Substance Law is a Toronto-based law firm providing specialized legal services to cannabis retail businesses seeking to open and operate dispensaries in Ontario. We advise entrepreneurs, operators, and investors on navigating Ontario’s cannabis retail licensing framework and ongoing regulatory obligations.
Our cannabis lawyers support clients through every stage of the retail licensing process—from initial planning and site selection to licensing applications, inspections, store launch, and long-term compliance.
Opening a cannabis retail store in Ontario requires compliance with a multi-layered regulatory regime governed primarily by the Alcohol and Gaming Commission of Ontario under the Cannabis Licence Act, 2018 and Cannabis Control Act, 2017.
At a high level, the process involves:
- Structuring the business and ownership properly
- Securing a compliant retail location
- Applying for AGCO cannabis retail licences and authorizations
- Passing background checks and regulatory reviews
- Completing inspections and opening compliantly
Each step carries regulatory risk if handled incorrectly.
Step 1: Business Structure & Eligibility
Before applying for a cannabis retail licence, applicants must ensure that their business structure complies with Ontario’s cannabis laws.
We advise on:
- Corporation vs. partnership vs. sole proprietorship structures
- Shareholder, director, and officer eligibility
- Disclosure obligations and indirect ownership issues
- Regulatory risk associated with investors or financing arrangements
Improper structuring or undisclosed interests can delay or derail an application.
Step 2: Securing a Compliant Retail Location
Retail location compliance is one of the most common causes of delay or refusal.
We assist with:
- Reviewing zoning and municipal bylaws
- Assessing proximity to schools and prohibited sites
- Lease review and cannabis-specific clauses
- Risk allocation between landlords and tenants
Municipal rules vary significantly, and site approval should occur before submitting an application.
Step 3: AGCO Cannabis Retail Licence Applications
To operate a cannabis dispensary in Ontario, applicants typically require:
- A Retail Operator Licence (ROL)
- A Retail Store Authorization (RSA) for each store location
We manage and support the full application process, including:
- Preparing and submitting AGCO applications
- Advising on required disclosures
- Addressing regulatory questions and deficiencies
- Communicating with the AGCO on your behalf
Step 4: Background Checks & Regulatory Review
The AGCO conducts detailed background checks on applicants and key individuals, including:
- Criminal background screening
- Financial integrity assessments
- Regulatory history review
We help clients:
- Prepare for background disclosures
- Identify and mitigate red flags
- Respond to AGCO follow-up questions
Step 5: Store Readiness, Inspections & Opening
Before opening, retail stores must meet strict operational requirements.
We assist with:
- Store layout and security compliance
- Surveillance and record-keeping obligations
- Inspection readiness and mock inspections
- Final authorization to open
Failure to meet inspection standards can result in delayed openings or enforcement action.
Ongoing Cannabis Retail Compliance
Once licensed, cannabis retailers must maintain continuous compliance with AGCO rules.
We advise on:
- Store operations and staff training requirements
- Advertising, marketing, and promotions compliance
- Record-keeping and reporting obligations
- Regulatory audits and inspections
Responding to AGCO Compliance Issues
If a cannabis retailer receives a notice, warning, or enforcement action, we assist with:
- Responding to AGCO correspondence
- Managing inspections and compliance reviews
- Addressing alleged violations
- Implementing corrective action plans
Early legal intervention can prevent escalation to licence suspension or revocation.
Buying or Selling a Cannabis Retail Store
We advise buyers and sellers of cannabis dispensaries on:
- Regulatory due diligence
- AGCO change-of-ownership requirements
- Transaction structuring in a regulated market
- Risk allocation and post-closing compliance
Cannabis retail transactions require careful coordination with regulators.
Why Work With Substance Law for Cannabis Retail Licensing?
- Focused experience in cannabis regulation
- Deep familiarity with AGCO licensing processes
- Practical, business-oriented legal advice
- National cannabis expertise with Ontario focus
Get a Dispensary Licence in Ontario
If you are planning to open, purchase, or operate a cannabis retail store in Ontario, Substance Law provides the legal clarity and regulatory support you need.
Contact us today to speak with a cannabis lawyer about getting a dispensary licence in Ontario.
What is a dispensary licence in Ontario?
A dispensary licence in Ontario refers to the approvals required from the Alcohol and Gaming Commission of Ontario to operate a cannabis retail store, including a Retail Operator Licence and a Retail Store Authorization.
What licences do I need to open a cannabis retail store in Ontario?
Generally, operators need a Retail Operator Licence to operate a cannabis retail business and a Retail Store Authorization for each physical store location.
How long does it take to get a dispensary licence in Ontario?
Timelines vary depending on application completeness, background checks, and site readiness. Delays are common if there are issues with disclosures, location compliance, or inspections.
Can I apply for an AGCO cannabis licence before securing a location?
A Retail Operator Licence can be pursued without a final store location, but a Retail Store Authorization requires a compliant site and is tied to a specific address.
Are background checks required for cannabis retail licensing?
Yes. The AGCO conducts background checks on applicants and key individuals, including criminal history, financial integrity, and regulatory compliance history.
Can a landlord refuse to lease to a cannabis dispensary?
Yes. Even if zoning permits retail stores, landlords may choose not to lease to cannabis businesses. Cannabis-specific lease provisions are common and should be reviewed carefully.
Do municipalities control cannabis retail in Ontario?
Municipalities can opt out of allowing cannabis retail stores and may impose zoning and land-use requirements on retail stores in general as long as they don’t specifically target cannabis stores. However, licensing authority rests with the AGCO.
What are common reasons cannabis retail applications are delayed or refused?
Common issues include incomplete disclosures, problematic ownership structures, non-compliant locations, unresolved background check concerns, and inspection deficiencies.
Do I need a lawyer to apply for a dispensary licence in Ontario?
A lawyer is not legally required, but legal guidance can help reduce delays, manage regulatory risk, and address issues that could lead to refusal or enforcement action.
What happens after my cannabis store is licensed?
Licensed retailers must comply with ongoing AGCO rules related to operations, advertising, record-keeping, inspections, and staff training.
Can I buy or sell an existing cannabis dispensary?
Yes, but changes of ownership require regulatory review and approval. Transactions must be structured to comply with AGCO requirements.
What happens if the AGCO raises a compliance issue?
Retailers may receive warnings, requests for information, or enforcement actions. Early legal advice can help resolve issues before they escalate to licence suspension or revocation.
How much does a dispensary licence in Ontario cost?
The cost of a dispensary licence in Ontario includes application and regulatory fees payable to the Alcohol and Gaming Commission of Ontario, as well as additional costs related to site preparation, security, compliance, and professional services. The AGCO charges $6,000 for a Retail Store Operator application and $6,000 per Retail Store Authorization application. Generally, a new operator should expect to invest more than $50,000 into the start-up and capital costs of their store.
