice to opt out of having a retail cannabis store. Applications for authorizations within these municipalities will not be processed. There are many municipalities that have opted out. For a full list list the AGCO website. Notable (more populated) municipalities include:
Additional Retail Store Requirements
An application for a retail store authorization will not be granted if:
If a person wishes to apply for an authorization in a municipality that has not opted out, they must meet the following criteria:
Cannabis Retail Manager Licence
No individual may supervise or manage a cannabis retail store unless they have either a cannabis retail manager licence or a cannabis operator licence. To be eligible for a manager licence, an individual must be over 19 years of age and must not meet the following criteria:
The Cannabis Licence Act, like many professional regulatory statutes, utilizes the concept of an “interested person” to ensure individuals who have, or may have influence over a licensee are subject to the same scrutiny as individuals or corporations who apply or hold licences. A person is deemed to be an interested person of another if:
If the Registrar of the AGCO considers an individual an interested person of a applicant or licensee, they will consider that individual’s past conduct in deciding whether to refuse, revoke, suspend, or fail to renew a licence or authorization.
The AGCO has the ability to make inquires and conduct investigations into individual and corporate applicants or licensees in regards to their competence, financial history, or character, in order to determine whether they meet, or continue to meet, the requirements for their licence. This includes their interested persons, or their officers, directors, shareholders (corporate licensees) or partners (partnership). The Registrar can require information or material from these individuals to assist in their inquiry or investigation and compel a written statement that has the same effect as testifying in court.
The applicant or licensee must pay reasonable costs or provide security to the Registrar to pay for the inquiry or investigation.
Proposals- Refuse, Revoke, Suspend, or Refuse to Renew
If the Registrar believes that an applicant or licensee does not meet one or multiple of the above listed criteria for the relevant type of licence, he or she will issue a proposal. A proposal is an administrative action the Registrar can take to either refuse an application, revoke an application, suspend an licence, or refuse to renew a licence when it’s up for renewal.
A proposal is a legal document that will outline what administrative action the Registrar is taking and why he or she is taking it. These reasons must be grounded in the above listed criteria for each type of licence.
The Registrar’s decision not to issue a retail store authorization is final. It does not issue a proposal to refuse and the decision cannot be appealed. The Registrar will only issue proposals to refuse a retail operator licence or manager licence.
Revocation without a Proposal
Under the Cannabis Licence Act, the Registrar has the power to revoke a licence or authorization without issuing proposal if the holder of the licence or authorization is convicted of:
The Registrar of the AGCO does not have final authority to determine whether a licence should be refused or revoked (unless described above). Individuals and corporations that receive proposals can appeal the Registrar’s decision to the Licence Appeal Tribunal, an independent tribunal that hears evidence and arguments about why a licence should or should nor be granted/suspended. To appeal, an individual or corporation must serve a notice of appeal to the Licence Appeal Tribunal and the Registrar within 15 days of receiving the proposal. Otherwise, the proposal will be carried out and whatever is being proposed on the proposal will come into effect.
Hearings at the Licence Appeal Tribunal are governed by their Rules of Practice and Procedure. Generally, hearings are similar to a trial in court where each party may make opening submissions, call evidence, cross-examine the other party’s evidence, and make closing submissions. A member of the Licence Appeal Tribunal will sit as an independent adjudicator and make findings of fact, weigh evidence, make witness credibility findings, and apply those findings to applicable law.
It is very common for conditions to be attached to the various licences described above. They often arise in situations where the Registrar has some concerns with an applicant or licensee, but they do not rise to the level of initiating or continuing with a proposal. Such conditions may impose restrictions on conduct or simply reiterate obligations already mandated by the Cannabis Licence Act, Cannabis Control Act, and it’s regulations. Conditions can be either imposed by the Licence Appeal Tribunal as outcome of a hearing, ordered as part of a resolution, or consented to by the applicant/licensee.
The AGCO employs inspectors who are empowered by the Cannabis Licence Act to enter retail stores (without warning) and conduct an inspection to ensure compliance with the Cannabis Licence Act, and it’s regulation. During an inspection, a inspector may open packages, demand and seize records, take photographs and videos, and inquire into financial transactions. The licensee has an obligation to produce documents as requested and assist the inspector as needed.
Offences and Prosecution
The AGCO also has powers to charge individuals and corporations with offences and prosecute them on court. The offences include:
Individuals found guilty of one of these offences can be sentenced to a fine up to $100,000 ($250,000 for corporations) and one year in prison. Charges are tried in the Ontario Court of Justice where a trial will be held similar to a criminal trial.
Any conviction under the Cannabis Licence Act will have severe consequences on an applicant’s or licensee’s ability to enter or remain in the industry.
Retail stores already operating are required to follow many regulations. Notable ones include:
If are interested in submitting an expression of interest, applying for a licence or authorization, or subject to an administrative action by the AGCO, please don't hesitate to contact Burokas Law for assistance to ensure your rights and interests are protected.