No Cap Set On Number Of Cannabis Retailers As Legalization Approaches

Wednesday, Oct 10, 2018


On Wednesday, October 17, 2018, Canada is set to become the first industrial country in the world to legalize cannabis. This was a major campaign promise which many political experts believe helped the Liberal party win the last federal election. The federal Liberals, lead by Justin Trudeau, argued that Canada’s system of cannabis prohibition was flawed and that these regulations only benefited criminals engaged in selling cannabis via the blackmarket. The other major issue for the Liberals was that these regulations provided very little safety measures to protect minors from easily accessing cannabis.

Shortly after the Liberals took office, many cities starting seeing unlicensed cannabis retailers popping up. This was already a trend for several years in Vancouver, British Columbia. The municipal government in Vancouver decided to create regulations which allowed these retailers to operate in their city by applying for a license and paying a hefty fee. Other major cities like Toronto – where you could find more unlicensed dispensaries on Google Maps than pizza places at the height of the dispensary boom – decided to clamp down with police intervention like the “Project Claudia Raids” among other raids against these unlicensed dispensaries. Many argued that legalization was on the horizon and current laws were no longer valid while others contested those claims by saying until the new law is passed cannabis is still illegal and people should continue to obey those laws. In the end most charges were dropped or stayed in court.

Fast forward 2 years. The Liberals eventually got their bill passed by the Senate and the new cannabis regulations were set to become law. Every province in the country was given the option to address their concerns but essentially the message from the federal government was that cannabis is going to be legalized and the country needed to be prepared in all sectors of government. This included regulating things like age limit, driving while impaired, smoking in public places but most importantly – how it could be sold and who could sell it. After a short time the provincial governments began to outline their own individual regulations. Some provinces chose to privatize cannabis sales which eliminated any idea of an open market. At the time, Ontario was ran by Kathleen Wynne who lead the provincial Liberal Party. They were fully devoted to privatized cannabis sales under the brand Ontario Cannabis Stores (OCS) which is an extension of the Liquor Control Board of Ontario (LCBO). In summer of 2018, Kathleen Wynne and the Liberals lost the provincial election to the Conservative Party lead by Doug Ford.

Doug Ford’s government announced they were going with a different plan that would allow for an open market where anyone that met the criteria set out in their licensing applications could open unlimited cannabis retail locations in Ontario. Only Licensed Producers (LP’s) would be limited to one retail location at their production facility. Ontario municipalities have until Jan. 22, 2019 to opt out of hosting cannabis retailers, and the province can require that cannabis shops be located a certain distance away from schools.

The only issue with this was that process was still about six months away as the proposed time frame needed to draft and amend the current cannabis laws. In the meantime the OCS would provide online sales to Ontarians looking to purchase cannabis legally and eventually transition the OCS into a wholesale supplier for all retail locations in Ontario. Anyone caught operating an unlicensed dispensary after Oct 17, 2018 will be banned from ever applying for a provincial retail license in Ontario. We have yet to see if there will be any police intervention such as raids to deal with the dispensaries that choose to ignore these warnings. However fines for operating unlicensed dispensaries have increased to $250,000 which should be enough for most to close shop and focus on applying for a provincial license.