The Impact of COVID-19 on Cannabis Retail Stores in OntarioMonday, April 13, 2020
Read online or download the full update here.
In response to the novel coronavirus (“COVID-19”) pandemic, the Government of Ontario, along with other provincial governments across Canada, declared a state of emergency mandating the closure of “non-essential” businesses. What does this mean for cannabis retail stores in Ontario?
Treatment of Retail Cannabis Stores under the Emergency Act
On March 23, 2020, pursuant to the Emergency Management and Civil Protection Act (the “Emergency Act”), the Government of Ontario issued an order (the “Order”) mandating the closure of all businesses in Ontario for a 14-day period, except for those businesses deemed “essential” as set forth in the Order. The initial list of essential businesses included retail cannabis stores licensed by the Alcohol and Gaming Commission of Ontario (the “AGCO”).
However, following the advice of health professionals regarding the potential impact of COVID-19 in Ontario, the Government of Ontario revised the list of essential businesses on April 3, 2020. This reduced list of essential businesses excluded retail cannabis stores, resulting in the mandatory closure of all retail cannabis stores as of April 4, 2020 for a period of at least 14 days.
In response to concerns voiced by cannabis industry participants, including concerns of a rise in black market cannabis sales, on April 7, 2020, the Government of Ontario changed course and issued another emergency order under the Emergency Act, allowing licensed cannabis retailers to offer pick-up and/or delivery services to customers, effective immediately and for the duration of the declared provincial emergency, with a possibility of an extension if business closures under the Order remain in effect for an extended period of time. In order to give effect to rules allowing for pick-up and delivery as well as other temporary loosening of certain licensing requirements, the AGCO has issued an Information Bulletin setting out the key requirements that retailers need to follow if they are to provide these services, including:
- sale, delivery and pick-up can take place 7 days per week between 9 a.m. and 11 p.m., subject to the maximum purchase amount of 30 grams of dried cannabis (or equivalent);
- customers must order and pay for their products by phone or online only, in advance of pick-up or delivery;
- location for pick-up must be an outdoor area in close proximity to the retail store and monitored by video surveillance – customers are not allowed in the store;
- individual picking up the cannabis must be the same individual that purchased the cannabis and, for delivery, it must be delivered to the purchaser’s residential address, and it can be accepted by another person who lives at that same residential address, provided they are also over 19 years of age; and
- retailers cannot use the services of a third party for delivery, but may charge for delivery service.
Update on AGCO Licensing Matters
The AGCO’s Information Bulletin further states that the AGCO is temporarily suspending the issuance of cannabis Retail Store Authorizations, but will continue to issue cannabis Retail Operator Licences and Retail Manager Licences. The AGCO will also process store authorization applications and conduct eligibility assessments to the extent possible.
Further, recognizing the detrimental impact COVID-19 has had on cannabis retailers, the AGCO has instituted a number of measures intended to ease administrative burden on cannabis retailers, including:
- allowing criminal background checks to be conducted on new employees “as soon as practicable”;
- moving inventory count requirements from weekly to monthly reporting;
- permitting certain operational changes to minimize customer and staff contact with surfaces;
- mandating online or telephone payment processing; and
- loosening of time periods for reporting requirements, including changes to officers and directors and changes to a licensee’s corporate structure.
Finally, the AGCO has advised that if a person has submitted an application to the AGCO during the COVID-19 pandemic for a Retail Operator Licence, Retail Store Authorization or Cannabis Retail Manager, they have the option of cancelling the application and receiving a refund paid upon request.
If you have any questions with respect to this legal update, please contact Jeff Hergott (firstname.lastname@example.org), Michael Rennie (email@example.com), Sarim Ali (firstname.lastname@example.org), or any other member of Wildeboer Dellelce LLP.
This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation.