Ontario's Minister of Finance Vic Fideli and Attorney General Caroline Mulroney deliver remarks following an announcement on Ontario's cannabis retail model, in Toronto on Monday, August 13, 2018.Christopher Katsarov/The Canadian Press
Part of cannabis laws and regulations
The Ontario government will allow the private sector to sell recreational cannabis by April while also handing municipalities the power to veto stores from opening, a move that could create an up to six-month delay before consumers can purchase the newly legal products in person.
Cabinet ministers said on Monday that the province will be in charge of wholesaling cannabis to retailers and managing the only legal online store starting on Oct. 17. Companies won’t be able to open bricks-and-mortar stores initially, but the new regime will be in place by April 1, 2019.
The plan, which was first reported last month by The Globe and Mail, has stoked uncertainty over whether cities and towns will be ready to handle such a major policy shift in a short period of time and what the new model is going to look like. The province was short on details on Monday and will be relying on a consultation process to help design what many expect will be Canada’s largest legal market for cannabis.
Related: Green rush: The race to sell cannabis in Canada
Finance Minister Vic Fedeli and Attorney-General Caroline Mulroney said on Monday that Premier Doug Ford’s government will allow municipalities to choose whether to allow cannabis stores to open in their communities through a “one-time window under which they can choose to opt out.”
A wrinkle in the plan is that most major communities in Ontario are heading to the polls in October, meaning councillors are gearing up to campaign for their jobs and not necessarily thinking about zoning for retail cannabis.
Next week, the province will begin consulting stakeholders, including municipalities, First Nations, police and the cannabis industry on how to best roll out the new regime, the ministers said. They added that Ontario will study the systems created by Alberta, Saskatchewan and Manitoba, which are all allowing private cannabis retailers.
“Implementing this new approach will take time. We have to get this right and we will not be rushed,” Mr. Fedeli said, speaking at Queen’s Park.
Monday’s policy shift does away with a plan created by the former Liberal government to sell cannabis at retail locations operated by a subsidiary of the Liquor Control Board of Ontario: the Ontario Cannabis Store.
The Ford government could eventually allow up to 500 private stores licences, according to industry sources who spoke with The Globe. Government officials have said the final number of stores has not been established.
Would-be retailers have been racing to scout locations across Ontario since Mr. Ford was elected. Some companies have already signed leases with landlords, which is risky since a city might not want cannabis to be sold in that area or at all.
Deepak Anand, a vice-president at Cannabis Compliance Inc., a consulting firm that advises clients on marijuana production and retail licences, said the firm’s phone has been ringing off the hook from would-be Canadian retailers, illegal dispensaries and U.S.-based retailers that are looking to expand north of the border.
“We’re flooded with inquiries,” he said. “I think it’s good news all around for both large and small business.”
Pat Vanini, the executive director of the Association of Municipalities of Ontario, applauded the province’s move to consult cities and towns on this policy shift. She said that it’s not necessarily a bad thing that there are still so many unanswered questions because it means that local governments can have a real say and influence how the framework is drafted.
The election season will add delays, Ms. Vanini said, as new city councils won’t be sworn in until Dec. 1 and the new officials may not be familiar with the municipal bylaw process. “I think it’s safe to say that no one will be making any decisions until new councils take effect on Dec. 1,” she added. “I know they said April 1 but it might need to be just a little bit longer than that.”
The hundreds of illegal dispensaries already operating in Ontario won’t be given a head start by Monday’s announcement as both ministers said they were still focused on getting the businesses to close down. However, a senior government official said the owners of dispensaries currently operating illegally won’t be prohibited from seeking a licence if they shut down and transition to the legal market.
“For those engaged in the underground activity today our message is simple: Stop,” Mr. Fedeli said. “We won’t want to do business with people running an illegal business.”
The province will give $40-million to municipalities over the next two years to help them cope with the transition to legal cannabis and part of the money will be earmarked to enforce new federal and provincial laws. The government’s priority will be public safety and combating the illicit market, Ms. Mulroney said. Mr. Ford’s ministers will also be taking a tough line with retailers who open stores next year. “If a private retailer is caught selling cannabis to any underage buyer, even once, their licence is done,” said Mr. Fedeli.
Toronto Mayor John Tory said in a statement that he will be reviewing the government’s decision and his support will only be forthcoming if Mr. Ford’s plan places public safety and public health at the forefront. “He wants to see exact details on how safety will be ensured before supporting a private retail model,” Mr. Tory’s spokesman, Don Peat, said.