Ontario Doubles Cannabis Retail Dispensary Capability

On January 1, 2024, changes took effect to Ontario Regulation 468/18 that affect licensed retail cannabis operators and their affiliates in the province. Changes to the Cannabis License Act now permit organizations to double the number of stores they operate, raising the cap from 75 to 150. The government asserts that this move is aimed at curbing the illegal cannabis market, aligning with similar regulations in other provinces.

Overall, the allowance of larger chains to operate additional storefronts compared to the previous cap marks a shift toward more corporate establishments as opposed to independent stores. Although this maneuver doesn’t solve the retail gap entirely in Ontario, as major population centers such as Richmond Hill, Markham, New Market, and Oakville, currently lack any cannabis stores due to municipal opt-outs. This presents an opportunity for the illicit market to thrive in these areas.

Commenting on the new amendment, major cannabis retailers such as High Tide Inc. were unsurprisingly excited by the new regulations. In a press release disseminated on Tuesday, CEO Raj Grover exalted the move, characterizing it as a move that “not only levels the retail playing field in Ontario but also creates a significant growth opportunity for High Tide and others that will help Ontario’s legal cannabis industry better compete with an entrenched illicit market, creating new jobs for Ontarians and increasing tax revenue for the province.”

He later joined BNNBloomberg to provide further commentary on the changes to Ontario Regulation 468/18 and what they mean for cannabis operators such as High Tide:

Ontario Regulation 468/18 Changes

According to the Cannabis Licence Act, 2018: The Registrar shall refuse to issue a retail store authorization if, at the time the authorization would otherwise be issued, the applicant already holds, or the applicant and its affiliates between them already hold, 75 authorizations. Furthermore, the Act states: It is a condition of a retail operator licence that the holder, or the holder and its affiliates between them, hold no more than 75 authorizations.

A note published on the ontario.ca webpage as codified the new amendment, with a note stating: On January 1, 2024, subsection 12 (1) of the Regulation is amended by striking out “75” and substituting “150”. 

The change in regulation brings Ontario closer inline with other Canadian provinces in terms of storefront allowance.

For example, Alberta has modeled much of its cannabis dispensary laws around alcohol and tobacco regulation, setting no specific cap on the number of retail cannabis dispensaries that license holders can operate in Alberta.

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