On March 17, 2020, the Government of Ontario announced the closure of all non-essential businesses in response to the COVID-19 pandemic. This initial list of businesses deemed essential included licensed cannabis retailers. On April 3, 2020, the Government of Ontario released a revised list of essential businesses that no longer included cannabis retailers. As a result, cannabis retailers were forced to close their doors by April 5, 2020, and the Ontario Cannabis Store’s online platform became the exclusive legal purveyor of adult-use cannabis. However, on April 7, 2020, in efforts to continue its fight against the illicit cannabis market, the Government of Ontario issued an emergency order (Emergency Order) that temporarily allows licensed cannabis retailers to offer delivery and curbside pickup services. The Emergency Order also provides certain burden reduction measures for cannabis retailers and institutes a temporary pause on the issuing of retail store authorizations.
The Emergency Order is intended to stay in effect until the end of the declared provincial emergency, or such other time as may be determined by the Government of Ontario.
Delivery and curbside pickup of cannabis
Any delivery or curbside pickup must adhere to the following requirements:
- All products sold are limited to cannabis and other items that would ordinarily be permitted for sale at a licensed cannabis retail store.
- The maximum purchase is 30 grams of dried cannabis (or equivalent) per person.
- Hours for delivery/curbside pickup must be between 9 a.m. and 11 p.m.
- Retailers are responsible for abiding by all laws – including ensuring that purchasers are not less than 19 years of age and that cannabis is securely stored.
- Only a retail licence holder or their direct employees are permitted to be involved in the sale and/or delivery of cannabis, and each such person must hold a CannSell certification. This includes retailers not being permitted to use third party services for delivery.
- Cannabis must be sold in its original packaging and must be delivered to a customer in a manner that ensures the contents are not visible to minors.
- All orders must be placed and paid for over the phone or online. Payment must be completed at the time of order.
Additional requirements for curbside pickup include:
- The person picking up the cannabis must be the same person who made the purchase. Retailers are required to ask for and inspect the identification of such person if the retailer suspects the person may be under 25 years of age.
- The location for pickup must be an outdoor area in close enough proximity to the store to be clearly captured by the store’s surveillance cameras. In no event are customers allowed in the store.
Additional requirements for delivery:
- Cannabis products must be delivered to the residential address specified in the order, and must be delivered to the purchaser or another person who lives at the residential address who is at least 19 years of age.
- Cannabis and accessories must be kept secure up until the point of distribution to a customer. The Alcohol and Gaming Commission of Ontario (ACGO) specifically notes, “the storing of undelivered cannabis and/or accessories overnight in a vehicle will not satisfy the AGCO’s requirements for secure storage.”
- Retailers must record and retain the name and address of each purchaser and the residential address of any delivery.
- Cannabis may not be sold for delivery to any First Nations reserves, which have passed a resolution prohibiting such activity.
The AGCO also specifically notes that retailers are allowed to charge for delivery.
The Emergency Order also provides that cannabis retailers follow all government directives concerning social distancing, including promoting a safe distance between customers with respect to curbside pickups.
Other burden reduction measures
The AGCO undertook a review of its regulatory requirements and made certain changes to ease the administrative burden on cannabis retailers. These include lowering the frequency of when full cannabis inventory counts are required and extending the timeframe to provide certain notices to the AGCO regarding changes such as the change of personnel or changes to store layout.
Retail operator licence and retail store authorization applications
The AGCO will also be temporarily pausing the issuance of retail store authorizations until the Emergency Order has been lifted. However, the AGCO will continue to issue retail operator licences and retail manager licences, and will process retail store authorization applications to the extent possible so that businesses will be ready to move forward once the restrictions are lifted.
Dentons Canada’s insight
Dentons Canada applauds the Government of Ontario for taking swift action to permit delivery and curbside pickup for licensed cannabis retailers. The COVID-19 pandemic poses a unique and significant challenge to this budding industry and these steps were necessary in order to stop the further proliferation of the illicit market. The Emergency Order provides an avenue for retailers to continue operations, while adhering to public health guidelines, and allows recreational cannabis consumers to conveniently obtain cannabis products without having to resort to the illicit cannabis market or lengthy delivery times from the online Ontario Cannabis Store.
The Emergency Order may also serve as a testing ground for the future viability of delivery and curbside pickup systems once retailers are allowed to open their doors back up to consumers. During the time the Emergency Order is in place, retailers will need to rapidly develop and implement online payment and delivery systems, which may serve to benefit retailers in the long-term should the Government of Ontario eventually decide to permit private retailer cannabis delivery.
While the issuance of retail store authorizations has been put on pause, Dentons Canada is pleased to see that the AGCO will continue to move forward with retail operator and retail manager applications already in the queue to the extent possible. This is particularly important given Ontario’s recent opening of the cannabis retail market to private retailers on March 2, 2020, as discussed in our previous Insight. Although it was anticipated that the AGCO would issue up to 20 retail store authorizations per month starting in April 2020, the pause on issuing retail store authorizations will be a thorn in the government’s plan to ramp up the distribution of retail stores throughout Ontario. Nevertheless, we expect that the steps the AGCO is taking to continue to issue retail store operator licences (a prerequisite of being issued a retail store authorization) will serve to facilitate a more efficient rollout of retail store authorizations once the Emergency Order is lifted and will ideally makeup at least some of the setback caused by the COVID-19 pandemic.
Dentons Canada’s leading Cannabis group will continue to work closely with existing and new industry stakeholders who intend to participate in the Ontario cannabis retail regime, and provide frequent insights on these important developments. For more information on how the Emergency Order impacts cannabis market participants, please contact Eric Foster, Ben Iscoe or Stuart Ruffolo.