Oakville maintains opt-out decision of allowing privately-operated retail cannabis stores

Tue, 03 Mar 2020

Decision to be reviewed in 2021

At last night’s meeting, Town Council voted to review, in one year, its decision to opt-out of allowing privately-operated cannabis retail stores in Oakville. Council requested that staff seek more information about the industry and how municipalities who have opted-in are operating.

In addition, the Province is currently consulting with municipalities regarding the expansion of cannabis business opportunities, including the sale of cannabis for consumption in cafés/lounges and at special events. After receiving information from staff outlining the town’s recommendations, including that consumption lounges not be permitted in opt-out municipalities, Council endorsed the comments and directed staff to submit them to the Province by the commenting deadline of March 10, 2020.

“We are still in an opt-out position but need additional time for staff to gather more details about the industry as well as the pros and cons of retail operations,” said Mayor Rob Burton. “We still have concerns with the Province not allowing municipalities to control the locations of cannabis stores through zoning rules. This is not a decision to be made in haste and it’s in our best interest to take a wait and watch approach.”

The Province mandates no other location criteria for cannabis stores other than 150m separation from schools. The Province prohibits any municipal licensing or zoning of cannabis retail stores. This means cannabis stores would be treated the same as any other retail store, which are widely permitted in most areas within Oakville, other than areas zoned only for residential uses. There are currently no limits or caps to the number of stores within a municipality and there aren’t any requirements defining how close cannabis stores can locate to one another within a municipality.

It’s also important to note that municipalities looking to change their status to an opt-in will not receive any additional funding at this time from the Ontario Cannabis Legalization Implementation Fund (OCLIF) as the final funding payments were released in August 2019.

In addition, under the current funding model for the federal excise tax for cannabis, municipalities would only be eligible for funding if they did not opt-out as of January 22, 2019.  Given that the town opted-out, there is no expected payment, even if the town had decided to modify their position to opt-in

Last January, Oakville Town Council adopted an opt-out position and directed staff to report back to Council in one year to review its position. Since then there have been some changes to provincial cannabis legislation:

• Cannabis regulations were updated around the production and sale of three new classes of cannabis at licensed retail location including edibles, extracts and topicals.
• The Province has moved to an open market for retail cannabis stores when initially it restricted the number of licenses through a lottery system. The AGCO, which license/regulates cannabis retail stores, started accepting applications in January with authorizations expected starting in April, at an initial rate of approximately 20 per month.

The federal government passed the Cannabis Act on October 17, 2018, legalizing recreational cannabis. The Ontario government launched its private retail model on April 1, 2019. The Province gave municipalities a one-time opportunity in January 2019 to opt-in or opt-out of having retail stores in their community. Municipalities who opted-out can opt back in at any time, but they may not reverse their decision.

To learn more, read the March 2, 2020 staff report and addendum, watch the Special Council meeting on YouTube or visit our Cannabis.