NEWS BRIEF

Ontario cannabis market surpasses 100 retail store authorizations

Canada’s largest market for adult-use cannabis products saw its 100th retail store authorization this month, Alcohol and Gaming Commission of Ontario records show, though not all the stores are open as they complete the regulatory process.

It is an important milestone for a province that has lagged other jurisdictions in store openings since cannabis was legalized in late 2018. Alberta remains the leader with 483 cannabis providers, though that market is showing signs of retail saturation.

The public data from the AGCO shows the province has increased the pace of new store authorizations despite the ongoing pandemic.

Fourteen new stores were granted a Retail Store Authorization (RSA) in February, falling to 11 in March before rebounding to 18 and 26 in April and May, respectively.

That puts Ontario on pace to reach – and likely surpass – the original target laid out by the previous Liberal government to open 150 stores in 2020. (The current government adopted a private-store model but had been slow to authorize new stores.)

The AGCO has conducted hundreds of virtual inspections since the onset of the pandemic, which was key to increasing the number of stores in recent months.

Toronto cannabis lawyer Matt Maurer, who co-chairs the cannabis practice at Torkin Manes, said the AGCO, the Ontario Cannabis Store and the provincial government all play pivotal roles in the store-allocation process.

“If either the AGCO or the OCS decided to shut down – or the government shut them down – it would have been devastating to the store count for 2020,” he said.

“I think if the government – and I use that term broadly to encompass the provincial government, the AGCO and the OCS – had the collective willpower, we could easily see more than 20 stores a month be licensed from here on out,” he said.

“But since you need all three, in some shape or form, to sign off on that decision, it becomes more difficult to just be decisive, despite the fact that the capacity and capability appears to be there.”

Cannabis stores are shown as “Authorized to Open” on Ontario’s public website once they have met all regulatory requirements, including passing a preopening inspection.

After a Retail Store Authorization is issued, the store operator may order product from the Ontario Cannabis Store – the province’s wholesaler.

After the product is in place and the store is ready with all other requirements, the AGCO schedules the final preopening inspection.

If approved, the store operator is issued an approval letter and the store is authorized to open.

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